Asset stripping: is the process in which a company or an individual – usually referred to as a corporate raider – attains control of another company, and then auctions off the acquired company’s assets for a profit. This is usually done to either settle debts owed, or for investment purposes, where an underperforming outfit is bought and then sold for a profit. The individual assets of the company, such as its equipment and property, may be more valuable than the company as whole due to such factors as poor management or poor economic conditions. For instance
Horizontal merger: is a business consolidation that occurs between firms who operate in the same space, often as competitors offering the same good or service. Horizontal mergers are common in industries with fewer firms where competition tends to be higher and the cooperation and potential gains in market share offer greater advantage. The major objective of a horizontal merger is to increase revenue by offering an additional range of products to your existing customers, and reduce the threat of competition in the market.
Cost-push inflation: occurs when there is a decrease in the aggregate supply of important goods and services stemming from an increase in the cost of production, and there is no suitable alternative. An example of an important good is oil. When oil prices go up, because there is no alternative to oil, and owing to the fact that developing countries depend on oil for manufacturing, the prices of most commodities is pushed up, hence the “cost-push” inflation.
Demand-pull inflation: arises when aggregate demand in an economy outpaces aggregate supply. Price levels often go up because of an imbalance in the aggregate supply and demand – consumers inadvertently bid the prices up because they are competing for a limited supply. When the aggregate demand in an economy strongly outweighs the aggregate supply, prices increase, a situation that economists describe as “too much money chasing too few goods”.
Futures: are financial contracts that oblige a buyer n to purchase an asset (and the seller an obligation to sell an asset) at a set price at a future point in time – also referred to as futures contracts.
The assets often traded in futures contracts include commodities such as grain, precious metals, etc., stocks, and bonds, electricity, natural gas foreign currencies, Internet bandwidth, and so on. Futures can be used either to hedge or to speculate on the price movement of the underlying asset – for example, a producer of maize could use futures to lock in a certain price to reduce risk.
