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YTM: The common abbreviation for yield to maturity, which is the annual rate of return on a financial asset that is held until maturity. Yield to maturity depends on both the coupon rate and the face or par value paid at maturity. If the selling price of a financial asset is equal to its par value, then the yield to maturity is equal to the current yield and the coupon rate. However, if the asset is selling at a discount, then the yield to maturity exceeds the current yield, which is greater than the coupon rate. And if the asset is selling at a premium, then the yield to maturity is less than the current yield, which is below than the coupon rate.
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UTILITY: The satisfaction of wants and needs obtained from the use or consumption of goods and services. The terms utility and satisfaction are, for the most part, used interchangeably in economics. The concept of utility is integral to utility analysis, consumer demand theory, and the microeconomic analysis of consumer behavior and market demand. Utility is another term for the satisfaction of wants and needs obtained from the consumption of goods. Two other economic terms that are also frequently used to capture this notion are welfare and well-being. Whichever term is used, the underlying concept is the same: Utility is the extent to which unlimited wants and needs are fulfilled using the goods and services produced from society's limited resources. The utility concept is an integral part of consumer demand theory and the in-depth study of market demand, the demand curve, and the law of demand.Beyond UsefulThe official, technical economic use of the term "utility" is NOT interchangeable with the common, everyday synonym "useful." When used in the analysis of consumer behavior, utility assumes a very precise meaning.For example, a common "utility" knife is one with many uses, something that is handy to have around. In baseball, a "utility" player can perform quite well at several different positions and is thus useful to have on the team. Moreover, a public "utility" is a company that supplies a useful product, such as electricity, natural gas, or trash collection. In contrast, the specific economic use of the term utility in the study of consumer behavior means the satisfaction of wants and needs obtained from the consumption of a commodity. The good consumed need not be "useful" in the everyday sense of the term. It only needs to provide satisfaction. In other words, a frivolous good that has little or no practical use, can provide as much utility as a more useful good. - An OmniStraight Shoestring Straightener is a useful good. It can be used to straighten even the most severely tangled shoestrings. It can also straighten telephone cords, computer cables, and fishing lines.
- In contrast, a FlexStar Interactive Trophy Plaque that periodically blares out "Congratulations, you took third place in the 27th Annual Shady Valley Badminton Tournament," is not very useful. It hangs on the wall broadcasting the same proclamation to every passerby.
Is the FlexStar Interactive Trophy Plaque useful? Hardly!But it does provide utility. By noting a past accomplishment that took years to achieve, this plaque provides utility. Each time the message is broadcast, the owner gets a warm, fuzzy felling inside. It satisfies the owner's desire to be recognized for this wondrous achievement. It does provide utility. In fact, both items provide utility. Both items satisfy wants and needs. But Not QuantifiableWhen analyzing consumer demand, economists are prone to use phrases like "level of utility." However, in spite what this phrase implies, utility is NOT, strictly speaking, quantifiable like many other human characteristics, such as height and weight. For example, the height and weight of Maurice Finklestein can be quantified at 54 inches and 347 pounds. These measures suggest a mental image of Maurice as being somewhat short and somewhat heavy--a rolly, polly fellow--with the geometric configuration of an overinflated beach ball.This mental picture of Maurice can be had without actually knowing Maurice or having ever seen Maurice up close and personal. The reason is the existence of standard height and weight benchmark measures--inches and pounds. But these are standard benchmarks because they measure characteristics (height and weight) that ARE measurable. Not only are they measurable, but they are also comparable between people. Lisa Quirkenstone, by contrast is 70 inches tall and 118 pounds. The image of a runway fashion model might come to mind with these quantified dimensions. Moreover, a direct comparison between Lisa and Maurice can be had with these numbers. Lisa is somewhat taller and definitely thinner. In fact, Lisa is 16 inches taller and 229 pounds lighter, which also means that Lisa is 30 percent taller and 66 percent lighter than Maurice. Utility, however, is NOT a quantifiable, measurable, comparable characteristic--at least based on a current understanding of human psychology. It falls into the same "unmeasurable" category as happiness, beauty, and love. There are no benchmark measures for these notions. Much like "beauty is in the eye of the beholder," so too is utility. Even though economists make extensive use, for instructional purposes, of the utility measurement unit termed "util," any such utility unit is purely hypothetical and only designed to make the presentation of assorted utility-related concepts easier.
Recommended Citation:UTILITY, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2024. [Accessed: December 7, 2024]. Check Out These Related Terms... | | | | | | | | | | Or For A Little Background... | | | | | | | | | And For Further Study... | | | | | | | | | |
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Today, you are likely to spend a great deal of time at a dollar discount store looking to buy either a box of multi-colored, plastic paper clips or several orange mixing bowls. Be on the lookout for small children selling products door-to-door. Your Complete Scope
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A scripophilist is one who collects rare stock and bond certificates, usually from extinct companies.
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"If you don't know where you are going, any road will get you there." -- Lewis Carroll, writer
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