Learn: finance and technology, explained for France
Plain-language answers to common questions about money, markets and technology. Each page opens with a short answer, gives the formula where one is standard, and cites its sources.
Economy and central banks
Inflation, growth, currencies, trade and the institutions behind them.
Inflation and CPI
Inflation is a sustained rise in the general level of prices, so each unit of money buys less over time. It is usually measured by the consumer price index (CPI), which tracks the cost of a fixed basket of goods and services.
Recession
A recession is a significant decline in economic activity spread across the economy and lasting more than a few months. Two straight quarters of falling GDP is a common rule of thumb, not an official US definition.
GDP
Gross domestic product (GDP) is the total market value of all final goods and services produced within a country in a given period. It is the standard headline measure of the size and growth of an economy.
Exchange rates
An exchange rate is the price of one currency in terms of another. Floating rates move with supply and demand, which respond to interest rates, inflation, trade and capital flows, and market sentiment.
Trade tariffs
A tariff is a tax a government charges on imported goods, usually as a percentage of their value. The importer pays it at the border, and the cost can be passed on to buyers or absorbed by sellers.
Interest rates and bonds
Policy rates, yields and what central banks do with them.
Interest rates and policy rates
An interest rate is the price of borrowing money, stated as a percentage of the amount borrowed per period. A central bank policy rate is the benchmark rate it sets to steer short-term borrowing costs across the economy.
The yield curve
The yield curve plots the yields of bonds with similar credit quality, usually government bonds, against their time to maturity. Its shape shows how the market prices borrowing for short versus long periods.
Bond yields
A bond yield is the return an investor earns from a bond, expressed as an annual percentage. Yields and bond prices move in opposite directions: when a bond’s price falls, its yield rises.
Quantitative easing
Quantitative easing is a monetary policy tool in which a central bank creates reserves to buy government bonds or other assets at scale, aiming to lower longer-term interest rates and ease financial conditions.
Stocks and investing
Listings, valuation ratios, indices, funds and shareholder terms.
Initial public offering (IPO)
An IPO is the first time a private company sells its shares to the public, in order to raise money and list on a stock exchange. After listing, the shares trade between investors on the exchange.
Price-to-earnings (P/E) ratio
The P/E ratio divides a company’s share price by its earnings per share. It shows how much investors pay for each unit of annual profit, and is used to compare valuation across companies and time.
Market capitalisation
Market capitalisation is the total market value of a company’s outstanding shares: the share price multiplied by the number of shares. It is the standard way to describe how large a listed company is.
ETF vs mutual fund
Both pool money from many investors into a basket of securities. An ETF trades on an exchange throughout the day at a market price, while a mutual fund is bought and redeemed at its net asset value, normally once a day.
Short selling
In a short sale, a trader borrows shares, sells them, and later buys them back to return to the lender. The trader gains if the price falls and loses if it rises, and potential losses have no fixed upper limit.
Dividends and dividend yield
A dividend is a share of a company’s profit paid to its shareholders, usually in cash per share. Dividend yield is the annual dividend per share divided by the current share price, shown as a percentage.
Stock splits
A stock split divides each existing share into several shares, lowering the price per share in proportion. A 2-for-1 split doubles the number of shares and halves the price, leaving the company’s total value unchanged.
Saving and borrowing
Compounding, loan instalments, deposits and regular investing.
Compound interest
Compound interest is interest earned on both the original amount and the interest already added. Over time it grows faster than simple interest, which is paid only on the original amount.
Crypto and digital money
Bitcoin and stablecoins, explained without price talk.
Stablecoins
A stablecoin is a crypto-asset designed to hold a steady value, usually one US dollar per coin, by being backed by reserves or managed by a rule. It can lose its peg if the backing or confidence fails.
Bitcoin basics
Bitcoin is a digital currency that runs on a public network of computers with no central operator. Transactions are recorded in a shared ledger called the blockchain, and new coins are issued on a fixed schedule capped at 21 million.
Startups and work
Venture funding, unicorns and layoff notices.
Venture capital and funding rounds
Venture capital is money invested in young, high-growth companies in exchange for equity. Startups raise it in stages called funding rounds, usually seed, then Series A, B and later, each at a higher valuation if things go well.
Unicorn startups
A unicorn is a privately held startup valued at more than US$1 billion. The term was coined in 2013 by venture investor Aileen Lee. The valuation is usually the figure implied by its latest funding round.
Technology
AI, chips, the cloud and cybersecurity, as they relate to markets.
Artificial intelligence
Artificial intelligence is the field of building computer systems that perform tasks associated with human intelligence, such as recognising speech or images, translating, predicting and generating text. Most modern AI is machine learning.
Large language models
A large language model is an AI system trained on very large amounts of text to predict the next piece of text. This lets it write, summarise, translate and answer questions, although it can also state things that are wrong.
GPUs
A graphics processing unit (GPU) is a chip with thousands of small cores that perform many calculations in parallel. It was built for graphics but is now the main hardware for training and running AI models.
Semiconductor fabs
A semiconductor fabrication plant, or fab, is a factory that makes integrated circuits (chips) by patterning and layering materials on silicon wafers in an ultra-clean environment. Building a leading-edge fab costs many billions of dollars.
Cloud computing
Cloud computing is the delivery of computing resources, such as servers, storage and software, over the internet on demand, usually paid for by use instead of bought as hardware. The largest providers run huge data centres.
Cybersecurity and ransomware
Cybersecurity is the practice of protecting computers, networks and data from unauthorised access or damage. Ransomware is malicious software that locks or encrypts files and demands payment to restore them.