Definitions (2)

1. The theory that the Internal Rate of Return of a fund will be low in its early stages, particularly due to costs incurred in starting the fund, but then as the firm becomes more stable and profitable, that its internal rate of return will increase. The shape of this, if graphed over time, would look like a J.
2. The shape of a country's trade balance after it devaluates its currency. The immediate effect of a devaluation is an increase in the trade deficit, though this will shift into an increased international demand for the country's exports due to a lowered exchange rate, as well as a decrease in the demand for more expensive imports. An appreciation in the value of a country's currency can result in an inverted J-curve.

Use J-curve in a sentence

I did not agree with the j-curve theory because it was nt proven and I thought it was more of a guess than anything.

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The j-curve effect was to be expected in the early stages so we re-assured our investors that our projections would be accurate.

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Although J-curve sounds like a name for an all girl pop band, it is an important theory to me because the rate of return will increase as the profitability becomes more stable as it has with technology stocks like Google and twitter.

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