1) What is Accounts Receivable?
- A comprehensive billing and customer information system that helps you manage your receivables, streamline the collection and control of cash, and separately track individual clients, organizations and funding sources.
2) What is Act of God?
- An extraordinary happening of nature not reasonably anticipated by either party to a contract.
3) What is Adaptation?
- Making changes to fit a particular culture/environment/conditions; when we produce special/modified services for different markets.
4) What is Administered Pricing?
- Relates to attempts to establish prices for an entire market.
5) What is Advertising Campaign?
- Designing and implementing particular advertising for a particular service/purpose over a fixed period.
6) What is Advertising Media?
- Different alternatives available to a company for its advertising.
7) What is After-Sales Service?
- Services that are available after the service has been rendered.
8) What is Air Freight?
- Sending a product by air.
9) What is Andean Common Market?
- A sub-regional economic integration organization existing out of Bolivia, Colombia, Ecuador, Peru and Venezuela.
10) What is Anti-Trust Laws?
- Laws to prevent businesses from creating unjust monopolies or competing unfairly in the marketplace.
11) What is APEC?
- Asian Pacific cooperation among 21 member state. APEC promotes free trade and economic cooperation between members.
12) What is Arbitration?
- Mediation done by a third party in case of a commercial dispute.
13) What is ASEAN?
- The fourth biggest trade area of the world comprising 10 Southeast Asian countries.
14) What is Asian Crisis?
- In 1996/97, stock exchanges and currency values in a number of Asian countries lost a major part of their value.
15) What is Balance of Payments?
- System of accounts that records a nation's international financial transactions.
16) What is Barter?
- Direct exchange of goods between two parties in a transaction.
17) What is Barter House?
- International trading company that is able to introduce merchandise to outlets and geographic areas previously untapped.
18) What is Billboards?
- Large stands that comprise advertising space, usually found on the sides of roads.
19) What is Blocked Currency?
- Blockage cuts off all importing or all importing above a certain level. Blockage is accomplished by refusing to allow importers to exchange national currency for the seller's currency.
20) What is Boycott?
- A coordinated refusal to buy or use products or services of a certain company/country.
21) What is Brand Loyalty?
- When customers always buy the same brand.
22) What is Branding?
- Developing and building a reputation for a brand name.
23) What is Bretton Woods Agreement?
- An agreement made in 1944. It set fixed exchange rates for major currencies and subsequently established the IMF.
24) What is Bribery?
- Voluntarily offered payments by someone seeking unlawful advantage.
25) What is a Broker?
- A catchall term for a variety of middlemen performing low-cost agent services.
26) What is Business Culture?
- Values and norms followed in business activities.
27) What is Business Services?
- Services that are sold to other companies (e.g. advertising).
28) What is Capital Account?
- A record of direct investment portfolio activities, and short-term capital movements to and from countries.
29) What is Cartel?
- A cartel exists when various companies producing similar products/services work together to control markets for the types of goods/services they produce.
30) What is Census Data?
- A record of population and its breakdown.
31) What is Centralization?
- When most decisions are made at the top or head office.
32) What is Centrally Planned Economic Model?
- A model that is characterized by state monopoly of all means of production, lack of consumer orientation and lack of competition.
33) What is Chaebol?
- Korean term for conglomerate of many companies clustered around one parent company.
34) What is Client Followers?
- Companies that have followed their clients to other countries (i.e. become international) to service their primary clients while they're abroad.
35) What is Collaborative Relationships?
- Relationship between companies to cooperate with each other.
36) What is Collective Programming?
- When groups of people are taught about certain values.
37) What is Commercial Disputes?
- Conflict about commercial agreements (e.g. terms of payment, penalties or delay).
38) What is Common Commercial Policy?
- Its aim is to liberalize world trade.
39) What is Common Market?
- A free trade area with a common external tariff, international labour mobility and common economic policies among member states.
40) What is Comparability and Equivalence?
- Information that is comparable and is understood in the same way.
41) What is Comparative Advertising?
- Advertising that directly compares you with your competitors.
42) What is Compensation Deals?
- Involve payment in goods and in cash.
43) What is Competitive Strength?
- Strength of a product/service/company as compared to competitors.
44) What is Conciliation?
- A non-binding agreement between parties to resolve disputes by asking a third party to mediate the differences.
45) What is Confiscation?
- Seizing a company's assets without payment.
46) What is Congruent Innovation?
- The service concept is accepted by the culture.
47) What is Consumption Patterns?
- How consumers buy a particular product/service.
48) What is Containerized Shipments?
- When products are packed into containers for transportation.
49) What is Content Labelling?
- Mention of the contents/ingredients of a product on the package.
50) What is Continuous Innovation?
- Alteration of service rather than the creation of the new one.
51) What is Counter trade?
- When services are exchanged with other services instead of cash/money.
52) What is Country-Specific Brand?
- A brand that is sold in only one country.
53) What is Cultural Imperatives?
- The business customs and expectations that must be met if relationships are to be successful.
54) What is Currency Inconvertibility?
- The deterioration in the ability to convert profits, debt service and other remittances from local currency into another currency.
55) What is being Deal-Centred?
- When a salesperson is solely concerned to finish the particular transaction.
56) What is a Dealer?
- Anyone who has a continuing relationship with a supplier in buying and selling goods/services.
57) What is Debt Equity Swaps?
- The exchange of a debt instrument by a company, in return for equity, which cancels out the debt.
58) What is Decentralization?
- When decisions can be made in subsidiaries or at all levels of the company.
59) What is Demand Elasticity?
- When demand for a service changes due to minor changes in the price.
60) What is Developmental Loans?
- Loans granted for developmental projects.
61) What is Differential Exchange Rate?
- The essential mechanism requires the importer to pay varying amounts of domestic currency for foreign exchange with which to purchase products/services in different categories.
62) What is Differentiation Strategy?
- The marketer is trying to convince the consumers that his product/service is different from that of competitors.
63) What is Direct Marketing?
- Advertisement sent directly to a customer.
64) What is Disposable Income?
- That proportion of income that is not already counted for (e.g.mortgages, loans, bills etc.)
65) What is Eco-labelling?
- A logo to show that a company is socially responsible.
66) What is E-commerce?
- Buying and selling through the internet or comparable systems.
67) What is Economic Nationalism?
- The preservation of national economic autonomy in that residents identify their interests with the preservation of the sovereignty of the state in which they reside.
68) What is Economic Needs?
- Things such as minimum food, drink. Shelter and clothing.
69) What is Economic Sanctions?
- When it is forbidden to trade with a country.
70) What is Efficiency Seeking?
- Firms want to enter markets/countries where they can achieve efficiency in different ways.
71) What is EPRG schema?
- A schema that classifies firms by their orientation: ethnocentric, polycentric, regiocentric or geocentric. The degree of commitment to internationalization is what determines a firm's orientation.
72) What is Establishment Chain Model?
- A stepwise internationalisation to foreign markets.
73) What is Eurodollar?
- A deposit liability banked outside the United States, that is, dollars banked in Germany or any other country other than the US.
74) What is Exchange Controls?
- When rate of exchange is controlled by authority.
75) What is Exchange Permits?
- Give permission to exchange money.
76) What is Expatriate?
- An employee of a company who is sent to another country to work.
77) What is Export Credit?
- A loan, that allows a company to pay for an export contract.
78) What is Export Credit Guarantee?
- When a government/organization commits to give a loan to an exporter.
79) What is Export Management Company?
- A middlemen for firms with relatively small international volume or for those unwilling to involve their own personnel in the international function.
80) What is Expropriation?
- Taking away companies from the owners and into state ownership.
81) What is Floating Exchange Rates?
- Changes in market demand and market supply of a currency cause a change in value.
82) What is Focus Groups?
- A group of people who are considered relevant for our services and can provide us with a useful information.
83) What is Focus Strategy?
- When a company decides to focus on a particular market segment or part of the product/service line.
84) What is Follower Brands?
- Brands that came later to the market.
85) What is Foreign Freight Forwarder?
- A company that helps other companies in transportation and export/import matters.
86) What is Free Trade Areas?
- Where products can move freely, without tariffs and restrictions.
87) What is Generic Strategy?
- The core strategy for a company as a whole.
88) What is Geographical Divisions?
- When a company is organized according to its markets.
89) What is Global Brand?
- The worldwide use of a name, term and logo etc.
90) What is GM Foods?
- Genetically Modified Foods.
91) What is Green Marketing?
- Marketing decisions that take the environment into consideration.
92) What is Import License?
- Permission to import.
93) What is Industrial Products?
- Products developed for industrial markets not for consumer markets.
94) What is Innovation?
- New product/technology/method.
95) What is Intellectual Property?
- An immaterial asset that can be bought, sold, licensed, exchanged or gradually given away like any other form of property.
96) What is Interim Credit?
- A business loan to fund the acquisition and remodeling of a structure.
97) What is ISO 9000?
- Quality assurance certification of the production process.
98) What is Labelling Laws?
- Laws that indicates what should be mentioned on packaging.
99) What is Licensing?
- Allow another company to produce and sell your product against royalties.
100) What is Local Responsiveness?
- When a company adapts its services and strategies according to local needs and requirement.
101) What is Lubrication?
- A relatively small sum of cash, a gift, or a service given to a low-ranking official in a country where such offerings are not prohibited by law.
102) What is Market-Driven Economies?
- Economies/countries that are following the free market economic system.
103) What is Market Resistance?
- When customers are reluctant to accept a new product/service.
104) What is Marketing Research?
- The systematic gathering, recording and analysis of data to provide information useful in marketing decision making.
105) What is Merger?
- When two companies decide to join together.
106) What is Middlemen?
107) What is Misleading Advertisement?
- Advertisements that give incorrect message/impression of a service/product or company.
108) What is Monopsony?
- The buying-side monopoly.
109) What is Outsourcing?
- When you let other companies take over part of your production process.
110) What is Parallel Imports?
- When products are imported into a country without the consent of the brand owner.
111) What is Patent?
- Any product or formula/technology registered with the relevant office that establishes who possesses the right of ownership.
112) What is Patent Rights?
- Only the owner of these rights is authorised.
113) What is Penetration Pricing?
- To charge lower prices to gain some market share in a new market.
114) What is Piggybacking?
- When the does not export directly but uses another company's channels to expert its products.
115) What is Pioneering Brands?
- The brands that were first in the market.
116) What is Planned Domestication?
- When a company plans to successively use local staff in a foreign market.
117) What is PLC stages?
- Stages in the product Life cycle: introduction, growth, maturity and decline.
118) What is Political Payoff?
- An attempt to lessen political risks by paying those in power to intervene on behalf of the multinational company.
119) What is Positioning?
- Creating an image of your service and its quality in the customers' minds.
120) What is Price Control?
- When priced are fixed by authority.
121) What is Privatization?
- When a government company is sold to a private investor.
122) What is Proactive Market Selection?
- Actively and systematically selecting a market.
123) What is Promotional Misfires?
- Mistakes made in the advertisement of the company.
124) What is Promotional Strategy?
- Systematic planning to promote a service.
125) What is Protectionism?
- When governments do not allow freedom of activity for foreign companies, to protect their own companies.
126) What is Psychic Distance?
- When the market is considered distant due to psychological barriers.
127) What is Rate of Diffusion?
- How quickly a product/service spreads out in a specific area.
128) What is Risk Shifting?
- When the risk is reduced nor eliminated but rather shifted to someone else.
129) What is Shari'ah?
- Islamic law.
130) What is Skimming?
- To charge a high price to maximize profit in the early stages of a product/service introduction.
131) What is Shareholders?
- Parties that have interest in the company's activities.
132) What is Standardization?
- Producing the same products/services for many markets.
133) What is Strategic Alliance?
- When two companies cooperate for a certain purpose.
134) What is Subornation?
- Sums of money, frequently not properly accounted for, designed to entice an official to commit an illegal act on behalf of the one paying the bribe.
135) What is Sustainable Competitive Advantage?
- Advantages over other competitors that can be enjoyed over a long period of time in the future.
136) What is Tariffs?
- A tax imposed by government on goods entering at its borders.
137) What is Third-Country Nationals?
- Expatriates from the business's own country working for a foreign company in a third country.
138) What is Total Quality Management?
- A method by which management and employers are involved in the continuous improvement of the production of goods/services.
139) What is Trade Association?
- Association of companies belonging to the same industry.
140) What is Trade Balance?
- The relationship between merchandise imports and exports.
141) What is Trade Fair?
- An exhibition where participants show/sell their products/services to visitors and public.
142) What is Trademark?
- Registered mark or logo for a company or business.
143) What is Transfer Pricing?
- Selective prices for internal transactions (e.g. between two subsidiaries).
144) What is Triad Trade?
- The process of trade undertaken between the EU, North America, Canada, Japan and China.
145) What is Zaibatsu?
- A large family-controlled banking and industrial combination in modern Japan.
146) What is Audit?
- A systematic assessment of the financial systems and operation of these for an organization's account(s). The purpose of an audit is to check whether an organization has complied with accepted accounting practice and has managed its finances in an appropriate manner.
147) What is Balancing?
- The process of recording, checking and writing up income and expenditure of a bank account so that the final totals account for all financial transactions and the account is balanced.
148) What is Bank Statement?
- A record of transactions, produced by a financial institution (i.e. a bank), indicating monthly movements in an account.
149) What is Board?
- Usually the top decision-making structure in an organization. Tasked with all key oversight functions, and overall policymaking.
150) What is Bookkeeping?
- The process of recording all financial (income and expenditure) transactions in financial books.
151) What is Budget?
- A prepared statement of expected expenditure for a given period ahead, normally 12 months.
152) What is Budget Management?
- The process of managing the actual expenses for a given period to make sure that actual expenses do not significantly exceed or fall short if budgeted expenses
153) What is Cash Book?
- Financial books of an organization which records all financial transactions.
154) What is Constituition?
- The legal basis for an organization containing key values and rules for the functioning of the organization..
155) What is Delivery Note?
- Proof of goods/services delivered
156) What is Expenditure
- All expenses incurred by the organization where payment is made by means of cash, cheque etc
157) What is Financial Control?
- The process of controlling the flow of money into and out of the company's bank account.
158) What is Financial Management?
- The management of all aspects of the company's finances including financial control, fundraising etc..
160) What is Financial Records?
- The written proof that a financial transactions have taken place with accompanying documentation, for example, invoices..
161) What is Financial Report?
- A report for a given period, for example 3 months, of all expenditure and income for a company..
162) What is Financial Strategy?
- The strategy of spending and fundraising for a given period; integral part of financial management..
163) What is Fixed Asset?
- Anything fixed (immovable) that is of value to an organization - for example, buildings, desktop computers etc..
164) What is Fraud?
- Theft of organization's money and assets, including the concealment of the theft..
165) What is Cheque Fraud?
- The act of stealing money (fraud) from an organization using cheque.
166) What is Boycott?
- A coordinated refusal to buy or use products or services of a certain company/country.
167) What is Fundraising?
- Raising funds for an organization through various means, for example, funding applications, charging for services supplied, etc.
168) What is Governance?
- The process of managing an organization democratically through transparent and accountable policymaking and oversight (Board function).
169) What is Invoice?
- A request for payment.
170) What is Management?
- The active process of managing all aspects of a company's life, including finances, human resources, projects etc.
171) What is PAYE?
- Pay As You Earn. Money paid to the South African Revenue Services (SARS) which is deducted from employees' salaries/wages according to scales set by SARS. The higher the salary, the bigger the PAYE deduction.
172) What is Petty Cash?
- Small amounts of cash kept in an organization for small expenses, for example, postage, tea etc
173) What is Quotation?
- A description of goods/services that are to be bought.
174) What is Reconciling?
- The process of verifying and agreeing to balances for a specific period.
175) What is Salary Book?
- Book for recording all salary related transactions and deduction
176) What is Salary Card?
- A single card detailing all employee related salary transactions and details per employee..
177) What is Sustainability?
- The ability of a company to marshall and manage its resources and direct its operations in such way as to ensure its continued successful operation into the future.
178) What is UIF?
- Unemployment Insurance Fund - a deduction on employees' salaries calculated at a percentage specified in the Unemployment Insurance Act. The deduction is made from basic pay and any other special allowances.
179) What is Financial Management?
- On the macro level financial management is the study of financial institutions and financial markets and how they operate within within the financial system and the global economy.
- On the micro level, financial management is the study of financial planning, asset management and capital acquisition.
180) What is Balance Sheet?
- It is a statement which shows funds (capital) and the source of the funds on the liability side, while the asset side shows how these funds have been applied or invested to acquire assets.
181) What is Capital Investment?
- It is the actual application of funds for productive purposes; in other words, it is the acquiring if real economic objects such as property, plant, equipment and inventories. In the balance sheet of the enterprise it is listed as an asset.
182) What is Capitalization?
- Is the debiting of an asset account with the amount spent on it, or the calculation of the present value of future amounts.
183) What is Current Assets?
- It is mainly assets such as inventories, trade receivables and cash and cash equivalents, i.e. assets either in the form of cash or that will be converted into cash in the short-term.
184) What is Current Liabilities?
- It represents the short-term debt (loans) of the enterprise and consists of trade payables, short-term borrowings and provisions made for dividends, tax and other payables.
185) What is Financial Investment?
- It is the transfer of short and long term purchasing power to third parties in the money market (short term) and the capital market (long term), or converting savings into cash deposits or financial assets (such as securities) with the object of earning a compensation.
186) What is Financial Structure?
- It is the relationship between the asset structure and the capital or financing structure.
187) What is Financing?
- For the supplier of capital it is capital made available to the enterprise while for the enterprise itself, it means that it is making provision for its capital needs.
188) What is Financial Gearing?
- (Leverage) refers to the mixture of debt and equity finance in the capital structure.
189) What is Liquidity?
- It is the continuous ability of the enterprise to make the necessary payments.
190) What is Networking Capital?
- Refers to the difference between current assets and current liabilities.
191) What is Ordinary Shareholders Equity?
- It is the interest of the ordinary shareholders and consists of ordinary share capital and reserves.
192) What is Permanent Capital Requirement?
- It is that part of the total capital requirement which the enterprise continuously needs to operate without difficulty.
193 What is Shareholders Wealth Maximization?
- It represents the goal of the business in terms of either the market price of ordinary shares, or the total market value of the enterprise, or the value of the shareholder's interest.
194) What is Solvency?
- It is the ability of the business to repay its debts even on eventually ceasing its activities and selling all assets, i.e. the extent to which debt is covered by the assets.
195) What is Variable Capital Requirement?
- It is that part of the total requirement which the enterprise requires in excess of the permanent capital requirement.
196) What is Sole Proprietorship?
- It is an enterprise owned by one person and operated for his/her own profit.
197) What is Partnership?
- It is an enterprise owned by two or more owners.
198) What is Company?
- It is a legal entity, separate and distinct from its owners.
199) What is Investment Decisions?
- Are some of the most important decisions that management must make and correspond to the first question of which and how many assets the enterprise must acquire.
200) What is Financing Decisions?
- Are directed at determining the capital or financing structure and comprise the mutual composition and relationship of shareholders' equity and debt capital.
201) What is Dividend Decisions?
- It relates to the application of the profit after tax.
202) What is Economic Value Added?
- EVA is a popular measure used by many enterprises to determine whether an investment positively contributes to the owner's wealth.
203) What is Shareholders?
- Shareholders are groups such as employees, customers, suppliers, creditors, owners and others who have a direct economic link to the enterprise.
204) What is Minority Interest?
- It is the interest of outside (minority) shareholders in the subsidiaries of a holding company. expenses, for example, postage, tea etc
205) What is Non-current Liabilities?
- Amounts received even from other sources
206) What is Depreciation?
- It is a non-cash item and the requirements for taxation purposes are prescribed by SARS.
207) What is Inflation?
- It results in a general rise in the level of prices, that is, all prices will tend to rise in relation to one another.
208) What is Profit Margins?
- It is expressed as a percentage of the relevant revenue represent profit margin.
209) What is Turnover Ratios?
- It provides insight into the effectiveness with which an enterprise applies its assets to realize turnover.
210) What is BBBEE Act?
- It is Broad-Based Black Economic Empowerment Act.
211) Whats is BBBEE Designated Groups?
- Black workers, black unemployed people, black youth, black aged people, black disabled people and black people living in rural areas.
212) What is CSI?
-Corporate Social Investment
213) What is Debt Capital?
-It is the capital contributed by outsiders and represents the debt of the enterprise to which an interest and repayable obligation is attached over a predetermined short, medium or long term.
214) What is Profit?
-It is the total revenue (sales) of the enterprise minus the costs incurred to generate the revenue.
215) What is Rate of Return or Profitability?
- (Return on assets) is the ratio between the profit after tax of a specific period, and the capital or assets used to earn that profit, expressed as a percentage.
216) What is Securities?
- (Shares and debentures) are the various financial instruments which may be listed on the stock exchange.
217) What is Abnormal Rate Return?
- It is the amount by which a security's return differs from its expected rate of return based on the market's rate of return and the security's relationship with the market.
218) What is Accelerated Method?
- A method of depreciation that allocates relatively large amounts of the depreciable cost of an asset to earlier years and reduced amounts to later years.
219) What is Accounting Beta Method?
- A method of estimating a project's beta by running a regression of the company's return on assets against the average return on assets for a large sample of firms.
220) What is Accounting Estimates?
- Estimates of items such as the useful lives of assets, warranty costs and the amounts of uncollectible receivables.
221) What is Accounting Profits?
- The sales revenues minus the expenses of a firm over a designated time period, usually one year. Accounting profits typically make allowances for changes in the firm's inventories and depreciation of its assets. No allowance is made, however, for the opportunity cost of the equity capital of the firm's owners, or other implicit costs.
222) What is Accounting Risk?
- The risk associated associated with accounting standards that vary from country to country or with any uncertainty about how certain transactions should be recorded.
223) What is Accrued Interest?
- Interest earned but not yet due and payable. This is equal to the next coupon to be paid on a bond multiplied by the time elapsed since the last payment date and divided by the total coupon period. Exact conventions differ across bond markets.
224) What is Accumulation Phase?
- Phase in the investment life cycle during which individuals in the early-to-middle years of their working career attempt to accumulate assets to satisfy short-term needs and longer-term goals.
225) What is Active Factor Risk?
- The contribution to active risk squared resulting from the portfolio's different-than-benchmark exposures relative to factors specified in the risk model.
226) What is Active Return?
- The return on a portfolio minus the return on the portfolio's benchmark.
227) What is Active Risk?
- The standard deviation of active returns.
228) What is Activist Strategy?
- Deliberate changes in monetary and fiscal policy in order to inject demand stimulus during a recession and apply restraint during an inflationary boom and thereby, it is hoped, minimize economic instability.
229) What is Actuarial Rate of Return?
- The discount rate used to find the present value of a defined benefit pension plan's future obligations and thus determine the size of the firm's annual contribution to the plan.
230) What is Actuarial Yield?
- The total yield on a bond, obtained by setting the bond's current market value equal to the discounted cash flow promised by the bond.
231) What is Adaptive Expectations Hypothesis?
- The hypothesis that economic decision makers base their future expectations on actual outcomes observed during recent periods.
232) What is Add-on Interest?
- A procedure for determining the interest on a bond or loan in which the interest is added onto the face value of a contract.
233) What is Administrative Lag?
- The time period after the need for a policy change is recognized but before the policy is actually implemented.
234) What is After-tax Cost of Debt?
- The relevant cost of new debt, taking into account the tax deductibility of interest.
235) What is Agency Problem?
- A potential conflict of interest between the agent (manager) and the outside stockholders or the creditors.
236) What is Agency Trade?
- A trade in which a broker acts as an agent only, not taking a position on the opposite side of the trade.
237) What is Allocative Efficiency?
- The allocation of resources to the production of goods and services most desired by consumers, at the lowest possible cost.
238) What is Amortization?
- The periodic allocation of the cost of an intangible asset to the periods it benefits.
239) What is Annual Percentage Rate?
- The cost of borrowing expressed as a yearly rate.
240) What is Annuity?
- A finite set of level sequential cash flow.
241) What is Anomalies?
- Security price relationships that appear to contradict a well-regarded hypothesis; in this case, the efficient market hypothesis.
242) What is Anticipated Inflation?
- An increase in the general level of prices that was expected by most decision makers.
243) What is Appreciation?
- An increase in the value of the domestic currency relative to foreign currencies. An appreciation increases the purchasing power of the domestic currency for foreign goods.
244 What is Arbitrage?
- The simultaneous purchase of an undervalued asset or portfolio and sale of an overvalued but equivalent asset or portfolio, in order to obtain a riskless profit on the price differential.
245) What is Arithmetic Mean?
- A measure of mean annual rates of return equal to the sum of annual holding period period rates of return divided by the number of years.
246) What is Arrears Swap?
- A type of interest rate swap in which the floating payment is set at the end of the period and the interest is paid at that same time.
247) What is Ask Price?
- The price at which a market maker is willing to sell a security.
248) What is Asset Allocation?
- Dividing of investment funds among several asset classes to achieve diversification. The process of deciding how to distribute an investor's wealth among different asset classes for investment purposes.
249) What is Asset Impairment?
- Loss of revenue generating potential of a long-lived asset before the end of its useful life.
250) What is Asymmetric Information?
- The situation in which managers have different (better) information about firm's prospects than do investors.
251) Attribution Analysis?
- An assessment technique designed to establish whether a manager's performance relative to a benchmark resulted from market timing or security selection skills.
252) What is Automatic Stabilizers?
- Built-in features that tend automatically to promote a budget deficit during a recession and a budget surplus during an inflationary boom, even without a change in policy.
253) What is Automation?
- A production technique that reduces the amount of labour required to produce a good or service. It is beneficial to adopt the new labour-saving technology only if it reduces the cost of production.
254) What is Average Fixed Cost?
- Total fixed cost divided by the number of units produced. It always declines as output increases.
255) What is Average Tax Rate?
- Tax liability divided by taxable income. It is the percentage of income paid in taxes. A person's total tax payment divided by his/her total income.
256) What is Average Total Cost?
- Total cost divided by the number of units produced.
257) What is Average Product?
- Total product divided by the number of units of the variable input required to produce that output level.
258) What is Back Office?
- Settlement and related processes.
259) What is Back to Back?
- Transactions in which a loan is made in one currency against a loan in another currency.
260) What is Backward dated?
- A situation in a futures market where the current contract price is less than the current spot price for the underlying asset.
261) What is Backwardation?
- A condition in the futures markets in which the benefits of holding an asset exceed the costs, leaving the futures price less than the spot price.
262) What is Balanced Budget?
- A situation in which current government revenue from taxes, fees, and other sources is just equal to current government expenditure.
263) What is Balanced Fund?
- A mutual fund with, generally, a three part investment objective: 1) to conserve investor's principal, 2) to pay current income, and 3) to increase both principal and income.
264) What is Balance of Merchandise Trade?
- The difference between the value of merchandise exports and the value of merchandise imports for a nation.
265) What is Balance of Payments?
- A summary of all economic transactions between a country and all other countries for a specific time period, usually a year.
266) What is Balance on Current Account?
- The import-export balance of goods and services, plus net investment income earned abroad, plus net private and government transfers.
267) What is Balance on Goods and Services?
- The exports of goods and services of a nation minute its imports of goods and services.
268) What is Bank Discount Basis?
- A quoting convention that annualizes, on a 360-day year, the discount as a percentage of face value.
269) What is Bank Reserves?
- Vault cash plus deposits of the bank.
270) What is Barriers to Entry?
- Obstacles that limit the freedom of potential rivals to enter and compete in an industry or market.
271) What is Basic Earnings Per Share?
- Total earnings divided by the weighed average number of shares actually outstanding during the period.
272) What is Basis?
- The difference between the futures price of an asset and its spot (cash)) price.
273) What is Bearer Bond?
- An unregistered bond for which ownership is determined by possession.
274) What is Bearer Security?
- A negotiable security. All cash flows paid on the security are remitted to its bearer.
275) What is Bear Spread?
- An option strategy that involves selling a put with a lower exercise price and buying a put with a higher exercise price.
276) What is Behavioral Finance?
- Involves the analysis of various psychological traits of individuals and how these traits affect how they act as investors, analysts and portfolio managers.
277) What is Benchmark?
- A standard measurement used to evaluate the performance of a portfolio.
278) What is Benchmark Bond?
- A bond representative of current market conditions and used for performance comparison.
279) What is Benchmark Error?
- Situation where an inappropriate or incorrect benchmark is used to compare and assess portfolio returns and management.
280) What is Benchmark Portfolio?
- A comparison standard of risk and assets included in the policy statement and similar to the investor's risk preference and investment needs, which can be used to evaluate the investment performance of the portfolio manager.
281) What is Beta?
- A statistical measure of market risk on a portfolio.
282) What is Bid Ask Spread?
- The difference between the quoted ask and the bid prices.
283) What is Bid Price?
- The price at which a market maker is willing to buy a security.
284) What is Bill-And-Hold Basis?
- Sales on a bill-and-hold basis involve selling products but not delivering those products until a later date.
285) What is Binomial Model?
- A model for pricing options in which the underlying price can move to only one of two possible new prices.
286) What is Black Market?
- A market that operates outside the legal system, either by selling illegal goods or by selling goods at illegal prices or terms.
287) What is Bond?
- A long-term debt security with contractual obligations regarding interest payments and redemption.
288) What is Bond-Equivalent Basis?
- A basis for stating an annual yield that annualizes a semiannual yield by doubling it.
289) What is Bond-Equivalent Yield
- The yield to maturity on a basis that ignores compounding.
290) What is Bond Option?
- An option in which the underlying is a bond; primarily traded in over-the-counter markets.
291) What is Bond Swap?
- An active bond portfolio management strategy that exchanges one position for another to take advantage of some difference between them.
292) What is Bond Price Volatility?
- The percentage changes in bond prices over time.
293) What is Book Value of Equity?
- Shareholder's equity (total assets minus liabilities) minus value of preferred stock; common shareholder's equity. The accounting value of a firm.
294) What is Book Value Per Share?
- Book value of equity divided by the number number of common shares outstanding.
295) What is Bottom-up Investing?
- With respect to investment approaches, a focus on selecting individual securities with whatever allocation of money to asset classes, countries or industry securities results.
296) What is Brand Name?
- A registered name that can be used only by its owner to identify a product or service.
297) What is Break-even Exchange Rate?
- The future exchange rate such that the return in two bond markets would be even for a given maturity.
298) What is Break even Point?
- The volume of sales at which total costs equal total revenues, causing operating profits to equal zero.
299) What is Broker?
- An agent who executes orders to buy or sell securities on behalf of a client in exchange for a commission.
300) What is Budget Constraint?
- The constraint that separates the bundles of goods that the consumer can purchase from those that cannot be purchased, given a limited income and the prices of the products.
301) What is Budget Deficit?
- A situation in which total government spending exceeds total government revenue during a specific period of time, usually one year.
302) What is Budget Surplus?
- A situation in which total government spending is less than total government revenue during a time period, usually a year.
303) What is Bull Spread?
- An option strategy that involves buying a call with a lower exercise price and selling a call with a higher exercise price.
304) What is Business Cycle?
- Fluctuations in the general level of economic activity as measured by such variables as the rate of unemployment and changes in real GDP.
305) What is Business Risk?
- The variability of operating income arising from the characteristics of the firm's industry. Two sources of business risks are sales variability and operating leverage.
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