Long Term Definition in Investing for Companies and Individuals

What is Long Term Definition in Investing? Long term investing is often associated with a buy-and-hold strategy, where investors aim to benefit from the potential growth of their investments over a prolonged period. This approach requires patience and a long-term perspective, as it may take years for the investments to …

Liquidity Premium – Understanding Definition, Examples, and Risk

What is Liquidity Premium? Liquidity premium refers to the additional return or compensation that investors require for investing in assets that are less liquid or harder to sell. It is the extra yield that investors demand for holding an asset that is not easily converted into cash without incurring significant …

Liquidating Definition and Process as Part of Bankruptcy

Liquidating Definition and Process as Part of Bankruptcy The liquidation process involves assessing the value of the debtor’s assets and selling them off to generate funds. These assets can include physical property, inventory, equipment, and even intellectual property. The proceeds from the sale are then distributed among the creditors based …

Level 1 Assets: Definition, Examples, Vs. Level 2 and 3

What are Level 1 Assets? Level 1 assets are financial instruments that have a readily available market price and can be easily valued. These assets are highly liquid and can be easily bought or sold in the market without any significant impact on their price. Level 1 assets are considered …

Legislative Risk: And Mitigating Its Impact

What is Legislative Risk? Legislative risk refers to the potential impact that changes in legislation or government policies can have on investments. It is a type of political risk that investors need to consider when making investment decisions. Legislative risk can arise from various factors, such as new laws, regulations, …

Lapse Insurance: Definition, How It Works, and Consequences

Lapse Insurance: Definition, How It Works, and Consequences When a policy lapses, the insurance company no longer has an obligation to provide coverage for the policyholder. This means that if an event covered by the policy occurs after the lapse, the policyholder will not receive any benefits or compensation from …

Laggard: Definition, Functionality, and Potential Risks

Laggard: Definition, Functionality, and Potential Risks A laggard, in the context of investing, refers to a stock or investment that has underperformed compared to its peers or the overall market. It is often used to describe companies or assets that have not kept up with the growth and performance of …

Jerome Kerviel: A Comprehensive Look at His Derivatives Career

Who is Jerome Kerviel? Jerome Kerviel is a former French trader who gained international attention for his involvement in one of the biggest financial scandals in history. Born on January 11, 1977, in Pont-l’Abbe, France, Kerviel grew up in a modest family and developed an interest in finance at a …

Jarrow Turnbull Model Explained: Its Mechanics

Jarrow Turnbull Model Explained The Jarrow Turnbull Model is a financial model used in investing to estimate the price of a derivative security, such as an option or a futures contract. It is named after its creators, Robert A. Jarrow and Stuart M. Turnbull, who developed the model in the …

Investor Relations Definition Career Path and Example

Investor Relations: Definition and Importance Investor Relations is a crucial function within a company that focuses on managing relationships and communications between the company and its investors. It plays a vital role in ensuring transparency, trust, and effective communication between the company and its shareholders, potential investors, financial analysts, and …

Investment Vehicles: Explanation and Types

What are Investment Vehicles? Investment vehicles are financial instruments or assets that individuals or organizations use to invest their money and potentially earn a return. These vehicles can range from traditional options like stocks and bonds to alternative investments like real estate or commodities. Investment vehicles serve as a means …

Investment Time Horizon – The Key to Successful Investing

Investment Time Horizon: The Foundation of Successful Investing For example, if you are investing for retirement and have several decades until you plan to retire, you may have a longer time horizon. This longer time frame allows you to take on more risk and potentially earn higher returns through investments …

Investment Strategy: Ways to Invest and Factors to Consider

Investment Strategy: Ways to Invest and Factors to Consider Types of Investments There are several types of investments available, each with its own potential risks and rewards. Some common investment options include: Investment Type Description Stocks Investing in shares of publicly traded companies. Bonds Buying debt securities issued by governments …

Investment Income Definition Example and Tax Treatment

Investment Income Definition Investment income refers to the money earned from various types of investments, such as stocks, bonds, real estate, and mutual funds. It is the return on investment that an individual or entity receives for putting their money into these assets. Types of Investment Income There are several …

Investment Horizon Considerations For Your Portfolio

What is Investment Horizon? Investment horizon refers to the length of time an investor plans to hold an investment before selling it. It is an important factor to consider when making investment decisions as it can greatly impact the potential returns and risks associated with the investment. Investment horizon can …

Investment Company Definition How It Works and Example

What is an Investment Company? An investment company is a type of financial institution that pools money from multiple investors and uses it to purchase a diversified portfolio of securities, such as stocks, bonds, or other assets. The investment company is managed by professional fund managers who make investment decisions …

Investment Basics: Types to Invest in and How They Work

Stocks: A Guide to Investing in the Share Market Investing in stocks can be a lucrative way to grow your wealth over time. However, it is important to understand the basics of the share market before diving in. This guide will provide you with an overview of stocks and how …

Investment Banking Guide: The Role Of Investment Bankers

INVESTING BASICS Are you interested in the world of finance and investment? Do you want to learn more about the role of investment bankers? Look no further! Our comprehensive Investment Banking Guide is here to help you understand the ins and outs of this exciting field. What is Investment Banking? …

Investing Explained: Types of Investments and How To Get Started

Investing Explained: Types of Investments 2. Bonds: Bonds are debt securities issued by governments or corporations. When you invest in bonds, you are essentially lending money to the issuer in exchange for periodic interest payments and the return of the principal amount at maturity. Bonds are generally considered lower risk …

Inflation-Adjusted Return – Definition, Formula and Example

Inflation-Adjusted Return When calculating the inflation-adjusted return, the nominal return of an investment is adjusted to reflect the changes in the purchasing power of the currency due to inflation. This adjustment is necessary because inflation erodes the value of money over time, reducing the real return on an investment. The …

Indexing: Definition and Uses in Economics and Investing

What is Indexing? Indexing is a method used in economics and investing to track and measure the performance of a group of assets or securities. It involves creating an index, which is a representation of a specific market or sector, and then using that index as a benchmark to compare …

In Specie Definition and Meaning in Asset Distributions

In Specie Definition and Meaning in Asset Distributions In specie distributions can occur in various situations, such as when a company distributes its assets to shareholders or when a trust distributes assets to beneficiaries. Instead of liquidating the assets and distributing cash, the assets themselves are transferred to the recipients. …

Import Definition Examples Pros and Cons

Import Definition Import is a term used in the field of international trade and commerce. It refers to the act of bringing goods or services into a country from another country for the purpose of selling or using them. When a country imports goods, it means that it is purchasing …

Hurdle Rate: How Businesses and Investors Use It

Hurdle Rate: What It Is and Why It Matters The hurdle rate is a critical concept in finance and investment. It is the minimum rate of return that a project or investment must achieve in order to be considered viable or worthwhile. In other words, it is the benchmark or …