Month: February 2020

The Garn-St. Germain Depository Institutions Act was enacted by Congress in 1982 to ease pressures on banks and savings and loans which increased after the Federal Reserve raised rates in an effort to combat inflation. The act followed the establishment of the Depository Institutions Deregulation Committee by the Monetary Control Act, which had the primary purpose of phasing out interest rate ceilings on bank deposit accounts by 1986.

The neckline is a level of support or resistance found on a head and shoulders pattern that is used by traders to determine strategic areas to place orders. A neckline connects the swing lows (which occur following the first two peaks) of the head and shoulders topping pattern. A move below the neckline signals a breakout of the pattern, and indicates that a reversal to the downside of the prior uptrend is underway.

Voluntary plan termination is the discontinuance of a defined-benefit plan by an employer. A voluntary plan termination may only occur if all of the requirements for a standard termination or distress termination are followed by the plan administrator. Section 4041 of the U.S. Code of Federal Regulations addresses voluntary plan terminations.

Yield equivalence is the interest rate on a taxable security that would generate a return equivalent to the return of a tax-exempt security, and vice versa. Yield equivalence is important to municipal bond investors who want to know if the tax savings of their muni bonds will make up for the lower yields relative to similar duration taxable securities. Yield equivalence can be calculated using the following equations.

Withholding is the portion of an employee’s wages that is not included in his or her paycheck but is instead remitted directly to the federal, state, or local tax authorities. Withholding reduces the amount of tax employees must pay when they submit their annual tax returns. The employee’s income, marital status, number of dependents, and number of jobs all determine the amount withheld.1

A junior security is one that has a lower priority claim than other securities with respect to the income or assets of its issuer.

An unsecured creditor is an individual or institution that lends money without obtaining specified assets as collateral. This poses a higher risk to the creditor because it will have nothing to fall back on should the borrower default on the loan. If a borrower fails to make a payment on a debt that is unsecured, the creditor cannot take any of the borrower’s assets without winning a lawsuit first.

Real estate agents are licensed professionals who arrange real estate transactions, putting buyers and sellers together and acting as their representatives in negotiations. Real estate agents usually are compensated completely by a commission—a percentage of the property’s purchase price, so their income depends on their ability to get a deal closed.

In statistics, a Poisson distribution is a statistical distribution that shows how many times an event is likely to occur within a specified period of time. It is used for independent events which occur at a constant rate within a given interval of time.