Month: May 2020

A Whartonite is a graduate of the Wharton School of Business at the University of Pennsylvania. Whartonite is a nickname that is most typically applied to the students who receive their MBA from the prestigious business school.

Holding the market is the deliberate practice of placing active or pending orders for a security into a market where the price is dropping rapidly in an attempt to artificially hold the price of the security steady, or create a floor in the security. This practice is outlawed in most instances, except when a broker or other party is mandated to keep the price of a security steady; this is only done in rare cases where there isn’t enough market depth to hold the price.

The infant-industry theory states that new industries in developing countries need protection against competitive pressures until they mature and develop economies of scale which can rival their competitors’. The infant industry argument is often cited as a rationale for protectionism and was developed by Alexander Hamilton and Friedrich List.

Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par, depending on factors such as the level of interest rates and the bond’s credit status.

Gross exposure refers to the absolute level of a fund’s investments. It takes into account the value of both a fund’s long positions and short positions and can be expressed either in dollar or percentage terms. Gross exposure is a measure that indicates total exposure to financial markets, thus providing an insight into the amount at risk that investors are taking on. The higher the gross exposure, the bigger the potential loss (or gain).

Monetize refers to the process of turning a non-revenue-generating item into cash, essentially liquidating an asset or object into legal tender.

A special power of attorney is a legal document that authorizes one person, called an agent or an attorney in fact, to act on behalf of another person, known as the principal, under specific, clearly laid-out circumstances.

The Intercontinental Exchange (ICE) was founded in May 2000 in Atlanta, Georgia, to facilitate the electronic purchase and sale of energy commodities. ICE operates entirely as an electronic exchange and is linked directly to individuals and companies looking to trade in oil, natural gas, jet fuel, emissions, electric power, commodity derivatives, and futures.

Noncallable security is a financial security that cannot be redeemed early by the issuer except with the payment of a penalty. The issuer of a noncallable bond subjects itself to interest rate risk because, at issuance, it locks in the interest rate it will pay until the security matures. If interest rates decline, the issuer must continue paying the higher rate until the security matures.

A cash budget is an estimation of the cash flows for a business over a specific period of time. This budget is used to assess whether the entity has sufficient cash to operate.