Month: May 2020

Killer bees are firms or individuals that help other companies avoid takeovers, such as investment bankers, accountants, attorneys and tax specialists, by aggressively devising and implementing anti-takeover strategies. These generally make the target company less attractive or more difficult to acquire, by forcing acquirers to pay more, or by diluting the acquirer’s holdings.

Tax accounting is a structure of accounting methods focused on taxes rather than the appearance of public financial statements. Tax accounting is governed by the Internal Revenue Code, which dictates the specific rules that companies and individuals must follow when preparing their tax returns.

A waterfall concept is a life insurance plan that allows insurance holders to roll their policy over to a child or grandchild.

Gresham’s law is a monetary principle stating that bad money drives out good. It is primarily used for consideration and application in currency markets. Gresham’s law was originally based on the composition of minted coins and the value of the precious metals used in them. However, since the abandonment of metallic currency standards, the theory has been applied to the relative stability of different currencies’ value in global markets.

A Dutch auction is a public offering auction structure in which the price of the offering is set after taking in all bids to determine the highest price at which the total offering can be sold. In this type of auction, investors place a bid for the amount they are willing to buy in terms of quantity and price.

A risk premium is the return in excess of the risk-free rate of return an investment is expected to yield; an asset’s risk premium is a form of compensation for investors who tolerate the extra risk, compared to that of a risk-free asset, in a given investment. For example, high-quality corporate bonds issued by established corporations earning large profits typically have very little risk of default. Therefore, such bonds pay a lower interest rate, or yield, than bonds issued by less-established companies with uncertain profitability and relatively higher default risk.

Overnight positions refer to open trades that have not been liquidated by the end of the normal trading day, which are quite common in foreign exchange and futures markets.

Xenocurrency is a currency that circulates or trades in markets outside of its domestic borders. The name derives from the Greek prefix xeno, meaning foreign or strange.

A nonaccrual loan is a lender’s term for an unsecured loan whose payment is 90 days or more overdue. The loan is no longer generating its stated interest rate because no payment has been made by the borrower. It is, therefore, a nonperforming loan.