Month: August 2020

A balloon payment is a large payment due at the end of a balloon loan, such as a mortgage, a commercial loan, or another type of amortized loan. It is considered similar to a bullet repayment.

A value proposition refers to the value a company promises to deliver to customers should they choose to buy their product. A value proposition is also a declaration of intent or a statement that introduces a company’s brand to consumers by telling them what the company stands for, how it operates, and why it deserves their business.

A trust is a fiduciary relationship in which one party, known as a trustor, gives another party, the trustee, the right to hold title to property or assets for the benefit of a third party, the beneficiary. Trusts are established to provide legal protection for the trustor’s assets, to make sure those assets are distributed according to the wishes of the trustor, and to save time, reduce paperwork and, in some cases, avoid or reduce inheritance or estate taxes. In finance, a trust can also be a type of closed-end fund built as a public limited company. read more

A wholly owned subsidiary is a company whose common stock is 100% owned by another company, the parent company. Whereas a company can become a wholly owned subsidiary through an acquisition by the parent company or having been spun off from the parent company, a regular subsidiary is 51% to 99% owned by the parent company.

The U.S. Securities and Exchange Commission (SEC) is an independent federal government regulatory agency responsible for protecting investors, maintaining fair and orderly functioning of the securities markets, and facilitating capital formation. It was created by Congress in 1934 as the first federal regulator of the securities markets. The SEC promotes full public disclosure, protects investors against fraudulent and manipulative practices in the market, and monitors corporate takeover actions in the United States. It also approves registration statements for bookrunners among underwriting firms.1 read more

Over-selling occurs when a salesperson continues their sales pitch after the customer has already decided to purchase. This mistake can sometimes annoy the customer and could potentially cause the customer to change their mind, causing the deal to fall through.

Korean Composite Stock Price Indexes (KOSPI) refers to a series of indexes that track the overall Korean Stock Exchange and its components. Each of the KOSPI indexes are capitalization-weighted market averages.

A loan participation note is a fixed-income security that permits investors to buy portions of an outstanding loan or package of loans. LPN holders participate on a pro-rata basis in collecting interest and principal payments. Banks or other financial institutions often enter into loan participation agreements with local businesses and may offer loan participation notes as a type of short-term investment.

The Uniform Prudent Investor Act (UPIA) is a uniform statute that sets out guidelines for trustees to follow when investing trust assets. It is an update to the previous prudent man standards intended to reflect the changes that have occurred in investment practice since the late 1960s. Specifically, the Uniform Prudent Investor Act reflects a modern portfolio theory (MPT) and total return approach to the exercise of fiduciary investment discretion.

A z-test is a statistical test used to determine whether two population means are different when the variances are known and the sample size is large. The test statistic is assumed to have a normal distribution, and nuisance parameters such as standard deviation should be known in order for an accurate z-test to be performed.