Month: August 2020

The term risk-averse describes the investor who chooses the preservation of capital over the potential for a higher-than-average return.

Vladimir Ilyich Lenin was the architect of Russia’s 1917 Bolshevik revolution and the first leader of what became the Union of Soviet Socialist Republics (USSR). Through violent means he imposed a system of Marxist socialism called Communism on the former empire that attempted a redistribution of wealth intended to abolish the aristocracy and create a more equitable society for the masses.

A posterior probability, in Bayesian statistics, is the revised or updated probability of an event occurring after taking into consideration new information. The posterior probability is calculated by updating the prior probability using Bayes’ theorem. In statistical terms, the posterior probability is the probability of event A occurring given that event B has occurred.

Bank reserves are the cash minimums that must be kept on hand by financial institutions in order to meet central bank requirements. The bank cannot lend the money but must keep it in the vault, on-site or at the central bank, in order to meet any large and unexpected demand for withdrawals.

A FICO score is a type of credit score created by the Fair Isaac Corporation. Lenders use borrowers’ FICO scores along with other details on borrowers’ credit reports to assess credit risk and determine whether to extend credit. FICO scores take into account various factors in five areas to determine creditworthiness: payment history, current level of indebtedness, types of credit used, length of credit history, and new credit accounts.

Other Real Estate Owned (OREO) is a bank accounting term that refers to real estate owned assets as non-earning assets. Just as excess intake of Oreo cookies may indicate poor health in humans, the presence of a large quantity of OREO assets on a bank balance sheet may raise concerns about the overall health of the institution.

Whole life insurance provides coverage for the life of the insured. In addition to providing a death benefit, whole life also contains a savings component where cash value may accumulate. These policies are also known as permanent or traditional life insurance.

A wild card play, usually involves a Treasury bond (T-Bond) futures contract, is where the seller of the contract has the right to give notice of intent to deliver after the closing price of that contract has been set, even though the contract is no longer trading.

The Fourth World is a term used to describe the most underdeveloped, poverty-stricken, and marginalized regions of the world.

A wild card play, usually involves a Treasury bond (T-Bond) futures contract, is where the seller of the contract has the right to give notice of intent to deliver after the closing price of that contract has been set, even though the contract is no longer trading.