Author: Gold Oil Drugs

Bank capital is the difference between a bank’s assets and its liabilities, and it represents the net worth of the bank or its equity value to investors. The asset portion of a bank’s capital includes cash, government securities, and interest-earning loans (e.g., mortgages, letters of credit, and inter-bank loans). The liabilities section of a bank’s capital includes loan-loss reserves and any debt it owes. A bank’s capital can be thought of as the margin to which creditors are covered if the bank would liquidate its assets. read more

A pyramid scheme is an illegal investment scam based on a hierarchical setup of network marketing. The most famous kind of pyramid scheme is, perhaps, the Ponzi scheme.

Defeasance is a provision in a contract that voids a bond or loan on a balance sheet when the borrower sets aside cash or bonds sufficient enough to service the debt. The borrower sets aside cash to pay off the bonds; therefore, the outstanding debt and cash offset each other on the balance sheet and do not need to be recorded.

A nonresident alien is a noncitizen who has not passed or is exempt from the Green Card or substantial presence tests.1 Nonresident aliens must pay taxes on income earned in the U.S. Typical examples of nonresident aliens are teachers, people seeking medical treatment, and students.2

Certified Management Accountant (CMA) is an accounting designation that signifies expertise in financial accounting and strategic management. This certification builds on financial accounting proficiency by adding management skills that aid in making strategic business decisions based on financial data.

Up volume generally refers to an increase in the volume of shares traded in either a market or security that leads to an increase in value. Overall, volume can be influenced by a number of factors and may have various affects.

The Fed balance sheet is a breakdown of the assets and liabilities held by the Federal Reserve. In the United States, the Federal Reserve is the central bank founded by Congress in 1913 to ensure the stability and safety of the nation’s financial and monetary structures. The Fed balance sheet is a report that essentially outlines the factors that affect both the supply and the absorption of Federal Reserve funds. The Fed balance sheet report reveals the means the Fed uses to inject cash into the economy. The report is formally known as the Factors Affecting Reserve Balances. read more

An exempt-interest dividend is a distribution from a mutual fund that is not subject to federal income tax. Exempt-interest dividends are often associated with mutual funds that invest in municipal bonds. While exempt-interest dividends are not subject to federal income tax, they may still be subject to state income tax or the Alternative Minimum Tax (AMT). The dividend income must be reported on the income tax return, and it is reported by mutual funds on Form 1099-INT.

Wire rooms are facilities used by financial institutions to process fund transfers and order requests on behalf of clients. Typical tasks performed by wire room staff include receiving trade orders from brokers and other registered representatives, transmitting those orders to the exchange floor or the firm’s trading department, and relaying notices of executed trade orders back to the brokers involved.

World insurance is a commercial liability policy with extended global coverage. World insurance provides coverage in the event the policyholder is sued anywhere in the world. In general, however, commercial liability policies have a geographic limit for coverage. It is common for companies with global operations or who have contracts with international partners/associates to purchase this type of world coverage.