What is the Sovereign Fund of Brazil? The Sovereign Fund of Brazil is the country’s government-controlled financial vehicle with different revenue sources, objectives, and investment approaches. It was established to insulate the country from short-term political pressure. Some of the Sovereign Fund of Brazil’s objectives were to fund projects of strategic interest to the country…
What is Sovereign Risk? Sovereign risk is a country’s probability of missing a debt obligation in its present economic status. Sovereign risks come in many forms and pose a considerable challenge to the banking system and a country’s financial stability in general. Strong central banks will impose foreign exchange regulations to reduce the value of…
What is a Sovereign Bond? A sovereign bond is a national government-issued debt security to finance spending programs, cover interests due, or repay old debts. As with other types of bonds, a sovereign bond promises to pay the buyer periodic interest and repay the face value on the maturity date. Its rating is associated with…
What is a Special Needs Trust? A special needs trust is a fiduciary relationship in which persons with developmental disabilities hold legal rights to the benefits of the property contained therein. Individuals planning to convey long-term financial resources to persons with special needs without jeopardizing their eligibility for public benefits resort to using special needs…
What is a Special Employer? A special employer is an employer who borrows an employee from the original employer and to whom the new employee owes a duty. When one employer loans another employer to provide specific services and expertise on loan, a special employment relationship changes the two employers’ roles and responsibilities. The borrowing…
What is a Special Item? A special item is an unusual transaction or event that management discloses separately that is not expected to recur on a regular basis. Special items occur during normal business cycles and are typically reported separately based on management’s judgment. They are used to differentiate normal business transactions from one-time transactions…
What is Shareholders’ Equity? Shareholders’ equity refers to the owners’ claim on the assets of a company after debts have been settled. It is also known as share capital, and it has two components. The first is the money invested in the company through common or preferred shares and other investments made after the initial…
What is a Sovereign Bond Yield? A sovereign bond yield is an interest rate that a national government pays to service its outstanding bonds. As with corporate bonds, a sovereign bond yield depends on the inherent risk for the bondholders. However, the risk involves political risks, economic uncertainties, and exchange rates if the issued debt…
What is a Sophisticated Investor? A sophisticated investor is a term used to refer to an individual or a class of individuals with vast knowledge and experience in investment and business matters, alongside high net worth that allows them to go for high-risk investment opportunities. Under financial regulation laws, a sophisticated investor has a special…
