What is Financial Literacy? Financial literacy is the cognitive understanding of financial components and skills such as budgeting, investing, borrowing, taxation, and personal financial management. The absence of such skills is referred to as being financially illiterate. According to the Financial Industry Regulatory Authority (FINRA), about 66% of the American population is considered financially illiterate. Being…
What is the Code of Ethics? Code of ethics refers to the official standards of conduct or guiding principles that a professional is expected to follow in an individual or combined capacity. A code of ethics can exist at various levels and across different functions. There is a corporate code of ethics (CCE), as well…
The role of finance teams is expanding from budgeting and forecasting to include decision support, strategy, and risk management in an AI-powered environment. But as the role grows, so does the need to address skills gaps across teams. Organizations that proactively invest in finance team training are better positioned to close those gaps and improve…
What is a High-Yield Investment Program (HYIP)? A high-yield investment program (HYIP) is an unregistered investment vehicle that promises significantly higher returns with little or no risk. They are typically run by unlicensed individuals and are scams, taking money from new investors to pay existing investors. HYIP can also be referred to as a prime…
What is a High-Yield Bond Spread? A high-yield bond spread, also known as a credit spread, is the difference in yields between multiple high-yield bonds, expressed in basis points or percentage points. A high-yield bond is a term that also refers to a junk bond. For example, if bond A and bond B offer a…
What is a Non-Operating Expense? A non-operating expense is a business expense that is not related to a company’s core business operations. The most common items that fall under the category include interest expense and loss on the sale of assets. Other types of non-operating expenses include asset write-downs and one-time restructuring or legal expenses…
What are Non-Marginable Securities? Non-marginable securities cannot be purchased on margin at a particular investment brokerage or financial institution. If purchasing the securities, investors must fund their full order with cash. Financial institutions will almost always maintain an internal list of non-marginable securities, which retail investors can find online or by contacting their broker. The…
What is a Non-Marketable Security? Non-marketable security refers to a security that is not traded on any major securities exchange. As a result, it is difficult to buy and sell such securities. Non-marketable securities are mainly traded as part of a private transaction. Attributes of a Non-Marketable Security 1. Highly Illiquid One of the most…
What is a Short Call? A short call is an options strategy where an investor writes (sells) a call option on a stock because he expects that stock’s price to decrease in the future. Understanding the Short Call Strategy The short call strategy creates a contract between the option writer (seller) and the option buyer…
What is Heavy Industry? Heavy industry refers to an industry that produces large industrial products, which requires large and heavy machinery and facilities and involves complex production processes. Heavy industry is dominated by large companies, as it is very capital intensive and requires significant investment in heavy equipment, massive buildings, large machine tools, and extensive…
