What is SEC Yield? The SEC yield, also referred to as the standardized yield, is a computation that allows comparison of bond funds that fall under the jurisdiction of the Securities and Exchange Commission (SEC). It assumes that an investor holds each bond in a portfolio to maturity, the SEC yield is used to estimate…
What is a Shutdown Point? A shutdown point is an operating level where a business does not benefit in continuing production operations in the short run when revenue from selling their product is unable to cover variable costs of production. The shutdown point represents a point where a firm will incur higher and increasing losses…
What is an Advance Rate? An advance rate is a percentage of the collateral’s value, reflecting the maximum loan amount that a lender is willing to extend to a borrower. The advance rate is a lending risk assessment ratio used to determine the maximum loan value a borrower can secure, given the pledged collateral value….
What is a Bill-and-Hold Arrangement? A bill-and-hold arrangement is a revenue recognition method in which revenue is recorded before the delivery of goods. It involves the recognition of revenue prior to the shipment of goods to the buyer. As such, a bill-and-hold arrangement is considered a controversial revenue recognition method due to the ease of manipulating…
What is the Jones Act? The Jones Act is a U.S. federal law aimed at revitalizing the U.S. shipping industry after World War I. It regulates maritime commerce in the country and is still in effect today. It is also called Section 27 of the Merchant Marine Act of 1920. Explaining the Jones Act According…
What are Retired Shares? Retired shares are shares that are repurchased and canceled by a company. They don’t possess any financial value and are void of ownership in the company. Understanding Retired Shares Companies issue shares to raise money and expand business operations. Subsequently, companies can choose to buy back shares from the market for…
What is the National Market System (NMS)? The National Market System (NMS) is a regulatory mechanism that governs the operations of securities trading in the United States. It covers all entities and facilities, both public and private, that are involved in the buying and selling of stocks. It includes stock exchanges, trade clearinghouses, and market…
What is the Average Daily Balance Method? The average daily balance method is a method for calculating the amount of interest to be charged to a borrower on an outstanding loan. It is an accounting method that is most commonly used by credit card issuers to calculate financing charges applied to any outstanding balance you…
What is the Average Daily Trading Volume (ADTV)? Average Daily Trading Volume (ADTV) is a technical indicator used by investors that refers to the number of shares of a particular stock that, on average, change hands during a single trading day. The average daily trading volume can be calculated for any span of time –…
What is the Brazilian Real (BRL)? The Brazilian Real is the official currency of the Federative Republic of Brazil and is represented by the ISO code BRL. Brazil is the biggest country in South America and is one of the BRIC (Brazil, Russia, India, China) nations – a group of countries that market analysts view…
