What is Hedonic Pricing? Hedonic pricing – or the hedonic pricing method – is used in the determination of the economic value for an ecosystem service or external factor that may influence the market price of a good or asset. The method is commonly applied in the valuation of properties, such as houses, and accounts…
What is Inferential Statistics? Inferential statistics enables one to make descriptions of data and draw inferences and conclusions from the respective data. Through inferential statistics, an individual can conclude what a population may think or how it’s been affected by taking sample data. Inferential statistics is mainly used to derive estimates about a large group…
What is Key Person Insurance? Key person insurance is life insurance and/ or illness insurance on a key employee of a business. A key person is a business partner/owner or employee whose skills and expertise are extremely valued such that the business would suffer substantial financial losses should that person fall sick to an illness…
What is Factorial? The factorial (denoted or represented as n!) for a positive number or integer (which is denoted by n) is the product of all the positive numbers preceding or equivalent to n (the positive integer). The factorial function can be found in various areas of mathematics, including algebra, mathematical analysis, and combinatorics. Starting…
What is a Fixed Interest Rate? A fixed interest rate refers to a static interest rate that is charged on a liability – such as a mortgage, credit card, loan, or corporate bond. A fixed interest rate may apply to a liability’s entire term or over a partial period of its term. Understanding Fixed Interest…
What is Foreign Exchange Risk? Foreign exchange risk, also known as exchange rate risk, is the risk of financial impact due to exchange rate fluctuations. In simpler terms, foreign exchange risk is the risk that a business’ financial performance or financial position will be impacted by changes in the exchange rates between currencies. Understanding Foreign…
What are “Excess Returns”? The term “excess returns” is used to denote how a fund has performed compared to a benchmark. Excess return, which is also known as alpha, can provide an indication of whether a respective fund, stock, or security has overperformed or underperformed, and it is computed with the Capital Asset Pricing Model…
What is Fitch Ratings? Fitch Ratings is an award-winning international credit rating agency. It ranks among the “Big Three credit rating agencies,” with the other two being Moody’s and Standard & Poor’s. Fitch Ratings provides forward-looking credit opinions (“ratings”) on investments, which reflects its likelihood of default. The credit ratings provided by Fitch are utilized…
What is the Electronic Fund Transfer Act (EFTA)? The Electronic Fund Transfer Act (EFTA), originally enacted in 1978, is a United States consumer protection law that lays out the rights, responsibilities, and liabilities of parties involved in electronic money transfers. The original legislation has undergone several amendments, primarily to keep up with changing technology. The…
What is the Employment-to-Population Ratio? The employment-to-population ratio is a macroeconomic employment metric that shows the number of people employed as a percentage of the total working-age population. It is sometimes referenced as simply the employment-population ratio. The employment-to-population ratio can be applied to any size area or region but is most commonly calculated for…
