What is an Unsecured Note? An unsecured note is basically a debt instrument or a loan that is not secured (covered by collateral) by the assets of the issuer of the note. An unsecured note is typically a corporate debt obligation. In the spectrum of finance and investment, a note is primarily a legal financial…
What is Electronic Money? Electronic money refers to the currency electronically stored on electronic systems and digital databases, as opposed to physical paper and coin money, and is used to make it easier for users to transact electronically. The value of the electronic currency is backed by fiat currency. What is Fiat Currency (or Fiat…
What is the Economic Recovery Tax Act of 1981 (ERTA)? The Economic Recovery Tax Act of 1981 (ERTA) was a federal tax law passed on August 13, 1981 by the 97th U.S. Congress as a big move to encourage economic growth by providing crucial tax cuts. The legislation was also known as the “Kemp-Roth Tax…
What is a Flow-Through Entity? A flow-through entity – also known as a “pass-through entity” or “fiscally-transparent entity” – is a legal business entity where its profits flow directly to the investors/owners, and only the investors or owners are taxed on the income. The structure helps avoid double taxation, which is when an income from…
What is a Keynesian Put? Keynesian put is the anticipation that the government will stimulate the economy through fiscal policy. The government is expected to spend money to continue to grow the economy. In 2016, the term was invented by analysts at the Bank of America Merrill Lynch as a reference to both the Keynesian…
What is a Voluntary Export Restraint (VER)? A voluntary export restraint (VER) is a self-imposed trade restriction where the government of a country limits the amount of a certain good or category of goods that are allowed to be exported to a different country. The restraint could be a preset limit, a reduction in the…
What is a Sampling Distribution? A sampling distribution refers to a probability distribution of a statistic that comes from choosing random samples of a given population. Also known as a finite-sample distribution, it represents the distribution of frequencies on how spread apart various outcomes will be for a specific population. The sampling distribution depends on…
What is a European Option? A European option is a type of options contract where the buyer or seller is able to execute the option only at its expiration date. Although it includes “European” in its name, the option is not related to any geographic location. Instead, different kinds of options contracts mean that there…
What is a Safe Haven? A safe haven is a term that refers to an investment that is anticipated to maintain or increase in value during times of economic downturn. Such investments are believed to be a safe option for investors, as they are not correlated to the economy – meaning that a financial crisis…
