What is Overcollateralization? Overcollateralization is used to define the situation where an asset (or assets) value used as collateral on a loan exceeds the loan value. It is commonly used by borrowers to reduce credit risk for the creditor and enhance the loan’s credit rating. The Collateralization Ratio The collateralization ratio is outlined below: A…
What is a Grace Period? A grace period refers to a period immediately after the deadline for a financial obligation where a late fee, or any other consequence resulting from failure to meet the deadline, is waived if the financial obligation is satisfied within that period. A grace period is commonly included in mortgage loans…
What is the Icahn Lift? The “Icahn lift” refers to the effect on the share price of a company that American businessman Carl Icahn buys into. Due to Mr. Icahn’s prominent reputation of being an activist investor, when he accumulates shares in a company, the market expectation is that he will act as an activist…
What is Exchange Control? Exchange controls are government-imposed controls and restrictions on private transactions conducted in foreign currency. The government’s major aim of exchange control is to manage or prevent an adverse balance of payments position on national accounts. It involves ordering all or part of foreign exchange received by a country into a common…
What is a Hiring Freeze? A hiring freeze is a scenario where a company stops hiring new employees or creating new positions to be filled. It is common when a company experiences financial distress and needs to begin cost-cutting to reduce operating costs. Hiring freezes are the preferred option by companies to avoid laying off…
What is a Social Enterprise? A social enterprise refers to a business with certain social objectives as its primary goal while using a commercial structure to run the organization. Social enterprises usually attempt to make a strong societal impact while maximizing their profit as well, which is then used to fund their social programs. Understanding…
Who is a Social Entrepreneur? A social entrepreneur refers to an individual who pursues novel ideas with the potential to solve or alleviate certain community-oriented problems. Social entrepreneurs often are willing to take the risks associated with their venture to help address issues, enabling positive change in society. In order to understand the term social…
What is Social Economics? Social economics, also known as socioeconomics, is the social science and branch of economics that studies the interrelation between economic activity and social behavior. Social economics analyzes how the economy is affected by social norms, ethics, sentiments, and other factors. Understanding Social Economics Social economics attempts to explain how social factors…
What is a Social Audit? In business, a social audit refers to a formal evaluation (or audit) of a company’s procedures and endeavors with regard to corporate social responsibility (CSR) and societal impact. Many companies formulate goals and objectives with regard to CSR initiatives, and the social audit is used to review to what extent…
What is the Evening Star Pattern? The Evening Star pattern is a type of reversal pattern of asset price charts. It usually appears at the top of an uptrend and is a bearish signal. Traders do not commonly see an Evening Star pattern, but it is a reliable indicator for technical analysis. Understanding Evening Star…
