What is a Key Employee? A key employee in an organization is an individual with ownership in the organization and/or who has an influence on decisions made in the organization. Key employees are typically well-remunerated and are considered to be stakeholders in the running of an organization. Other words or phrases for key employees are…
What is Hit the Bid? The phrase “hit the bid” is a colloquial expression commonly used in investments to describe a scenario where a trader sells a financial instrument at the bid price quoted by a potential buyer (also a trader). When the scenario happens, it typically means accepting an offer that is considered fair…
What are Hard Assets? Hard assets are physical or tangible assets that hold value and are normally held for the long term. In addition to tangibility, they are also visible and are considered an investable asset because of their intrinsic value. Companies and individuals can purchase and own hard assets for revenue growth and increase…
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…
