What is Delivered-at-Place (DAP)? The term Delivered-at-Place (DAP) is used in international trade to describe a situation wherein the seller of goods bears the responsibility and cost of transporting them to a place specified in the contract. The seller will also be liable to pay for any potential losses arising in transit. In such deals,…
What is Delivered Duty Paid (DDP)? The term Delivered Duty Paid (DDP) is used in international trade to describe a deal wherein the seller of goods agrees to bear all costs till the goods reach the destination mutually agreed upon in the contract. They include the cost of all transportation, any loss due to damage…
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…
