What is a Floating Exchange Rate? A floating exchange rate is an exchange rate system where a country’s currency price is determined by the foreign exchange market, depending on the relative supply and demand of other currencies. A floating exchange rate is not restrained by trade limits or government controls, unlike a fixed exchange rate….
What is a Floating Rate Fund? A floating rate fund is a type of mutual fund that invests in securities paying fluctuating interest rates. Floating rate funds primarily invest in debt instruments like loans and bonds. The fluctuation in rates of interest generates worthy returns for investors. Each financial instrument that the floating rate fund…
What is a Floor Trader (FT)? A floor trader (FT) is an individual who conducts transactions on the exchange floor for his/her own account. Usually, a floor trader trades in derivatives or securities on the trading floor and seeks to make profits from price swings over the short term. A floor trader can be referred…
What is a Floating Charge? A floating charge (or floating lien) gives a lender a broad legal interest over a pool of assets owned by a business and which serve as collateral to secure debt. It matches operating debt to assets that change, often current assets. Unlike a fixed charge, a floating charge does not…
What is the Four Percent Rule? The Four Percent Rule is known as the percentage amount a retiree should withdraw from their retirement account per year. It is meant to be a benchmark that provides individuals with a steady set stream of income while allowing the invested balance to continue to grow throughout retirement. Understanding…
Who is Kenneth Arrow? Kenneth Arrow was an economist who won the Nobel Memorial Prize in Economic Sciences in 1972. He was known for his contribution to equilibrium analysis and welfare economics. He also explored social choice theory, endogenous growth theory, collective decision-making, the economics of information, and economics of racial discrimination. …
What are Hard Skills? Hard skills are technical or learned abilities that are developed and refined through practice and repetition. Hard skills are crucial for the job, as they increase productivity, efficiency, and ultimately can complete the job in a satisfactory manner. However, it is important to understand that hard skills do not ensure success,…
What is a Forward Market? A forward market is a marketplace that offers financial instruments that are priced in advance for future delivery. It tends to be referenced as the foreign exchange market, but it can also apply to securities, commodities, and interest rates. How a Forward Market Works Forward markets create forward contracts. The…
What is a Fractional Share? A fractional share is when a full single share is split. For example, fractional shares occur during stock splits, dividend reinvestment plans, or various other actions that may result in a partial share of ownership. Generally speaking, the stock market does not offer partial shares, and while some do, it…
What is Franchise Tax? A franchise tax, also known as a privilege tax, is a tax paid by certain companies that wish to conduct business in specific states. It gives businesses the ability to be chartered and to operate within the said state. Nonetheless, a franchise tax is different from a tax given to franchises,…
