What is Home Bias? Home bias, which might more appropriately be termed home country bias, refers to the tendency of equity investors to favor investing in domestic stocks over investing in the stocks of foreign companies. The overwhelming majority of investors exhibit a high degree of home bias, which can be seen in the high…
What is Home Equity? Home equity is the value of a homeowner’s unencumbered ownership interest in the property that is their home. Another way of expressing home equity is to say that it’s the portion of your home’s market value that is free and clear of your mortgage loan obligation. Home equity is…
What is Home Inspection? A home inspection refers to a non-invasive assessment of a property’s current conditions – often before buying it. Home inspections are typically performed by a professional home inspector who looks for malfunctions, any needed repairs, and other issues that are required to be fixed. Generally, a home inspector looks at various…
What is Mutually Exclusive? Mutually exclusive is used to describe when two or more respective outcomes cannot occur simultaneously. If one of the results is chosen, all the other possible outcomes cannot be true at the same time. The most basic and commonly used example is a coin toss. With every toss of a coin,…
What is a Defined-Benefit Plan? A defined-benefit plan is an employer-promised specified/pre-determined pension payment plan that can be received in a lump sum, periodically, or both. The payment plan is “defined” in advance and based on the employee’s earnings history, tenure, and age – not solely on the individual investment returns. For most…
What are Earnings? Earnings refer to the income that an individual or organization gains during a certain period. They can be found on a company’s income statement and are used to measure the profitability of that company. Higher recurring earnings usually indicate better financial performance and can positively impact stock prices. However, the…
What is a Shareholders’ Agreement? A shareholders’ agreement is an arrangement among the shareholders of a company. It contains provisions regarding the operation of the company and the relationship between its shareholders. A shareholders’ agreement is also known as a stockholders’ agreement. It protects both the corporate entity and the shareholders’ investment in that entity….
What is Renewable Energy? Renewable energy is the energy that is extracted by renewable resources – such as sunlight, wind, waves, heat, etc. In contrast, non-renewable energy would be sources such as coal, nuclear, oil, and natural gas, as they are available in limited supplies and take a long time to be replenished. Main Types…
What are Infrastructure Investments? Infrastructure investments are a form of “real assets,” which contain physical assets we see in everyday life like bridges, roads, highways, sewage systems, or energy. Such a type of asset is quite crucial in a country’s development. Often, investors invest in infrastructure, as it is non-cyclical, and it offers stable and…
What is the Equation of Exchange? The equation of exchange is a mathematical equation for the quantity theory of money in economies, which identifies the relationship among the factors of: Money Supply Velocity of Money Price Level Expenditure Level The Equation of Exchange Explained The equation of exchange was derived by economist John Stuart Mill….
