What is an Endowment Fund? An endowment fund is an investment portfolio with the initial capital deriving from donations. Endowment funds are established to fund charitable and nonprofit institutions such as churches, hospitals, and universities. Donations to endowment funds are tax-deductible. The Harvard University endowment is the largest academic endowment fund in the world, with…
What is a Stock Quote? A stock quote is essentially the price of a stock or equity security that is quoted on an exchange. The stock quote provides key pieces of information to be used by traders and brokers. It includes information regarding the bid price and ask price, the last traded price, and the…
What is Erosion? Erosion is broadly defined as any negative impact that is directed towards an organization’s sales, profits, or assets. It is a risk factor that must be taken into consideration, especially when considering the company lifecycle or the economic market cycle. Understanding Erosion Erosion is not a specific term, but as mentioned before,…
What is Engel’s Law? Engel’s Law is an economic theory that describes the relationship between household income and a particular good or service expenditures. It states that as family income increases, the percentage of income spent on food decreases. The theory was introduced by Ernst Engel, a German economist and statistician, in 1857. Besides Engel’s…
What is Environmental Economics? Environmental economics is a discipline of economics that studies the economic effects of environmental policies around the world. Its main focus is on the efficient allocation of environmental and natural resources and how alternative environmental policies deal with environmental damage, such as air pollution, water quality, toxic substances, solid waste, and…
What is Adjustable Life Insurance? Adjustable life insurance is a hybrid policy between term life and whole life insurance. Term life insurance is when the death benefit is paid at the time of death if death occurs within a certain number of years; otherwise, no benefit is paid. Whole life insurance is when…
What are American Depositary Shares (ADS)? Before we take a look at American Depositary Shares, we first need to understand the concept of American Depositary Receipts (ADR). The first ADR was introduced by J.P. Morgan back in 1927 for the British retailer, Selfridges. An ADR is a financial product that trades in the US financial…
What is an Employee Buyout (EBO)? An employee buyout (EBO) is a restructuring strategy used by employers to reduce costs and avoid potential layoffs. It is generally done by offering employees voluntary severance packages. If the package is accepted, the employee must leave the organization. If the employee does not accept the severance package, their…
What is an Employee Stock Option (ESO)? An employee stock option (ESO) is a form of financial equity compensation that is offered to employees and executives by their organization. The stock options offered come in the form of regular call options and allow the employee or executive to purchase their organization’s stocks at a specified…
What is Encroachment? Encroachment is a real estate situation where a property owner violates contractual property rights by unlawfully entering, building, or extending structures onto their neighbor’s land without permission. Whether the encroachment is intentional or not, the property owner is still liable for violating the contractual property rights of their neighbor. Structural encroachment occurs…
