What is a Statute of Limitations? A statute of limitations refers to a law that limits the maximum time frame during which legal proceedings – civil or criminal – can be initiated after an alleged offense. Some statutes are specified by legislation, while others are a matter of common law history. Once the time period…
What is Statistical Significance? Statistical significance is the claim that the results or observations from an experiment are due to an underlying cause, rather than chance. Researchers conduct hypothesis testing to determine statistical significance. Financial analysts often analyze their models to determine if a change in actions will make a statistically significant difference. For example,…
What is a Stipend? A stipend is a set sum of money that is paid to an individual to help defray expenses. Common recipients of stipends include students, interns, researchers, and clergy. Stipends are distinct from salaries or wages, as they are not directly tied to work performed and are customarily given to someone performing…
What is a Depository? A Depository refers to a place or entity that holds financial securities in a dematerialized form. A bank, organization, or any institution holding and assisting in security trading is referred to as a depository. Depository accounts hold securities in the same way that bank accounts hold funds. A depository can also…
What are Dependent Care Benefits? Dependent care benefits are the benefits offered by employers to employees for taking care of dependents, such as disabled members of the family and young children. Dependent care benefits include dependent care tax credits, paid leave for the care of dependents, and flexible spending accounts for dependent care. …
What is a Dependent? Dependent is a term used for a person who relies on a tax filer for financial support and enables the tax filer to claim dependent care tax benefits on the annual tax return. The Internal Revenue Code (IRC) determines the eligibility criteria for a person to be considered a dependent of…
What is a Deposit? Deposit is a term used to denote the money kept or held in any bank account, especially to accumulate interest. The fund used as a security to get the goods delivered can also be called a deposit. Any transaction processed to transfer money to an entity for safeguarding can be referred…
What is Hotelling’s Theory? Hotelling’s theory proposes that the only time holders of nonrenewable resources should produce their commodities is when the revenue generated from them can exceed that from other financial instruments. Also known as Hotelling’s rule, the theory makes several assumptions. First, that markets are efficient. Second, that owners of the respective resources…
What is a Hostile Takeover Bid? A hostile takeover bid is the acquisition of a target company, but one that takes place against the board of directors’ consent. Ideally, an entity interested in a publicly-traded company should seek approval from the respective company’s board of directors. But if the board rejects the acquisition…
What is Homemade Leverage? Homemade leverage is a financial concept that holds that as long as investors borrow on the same terms as the company, they can artificially duplicate the effects of corporate leverage. Investors use the idea to recreate a leverage scenario using a portion of their investments. The argument works under…
