What is Standard Error? Standard error is a mathematical tool used in statistics to measure variability. It enables one to arrive at an estimation of what the standard deviation of a given sample is. It is commonly known by its abbreviated form – SE. Standard error is used to estimate the efficiency, accuracy, and consistency…
What is the Eclectic Paradigm? Based on the internalization theory of British economist J.H Dunning, the eclectic paradigm is an economic and business method for analyzing the attractiveness of making a foreign direct investment (FDI). The eclectic paradigm model follows the OLI framework. The framework follows three tiers – ownership, location, and internalization. The eclectic…
What is an Earnings Announcement? An earnings announcement is the public statement a company offers to reveal its profitability for a certain period of time. Most often, an earnings announcement details profit for a quarter or a year. Well before an earnings announcement is made, equity analysts study past announcements and other metrics to develop…
What is an Evergreen Loan? In the financial world, an evergreen loan is, as its name suggests, one that doesn’t go away. Essentially, an evergreen loan is a type of revolving loan. The borrower makes payments on the loan balance, based on the loan’s terms. As the principal balance on the loan is paid off,…
What is a Master of Business Administration (MBA)? An MBA, also known as a Master of Business Administration, is a post-secondary degree that provides in-depth knowledge and training from the perspective of business management. The graduate degree can involve a general focus or specialize in areas, such as accounting, finance, marketing, and more. An In-depth…
What is Business Process Outsourcing (BPO)? Business process outsourcing (BPO) is a type of outsourcing wherein a third-party service provider is employed to carry out one or more business functions in a company. The third party is responsible for carrying out all operations related to the business function. BPO is also known as subcontracting or…
What is Discounted Cash Flow (DCF)? Discounted cash flow (DCF) is an analysis method used to value investments by discounting the estimated future cash flows. DCF analysis can be applied to value a stock, company, project, and many other assets or activities, and thus is widely used in both the investment industry and corporate finance…
What is a Discount Broker? A discount broker is simply a brokerage firm that offers discount trading rates to investors. The brokers work at a discounted commission rate to accommodate their clients. Discount brokers – either individuals or firms – complete buy and sell orders for clients. They do not, however, provide specific trading advice…
What is Disguised Unemployment? Disguised unemployment, or hidden unemployment, is an economic term used to refer to a portion of the labor force involved in redundant work with very minimal to no productivity. Hidden unemployment does not impact the aggregate output of an economy. An example would be a small family farm with ten employees…
What is a Diversified Company? A diversified company is a type of company that oversees several lines of business – most of them being unrelated to each other. Creating a diversified company is beneficial, as it provides several different product lines and customers, resulting in the company being shielded from any economic downswings or business…
