What is Expansionary Policy? Expansionary policy is a type of macroeconomic policy that is implemented to stimulate the economy and promote economic growth. Expansionary policies are used by central banks in times of economic downturns to reduce the adverse impact on the economy. Types of Expansionary Policy There are two main types of expansionary policy…
What is a Budget? A budget is an estimation of future revenues and expenses for a certain period. The budgeting process creates plans to make expenses or allocate resources. It can be made for an individual, project, business, government, or other organization. Understanding Budgets Based on the concept of limited resources, it is common for…
What is a Day Trader? A day trader is someone who actively buys and sells financial instruments, such as stocks or currencies, throughout the trading day. All positions are opened and closed within the same market session, preventing exposure to overnight risks. A day trader, meaning they avoid holding positions after the market closes, minimizes…
What is an ASCOT? The term ASCOT is short for Asset Swapped Convertible Option Transaction. It is an American-style call option to buy back a convertible bond. It falls under the category of financial products called structured products, which are a combination of two or more financial products combined to meet the needs of the…
What is External Debt? External debt refers to the loans raised through foreign lenders, such as foreign commercial banks, foreign governments, and international financial institutions. In the case of external debt, all repayments must be made in the currency in which the debt was issued. On the other hand, internal debt refers to the money…
What is an Express Warranty? An express warranty is a guarantee by a seller to provide replacement or repairs for a faulty product or service within a specified time period after it was purchased. Such warranties are printed on a product’s packaging or are offered as an option to the buyer. Buyers rely on the…
What is an Extraordinary General Meeting (EGM)? An Extraordinary General Meeting (EGM) is a meeting held by a company or an organization to deliberate upon matters that require the urgent attention of senior executives, the board of directors, and all shareholders and cannot be deferred until the next scheduled annual general meeting. The EGM is…
What is an Extraordinary Item? An extraordinary item is an accounting term that refers to an abnormal gain or loss that is not generated from the ordinary business operations of a company, is infrequent in nature, and is unlikely to recur in the foreseeable future. Extraordinary items are disclosed separately in the financial statements of…
What is a Deferment Period? A deferment period is a length of time where the borrower does not need to pay interest or repay the remaining amount on a loan. Before the loan is issued, a contractual agreement is decided between the lender and the borrower regarding the length of the deferment period. The diagram…
