What is Accepting Risk? Accepting risk is a concept where an individual or business identifies risk and renders it acceptable, thereby making no effort to reduce or mitigate it. The potential loss from the identified and accepted risk is considered bearable. The concept of risk acceptance is commonly applicable in investment fields and…
What is Organic Growth? Organic growth is the process by which a company expands on its own capacity. In an organic growth strategy, a business utilizes all of its resources – without the need to borrow – to expand its operations and grow the company. Organic growth is typically marked by an increase in output,…
What is Average Life? Average life is the length of time that each unit of unpaid principal is expected to remain outstanding. The average life of mortgages, bonds, and loans refers to the estimated time to pay principal through amortization or sinking funds. Some issued assets such as bonds include purchase funds that enable the…
What is an Account Statement? An account statement is a periodic report that is sent to a customer. It contains a summary of account activity within a defined period – usually a month, quarter, year, or other custom periods. Examples of account statements may include credit card statements, brokerage account statements, and checking account statements….
What is an Account Balance? An account balance is the amount of money present in a financial repository during the current accounting period. It is the net difference between the credits and debits posted in any given accounting cycle, added to the balance carried forward from the previous month. An account balance may…
What is Backward Integration? Backward integration is a process in which a company acquires or merges with other businesses that supply raw materials needed in the production of its finished product. Businesses pursue backward integration with the expectation that the process will result in cost savings, increased revenues, and improved efficiency in the production process….
What is an Account Number? An account number is a unique code composed of numbers, letters, or other characters and is assigned to the account owner for ease of reference in a financial institution’s accounting records. The most common type of account number is a checking account number, which identifies the owner and grants access,…
What is NYSE Arca? NYSE Arca is an electronic securities exchange where exchange-traded products and securities are traded. The exchange was previously known as Archipelago Exchange (ArcaEX) until 2006 when it was acquired by the New York Stock Exchange. The exchange operates as a subsidiary of the NYSE group, and it is based in Chicago,…
What is the NYSE Composite Index? The NYSE Composite Index is an index that tracks stocks traded on the New York Stock Exchange. It also measures real estate investment trusts, American depository receipts, and foreign listings, and it excludes derivatives, ETFs, and closed-end funds. The index covers over 2,000 stocks, out of which 1,600 stocks…
What is Nonfeasance? Nonfeasance is the intentional inaction to perform an act required of one’s position or office. The inaction causes harm to a person or damage to property or goods. A person who is found to have willfully failed to perform their duty as required of their position, or by law, can be found…
