What Does “At Par” Mean? The term “at par” means “at face value.” Bonds, preferred stocks, or other debt securities can be traded at par or at face value, below par, or above par. Par values are normally constant, as opposed to market prices, which fluctuate with consumer demand and interest rate movements. The par…
What is a Macroeconomic Factor? A macroeconomic factor is a pattern, characteristic, or condition that emanates from, or relates to, a larger aspect of an economy rather than to a particular population. The characteristic may be a significant economic, environmental, or geopolitical event that widely influences a regional or national economy. A macroeconomic factor can…
What is the Merchant Discount Rate (MDR)? The merchant discount rate, or MDR, is the rate charged to a merchant for the payment processing of debit and credit card transactions. The service is set up by the merchant, and they must agree or commit to the rate before accepting and/or authorizing debit or credit cards…
What is Monopolistic Competition? Monopolistic competition is a type of market structure where many companies are present in an industry, and they produce similar but differentiated products. None of the companies enjoy a monopoly, and each company operates independently without regard to the actions of other companies. The market structure is a form of imperfect competition….
What are the Basel Accords? The Basel Accords refers to a set of banking supervision regulations set by the Basel Committee on Banking Supervision (BCBS). They were developed over several years between 1980 and 2011, undergoing several modifications over the years. The Basel Accords were formed with the goal of creating an international regulatory framework…
What is an Audit? An audit refers to an examination of the financial statements of a company. Audits are conducted to provide investors and other stakeholders with confidence that a company’s financial reports are accurate. Audits also provide regulators with the assurance that a company is adhering to the appropriate legal and regulatory standards. It’s…
What are Management Fees? Management fees are fees paid to professionals entrusted with managing investments on a client’s behalf. Typically determined as a percentage of the total assets under management (AUM), management fees can cover a variety of expenses, including portfolio management, advisory services, and administrative costs. Management fees are present in almost all investment…
What is the Euro Interbank Offered Rate (Euribor)? The Euro Interbank Offered Rate, or Euribor, is a benchmark interest rate that reflects the average rate at which major banks in the Eurozone lend unsecured funds to one another. It’s published daily by the European Money Markets Institute (EMMI) and plays a key role in pricing…
What is a Market Order? Market order refers to a request made by an investor to purchase or sell a security at the best possible price. Market orders are usually executed by a broker or brokerage service on behalf of their clients who want to take advantage of the best price available on the current…
What is Momentum? Momentum is the observation that financial assets trending strongly in a certain direction will continue to move in that direction. The concept of momentum is based on similar theories in physics, where an object in motion tends to stay in motion unless disrupted by an external force. In finance, momentum refers to…
