What is Layaway? Layaway is a purchasing arrangement where a retailer reserves and stores an item for a customer who has a predetermined period to pay for the item in full. The customer typically enters into an agreement to pay the full price for the item within an agreed period of time; failure to do…
What is the American Dream? The “American Dream” is a sort of ethos or set of beliefs that drive many U.S. citizens as they work toward creating a life for themselves. This set of ideals – which includes notions of individual rights, freedom, democracy, and equality – is arguably centered around the belief that each…
What is a Service Charge? A service charge, also called a service fee, refers to a fee collected to pay for services that relate to a product or service that is being purchased. In other words, a service charge is an additional charge for the service provided with the purchase of a product or service….
What is an Employee Background Check? An employee background check refers to a review of a person’s past record to compile their criminal, financial, and commercial records. Background checks are common when organizations are hiring employees for a position of trust and want the assurance that they are hiring the right people for the job….
What is a Bank Stress Test? A bank stress test is a simulation or analysis conducted to analyze how a bank will be impacted under adverse market conditions – for example, a financial market crash or recession. The analysis is conducted by stress-testing a bank’s balance sheet under hypothetical market conditions and economic variables, i.e.,…
What is a Royalty Trust? A royalty trust is a type of corporation that usually operates in the energy or resource mining industries and that has ownership rights to mineral deposits, wells, or reservoirs. The main purpose of royalty trusts is to distribute the generated resource sales income to shareholders. If the major…
What are Carbon Credits? Carbon credits, often referred to as carbon allowances, can be thought of as a unit of measurement; however, they have a “tradeable” component. Carbon credits are not the same as carbon offsets. Carbon credits only exist in jurisdictions that are governed by what’s called a “cap and trade” system (such as…
What is For Sale by Owner (FSBO)? For Sale By Owner (FSBO) is a method of selling property that is conducted directly by the seller without using a listing agent. Most owners opt for FSBO in selling their properties because it saves the commission that would’ve been paid to a listing agent or broker, which…
What is a Principal-Agent Problem? A principal-agent problem arises when there is a conflict of interest between the agent and the principal, which typically occurs when the agent acts solely in his/her own interests. In a principal-agent relationship, the principal is the party that legally appoints the agent to make decisions and take actions on…
What is Little’s Law? Little’s Law is a theorem that determines the average number of items in a stationary queuing system, based on the average waiting time of an item within a system and the average number of items arriving at the system per unit of time. The law provides a simple and intuitive approach…
