What is Base Pay? Base pay is the minimum salary paid to an employee. It can also be interpreted as a fixed amount paid to an employee for a certain job. Base pay is only one component of an employee’s total compensation and does not include overtime pay, bonuses, benefits, or insurance. The rate can…
What is Full Time Equivalent (FTE)? Full Time Equivalent (FTE) refers to the unit of measurement equivalent to an individual – worker or student – one unit of a work or school day, applicable in a variety of contexts. In most cases, full time equivalents measure an employee or student and/or their workload. For example,…
What is a Bank Identification Number (BIN)? A bank identification number (BIN) represents the first four to six digits on a credit card. The first four to six digits identify the financial institution that issued the card. The BIN is a security measure to protect both consumers and merchants engaging in online transactions. It can…
What are Bank Reserves? Bank reserves are the minimum cash reserves that financial institutions must keep in their vaults at any given time. The minimum cash reserve requirements for financial institutions in each country are set by the central bank of that country. For example, the Federal Reserve is responsible for setting the requirements for…
What is Moral Hazard? Moral hazard refers to the situation that arises when an individual has the chance to take advantage of a financial deal or situation, knowing that all the risks and fallout will land on another party. It means that one party is open to the option – and therefore the temptation –…
What is Fiduciary Duty? Fiduciary duty is the responsibility that fiduciaries are tasked with when dealing with other parties, specifically in relation to financial matters. In most cases, it means that the duties involve a fiduciary overseeing the wealth of their clients, acting on the client’s behalf, and in their best interests. What is a…
What is the Empirical Rule? In mathematics, the empirical rule says that, in a normal data set, virtually every piece of data will fall within three standard deviations of the mean. The mean is the average of all of the numbers within the set. The empirical rule is also referred to as the Three Sigma…
What is the Coefficient of Variation? The coefficient of variation (relative standard deviation) is a statistical measure of the dispersion of data points around the mean. The metric is commonly used to compare the data dispersion between distinct series of data. Unlike the standard deviation, which must always be considered in the context of the mean…
What is Mode? Mode is the most frequently occurring value in a dataset. Along with mean and median, mode is a statistical measure of central tendency in a dataset. Unlike the other measures of central tendency that are unique to a particular dataset, there may be several modes in a dataset. Corporate Finance Institute reviews…
What is Social Mobility? Social mobility refers to the shift in an individual’s social status from one status to another. The shift can either be higher, lower, inter-generational, or intra-generational, and it cannot necessarily be determined if the change is for good or bad. Origin of the Social Mobility Concept Russian-born American sociologist and political…
