What is APIC (Additional Paid-In Capital)? Additional paid-in capital (APIC) is a component of shareholders’ equity that reflects the price investors are willing to pay above the par value of issued stock. APIC can be thought of as the surplus amount or premium a company receives from stock issued in an initial public offering (IPO)…
What is Simple Moving Average (SMA)? Simple Moving Average (SMA) refers to a stock’s average closing price over a specified period. The reason the average is called “moving” is that the stock price constantly changes, so the moving average changes accordingly. SMA is one of the core indicators in technical analysis and is usually the…
What is a Variable-Benefit Plan? A variable-benefit plan is a type of pension plan wherein the payout that the beneficiary is entitled to is subject to change according to the performance of the investments made as part of the plan. The benefit that the pensioner is entitled to changes in tandem with market fluctuations, hence…
What is a Vanishing Premium Policy? A vanishing premium policy is a type of permanent life insurance policy wherein a consumer can opt to utilize the dividends accruing from such a policy to pay its premium. After a given period of time, the cash value of the policy increases to a level where the sum…
What is Variable Death Benefit? The variable death benefit is that aspect of a death benefit that is linked to the performance of the investment account within a policy holder’s variable universal life insurance policy. The death benefit is the amount that can be claimed by the declared beneficiaries of a policyholder. Features of Variable…
What is a Variance Swap? Variance swap refers to an over-the-counter financial derivative that allows the holder to speculate on the future volatility of a given underlying asset. Holders use variance swaps to hedge their exposure to the magnitude of possible price movements of underliers, such as exchange rates, interest rates, or an equity index….
What is Variation Margin? The term variation margin refers to a margin payment made by a clearing member to a clearinghouse based on the price movements of futures contracts held by the clearinghouse members. Clearing members are required to pay variation margins on a day-to-day or an intraday basis in order to reduce the risk…
What is Vested Benefit Obligation (VBO)? The term vested benefit obligation is used to signify the actuarial present value of a retirement plan. The retirement or pension plan in question is the one earned by employees, and may also commonly be used as one of the measures of the pension fund liability of a company….
What is a Vested Benefit? A vested benefit refers to an asset or a privilege that may be granted to an employee as part of a guaranteed financial package offered to any person or entity. Usually, the term “vested benefit” is used to denote the retirement savings that a person may become eligible to access…
What is Aggregate Stop-Loss Insurance? Aggregate stop-loss insurance is a type of insurance that protects the insured if the total number of claims under a specific coverage in their policy ends up being higher than anticipated. The aggregate stop-loss insurance is usually added to employer insurance policies that cover employees that opt into the policy….
