What is a Brokerage? A brokerage provides intermediary services in various areas, e.g., investing, obtaining a loan, or purchasing real estate. A broker is an intermediary who connects a seller and a buyer to facilitate a transaction. Individuals or legal entities can act as brokers. The broker performs its actions according to the client’s instructions….
What is an Institutional Investor? An institutional investor is a legal entity that accumulates the funds of numerous investors (which may be private investors or other legal entities) to invest in various financial instruments and profit from the process. In other words, an institutional investor is an organization that invests on behalf of its members….
What is a Blended Rate? A blended rate is an average interest rate between an old loan and a new loan. The rate is calculated in case a borrower receives an additional loan without fully repaying the previous one. Sometimes, the blended rate can be calculated when the old loan is being refinanced by originating…
What are Credit Conditions? Credit conditions represent the terms used by lenders, such as banks, during the due diligence process for lending capital to potential borrowers. In other words, lenders follow specific rules and abide by a particular system while qualifying individuals and corporations for obtaining loans. 5 Cs of Credit There are five main…
What are Emerging Markets? “Emerging markets” is a term that refers to an economy that experiences considerable economic growth and possesses some, but not all, characteristics of a developed economy. Emerging markets are countries that are transitioning from the “developing” phase to the “developed” phase. Characteristics of Emerging Markets Some common characteristics of emerging markets…
What is the Modern Portfolio Theory (MPT)? The Modern Portfolio Theory (MPT) refers to an investment theory that allows investors to assemble an asset portfolio that maximizes expected return for a given level of risk. The theory assumes that investors are risk-averse; for a given level of expected return, investors will always prefer the less…
What is Fintech (Financial Technology)? As financial services companies adapt to rising consumer expectations and shifting technology, a wave of fintech innovation is transforming how people and businesses manage money. From digital banking to disruptive fintech startups, the industry is evolving faster than ever. But what is fintech, and why does it matter to today’s…
What is the Securities Investor Protection Corporation (SIPC)? The Securities Investor Protection Corporation (SIPC) is a non-profit, member-funded organization that works to protect customers from financial loss when a brokerage firm goes bankrupt. The SIPC was created in the United States in 1970 under the Securities Investor Protection Act in order to reduce insecurity among…
What are Robo-Advisors? Robo-advisors are online investment management services that employ mathematical algorithms to provide financial advice with minimal human intervention. They use their algorithms to manage and allocate client assets in the most efficient way possible. Robo-advisors use online questionnaires that obtain information about the clients’ degree of risk-aversion, financial status,…
What is an Acceleration Clause? An acceleration clause is a covenant in loan agreements that requires borrowers to repay the full principal amount upon breach of contract or failure to meet certain requirements set by the lender. Acceleration clauses are most prevalent in the real estate industry, where they protect the lender when the borrower…
