What is a Living Trust? A living trust is a specific type of trust created during an individual’s lifetime, known as the trustor, where a designated person, the trustee, is given authority to manage the trustor’s assets for the benefit of the eventual beneficiary once the trustor passes away. Understanding Living Trusts In some cases,…
What is a Gig Economy? A gig economy is an economy that operates flexibly, involving the exchange of labor and resources through digital platforms that actively facilitate buyer and seller matching. In the gig economy, organizations hire independent contractors and freelancers instead of full-time employees. It is because work is allocated on a temporary basis,…
What is a Trust? A trust refers to a legally binding relationship in which one party, known as the trustor, gives another party, known as the trustee, the lawful right of property or assets that must be kept and used solely for the third party’s benefit, referred to as the “beneficiary.” When a trust is…
What is a Grantor Retained Annuity Trust? A grantor retained annuity trust (GRAT) is an estate planning tool used in the United States that is structured as a trust. A trust is a fiduciary agreement for one party (trustor) to maintain the rights to hold property or assets for another party (trustee) and is commonly…
What is Regret Theory? Regret theory, studied in behavioral finance, is a concept stating that investors will feel regret if a wrong decision is made and thus will consider this anticipated regret when making investment decisions. Regret theory can adversely impact an investor’s rational behavior, such as dissuading them from acting or motivating them to…
What is Rational Behavior? Rational behavior is used to describe a decision-making process that results in the optimal level of benefit, or alternatively, the maximum amount of utility. Individuals who exhibit rational behavior make decisions that provide them with the highest amount of personal satisfaction. Understanding Rational Behavior Rational behavior is the underlying assumption of…
What is a Meme Stock? A meme stock is a stock that is highly popular among retail investors on social media platforms such as Reddit, Stocktwits, Twitter, and Facebook. Understanding a Meme Stock Meme stocks are stocks with a compelling narrative that are hyped up and popularized by retail investors on social media platforms. The…
What is a Pip? A pip is a unit of measurement for price movements of currencies in foreign exchange (FX) markets. Pip stands for “percentage in point” or “price interest point.” It represents the smallest price variation that a particular exchange rate experiences based on typical FX market convention. Currency pairs are generally traded on…
