Market Risk
What is Market Risk? The term market risk, also known as systematic risk, refers to the uncertainty associated with any investment decision. Price volatility often arises due to unanticipated fluctuations in factors that commonly affect the entire financial market. Systematic risk is not specifically associated with the company or the industry one is invested in;...
Allotment
What is Allotment? The term allotment, in business, refers to the structured and systematic distribution of the business’ resources. Commonly, the term allotment is used in the context of equity distribution in finance. A company that offers its shares to the public uses the process of allotment to determine the amount of stock offered to...
Net Settlement
What is Net Settlement? A net settlement is an inter-bank payment settlement system wherein banks collect data on transactions throughout the day and exchange the information with the clearinghouse and the central bank to settle any outstanding amounts. In a net settlement system, banks keep track of their electronic (and physical) credit and debit transactions...
Negative Gearing
What is Negative Gearing? Negative gearing occurs when an investment that is made using borrowed funds produces cash flows that are lower than the interest and other expenses paid towards that investment. Understanding Negative Gearing The concept can be explained using the figure below: Normally, negative gearing is seen in...
Neoliberalism
What is Neoliberalism? Neoliberalism is an economic philosophy that conceptually describes a move towards free markets, capitalism, and a diversion from government ownership. The typical policies associated with neoliberalism include free trade, globalization, privatization, and changes in government spending to stimulate the private sector. Neoliberals favor a progressive tax regime and do not oppose measures...
