Debt Security
What is a Debt Security? A debt security is any debt that can be bought or sold between parties in the market prior to maturity. Its structure represents a debt owed by an issuer (the government, an organization, or a company) to an investor who acts as a lender. Understanding Debt Securities Debt securities are...
Defensive Stock
What is a Defensive Stock? A defensive stock is a stock that demonstrates relatively stable performance regardless of the current state of the economy. Defensive stocks are also called non-cyclical stocks, as they are less prone to the economic cycle of expansions and recessions. Defensive stocks will come with a steady dividend payment and a...
Voting Trust Certificate
What is a Voting Trust Certificate? A voting trust certificate is a document used to give temporary voting control over a corporation to one or several individuals. It is issued to a shareholder and represents the normal rights of any other stockholder, such as receiving quarterly dividends in exchange for their common shares. The only...
How Do Banks Make Money?
How Do Banks Make Money? Diversified banks make money in a variety of different ways; however, at the core, banks are considered lenders. Banks generally make money by borrowing money from depositors and compensating them with a certain interest rate. The banks will lend the money out to borrowers, charging the borrowers a higher interest...
Voluntary Reserve
What is a Voluntary Reserve? A voluntary reserve is a financial reserve held by insurance companies. The reserves are frequently regulated by government agencies to ensure the solvency of an insurance company. Voluntary reserves are additionally held as liquid assets. Understanding Voluntary Reserves To appear financially stable and improve liquidity ratios, insurance companies will hold voluntary...
