ARBITRAGE
The simultaneous purchase and sale of an asset in order to profit from a difference in the price. This usually takes place on different exchanges or marketplaces.
Also known as a "riskless profit".
Here's an example of arbitrage: Say a domestic stock also trades on a foreign exchange in another country, where it hasn't adjusted for the constantly changing exchange rate. A trader purchases the stock where it is undervalued and short sells the stock where it is overvalued, thus profiting from the difference. Arbitrage is recommended for experienced investors only.
Tuesday, November 13, 2007
ACCRETING PRINCIAL
ACCRETING PRINCIPAL
A swap whereby the notional value is increasing over time.
This type of swap is used mainly by companies willing to pay a fixed rate in return for an increasing notional as a result of increasing working capital requirements.
A swap whereby the notional value is increasing over time.
This type of swap is used mainly by companies willing to pay a fixed rate in return for an increasing notional as a result of increasing working capital requirements.
ALL FOREX BUZZWORDS....! ABSOLUTE RATE
ABSOLUTE RATE
The fixed portion of an interest-rate swap, expressed as a percentage rather than as a premium or a discount to a reference rate.
The absolute rate is a combination of the reference rate and the premium or discounted fixed percentage. For example, if the LIBOR is 3% and the fixed interest portion of the swap is at a 7% premium, the absolute rate is 10%.
It is sometimes also referred to as an absolute swap yield.
The fixed portion of an interest-rate swap, expressed as a percentage rather than as a premium or a discount to a reference rate.
The absolute rate is a combination of the reference rate and the premium or discounted fixed percentage. For example, if the LIBOR is 3% and the fixed interest portion of the swap is at a 7% premium, the absolute rate is 10%.
It is sometimes also referred to as an absolute swap yield.
WHAT IS FINANCIAL BLOG???
An online journal (or web log) that provides news and information related to the finance industry. Financial blogs not only comment on news and information, but some also provide stock analysis based on both fundamental and technical principles. Most, if not all, financial blogs are provided free of charge to the general public. For the most part the style of these blogs is more casual than articles and often reflect the personal opinion of the respective writers.
The use of financial blogs has become a great tool for investors to share their thoughts on the latest news in the finance industry. Financial blogs are not only provided by major financial websites, but also from individual investors.
Since anyone is capable writing a blog without restrictions on the information used, investors should be wary of what they read. Although reputable websites are reliable with their information, blogs provided by individuals may be more subject to manipulation. Unethical investors can use an investing blog to promote stocks in ways to benefit positions they have taken. Investors who use blogs should be aware these sites exist and ensure that a blog they read has an adequate disclosure policy before they act on anything.
The use of financial blogs has become a great tool for investors to share their thoughts on the latest news in the finance industry. Financial blogs are not only provided by major financial websites, but also from individual investors.
Since anyone is capable writing a blog without restrictions on the information used, investors should be wary of what they read. Although reputable websites are reliable with their information, blogs provided by individuals may be more subject to manipulation. Unethical investors can use an investing blog to promote stocks in ways to benefit positions they have taken. Investors who use blogs should be aware these sites exist and ensure that a blog they read has an adequate disclosure policy before they act on anything.
Monday, November 12, 2007
forex spot market
Forex spot market is a security or commodities market where goods, both perishable and non-perishable as well, are been sold for cash and transported at once or within a little period of time. Contracts sold on a spot market are as well successful immediately. The spot market is other known as the “cash market” or also “physical market.” Purchases are settled in cash at the existing prices set by the spot market, as contrasting to the price at the time of delivery. An example of a spot market commodity, which is frequently sold, is crude oil; it is sold at the existing prices, and actually delivered later.
Goods are essential products which is identical with other like type commodities. Some good examples of commodities are grains, beef, oil, gold, silver, and other natural gas. Technology has pierced the industry with commodities like cell phone minutes and as well the bandwidth. Commodities are actually consistent, and should meet exact standards to be sold on the spot market.
The world spot market, or Forex trading (Foreign Currency Exchange), is a giant spot market. It is the instantaneous exchange of one country’s currency for another’s. The way it works is through a trader choosing a currency pair. Great Britain (GBP) and the United State’s (USD) currency is an ordinary pair, which is bought and sold on the globe spot market. If the GBP is ahead strength against the USD, the trader buys. If it is puny, he sells. The advantage of Forex trading is that it is very runny; a trader could enter and egress the market as he chooses.
Another factor, which affects Forex spot market prices, is whether the commodity or goods are perishable or non-perishable. Non-perishable goods like gold or silver would sell at a price that appears in near future price movements. A perishable commodity like grain or fruit would be affected by supply and demand. For instance, oranges bought in April would reveal the existing extra of the commodity and would be less luxurious than in January, when demand for a lesser crop drives costs up. An investor cannot buy oranges for a January delivery at April’s prices, making oranges an ideal example of a spot market commodity.
Goods are essential products which is identical with other like type commodities. Some good examples of commodities are grains, beef, oil, gold, silver, and other natural gas. Technology has pierced the industry with commodities like cell phone minutes and as well the bandwidth. Commodities are actually consistent, and should meet exact standards to be sold on the spot market.
The world spot market, or Forex trading (Foreign Currency Exchange), is a giant spot market. It is the instantaneous exchange of one country’s currency for another’s. The way it works is through a trader choosing a currency pair. Great Britain (GBP) and the United State’s (USD) currency is an ordinary pair, which is bought and sold on the globe spot market. If the GBP is ahead strength against the USD, the trader buys. If it is puny, he sells. The advantage of Forex trading is that it is very runny; a trader could enter and egress the market as he chooses.
Another factor, which affects Forex spot market prices, is whether the commodity or goods are perishable or non-perishable. Non-perishable goods like gold or silver would sell at a price that appears in near future price movements. A perishable commodity like grain or fruit would be affected by supply and demand. For instance, oranges bought in April would reveal the existing extra of the commodity and would be less luxurious than in January, when demand for a lesser crop drives costs up. An investor cannot buy oranges for a January delivery at April’s prices, making oranges an ideal example of a spot market commodity.
what is mini forex?
Debt Management
www.trapped.co.uk |
A mini Forex trading account is extremely helpful for a new trader who is more interested in developing a disciplined, rational trading strategy without focusing entirely on profits and losses.
When you start Forex trading you can begin with a paper trading account with which you can understand how the market moves and you can develop more skills and knowledge about this trading account. Once you are successful with the paper trading account then you can move in for the mini Forex trading account.
In mini Forex trading, you get all the benefits of a full-size Forex accounts. The same software, charts and graphs can be used while handling mini Forex trading. However, it helps you to develop the confidence needed to be successful without the anxiety and distractions that come when large sums are on stake.
Mini Forex trading is done in smaller contract sizes of ten thousand units, which is 1/10th the size of the standard account. For opening a mini Forex account you would require 100-300 dollars. Here one PIP is equivalent to one dollar for EUR/USD and GBP/USD.
With a mini Forex trading account you can learn risk management, which will help you in future while dealing full-size trading account. You can trade by using one mini lot and can then build up on the lot size later.
In a conventional sense, you should use only one mini lot for every thousand dollars that you have in your account. Say if you have five thousand dollars, you can take only five mini lots. But in mini Forex trading the pip value is one dollar and therefore, you can concentrate on building strategies without paying much attention to the profit and loss.
With mini Forex trading, you can invest just $250, but trade 10,000 worth of a currency because of the high leverage. In a mini account, the margin deposit requirement per $10,000 lot traded is only $50. This leads to a leverage of 200 to 1 (10,000/50 = 200). Therefore, with your $250, you can trade a maximum of 5 mini lots, with $500 a maximum of 10, with $1000 a maximum of 20, etc.
So the basic advantages of mini Forex trading are:
1) The account can be opened with as small an amount as $250
2) It has a leverage of 200 – 1
3) It facilitates smaller trade size
The account helps new Forex traders build confidence as they are trying out different strategies
There are other methods like Base 10 Trading for small traders. However, mini Forex trading is most suitable if you want to maintain the account under $10,000. It will provide you the flexibility of implementing strategies and offer more staying power in the Forex market as you can take advantage of multiple trades without over-leveraging your trading account.
Friday, November 9, 2007
what is dove??
An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that inflation and its negative effects will have a minimal impact on society. This term is derived from the docile and placid nature of the bird of the same name, and is the opposite of the term "hawk".
Statements that suggest that inflation will have a minimal impact are called "dovish".
Doves prefer low interest rates as a means of encouraging growth within the economy because this tends to increase demand for consumer borrowing and spur consumer spending. As a result, doves believe the negative effects of low interest rates are negligible in the larger scheme of things. However, if interest rates are kept low for an indefinite period of time, inflation could rise considerably.
Statements that suggest that inflation will have a minimal impact are called "dovish".
Doves prefer low interest rates as a means of encouraging growth within the economy because this tends to increase demand for consumer borrowing and spur consumer spending. As a result, doves believe the negative effects of low interest rates are negligible in the larger scheme of things. However, if interest rates are kept low for an indefinite period of time, inflation could rise considerably.
what are green investments?
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Green investments are traditional investment vehicles (such as stocks, exchange-traded funds and mutual funds) in which the underlying business(es) are somehow involved in operations aimed at improving the environment. This can range from companies that are developing alternative energy technology to companies that have the best environmental practices.
For the stock savvy, there are many pure-play, leading edge green companies that are traded on the major stock exchanges. These include startups that are developing new methods for creating biofuels or solar panels, and traditional market cap heavyweights that are expanding their product lines to include environmentally friendly products (such as General Electric's development of wind-powered electric generators). (To learn more, read Go Green With Socially Responsible Investing.)
Green investing can also be achieved through exchange-traded funds (ETFs), which mimic the stock indexes made up of green companies. Mutual funds can be another alternative, in which case a professional portfolio manager makes the green asset allocation decisions based on the fund's prospectus.
Unfortunately, because individual beliefs on what constitutes a "green investment" vary, exactly what qualifies as a green investment is a bit of a gray area. Purchasing stock in a business that is an industry leader in terms of employing environmentally conscious businesses practices in a traditionally "ungreen" industry may be considered a green investment for some, but not for others. For example, consider an oil company that has the best record for environmental practices. While it is environmentally sound that the company is making the best precautions in preventing any direct damage to the environment through its day-to-day operations of drilling for oil, some people may object to purchasing its stock as a green investment, because burning fossil fuels is the leading contributor of global warming.
Therefore, prospective green investors should research their investments (by checking out a green fund's prospectus or a stock's annual filings) to see if an investment includes the types of companies that fit their personal definition of "green".
Green investments are traditional investment vehicles (such as stocks, exchange-traded funds and mutual funds) in which the underlying business(es) are somehow involved in operations aimed at improving the environment. This can range from companies that are developing alternative energy technology to companies that have the best environmental practices.
For the stock savvy, there are many pure-play, leading edge green companies that are traded on the major stock exchanges. These include startups that are developing new methods for creating biofuels or solar panels, and traditional market cap heavyweights that are expanding their product lines to include environmentally friendly products (such as General Electric's development of wind-powered electric generators). (To learn more, read Go Green With Socially Responsible Investing.)
Green investing can also be achieved through exchange-traded funds (ETFs), which mimic the stock indexes made up of green companies. Mutual funds can be another alternative, in which case a professional portfolio manager makes the green asset allocation decisions based on the fund's prospectus.
Unfortunately, because individual beliefs on what constitutes a "green investment" vary, exactly what qualifies as a green investment is a bit of a gray area. Purchasing stock in a business that is an industry leader in terms of employing environmentally conscious businesses practices in a traditionally "ungreen" industry may be considered a green investment for some, but not for others. For example, consider an oil company that has the best record for environmental practices. While it is environmentally sound that the company is making the best precautions in preventing any direct damage to the environment through its day-to-day operations of drilling for oil, some people may object to purchasing its stock as a green investment, because burning fossil fuels is the leading contributor of global warming.
Therefore, prospective green investors should research their investments (by checking out a green fund's prospectus or a stock's annual filings) to see if an investment includes the types of companies that fit their personal definition of "green".
Thursday, November 8, 2007
Some may believe that unscrupulous means are sometimes necessary for making gains in a portfolio. However, it is possible to profit while using an ethical investment strategy - and you don't need to join Greenpeace in order to do it. Here we'll take a look at socially responsible investing (SRI) and how you can use socially responsible mutual funds to activate this strategy in your portfolio. (Is it possible to be environmentally friendly and still make money? Read our Green Investing Feature for both sides of the issue.)
What is socially responsible investing?A socially responsible investing strategy is one that views successful investment returns and responsible corporate behavior as going hand in hand. SRI investors believe that by combining certain social criteria with rigorous investment standards, they can identify securities that will earn competitive returns and help build a better world.SRI analysts gather information on industry and company practices and review these in the context of a country's political, economic and social environment.Generally, these seven areas are the focus of socially responsible investors:
Corporate governance and ethics
Workplace practices
Environmental concerns
Product safety and impact
Human rights
Community relations
Indigenous peoples' rights It should be noted that socially responsible investing is essentially interested in promoting the adherence to the positive aspects of these areas with publicly held companies. However, SRI also gets a lot of attention for industries and companies that it opposes as "bad" for society. The latter would include, among others, businesses involved in gambling, tobacco, weapons and alcohol. These so-called "sinful" investment categories are often eliminated through SRI screening. (For related reading, see A Prelude To Sinful Stock.)What are socially responsible mutual funds?Socially responsible mutual funds hold securities in companies that adhere to social, moral, religious or environmental beliefs. To ensure the stocks chosen have values that coincide with the fund's beliefs, companies undergo a careful screening process. A socially responsible mutual fund will only hold securities in companies that adhere to high standards of good corporate citizenship. (To learn more about shareholder rights and responsibilities, see Proxy Voting Gives Fund Shareholders A Say and Knowing Your Rights As A Shareholder.)Because people hold such a wide variety values and beliefs, fund managers have quite a challenge in determining the stocks that reflect the optimal combination of values for attracting investors. The specific criteria used when screening for stocks all depend on the values and goals of the fund. For example, funds with a strong sensitivity toward issues of environmental concern will specifically pick stocks in companies that go beyond fulfilling minimal environmental requirements. (For more insight, read Go Green With Socially Responsible Investing.)Many socially responsible mutual funds will also partition a portion of their portfolios for community investments. A common misconception is that these investments are donations. This is not the case. These investments allow investors to give to a community in need while making a return on their investment. Many community investments are put toward community development banks in developing countries or in lower-income areas in the U. S. for affordable housing and venture capital. Ownership is Taken SeriouslyShareholder activism is one of the most important issues for socially responsible funds. SRI funds use their ownership rights to influence management through policy change suggestions. This advocacy is achieved through attending shareholder meetings, filing proposals, writing letters to management and exercising voting rights. Because it is difficult for fund shareholders to exercise their votes, voting is achieved by proxy; fund shareholders assign management to vote on their behalf. Most socially responsible mutual funds have a strict policy to maintain transparency in their decisions and disclose all proxy voting policies and procedures to their shareholders. Proof that individuals can make a difference is illustrated by the proposal the Securities and Exchange Commission (SEC) passed in January 2003, which states that all mutual fund companies must disclose proxy voting policies and procedures and the actual votes to their shareholders. The SEC's decision was brought about by the thousands of proposal requests sent to them by socially responsible investors. Does good triumph over all?As an investor, you cannot be completely philanthropic and expect nothing in return for your investment other than that pure feeling of having invested in a company that reflects your own values. So how does the performance of socially responsible mutual funds measure up to that of a regular portfolio? On average, its performance has been close to that of regular mutual funds. There are several indexes that track the performance of stocks considered socially responsible investments. According to KLD Indexes, the total returns for the Domini Social 400 Index between 1990 (its inception) and September 2007 was 12%. Over the same period, the S&P 500 returned 11.49%.The Price for Doing Good Socially responsible mutual funds tend to have higher fees than regular funds. These higher fees can be attributed to the additional ethical research that mutual fund managers must undertake. In addition, socially responsible funds tend to be managed by smaller mutual fund companies and the assets under management are relatively small. Under these circumstances, it is difficult for SRI funds to make use of the economies of scale available to their larger rivals. (For related reading, see Stop Paying High Fees.)
ADVERTISEMENT
Get a FREE Learning Kit on Managed Futures and Portfolio DiversificationIn 18 months investors have put more money in managed futures than in 22 years! The Kit includes audio and video tapes and a beautiful color brochure. Video filmed at HBO studios. Valued at $95, it’s yours free while supplies last! Click Here to get yours mailed todayKeep a Level HeadBefore you let your emotions become your investment advisor, it is wise to maintain a level head. Here are some important tips to follow in order to maximize your chances for earning decent returns and investing in qualified socially responsible funds:
1. Get informed - Learn about socially responsible investing, which funds qualify and where you can buy them. Socialfunds.com is a good place to start your research.2. Know your values - Everybody's values are different. Some may feel strongly about environmental causes while others are more concerned with social programs. Rank your concerns. Once you have established a few top values, you may narrow your fund choices down to a few select funds whose values closely match your own.3. Go beyond your values - Research the fundamentals and fees of the funds in which you are interested. Some items to consider include the level of the management expense ratio, the cost of load fees, the fund manager's track record and how the fund has performed over the last few years. There is no need to sacrifice investment quality when considering an SRI fund. Do your homework as you would for any fund investment. (Visit our Mutual Fund Basics Tutorial for further tips and information on mutual funds.) 4. Diversify - A consequence of investing in SRI funds is that you may be limiting your investment to a few companies who have a lot in common socially, ethically and financially. Think of a sector fund with a portfolio formed mainly from stocks in the internet industry. If you had all of your eggs in this basket during the internet market crash, all your eggs would have been broken. If your investment is placed strategically in different types of investments, the possibility of losing all of your investment is minimal. If you want to be a socially responsible investor, it is still possible to diversify your portfolio with other stocks, bonds or Treasuries without going against your values. Investing in other socially responsible securities whose values differ somewhat from the specific focus of your chosen fund can help. ConclusionSocially responsible investing opportunities suggest that investors need not compromise their values to make money. If you approach socially responsible mutual funds like any other investment, you may be able to put your money into something that both supports your values and lines your pocketbook.For the counterpart to this kind of investing see, Socially (Ir)responsible Mutual Funds
What is socially responsible investing?A socially responsible investing strategy is one that views successful investment returns and responsible corporate behavior as going hand in hand. SRI investors believe that by combining certain social criteria with rigorous investment standards, they can identify securities that will earn competitive returns and help build a better world.SRI analysts gather information on industry and company practices and review these in the context of a country's political, economic and social environment.Generally, these seven areas are the focus of socially responsible investors:
Corporate governance and ethics
Workplace practices
Environmental concerns
Product safety and impact
Human rights
Community relations
Indigenous peoples' rights It should be noted that socially responsible investing is essentially interested in promoting the adherence to the positive aspects of these areas with publicly held companies. However, SRI also gets a lot of attention for industries and companies that it opposes as "bad" for society. The latter would include, among others, businesses involved in gambling, tobacco, weapons and alcohol. These so-called "sinful" investment categories are often eliminated through SRI screening. (For related reading, see A Prelude To Sinful Stock.)What are socially responsible mutual funds?Socially responsible mutual funds hold securities in companies that adhere to social, moral, religious or environmental beliefs. To ensure the stocks chosen have values that coincide with the fund's beliefs, companies undergo a careful screening process. A socially responsible mutual fund will only hold securities in companies that adhere to high standards of good corporate citizenship. (To learn more about shareholder rights and responsibilities, see Proxy Voting Gives Fund Shareholders A Say and Knowing Your Rights As A Shareholder.)Because people hold such a wide variety values and beliefs, fund managers have quite a challenge in determining the stocks that reflect the optimal combination of values for attracting investors. The specific criteria used when screening for stocks all depend on the values and goals of the fund. For example, funds with a strong sensitivity toward issues of environmental concern will specifically pick stocks in companies that go beyond fulfilling minimal environmental requirements. (For more insight, read Go Green With Socially Responsible Investing.)Many socially responsible mutual funds will also partition a portion of their portfolios for community investments. A common misconception is that these investments are donations. This is not the case. These investments allow investors to give to a community in need while making a return on their investment. Many community investments are put toward community development banks in developing countries or in lower-income areas in the U. S. for affordable housing and venture capital. Ownership is Taken SeriouslyShareholder activism is one of the most important issues for socially responsible funds. SRI funds use their ownership rights to influence management through policy change suggestions. This advocacy is achieved through attending shareholder meetings, filing proposals, writing letters to management and exercising voting rights. Because it is difficult for fund shareholders to exercise their votes, voting is achieved by proxy; fund shareholders assign management to vote on their behalf. Most socially responsible mutual funds have a strict policy to maintain transparency in their decisions and disclose all proxy voting policies and procedures to their shareholders. Proof that individuals can make a difference is illustrated by the proposal the Securities and Exchange Commission (SEC) passed in January 2003, which states that all mutual fund companies must disclose proxy voting policies and procedures and the actual votes to their shareholders. The SEC's decision was brought about by the thousands of proposal requests sent to them by socially responsible investors. Does good triumph over all?As an investor, you cannot be completely philanthropic and expect nothing in return for your investment other than that pure feeling of having invested in a company that reflects your own values. So how does the performance of socially responsible mutual funds measure up to that of a regular portfolio? On average, its performance has been close to that of regular mutual funds. There are several indexes that track the performance of stocks considered socially responsible investments. According to KLD Indexes, the total returns for the Domini Social 400 Index between 1990 (its inception) and September 2007 was 12%. Over the same period, the S&P 500 returned 11.49%.The Price for Doing Good Socially responsible mutual funds tend to have higher fees than regular funds. These higher fees can be attributed to the additional ethical research that mutual fund managers must undertake. In addition, socially responsible funds tend to be managed by smaller mutual fund companies and the assets under management are relatively small. Under these circumstances, it is difficult for SRI funds to make use of the economies of scale available to their larger rivals. (For related reading, see Stop Paying High Fees.)
ADVERTISEMENT
Get a FREE Learning Kit on Managed Futures and Portfolio DiversificationIn 18 months investors have put more money in managed futures than in 22 years! The Kit includes audio and video tapes and a beautiful color brochure. Video filmed at HBO studios. Valued at $95, it’s yours free while supplies last! Click Here to get yours mailed todayKeep a Level HeadBefore you let your emotions become your investment advisor, it is wise to maintain a level head. Here are some important tips to follow in order to maximize your chances for earning decent returns and investing in qualified socially responsible funds:
1. Get informed - Learn about socially responsible investing, which funds qualify and where you can buy them. Socialfunds.com is a good place to start your research.2. Know your values - Everybody's values are different. Some may feel strongly about environmental causes while others are more concerned with social programs. Rank your concerns. Once you have established a few top values, you may narrow your fund choices down to a few select funds whose values closely match your own.3. Go beyond your values - Research the fundamentals and fees of the funds in which you are interested. Some items to consider include the level of the management expense ratio, the cost of load fees, the fund manager's track record and how the fund has performed over the last few years. There is no need to sacrifice investment quality when considering an SRI fund. Do your homework as you would for any fund investment. (Visit our Mutual Fund Basics Tutorial for further tips and information on mutual funds.) 4. Diversify - A consequence of investing in SRI funds is that you may be limiting your investment to a few companies who have a lot in common socially, ethically and financially. Think of a sector fund with a portfolio formed mainly from stocks in the internet industry. If you had all of your eggs in this basket during the internet market crash, all your eggs would have been broken. If your investment is placed strategically in different types of investments, the possibility of losing all of your investment is minimal. If you want to be a socially responsible investor, it is still possible to diversify your portfolio with other stocks, bonds or Treasuries without going against your values. Investing in other socially responsible securities whose values differ somewhat from the specific focus of your chosen fund can help. ConclusionSocially responsible investing opportunities suggest that investors need not compromise their values to make money. If you approach socially responsible mutual funds like any other investment, you may be able to put your money into something that both supports your values and lines your pocketbook.For the counterpart to this kind of investing see, Socially (Ir)responsible Mutual Funds
Tuesday, November 6, 2007
TYPICAL FOREX JARGON!!!!
3-6-3 Rule
Slang used to refer to an "unofficial rule" under which the banking industry once operated, which alludes to it being noncompetitive and simplistic.The 3-6-3 rule describes how bankers would give 3% interest on depositors' accounts, lend the depositors money at 6% interest and then be playing golf at 3pm. This alludes to how a bank's only form of business is lending out money at a higher rate than what it is paying out to its depositors.
Many attribute the problems faced by the banking industry during the events that lead up to the Great Depression as reasons why the government implemented tighter banking regulations. These regulations controlled the rates at which banks can lend and borrow money. Unfortunately, the regulations made it difficult for banks to compete with each other and the banking industry became stagnant. However, with the loosening of banking regulations and the widespread adoption of information technology such as the internet, banks now operate in a much more competitive and complex manner. For example, banks are now providing insurance, brokerage and other forms of financial services.
A Ton Of Money
A slang term used to describe a significant amount of money. The amount implied typically depends on the person, company or situation.
We may all have a different idea of what constitutes a "ton of money", but according to the Bureau of Engraving and Printing, a ton of $1 bills amounts to $908,000 - nearly $1 million!If you're talking about a ton of coins, then it's a different story - a ton of quarters is worth $40,000, and one ton of pennies (363,000 pennies to be exact) is worth $3,630.
Fat Cat
A slang word used to describe executives who earn what many believe to be unreasonably high salaries and bonuses. These top executives also receive generous pensions and retirement packages, consisting of extra compensation not available to other company employees.
This term conjures up the image of cats that consume more than an appropriate amount of food and become grossly overweight. Publicly-traded companies are required to disclose the amount of compensation that their top five executives receive. As a result, companies have been under a lot of scrutiny for excessive executive compensation, especially in the face of floundering revenues.A real-life example of a fat cat would be former Disney CEO, Michael Eisner. For a period of five years in the late 1990s, Eisner received over $737 million in compensation, despite the fact that the company's five-year net income shrank an average of 3.1% each year.
Fool's Gold
A gold-colored mineral that is often mistaken for real gold. Also known as Iron Pyrite.
During historical periods of gold rushes, many less-than-knowledgeable miners would frequently believe that they hit the motherload upon finding a huge cache of fool's gold. Unfortunately, unlike the real stuff, fool's gold is relatively worthless.
Slang used to refer to an "unofficial rule" under which the banking industry once operated, which alludes to it being noncompetitive and simplistic.The 3-6-3 rule describes how bankers would give 3% interest on depositors' accounts, lend the depositors money at 6% interest and then be playing golf at 3pm. This alludes to how a bank's only form of business is lending out money at a higher rate than what it is paying out to its depositors.
Many attribute the problems faced by the banking industry during the events that lead up to the Great Depression as reasons why the government implemented tighter banking regulations. These regulations controlled the rates at which banks can lend and borrow money. Unfortunately, the regulations made it difficult for banks to compete with each other and the banking industry became stagnant. However, with the loosening of banking regulations and the widespread adoption of information technology such as the internet, banks now operate in a much more competitive and complex manner. For example, banks are now providing insurance, brokerage and other forms of financial services.
A Ton Of Money
A slang term used to describe a significant amount of money. The amount implied typically depends on the person, company or situation.
We may all have a different idea of what constitutes a "ton of money", but according to the Bureau of Engraving and Printing, a ton of $1 bills amounts to $908,000 - nearly $1 million!If you're talking about a ton of coins, then it's a different story - a ton of quarters is worth $40,000, and one ton of pennies (363,000 pennies to be exact) is worth $3,630.
Fat Cat
A slang word used to describe executives who earn what many believe to be unreasonably high salaries and bonuses. These top executives also receive generous pensions and retirement packages, consisting of extra compensation not available to other company employees.
This term conjures up the image of cats that consume more than an appropriate amount of food and become grossly overweight. Publicly-traded companies are required to disclose the amount of compensation that their top five executives receive. As a result, companies have been under a lot of scrutiny for excessive executive compensation, especially in the face of floundering revenues.A real-life example of a fat cat would be former Disney CEO, Michael Eisner. For a period of five years in the late 1990s, Eisner received over $737 million in compensation, despite the fact that the company's five-year net income shrank an average of 3.1% each year.
Fool's Gold
A gold-colored mineral that is often mistaken for real gold. Also known as Iron Pyrite.
During historical periods of gold rushes, many less-than-knowledgeable miners would frequently believe that they hit the motherload upon finding a huge cache of fool's gold. Unfortunately, unlike the real stuff, fool's gold is relatively worthless.
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