Interest is the cost of borrowing money, and it is typically expressed as a percentage of the total loan amount. For example, if you borrow $100 at an interest rate of 10%, you will owe $110 after one year. The interest rate is the percentage of the loan amount that you will pay in interest … Read more
Level 2 assets are defined as assets that are not as liquid as Level 1 assets, but are still considered to be liquid. This means that they can be sold within a reasonable period of time and at a reasonable price. Level 2 assets include things like corporate bonds, certain types of real estate, and … Read more
Market exposure is the percentage of a portfolio that is invested in a particular market or asset class. For example, if a portfolio has a market exposure of 50%, that means that 50% of the portfolio is invested in that market or asset class. The term is often used in the context of managing risk. … Read more
Bid definition is the highest price an investor is willing to pay for a security. The bid price is typically lower than the ask price, which is the lowest price an investor is willing to sell a security. The difference between the bid and ask prices is called the bid-ask spread. Is a bid a … Read more
A personal equity plan, or PEP, is a UK government-approved investment scheme that allows individuals to invest in a portfolio of shares or securities without having to pay capital gains tax on any profits they make. PEPs were introduced in 1987 and were originally limited to UK residents who were 18 years of age or … Read more
The effective annual interest rate is the actual rate of interest paid on a loan or earned on an investment over a one-year period. This rate takes into account the effects of compounding and can be used to compare different investments. The effective annual interest rate is also known as the effective rate or the … Read more
Expected Return: Formula, How It Works, Limitations, Example Is expected return a percentage? Expected return is the average return that an investor anticipates receiving from a security over a period of time. It is typically represented as a percentage. For example, if an investor expects to earn an annual return of 10% on a stock, … Read more
Downside protection is a strategy employed by investors to limit their potential losses in a security or investment portfolio. There are a number of ways to achieve downside protection, but the most common is through the use of stop-loss orders. A stop-loss order is an order placed with a broker to sell a security when … Read more
More Than Just Buying and Selling Stocks: Investment Management What are the features of investment management? The main features of investment management are: -Asset Allocation: This is the process of selecting the mix of asset classes that is right for an investor based on their goals, risk tolerance, and time horizon. -Rebalancing: This is the … Read more
Bailment: Definition, How It Works, Types, and When It Ends Who is Bailee with example? Bailee is an individual who has been entrusted with the possession of goods or property for the purpose of holding, transporting, or performing some other service with respect to those goods or property. The term is most often used in … Read more
