ECONOMIC TERMS unearned income An individuals income derived from sources other than employment, such as interest and dividends from investments,or income from rental property. also called unearned revenue. opposite of earned income. due diligence The process of investigation, performed by investors, into the details of a potential investment, such as anexamination of operations and management and theverification of material facts. tax bracket The level of income tax of a given individual, as indicated by the amount of taxes he/she pays on his/her final dollar oftaxable income. also called marginal tax bracket or tax rate. arbitrage Attempting to profit by exploiting price differences of identical or similar financial instruments, on differentmarkets or in different forms. The ideal version is riskless arbitrage. forex trading The exchange of currencies between two or more countries on a recognized market. Forex trading is a popular type ofinvesting because it provides investors with the ability tomake quick profits due to small changes in one countryscurrency. Due to the time differences around the world, forex trading takes place continuously because as onemarket closes another one opens. evergreen A type of contract that rolls over on a continuous basis until one of the obligated parties cancels it. Each contractualperiod typically covers a short amount of time so thecontinuation of the agreement may occur multiple times during a one year period. Perkins loan A need-based, low-interest loan available to students rather than their parents. The amount of the loan is determined by each college and is based on the expected family contribution. The student will be held responsible for this loan, not the parent. Repayment doesnt begin until after a student graduates, falls below half-time student status, or leaves college. After graduating, a student typically has a nine-month grace period during which interest doesntaccrue. Perkins loans offer low interest rates to students and can be repaid within ten years. entity A thing that exists it its own right. The law recognizescorporations and people as entities with rights and legalobligations. invoice A bill issued by one who has provided products and/orservices to a customer. In asset-based lending, invoicemeans account receivable.
Posted on: Fri, 21 Mar 2014 14:35:02 +0000
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