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What is mortgage?

Mortgage pertains to the debt instrument that is used to buy some real estate property. A person or entity that wants to buy real estate assets offers collateral in exchange for a loan and make payments based on the defined payment schedules. Mortgages are used to purchase real estate assets when the buyer cannot afford [...]

What is money laundering?

Money laundering is a crime wherein a criminal or criminals mask the real ownership as well as control of the income from criminal activities by making it appear that the funds came from a legitimate source. There are many ways money launderers disguise ill-gotten money. Money laundering can happen even without the help of the [...]

What is IPO?

IPO stands for initial public offering or the selling of a stock of one firm to the general public. A firm can obtain money by offering stock—equity or debt—to the public. The first time a firm offers its equity to the public, and then it is an IPO. IPO explained There are two categories for [...]

What is Collateral Mortgage?

Collateral mortgage refers to a type of mortgage where the loan agreement is secured by collateral. There are lenders that offer a borrower’s ability to register collateral for a mortgage up to 125 percent of the mortgage value. This allows a borrower to borrow more funds from the same lender. The amount borrowed the second [...]

What is leverage?

Leverage is when a person or entity uses different financial instruments or borrows capital to increase the possible return of the investment. A company or person who has more debts or loans than equity is referred to as highly leveraged. The term is widely used for real estate deals since mortgages are used to buy [...]

What is Ledger Balance?

Ledger balance is the resulting balance when the total debit is subtracted from the total number of credits. It is shown in every customer’s bank statement. A bank account would basically show two balances. The first one represents the ledger balance while the second is the current balance. The current balance is the amount that [...]

What are liquid assets?

Liquid assets are important elements in financial planning and investing. They serve as key tool for financial planners to analyze potential net or profit within a given period by monitoring the accessible funds of an individual. Through liquid assets financial investors are also able to demonstrate and predict the rise and fall of financial markets [...]

What is CFR?

CFR is an abbreviation for the phrase Cost and Freight. This phrase means that a seller is required to pay the cost of goods plus freight charges required to transport those good to the port of destination. CFR requires that a seller clears goods for export. However, the risk associated to damages or loss of [...]

What is Fixed Income?

The term fixed income can have several meanings. One of the most common definitions is that it is a stable and constant rate on a particular investment. An example is when an individual purchased bonds and obtains an unchanging rate of income from these bonds. Generally, this is a low rate of interest on the [...]

What is IBAN?

IBAN is the acronym for International Bank Account Number. This refers to a kind of numbering system which was devised in order to recognize a bank account, no matter where the bank which maintains the account is located. This system was developed so that transactions involving bank accounts from other countries could be processed and [...]

What is a Hedge Fund?

A hedge fund refers to a collection of investments that is aggressively managed to utilize innovative strategies to generate high profits. Such strategies could be short term or long term and may be leveraged locally or internationally. In most cases, hedge funds are established as investment partnerships of a private nature open to a specific [...]

What is Financial Aid?

Introduction: The term “financial aid” is used in many contexts these days. Educational institutes use this term for helping out the needy students in their finances so that they can pursue their studies without any financial problem. Countries use this term for giving some finance to the poor countries. But in the long run, this [...]

What is Interest?

In very simple terms, interest refers to the cost incurred for borrowing money. It is also known as the cost of debt. When someone borrows money, the charge they pay is the interest. On the other hand, the person who lends money earns an interest. Interest is calculated based on a specified rate. If the [...]

What is foreclosure?

Foreclosure is the seizure of a property by a lender after a homeowner failed to make the payments for the principal as well as interest payments for the mortgage. The lender evicts the homeowner and sells the asset as indicated in the contract of mortgage. A homeowner is considered to be in default when he [...]

What is CSC?

CSC is the abbreviation for Card Security Code. CSC is a crucial online security feature appearing at the back of MasterCard, Visa, Switch, JCB or Solo Card and on front side of AmericanExpress cards. This recent code has 3 to 4 digits that provide cryptographic scans on information imprinted on a card. A CSC code [...]

What is CAGR?

CAGR or compound annual growth rate and it refers to the average growth rate of an investment over a specified period of time. The calculation used for CAGR can be applied to investments that are made for a few years or those that are intended for long-term yields. Assuming that the growth rate is positive [...]

What is hedging?

Hedging is when investors take necessary steps to protect themselves from unforeseeable events in relation to their investments. In the financial markets, hedging takes place when investors and portfolio managers employ various techniques to protect their investments or their client’s investments to reduce the risks. Hedging is the strategic use of different instruments in the [...]

What is grace period?

Grace period is the time provided by financial firms for those with loans to settle their obligation after the due date has already lapsed. Those who settle their obligations within the grace period are not required to pay late fee charges, and their loans will not be cancelled nor considered as in default. Most financial [...]

What is Myanmar Kyat?

The Myanmar Kyat, also known as MMK, is the official currency of Myanmar. Though one kyat is made up of a hundred pyas, pya coins are scarce making them use notes up to a thousand kyat. While the official exchange rate of MMK to U.S dollars has stayed around 7 kyats to one US dollar, [...]

What is Inequality?

Inequality simply means the state that lacks equality. This term can also be used in two different contexts, economics and mathematics. In economics, inequality pertains to the distribution of resources to different sectors of the society. This shows the difference between the wages and income of the poor against the rich. Inequality also has a [...]

What is bid and ask?

Bid and ask refers to a terms in stocks or foreign exchange trading which refers to the price at which the buyer and seller agree on some stock or security. The bid and ask price is typically given in two values with one price lower and the other price higher than the other. As in [...]

What is IRA?

IRA stands for Individual Retirement Account and refers to an account setup that allows people to save money for his retirement with a tax-deferred basis or a tax-free growth. The three major types of Individual Retirement Accounts include Traditional, Rollover, and Roth. The first type, called Traditional IRA, involves making monetary contributions which may be [...]

What is Mortgage Insurance?

Mortgage insurance, also called private mortgage insurance, refers to an insurance policy that is aimed to provide protection to the lender in case the borrower fails to pay his mortgages. Mortgage insurance is paid by borrowers in order to encourage lenders to offer them with financing. Private mortgage insurance is sometimes confused with credit life [...]

What is BNY Mellon?

BNY Mellon is short for The Bank of New York Mellon Corporation, a banking and investment management firm based in the US.  Its main office is located in New York’s Wall Street and offers various banking and financial services to its global customers.  The company is known to be the US’ oldest bank and the [...]

What is debt ceiling?

Debt ceiling refers to some kind of limit imposed by the US Congress for its own government.  The limit or ceiling on US debt is basically set to prevent the government from exhausting all its resources and engage in overspending.  Putting a limit on how the US government spends or borrows is one direct way [...]

What is bitcoin?

Bitcoin refers to a digital or electronic form of payment or currency system.  It works through a specific application on a person’s computer or mobile phone.  The value of bitcoins that a person has can be used for online payments for goods and services.  Bitcoins are likened to some kind of virtual money or wallet [...]

What is CGL insurance?

CGL insurance refers to Commercial General Liability insurance policies that are applicable to businesses, whether big or small. This type of insurance basically helps protect business owners from possible lawsuits wherein there is bodily injury involved or when there is damage in one’s property. This type of insurance basically gives protection to a business in [...]

What is loan modification?

Loan modification refers to a process wherein the terms of an existing loan are changed or modified because of the borrower’s inability to payoff his/her loan under existing terms and condition. In many cases, some borrowers are not able to pay their debts at specified amounts and periods of time. When this happens, the money [...]

What is CMF indicator?

CMF indicator refers to the Chaikin Money Flow index or indicator.  In the field of finance and investments, money flow indicators such as the one created by Chaikin is basically used to assess the flow of money in stock trading.  Using several days of stock trading as the main source of data, money flow may [...]

What is a CDX index?

CDX is short for credit derivative index and it is part of a group of indices called CDS or credit default swap. Under CDS, the index that covers various emerging markets and existing credit markets in North America is the CDX. Companies that are based in other countries like those in Europe or Asia for [...]

What is Lehman shock?

Lehman shock refers to the shock 2008 filing of bankruptcy in of Lehman Brothers, one of the US and the world’s largest financial services firm. In the US alone, Lehman’s bankruptcy was considered the biggest in financial history with assets of the organization reported to be around 600 billion US dollars. It was in September [...]

What is FTB reconciliation?

FTB reconciliation refers to an accounting process wherein the filed tax income a particular individual or family is checked and compared with the actual benefits received through the FTB or the Family Tax Benefit. This particular benefit payment is given to eligible individuals and families who have dependent children under their care. A basic requirement [...]

What are IDFC bonds?

IDFC bonds refer to fixed-income financial instruments issued by the IDFC firm or the Infrastructure Development Finance Company. IDFC is considered one of India’s most trusted organizations in the field of infrastructure and financial services. Founded back in 1997, the IDFC has provided support to various infrastructure projects across India and helped many people with [...]

What is EQECAT?

EQECAT is a company involved in providing insurance and financial-related services for various clients in the field of risk modeling, property and casualty insurance. The basic services of EQECAT helps various businesses have the right information in terms of calculating various risks that are brought about by life-changing, natural, and catastrophic events. Through risk modeling [...]

What is MCIF?

MCIF or Marketing Customer Information File refers to a computerized filing system containing details and accounts of an organization’s existing customers.  In simple terms, having MCIF is equivalent to having a full database of existing customer accounts and their associated relationships.  The besting thing about getting a MCIF is that it not only provide basic [...]

What is an ITF bank account?

“ITF bank accounts” refer to accounts that are set up in such a way that the account owner is able to designate a beneficiary when he/she dies.  The “ITF” term in the bank account stands for “in trust for,” and this literally pertains to the authority given by the account owner to the named person [...]

What is a CVS number?

A CVS number refers to a credit card’s security value or number.  Some credit card companies refer to this security value as a CVV or card verification value while others use CSC or card security code. Some people also equate a CVS number to other terms such as card code verification number or the signature [...]

What is an APF number?

What is an APF number? APF number refers to the Approved Project Financial number or code and this is provided by various financing companies in India that are involved with housing and related developments. This particular code is given to the authorized builder of a house, building, or similar project. When a person for example [...]

What is a DuPont analysis?

What is a DuPont analysis? “DuPont analysis” refers to a formula that measures a company’s financial performance in terms of ROE or “return on equity.”  Its name comes from DuPont Corporation which is credited for creating and using the performance formula. Based on the DuPont analysis formula, a company’s ROE performance is mainly affected by [...]

What is “CMTA”?

What is “CMTA”? “CMTA” or “clearing member trade agreement” refers to an agreement or understanding between one investor and more than one broker or brokerage firms with the intent of consolidating all possible trade orders for a single broker later.  This agreement involves a document that has to be signed by the investor and the [...]

What is an EBT card?

EBT cards are Electronic Benefit Transfer cards issued by the U.S. government to citizens who may be in need of some kind of assistance for their daily and other needs.  Instead of the common practice of giving food items or cash to various beneficiaries, one may just opt to have an EBT card that will [...]

What is FNMA Alliance?

What is FNMA Alliance? Many people have been asking what the FNMA Alliance is all about.  Some have heard of this organization through friends while others have direct experience with the organization through a series of phone calls.  Not many people exactly know much about what business the FNMA Alliance is engaged in with some [...]

What is EFTPS?

What is EFTPS? EFTPS or Electronic Federal Tax Payment System is literally an “electronic” way of paying taxes for American taxpayers.  Whether the taxpayer is an individual or a business entity, taxes may be filed using means such as via phone call to a customer service hotline or through the online channel.  This tax-paying system [...]

What is FMP?

What is FMP? FMP or Fixed Maturity Plan is a type of mutual fund that involves investing in debt with a maturity date that is pre-determined and fixed. Through FMPs, investors will be able to earn some income by means of interest payments but with quite minimal risk. Fixed Maturity plans are also referred to [...]

What is Cash Flow?

What is Cash Flow? Cash flow is basically a financial term that involves all the cash of a particular company including those that are created or received and those that are spent as operations expense. And since it involves all the cash that a company is able to generate and spend, cash flow figures can [...]

What is a Derivative?

What is a Derivative? In the world of business and finance, a derivative refers to a form of security which has a value that depends on a particular asset product. If the value of this particular asset changes with the market conditions, so is the value of the derivative. These assets from which the value [...]

What is BIG?

What is BIG? BIG stands for “basic income guarantee” and it refers to a government-initiated program for social security, especially intended for people that are poor and live below the poverty line. The main concept of this program is the provision of some form of regular income to citizens covered under this program. This income [...]

What are Bank Routing Numbers?

What are Bank Routing Numbers? Bank Routing Numbers are numeric codes that appear on bank checks and other negotiable instruments to basically give identification from which bank or financial institution a particular check is drawn. All banks in the US for example have unique 9-digit routing numbers or routing transit numbers which used to be [...]

What is Bumper to Bumper Warranty?

What is Bumper to Bumper Warranty? Bumper to bumper warranty refers to warranty coverage for a new car bought by a customer. From the term itself, “bumper to bumper” literally means that the specific car is covered with a certain warranty from the “front bumper” to the “back bumper”. Though this is not an absolute [...]

What is HDHP?

What is HDHP? HDHP refers to a health insurance plan called “High Deductible Health Plan”. From the term itself, it is a type of health insurance plan that involves a high deductible but with low premiums. Deductible is the amount a person is required to pay the insurance company before it could give out the [...]

What Is FDIC?

What Is FDIC? FDIC stands for Federal Deposit Insurance Corporation. It is actually an independent body which was created by the Congress back then in order to insure the money saved by people. It is also a way of building confidence when it comes to banking and other financial transactions. However, it is important to [...]

What is QE2?

What is QE2? QE stands for quantitative easing and the 2 represents the second time or second round of this process. In this context, QE2 is the second time in which a particular central bank has offered or “done” quantitative easing to help stimulate the economy of a particular country. Quantitative easing is a process [...]

What is KPMG?

What is KPMG? KPMG stands for Klynveld, Peat, Marwick, and Goerdeler representing the names of four people who joined their separate accounting firms together to form a global firm. Today, KPMG is one of the “Big 4” audit firms in the world along with Ernst & Young, Deloitte, and PwC. With its main office located [...]

What is CDO?

What is CDO? CDO is a financial term that stands for “collateralized debt obligation”. CDO is an investment security that is backed—or secured—by a pool of other bonds, loans, or assets. The CDO a type of structured asset-backed security and is traded in public security markets. CDOs do not typically deal with mortgages—rather a CMO, [...]

What is PMI Percentage?

What is PMI Percentage? PMI refers to private mortgage insurance and PMI percentage is the rate of insurance required for properties that are acquired by borrowers who may default on the policy. This particular insurance policy is some sort of a guarantee for lenders in case the borrowers are not able to fully pay a [...]

What is a NAIC Number?

What is a NAIC Number? NAIC number refers to the number issued by the National Association of Insurance Commissioners to licensed and affiliated insurance companies across the US. The NAIC is a body or organization that helps in the creation of similar or uniform policies across various insurance companies and organizations. Officials of the NAIC [...]

What is Ownership?

What is Ownership? Ownership refers to the state of having the ultimate and exclusive rights and control over a particular thing or property. It is determined or conferred through a lawful title or claim. Owners have certain restrictions to occupy, possess, enjoy, sell, rent, give away or in some cases, destroy a particular property or [...]

What is FDIC Insured?

What is FDIC Insured? FDIC insured refers to the state or condition that you are already entitled to the different rights and privileges of the insurance provider. FDIC refers to the Federal Deposit Insurance Corporation. This organization is responsible for preserving and promoting the public confidence especially in the financial system of the United States [...]

What is Jumbo Loan?

What is Jumbo Loan? Jumbo loans also referred to as jumbo mortgages or non-conforming loans are loans that exceed the established conforming loan limit. Each January the Office of Federal Housing Enterprise Oversight (OFHEO) establishes the conforming loan limits. Traditionally, the limits have lingered around $400,000 per year. Currently, the conforming loan limit is $417,000 [...]

What is Annual Percentage Rate?

What is Annual Percentage Rate? Annual Percentage Rate refers to the rate or amount of interest for money that is borrowed. When a particular person decides to make a loan, he/she usually looks on the APR for a particular loan. The lower the APR, the less expensive is the interest. Computations for APR is quite [...]

What is FICA Tax?

What is FICA Tax? The acronym FICA refers to Federal Insurance Contributions Act. This is a federal act mandating employers to deduct a particular percentage from the salary of every employee each pay period. As an added requirement, FICA mandates the employer to match the amount deducted from each employee and put the money to [...]

What is Budget?

What is Budget? Budget was derived from a French word bougette, which means purse. Budget is an essential concept not just in macroeconomics but as well as microeconomics. It is a financial plan concerning the process of saving and spending money. There are several types of budget. However, this article will be focusing mainly on [...]