Management By Objectives (MBO)
What is 'Management By Objectives - MBO' Managers use management by objectives (MBO) to enhance the performance of their organizations. MBO is a management approach that tries to improve the performance of an organization by clearly identifying objectives that are accepted by both management and employees. In accordance with the notion, giving workers a voice in goal formulation and action...
Parity Price
What is a ‘Parity Price' When the price of one asset is closely connected to the price of another asset, this is referred to as a parity price. Known as the parity pricing idea, it is used to both stocks and commodities and describes the situation in which two items have the same worth. To decide whether it is financially advantageous...
Investment
Investment refers to buying financial assets with the expectation of earning profit in the future. The underlying asset is purchased not for immediate consumption, but to create wealth with the passage of time. An investor purchases an asset with the idea of earning income from the investment. The asset can be anything such as real estate, financial securities, commodities,...
Range Forward Contract
What is 'Range Forward Contract' It is a zero-cost currency forward contract that employs a variety of exchange rates rather than a single rate and has no transaction costs. It is designed in such a way that it gives complete protection against unfavourable exchange rate movements while still preserving some upside potential in order to profit from positive currency swings....
Uncle Sam
What is 'Uncle Sam' A nickname dating back to 1812 used to refer to the U.S. government. The term is said to come from "Uncle Sam" Wilson, who provided barrels of beef to the U.S. Army during the War of 1812. The barrels were stamped "U.S." to indicate that they were government property, but they came to...
Off-Balance-Sheet Financing
DefinitionOff-balance sheet, or Incognito Leverage, usually means an asset or debt or financing activity not on the company's balance sheet. Total return swaps are an example of an off-balance sheet item. Off-Balance-Sheet Financing What is 'Off-Balance-Sheet Financing' In off-balance-sheet financing, large capital expenditures are kept off a company's balance sheet to keep the debt to equity (D/E)...
Long
A Long, or a long position, is an investment term that relates to securities such as currency, commodity, and stocks. Individuals that take the long position believe that the market will improve in the near future. The opposite of taking the long position is short position. Explanation of Long (or Long Position) Investors that take the long position buy...
Economic And Social Stabilization Fund (Chile)
What is 'Economic And Social Stabilization Fund - Chile' The Economic and Social Stabilization Fund is a government-owned investment organization that manages a sovereign wealth fund for the government of Chile. The funds deposited in the ESSF were sourced from surplus revenues from Chile's copper exports. According to the Chilean Ministry of Finance, the ESSF has approximately...
Absentee Landlord
DefinitionIn economics, an absentee landlord is a person who owns and rents out a profit-earning property, but does not live within the property's local economic region. The term "absentee ownership" was popularised by economist Thorstein Veblen's 1923 book of the same name, Absentee ownership. Absentee Landlord What is 'Absentee Landlord' An individual or entity that rents or...
Stock
A stock is a security that proves ownership of an individual or a company in another corporation and it also represents a claim its earnings as well as assets. There are basically two main types of security namely preferred and common. The latter allows the owner to place his/her vote during a shareholder’s meeting and is eligible to receive...