Recurring Billing

Recurring billing happens when a merchant automatically charges a customer for goods or services on a prearranged schedule. Recurring billing requires the merchant to get the customer’s information and permission. The vendor will then automatically make recurring charges to the customer’s account with no further permissions needed.Any good or service that a customer subscribes to with regularly scheduled payments might be a good candidate for recurring billing. Examples include cable bills, cell phone bills, gym membership fees, utility bills, and magazine subscriptions. Recurring billing may also be referred to as automatic bill payment.

Revolving Loan Facility

A revolving loan facility is a form of credit issued by a financial institution that provides the borrower with the ability to draw down or withdraw, repay, and withdraw again. A revolving loan is considered a flexible financing tool due to its repayment and re-borrowing accommodations. It is not considered a term loan because, during an allotted period of time, the facility allows the borrower to repay the loan or take it out again. In contrast, a term loan provides a borrower with funds followed by a fixed payment schedule.

Demand Curve

The demand curve is a graphical representation showing the quantity of a good or service that consumers are willing to purchase at different price levels. Typically, the demand curve slopes downwards to the right, indicating that the lower the price, the higher the quantity purchased by consumers.

Demand Theory

Demand theory is an important concept in economics that studies consumers' willingness to purchase goods and services at different price levels. It explores how factors such as price, income, and preferences affect the quantity demanded and reveals the shape and movement of the demand curve. Demand theory helps understand market behavior and formulate economic policies.

Law Of Demand

The law of demand is one of the most fundamental concepts in economics. It works with the law of supply to explain how market economies allocate resources and determine the prices of goods and services that we observe in everyday transactions.The law of demand states that the quantity purchased varies inversely with price. In other words, the higher the price, the lower the quantity demanded. This occurs because of diminishing marginal utility. That is, consumers use the first units of an economic good they purchase to serve their most urgent needs first, then they use each additional unit of the good to serve successively lower-valued ends.

Demand Elasticity

Price elasticity of demand is a measurement of the change in the consumption of a product in relation to a change in its price. Expressed mathematically, it is:Economists use price elasticity to understand how supply and demand for a product change when its price changes. Like demand, supply also has an elasticity, known as price elasticity of supply. Price elasticity of supply refers to the relationship between change in supply and change in price. It’s calculated by dividing the percentage change in quantity supplied by the percentage change in price. Together, the two elasticities combine to determine what goods are produced at what prices.

Demand Shock

A demand shock is a sudden unexpected event that dramatically increases or decreases demand for a product or service, usually temporarily. A positive demand shock is a sudden increase in demand, while a negative demand shock is a decrease in demand. Either shock will have an effect on the prices of the product or service.A demand shock may be contrasted with a supply shock, which is a sudden change in the supply of a product or service that causes an observable economic effect.Supply and demand shocks are examples of economic shocks.

Amended Return

An amended return is a form filed in order to make corrections to a tax return from a previous year. An amended return can correct errors and claim a more advantageous tax status, such as a refund. For example, one might choose to file an amended return in instances of misreported earnings or tax credits. Mathematical errors, however, do not require amendments because the IRS automatically corrects for such errors when processing the tax return.

Modified Duration

Modified duration is an indicator that measures the sensitivity of a bond's price to changes in interest rates. It represents the percentage change in the bond's price for a 1% change in interest rates. The higher the modified duration, the more sensitive the bond's price is to changes in interest rates.

Trimmed Mean

A trimmed mean (similar to an adjusted mean) is a method of averaging that removes a small designated percentage of the largest and smallest values before calculating the mean. After removing the specified outlier observations, the trimmed mean is found using a standard arithmetic averaging formula. The use of a trimmed mean helps eliminate the influence of outliers or data points on the tails that may unfairly affect the traditional or arithmetic mean.Trimmed means are used in reporting economic data in order to smooth the results and paint a more realistic picture.

Dormant Account

A dormant account is a customer's account at a bank or other financial institution that has seen no activity, with the possible exception of interest deposits, for a long period of time. The owner may have forgotten about the account, moved out of town without leaving a forwarding address, or died.A dormant account with a very small balance may simply evaporate, reaching a zero balance due to monthly bank fees that exceed any interest paid. If not, the balance is turned over to the state, which will return it to the rightful owner upon request.Financial institutions are required to transfer the money held in dormant accounts to the state's treasury after the accounts have been dormant for a certain period of time. The amount of time varies by state.

Exercise

Exercise means to put into effect the right to buy or sell the underlying financial instrument specified in an options contract. In options trading, the holder of an option has the right, but not the obligation, to buy or sell the option's underlying security at a specified price on or before a specified date in the future.

Strike Price

Options contracts are derivatives that give the holders the right, but not the obligation, to buy or sell some underlying security at some point in the future at a pre-specified price. This price is known as the option's strike price (or exercise price). For call options, the strike price is where the security can be bought by the option holder; for put options, the strike price is the price at which the security can be sold.An option's value is informed by the difference between the fixed strike price and the market price of the underlying security, known as the option's "moneyness."For call options, strikes lower than the market price are said to be in-the-money (ITM), since you can exercise the option to buy the stock for less than the market and immediately sell it at the higher market price. Likewise, in-the-money puts are those with strikes higher than the market price, giving the holder the right to sell the option above the current market price. This feature grants ITM options intrinsic value.Calls with strikes that are higher than the market, or puts with strikes lower than the market, are instead out-of-the-money (OTM), and only have extrinsic value (also known as time value).

Excersise Price

The exercise price is the price at which an underlying security can be purchased or sold when trading a call or put option, respectively. It is also referred to as the strike price and is known when an investor initiates the trade.An option gets its value from the difference between the fixed exercise price and the market price of the underlying security.

Beacon Score

A Beacon score is one of many credit scoring models developed by FICO, the major company in that field. It is still in use today but is currently branded simply as a FICO score. In years past it was often referred to as an Equifax Beacon score, after the credit bureau Equifax. For example, a Beacon 5.0 score is now known as a FICO Score 5, according to FICO. That score remains in wide use in the mortgage industry.

Impaired Credit

Impaired credit typically refers to a deterioration in the perceived creditworthiness of an individual, a business, or other entity. Impaired credit is usually reflected for individuals in a lower credit score and for businesses and other entities as a lower credit rating. Would-be borrowers with impaired credit will find it harder to obtain loans and generally have to pay higher interest rates if they do. Impaired credit can be either a temporary and fixable condition or a warning sign that even greater financial distress may lie ahead.

Credit Limit

A credit limit is the maximum amount of credit a financial institution extends to a client on a credit card or a line of credit. Lenders usually set credit limits based on specific information about the credit-seeking applicant, including their income and employment status. Credit limits are an important factor that can affect consumers' credit scores and their ability to obtain credit in the future.

Credit Report

A credit report is a record compiled by credit rating agencies that details the credit history and credit status of an individual or business. It typically includes borrowing records, repayment history, credit card usage, and other credit-related information. A credit report is used to assess the credit risk of the borrower, helping lending institutions decide whether to approve a loan and determine the loan interest rate.

Information Ratio

The Information Ratio is a metric used to evaluate the performance of an investment portfolio. It reflects the relationship between the portfolio's excess return and the nonsystematic risk it takes on. Specifically, it is the ratio of the portfolio's excess return (i.e., returns above the benchmark) to the tracking error (i.e., the standard deviation of the difference between the portfolio returns and the benchmark returns). A higher Information Ratio indicates that the portfolio achieves more excess return for the same level of risk.

Account In Trust

An account in trust or trust account refers to any type of financial account that is opened by an individual and managed by a designated trustee for the benefit of a third party per agreed-upon terms.

Trust Property

Trust property refers to assets that have been placed into a fiduciary relationship between a trustor and trustee for a designated beneficiary. Trust property may include any type of asset, including cash, securities, real estate, or life insurance policies. Trust property is also referred to as "trust assets" or "trust corpus."