What Is Ability-To-Pay Principle?

Definition: This principle says, regardless of the benefits people receive, they should be taxed according to their ability to pay. That is, people who earn more money can afford to pay more taxes. The U.S. individual income taxation system is based on this belief.

What Is Absolute Advantage?

Definition: The ability of a person, company or country to produce more output than others by using the same amount of resources

What Is Accelerator Principle?

Definition: According to this economic concept, if the consumption (or demand) of a good or service increases, demand for new investment to produce this good or service will increase (or vice versa).

What Is Accounting Loss?

Definition: This loss occurs when total explicit revenue is lower than total explicit costs.

What Is Accounting Profit?

Definition: This refers to total revenue less total explicit costs such as depreciation, interest and taxes. Note that accounting profit is higher than economic profits because it omits implicit costs such as all opportunity costs

What Is Accounts Payable?

Definition: This refers to all short-term debts of a company or household (including invoices, bills, tax payments) to be paid to its creditors and suppliers. In a company’s balance sheet, these can be found under the heading current liabilities

What Is Accounts Receivable? 

Definition: This refers to all short-term expected payments to the company from clients that have received the goods and services without paying all money. The clients must make the payments within a given period. On a company’s balance sheet, accounts receivable is recorded under the heading of current assets.

What Is Adaptive Expectations?

Definition: In economics, people form their future expectations about inflation or other economics events to make investment decisions based on using historical data

What Is Add-On Rate?

Definition: Based on the assumption that the borrower holds the original principal for the entire loan period, it is an interest rate that is added to the principal of loan, and total interest for all years is computed on the original principal.

What Is Adjusted Balance Method?

Definition: This method is used to calculate the interest income or finance charges related to a bank account or credit card account. At the end of the current time period, after the all the transactions have been posted, the company calculates interest income and finance charges based on this ending balance.

What Is Adverse Selection?

Definition: It occurs when there are information asymetries and difficulties in selecting customers. This term is used in insurance, economics, risk management and statistics. For example, in insurance, a firm has to identify different customer groups in order to decide the premiums. This is why health insurance premiums are higher for smokers and obese people. If the insured hides certain pertinent information from the insurer, the insurer will determine the wrong risk profile of the insured, and so the wrong premium.

What Is Agency Costs?

Definition: This occurs when the interests of the principal (a company or people) conflict with the interests of the agent.  The principal hires the agent to act on its behalf, but due to having different interests, it is not certain that the agent always acts for the principal’s best interests. These kind of conflicts, for example, arise between the shareholders of the company and its management. Shareholders wish for management to run the company in a way that increases shareholder value. But management may wish to grow the company in ways that maximize their personal power and wealth (with performance bonuses and stock options) that may not be in the best interests of shareholders. In order to minimize the agency costs, the principal can monitor what the agent does, or to make the interests of the agent more like those of itself.

What Is Aggregate Demand?

Definition: In macroeconomics, it is the total demand for final goods and services within an economy at a given period and overall price level. It makes up the national income of an economy.


AD = C + I + G + (X-M)

AD = Aggregate demand

C = Consumers’ expenditures on goods and services.

I = Investment spending by companies on capital goods

G = Government expenditures on publicly provided goods and services

X = Exports of goods and services

M = Imports of goods and services


What Is Aggregate Demand Curve?

Definition: The graph that shows the relationship between the aggregate demand (quantity of output –real GDP) and diffrerent price levels. The aggregate demand curve, AD, like the demand curves for individual goods, is downward sloping, implying that there is an inverse relationship between the price level and the quantity demanded of real GDP.

What Is Aggregate Expenditure?

Definition: It is the total amount of desired spending by consumers, governments, private investors and foreign buyers (net of spending on imports) at each level of real national income (GDP) in a given period.


AE = C + I + G + (X-M)

AE = Aggregate expenditure

C = Consumers’ expenditures on goods and services.

I = Investment spending by companies on capital goods

G = Government expenditures on publicly provided goods and services

X = Exports of goods and services

M = Imports of goods and services


What Is Aggregate Supply?

Definition: In macroeconomics, it is the total supply of goods and services that the firms are willing to sell at a given price level in a given period of the economy. In the short run, aggregate supply shows total planned output when prices in the economy can change but the prices and productivity of all factor inputs are held constant. In the long run, it shows a constant level of real GDP at all price levels, determined by the economy’s productive capacity at full employment.

What Is Aggregate Supply Curve?

Definition: The graph that shows the the relationship between the price levels and the amount of output (GDP) that the firms will choose to produce. Short run aggregate supply is upward sloping. The long run aggregate supply curve is a vertical line at the full employment (capacity output) level of real national income (GDP).

What Is Allocative Efficiency?

Definition: It refers to providing maximum social welfare by satisfying unlimited human wants and needs with the scarce resources in the economy. Markets do this with producing the right goods for the right people at the right prices.

Allocative efficiency level can be measured at the output level where the price equals the marginal cost of production (P = MC). At this level, the social surplus is maximized and there will no deadweight loss.

What Is Allowance?

Definition: It refers to sum of money paid at regular intervals to a recipient, often by a parent to a child; sometimes paid in compensation for services rendered. The person making the allowance usually decide the purpose and may put controls in place to make sure that the money is spent for that purpose only.

What Is Amortization?

Definition: It refers to writing off an intangible asset investment over the projected life of the assets, or the process of liquidating a debt such as mortgage or car loan over a period of time.

What Is Amount Past Due?

Definition: It refers to a loan payment in a credit arrangement that is not repaid on time. For example, if a loan payment is due by the 6th of the month and is not paid by the 9th, the payment will be considered past due. The borrower who is past due will have some negative effects on its credit status. And he/she will pay a late fee after the given grace period.

What Is Annual Fee?

Definition: It refers to the yearly charge by financial institutions on certain type of accounts (for having a credit card or credit account) in order to offset operating expenses

What Is Annual Percentage Rate (APR)?

Definition: It refers to the annual percentage rate of the interest on the principal of a loan, mortgage, credit card, etc. It includes any fees or additional costs of funds over the period of the loan.

What Is Annual Percentage Yield (APY)?

Definition: It refers to the rate that income earned on a investment in a year divided by the amount of the investment

What Is Annuity?

Definition: It refers to a series of equal payments that are usually made at regular intervals for a set amount of years or for the person’s lifetime

Annuity equation

FV = (A/i)[(1+i)n – 1], where:


FV = Future value (It’s the amount wanted in the future)

A = Annuity; annuities are the initial and subsequent payments (which must be the same amount).

i = Interest rate (The interest rate in the formula must be written in decimal form, such as 0.03 instead of 3%)

n = This is the number of periods, where “n” is the number of equal deposits that will be made.

 What Is Appreciation?

Definition: It refers to an increase in the value of an asset (such as such as a stock, bond, currency or real estate) occurred  for a number of reasons including increased demand, weakening supply, changes in inflation or interest rates. For example, when the value of a currency rises relative to another, it appreciates. If the value of a currency goes up, then so does consumer spending and business, thus inflation “or the cost of prices” also goes up to keep the economy stable.

What Is Arbitrage?

Definition: It refers to buying of one item and the selling of the same item for a higher price in the same or different markets. Thus, it is a profit making activity, and somebody who takes part in arbitrage is known as an arbitrageur. For example, if the good A is trading at $5 in London and $7 in Paris, an arbitrageur can turn a profit by buying in London and selling in Paris. Arbitrage originally occurred in the currency market, but it is applied in th commodity, futures and stock markets as well.

What Is Arbitrage Pricing Theory?

Definition: This theory developed by Stephen Ross in 1976. It predicts a relationship between the returns of a portfolio and the returns of a single asset through a linear combination of many independent macro-economic variables. If the price of an asset happens to diverge from what the theory says it should be, arbitrage by investors should bring it back into line. It is often viewed as an alternative to the capital asset pricing model (CAPM), since the APT has more flexible assumption requirements.

What Is Asian Financial Crisis (1997 -98)?

Definition: Asian financal crisis or Asian Contagion occurred between June 1997 and January 1998 in Eastern Asian countries as Indonesia, South Korea and Thailand. Then it affected all other Asian countries such as Hong Kong, Malaysia, Laos, the Philippines, China, Taiwan, Singapore, Brunei and Vietnam.

After the high growth rates (by 6% to 9% per annum) in South Korea, Thailand, Malaysia, Indonesia, Singapore and the Philippines (these called as “tiger economies”), their stock markets and currencies lost about 70% of their value. They and others suffered from loss of demand and confidence. Market declines were also felt in the United States, Europe and Russia as the Asian economies slumped.

Although most of the governments of Asia had seemingly sound fiscal policies, the International Monetary Fund (IMF) stepped in to initiate a $40 billion program to stabilize the currencies of South Korea, Thailand, and Indonesia, economies particularly hard hit by the crisis.

What Is Asset?

Definition: It refers to anything with an economic value that an individual, business or country owns with the expectation that it will provide future benefits, or that can be sold to make cash.

For individuals, assets that are really considered to be worth money are houses, vehicles, expensive jewelry and electronics.

In business and accounting there are several types of assets. Current assets are the things that can easily be turned into cash and are expected to be sold or used up within a year. Fixed Assets are assets that have a useful life of more than one year, for example buildings and machinery; there are also intangible fixed assets, like the good reputation of a company or brand.

What Is Asymmetric Information?

Definition: It refers to a situation in which a person has more information than another person. In this situation, one side can take advantage of the other side’s lack of information. Thus, it will lead harmful problems such as adverse selection (immoral behavior that takes advantage of asymmetric informationbefore a transaction) and moral hazard (immoral behavior that takes advantage of asymmetric information after a transaction).

For example, consider a potential buyer of Company ABC shares and the seller of those shares. If the seller knows the CFO’s friend and has heard that the company is facing undisclosed financial problems, then the seller has asymmetric information. The seller is taking advantage of the buyer’s lack of knowledge, and thus the buyer will lose money.

What Is Auction?

Definition: It refers to the efficient way for a seller to set price of its goods and services by observing how much people are willing to pay for them. In other words, it is a process of buying and selling goods or services by offering them up for bid, taking bids, and then selling the item to the highest bidder.

What Is Automatic Stabilizers?

Definition: It refers to policies and programs that works automatically without any governmental and policymakers’ intervention during the fluctuations in the economy. For example, tax systems (individual and corporate income taxes) and transfer systems (unemployment insurance and welfare) are the well-known automatic stabilizers. For example, transfer payments such as unemployment insurance fall when the economy is growing, or rise when the economy is in the recession.

What Is Average Daily Balance Method?

Definition: It refers to a calculating method which is used finance charges charges based on the average amount owed for each day of the billing cycle.


(A / D) x (I / P)


A = the sum of the daily balances in the billing period

D = number of days in the billing period

I = annual interest rate

P = number of billing periods per year (usually 12)


What Is Average Fixed Cost (AFC)?

Definition: It refers to total fixed costs divided by the number of units of output, that is, fixed cost per unit of output.

What Is Average Revenue (AR)?

Definition: It refers to total revenue divided by the number of units of output, that is, revenue per unit of output or price of per unit of output

What Is Average Variable Cost (AVC)?

Definition: It refers to total variable costs divided by the number of units of output, that is, variable cost per unit of output.

What Is Algorithm Trading?

It refers to a trading system that uses developed mathematical models with electronics platforms to make transaction decisions automatically in financial markets. Trading orders are entered to the system with an algorithm, including order’s timing, price or quantity. In this system, human intervention is minimized, and hence decision making process is very quick. This system is usually used by investment banks, mutual funds, pension funds and brokerage houses.

What Is Alpha?

Definition: It refers to an estimated numeric value of a stock’s expected excess return that cannot be attributed to the market’s volatility, but may be due to some other security. That is, the excess return of the investment relative to the return of the benchmark index is a investment’s alpha.

Alpha is one of the technical ratios in modern portfolio theory. Others are beta, standart deviation, R-squared, and the Sharpe ratio. Alpha is always wanted to be positive and beta to be zero

What Is American Option?

Definition: It refers to an option that can be exercised anytime during its life. Due to this particular feature, it is the most widely traded option on trade exchanges. It is highly liquid in nature.

What Is AAA-rating?

Definition: It refers to the best credit rating that can be given to a borrower’s debts, indicating that the risk of a borrower defaulting is minuscule and borrower can meet its financial commitments easily. Ratings agencies such as Standard & Poor’s and Fitch Ratings use the AAA nomenclature to indicate the highest credit quality, while Moody’s uses Aaa.

What Is Austerity?

Definition: It refers to an economic policy which aims to reduce a government’s deficit. It can be achieved by decreasing government spending or increasing taxes.

What Is Acquisition?

Definition: It refers to a process whereby one company or the target is bought out by another company. Further, an acquisition may be full, when the acquirer buys out a hundred percent of the acquiree’s shares, or partial where it buys only a part of its shares. These, however, will always be larger than fifty per cent of the acquiree’s assets.

Acquisitions are a part of a company’s growth strategy whereby it is more beneficial to take over an existing firm’s operations and niche compared to expanding on its own. Acquisitions are often paid in cash, the acquiring company’s stock or a combination of both.

What Is Appraisal?

Definition: It refers to a process of determining the fair value of an asset. For example a mortgage appraisal will estimate the value of a property based of its quality, appearance and value of comparable properties sold on the market.

What Is Asset Allocation?

Definition: It refers to the overall term that describes how an investor spreads his cash for investing throughout different types of investment, such as savings accounts, stocks and bonds. The main purpose for people that actively look in to asset allocation is to devise a strategy that weighs up their aims and risks so their total investment is safe yet will make a reasonably quick return. For example putting all of your money in to a savings account is safe, but returns are low. Studying asset allocation may make you change your mind into putting 80% into a savings account and the other 20% into the stock market. The most important thing is that you have to know your risk profile. When you know your risk profile, you can make asset allocation more safely.

What Is Assumable Mortgage?

Definition: It refers to buying a house and taking on the previous owner’s mortgage as it stood before the sale. So instead of taking out your own mortgage you assume the role of the previous owner and continue payment of their mortgage. This type mortgage is usually preferred during the high interest rate environment

What Is Backwardation?

Definition: It refers to a condition in which the market quotes a lower price for a more distant delivery date, and a higher price for a nearby delivery date. It occurs due to shortages resulted from excess demand over supply. It is the opposite of contango. The resulting futures and forward curve would be downward sloping.

What Is Bad Credit Loan?

Definition: It refers to the loans which are made to the borrowers with low or no credit scores. The individual with poor credit can find credit with higher interest rates due to the past failures related to paying credit obligations on time. Bad credit usually occurs when these failures happen several times rather than just a single time.

What Is Bad Debt?

Definition: It refers to accounts receivable or trade accounts receivable that is unlikely to be paid and is treated as loss. Bad debt occurs after all attempts are made to collect the debt. Bad debt is shown as an expense on the company’s income statement, which causes lower profit. Companies that do make credit sales estimate the amount of sales they expect to lose to bad debt, which is found in the allowance for doubtful accounts.

What Is Bailout?

Definition: It refers to the provision of financial help or liquidity to a company or country which has serious financial difficulties or bankruptcy. Bailouts can take the forms of : 1) providing loans to a borrower that markets will no longer lend to; 2) guaranteeing a borrower’s debts; 3) guaranteeing the value of a borrower’s risky assets; 4) providing help to absorb potential losses, such as in a bank recapitalisation. For example, the U.S. government in 2008 that will see $700 billion put toward bailing out various financial organizations and those affected by the credit crisis.

What Is Bait And Switch?

Definition: It refers to  a marketing tactic in which stores attract the customers with a product with lower price (the bait), then seller tries to sell more expensive products to the customers (the switch), saying that the cheap products are no longer available in the store.

What Is Balance Of Payments?

Definition: It refers to a record of all visible and non-visible transactions (exports, imports, borrowing, lending) of a country with rest of the world in a given period (quarterly and yearly), expressed in monetary terms (usually the domestic currency for the country concerned). These transactions are made among individuals, firms and governments.

Balance of payments is divided into three main groups: 1) current account (inflow and outflow of goods and services into a country,and earnings on investments); 2) capital account (acquisition or disposal of non-financial assets and non-produced assets); 3) financial account (international monetary flows related to investment in business, real estate, bonds and stocks).

What Is Balance Of Payments Deficit?

Definition: It refers to inequality of a country’s balance of payments where more currency is flowing out of the country than is flowing in. This can lead to a loss of foreign currency reserves.

What Is Balance Of Payments Surplus?

Definition: It refers to inequality of a country’s balance of payments in which more currency is flowing into the country than is flowing out. This can lead to an increase in foreign currency reserves.

What Is Balance Of Trade?

Definition: It refers to a record of a country’s exports and imports of goods and services. Also it can be called as “Net Exports” .If the monetary value of country’s exports is greater than country’s imports, it can be said that the country has a trade surplus. If the monetary value of country’s exports is lower than country’s imports, it can be said that the country has a trade deficit. The balance of trade is sometimes divided into a goods and a services balance.

What Is Balance Sheet?

Definition: It refers to a financial statement which summaries the financial items of a company, including all assets and liabilities and shareholders’ equity in a specific period. The main categories of assets are usually listed first, and typically in order of liquidity. In balance sheet, assets are followed by the liabilities. The difference between the assets and the liabilities is known as equity or the net assets.

What Is Balanced Budget?

Definition: It refers to a situation in which revenues are equal to or greater than the expenses. Therefore, there is no budget deficit, but budget surplus is possible.

What Is Balloon Loan?

Definition: It refers to a kind of long-term loan which does not fully amortized over its term and requires a large sum of money to be paid due upon maturity. It has an advantege of low interest payments.

What Is Balloon Mortgage?

Definition: It refers to a kind of short-term mortgage which requires borrower to make monthly payments  for an amount that is similar to standard mortgage loans. However, after 5-10 years, borrower stops the regular payments and will be required to pay off the entire rest of loan. Balloon payment mortgages are more common incommercial real estate than in residential real estate.

What Is Balloon Payment?

Definition: It refers to the final payment of a balloon mortgage which is a large, lump sum payment that is higher than the regular monthly payments. It can occur within a fixed-rate or adjustable-rate mortgage.

What Is Bank?

Definition: It refers to a financial intermediary which provides various products and services to its customers, including checking accounts, savings accounts, direct deposit, certificates of deposit, loans, debit Cards/ATM, check Cashing services, internet banking services, overdraft protection, etc. There are two types of banks: commercial/retail banks and investment banks. In most countries, banks are regulated by the national government or central bank. In general banks borrow funds from other companies and individuals and lend them to other companies and individuals at cost plus interest.

What Is Bank Account?

Definition: It refers to a financial account which is arranged between bank and its customer, and allows withdrawals and deposits. It can be a deposit account, a credit card, or any other type of account offered by a financial institution.

What Is Bank Failure?

Definition: It refers to  a situation in which banks are no longer able to meet their obligations due to becoming insolvent or illiquid to meet its liabilities.

What Is Bank Reserves?

Definition: It refers to some amount of bank’s deposits not loaned out by bank. This amount is held internally by the bank or deposited with the central bank. Minimum reserve requirements are established by central banks against unexpected events such as unusually large net withdrawals by customers or even bank runs.

What Is Bank Statement?

Definition: It refers to a record which is sent to bank account holders periodically in order to inform them about transactions in the related period.

What Is Bankruptcy?

Definition: It refers to a legal process which occurs when an individual or business entity is unable to repay its outstanding debts to its creditors. It is mostly imposed by a court order, and all assets and financial affairs of person or business entity administered by an appointed trustee. All of them are valued and possibly sold of (liquidated) in order to repay debts.

What Is Barrel (bbl)?

Definition: It refers to  a mesasurement which is usually used for oil. One barrel equals 42 U.S. gallons, or 159 litres.

What Is Barriers To Entry?

Definition: It refers to restrictions which make it difficult to enter a specific market because of high start-up costs, legal rights, patents, licenses, etc.

What Is Barriers To Trade?

Definition: It refers to restrictions on trade such as tariffs, quotas and regulations.

What Is Barter?

Definition: It refers to paying for goods and services with other goods or services instead of using money or credit.

What Is Base Year?

Definition: It refers to the starting point for a series of years in an index . The base year invariably has a starting value of 100.

What Is Basel 1 And 2 ?

Definition: It refers to banking regulations and recommendations on banking laws which set by the Basel Committee on Banking Supervision.  By Basel accords, it is attempted to reduce the number of bank failures by tying a bank’s capital adequacy ratio to the riskiness of loans it makes.

What Is Basis Point?

Definition: It refers that small movements in the interest rate, the exchange rate and bond yields are often described in terms of basis points. One basis point equals 1/100th of a percentage point. For example, , if the Bank of Turkey raises its key lending rate from 7.50 per cent to 9.0 per cent, it is said to have raised the rate by 150 basis points.

What Is Bear Market?

Definition: It refers to a market condition in which prices  in the stock market is falling over a period of time and investors tend to sell because of anticipating losses. Typical features of a bear market include financial securities losing their value, lots of negative speculation and panic, a lack of trust and a general cynicism in the air. Lots of people rush to sell their shares and securities to save what little value they have left

What Is Bearish Trend?

Definition: It refers to a downward trend  in the prices of stocks. A fall in the prices of about 20% is identified as a bearish trend.

What Is Behavioral Economics?

Definition: It refers to a branch of economics which concentrates on the effects of psychological, social, cognitive, and emotional factors on the economic decisions of individuals and institutions.

What Is Benchmark?

Definition: It refers to a set of standards which is used to evaluate and compare the performance of a fund and investment manager. For instance, a mutual fund which outperforms the benchmark is a sign of an efficient fund manager.

What Is Beneficiary?

Definition: It refers to a person who receives an an advantage or benefit from a particular thing. For example, the beneficiary of a life insurance policy is the person who receives the payment of the amount of insurance after the death of the insured.

What Is Benefits-Received Principle?

Definition: It refers to an idea about taxation that people should be taxed according to the benefits they receive from the good or service

What Is Beta?

Definition: It refers to a numeric value which measures the fluctuations, or systematic risk, of a stock or portfolio to changes in the overall market. Beta is used in the capital asset pricing model (CAPM). Beta helps the investor to decide whether he wants to go for the riskier stock that is highly correlated with the market (beta above 1), or with a less volatile one (beta below 1).

What Is Bank For International Settlements (BIS) ?

Definition: It refers to an international financial organization which fosters international monetary and financial cooperation among the central banks. It was established in 1930.

What Is Big Mac Index?

Definition: It refers to a survey done by The Economist which measures the purchasing power parity (PPP) between two currencies. With this index, purchasing power is reflected by the price of a McDonald’s Big Mac in a particular country. The measure gives an impression of how overvalued or undervalued a currency is.

What Is Black Economy (Market)?

Definition: It refers to a part of the economy in which trade transactions are outside of the country’s rules and regulations, so they are mostly illegal and untaxable. Also, Such transactions do not normally show up in the figures for GDP, so the black economy may mean that a country is much richer than the official data suggest.

What Is Black-Scholes Model?

Definition: It refers to a model developed in 1973 by Fisher Black, Robert Merton and Myron Scholes. It is used for pricing financial options. The model assumes that the price of heavily traded assets follow a geometric Brownian motion with constant drift and volatility. When applied to a stock option, the model incorporates the constant price variation of the stock, the time value of money, the option’s strike price and the time to the option’s expiry.

What Is Block Deal?

Definition: It refers to a single transaction of large quantity of securities. The transaction happens through a separate trading window at specified prices.

What Is Blue Chip Stocks?

Definition: It refers to a company which is large, profitable and trusted for long time. These kind of companies have high reputation, high quality, and high reliability. They usually have a market capitalization in the billions and might be the industry leaders . The most popular index including this kind of corporations is Dow Jones Industrial Average (DJIA).

What Is Bond?

Definition: It refers to a certificate of indebtedness issued by a corporation or government under which the issuer promises to repay borrowed money to the lender as fixed rate of interest (coupons) at specific periods and the principal at the maturity date. In other words, a bond is a loan in the form of a security following different terms and conditions. In this case the lender is the bond holder, the issuer is the borrower and finally the coupon is the interest.

What Is Bond Funds?

Definition: It refers to a kind of mutual fund which invests in bonds and other debt instruments, instead of stocks. It usually provides periodic dividends, so they can be preferred  by people who want to have a regular income.

What Is Bonus Share?

Definition: It refers to free shares given to the existing shareholders of the company additionally. These are company’s accumulated earnings which are not given out in the form of dividends, but are converted into free shares. This leads to an increase in the number of shares, but it does not increase the total value.

What Is Book Value?

Definition: It refers to the value of an asset is based on its original purchase costs, minus depreciation, amortization and other similar devaluing costs. For a company, its book value may also refer to its total net asset value. It is calculated by taking the total value of the company’s assets minus its intangible assets and liabilities.

What Is Bottom Line?

Definition: It refers to a firm’s net earnings, net income or earnins per share.

What Is Bounded Rationality?

Definition: It refers to a concept which assumes that people behave rationally in decision-making process under the limited conditions of information and time.

What Is Break-Even Point?

Definition: It refers to a point at which a business’ revenue equals  the costs associated with this business. Under or above this point, there is profit or loss.

What Is Bretton Woods System?

Definition: It refers to a system which is established in the conference held in Bretton Woods, New Hampshire, from July 1 to July 22, 1944. The system was about the monetary and exchange rate management among the countries.

What Is BRIC?

Definition: It refers to an acronym which is used to describe the fast-growing economies of Brazil, Russia, India and China.

What Is Bridge Loan?

Definition: It refers to a short-term loan which is used for completing an existing obligation, or pending the arrangement of larger or longer-term financing. This type of loan usually has higher interest rates and requires a collateral.

What Is Broker?

Definition: It refers to a licensed individual or company that behaves as an intermediary between the seller and buyer by charging fee or commission.

What Is Bubble?

Definition: It refers to a situation in which the price of an asset rises far higher than that can be explained by fundamentals. It is usually caused by speculations, but after it, it is highly probable to see a contraction in this market segment.

What Is Budget?

Definition: It refers to estimated listed income and expenses for a specific period. With this planned listed, income, spending and saving are managed.

What Is Budget Deficit?

Definition: It refers to a situation in which revenue of government, firm or individual is lower than the expenditures. The term is usually used for governments.

What Is Budget Surplus?

Definition: It refers to a situation in which revenue of government, firm or individual exceeds the expenditures. The term is usually used for governments.

What Is Bull Market?

Definition: It refers to a market condition in which prices  in the stock market is rising over a period of time and investors tend to buy because of anticipating possible gains. It usually begins with a combination of investor confidence (lots of money is being put in), general economic optimism (the general public are pleased with the economy), and positive forecasts that the market is strong and will continue to be strong in the coming months.

What Is Bullish Trend?

Definition: It refers to a upward trend  in the prices of an industry’s stocks or the overall rise in broad market indices, characterized by high investor confidence.

What Is Bureau of Labor Statistics (BLS)?

Definition: It refers to a research agency of United States Department of Labor that compiles statistics on employment, unemployment and other economic data.

What Is Business Plan?

Definition: It refers to formal statement of a corporation that describes its name, its goals and objectives, the product(s) sold and distributed, the work skills needed to produce those products, and the marketing strategies used to promote them.

What Is Buyback?

Definition: It refers to repurchase of stocks or bonds by the issuing company, and number of shares in the market is reduced. By buyback method, companies will buy back shares either to increase the value of shares still available (reducing supply), or to eliminate any threats by shareholders who may be looking for a controlling stake.

What Is Buyer’s Market?

Definition: It refers to a market in which supply is higher than demand, and thus buyers have advantages during the price arrangements.