Annuitization
What is annuitization and how does it work Annuitization is the process of turning a lump sum of money into a stream of payments. This...
The Ratchet Effect Explained
We can often reverse human processes without realizing it, such as when we wind a clock. This phenomenon, called the ratchet effect, is analogous...
What is Proprietary Trading?
Proprietary trading is a term that relates to the type of trading in which the trader uses his or her own money to participate...
Default Risk
Default Risk A default risk occurs when a partner in a business transaction does not live up to his or her obligations. This can occur...
Risk Parity
What is risk parity Risk parity is an investing strategy that aims to balance risk across asset classes. The goal is to achieve a portfolio...
Net Interest Income
Net interest income is the difference between revenues from interest-bearing assets and costs of servicing liabilities. Bank assets typically consist of commercial and personal...
Bear Call Spread
What is a Bear Call Spread A bear call spread is an options strategy that involves buying and selling two calls with different strike prices...
What is a Direct Cost?
In economics and accounting, a direct cost is a cost directly associated with the object for which the account is maintained. In contrast, a...