Quality Spread Differential (QSD)
What is 'Quality Spread Differential - QSD' The term 'quality spread differential', or QSD, refers to the difference between the price of a low-quality commodity and that of a high-quality commodity. For example, if a bushel of low-quality wheat is currently priced at $5, and a bushel of high-quality wheat is priced at $6, there would be a Quality Spread...
Qualified Exchange Accommodation Arrangements
What is 'Qualified Exchange Accommodation Arrangements' A strategy used in some 1031 exchanges where a third party, known as an "accommodation party," temporarily holds the real estate investor's relinquished or replacement property. The purpose of this arrangement is to help investors comply with section 1031 of the Internal Revenue Code, which allows investors to defer taking a...
Quasi-Reorganization
What is quasi-reorganization and what are the benefits for businesses A quasi-reorganization is a type of financial restructuring in which a company makes minor changes to its balance sheet without officially changing its corporate structure. This can be done by moving assets and liabilities around on the balance sheet, or by changing the way that financial statements are reported. Quasi-reorganizations...
Quantitative Easing
DefinitionQuantitative easing, also known as large-scale asset purchases, is an expansionary monetary policy whereby a central bank buys predetermined amounts of government bonds or other financial assets in order to stimulate the economy and increase liquidity. An unconventional form of monetary policy, it is usually used when inflation is very low or negative, and standard expansionary monetary policy has...
Qualifying Relative
What is 'Qualifying Relative' A federal income tax designation that allows a taxpayer to claim as a dependent someone for whom he or she provided considerable financial support during the tax year. Claiming a qualifying relative as a dependent will allow the taxpayer to take an additional exemption, which will reduce his taxable income, dollar for dollar. Explaining 'Qualifying Relative' The IRS...
Quid Pro Quo
What is 'Quid Pro Quo' A Latin phrase meaning "something for something". This term is typically used in financial circles to describe a mutual agreement between two parties in which each party provides a good or service in return for a good or service. Explaining 'Quid Pro Quo' Quid pro quo agreements are sometimes...
Pareto Analysis
DefinitionPareto analysis is a formal technique useful where many possible courses of action are competing for attention. In essence, the problem-solver estimates the benefit delivered by each action, then selects a number of the most effective actions that deliver a total benefit reasonably close to the maximal possible one. Pareto Analysis What is a 'Pareto Analysis' A...
Value Line Index
What is 'Value Line Index' A stock index that includes about 1,675 businesses from the New York Stock Exchange, the American Stock Exchange, the Nasdaq, and the over-the-counter market. Two versions of the Value Line Index exist: the Value Line Geometric Composite Index (the initial equally-weighted index) and the Value Line Arithmetic Composite Index (the more recent equally-weighted index) (an...
Value Chain
What is a 'Value Chain' A value chain is a high-level model developed by Michael Porter used to describe the process by which businesses receive raw materials, add value to the raw materials through various processes to create a finished product, and then sell that end product to customers. Companies conduct value-chain analysis by looking at every...
Variable Rate Mortgage
DefinitionA variable-rate mortgage, adjustable-rate mortgage, or tracker mortgage is a mortgage loan with the interest rate on the note periodically adjusted based on an index which reflects the cost to the lender of borrowing on the credit markets. The loan may be offered at the lender's standard variable rate/base rate. There may be a direct and legally defined link...