Last In, First Out (LIFO)
What is Last In, First Out (LIFO)? LIFO is an inventory accounting method in which the most recently acquired items are the first ones to be sold. This approach is used to match current revenue with current expenses, and it can also help businesses manage their inventory levels. In a LIFO system, businesses keep track of inventory using a "stack"...
Lattice-Based Model
What is 'Lattice-Based Model' An option pricing model that involves the construction of a binomial tree to show the different paths that the underlying asset may take over the option's life. A lattice model can take into account expected changes in various parameters such as volatility over the life of the options, providing more accurate estimates of...
Lead Bank
What is Lead Bank and how does it work A lead bank is a financial institution that acts as the coordinator for a syndicated loan. The lead bank is responsible for assembling the syndicate, negotiating terms with the borrower, and organising the syndicated loan agreement. The lead bank typically provides the biggest share of the loan and sets the interest...
Law Of Supply
DefinitionThe law of supply is a fundamental principle of economic theory which states that, keeping other factors constant, an increase in price results in an increase in quantity supplied. In other words, there is a direct relationship between price and quantity: quantities respond in the same direction as price changes. This means that producers are willing to offer more...
Law Of 29
What is 'Law Of 29' A belief held by some marketers that on average a prospective customer will not purchase a good or service until they have been exposed to a marketing message 29 times. While the number of messages can differ a great deal when courting prospective clients, advocates of the law of 29 believe that...
Lawrence Ellison
DefinitionLawrence Joseph Ellison is an American businessman, entrepreneur, and philanthropist who is co-founder, executive chairman and chief technology officer of Oracle Corporation. As of June 2018, he was listed by Forbes magazine as the fifth-wealthiest person in the United States and as the eighth-wealthiest in the world, with a fortune of $54.5 billion. Lawrence Ellison What is 'Lawrence...
Latin Baseball Futures
What is 'Latin Baseball Futures' A financial contract used to speculate on the potential of teenage baseball players from Latin America who are training to earn spots in Major League Baseball (MLB). Investors in Latin baseball futures finance academies that train the young athletes and receive a return on their investment when a player is signed to...
Lady Macbeth Strategy
What is 'Lady Macbeth Strategy' A corporate-takeover strategy with which a third party poses as a white knight to gain trust, but then turns around and joins with unfriendly bidders. Explaining 'Lady Macbeth Strategy' Lady Macbeth, one of Shakespeare's most frightful and ambitious characters, devises a cunning plan for her husband, the Scottish general,...
Learning Curve
What is the 'Learning Curve' A learning curve is a concept that graphically depicts the relationship between cost and output over a defined period of time, normally to represent the repetitive task of an employee or worker. The learning curve was first described by psychologist Hermann Ebbinghaus in 1885 and is used as a way to measure...
Late-Day Trading
What is 'Late-Day Trading' An unethical (if not illegal) practice of a hedge fund purchasing and then selling securities (usually shares of a mutual fund) after the close of a trading day, but making the transactions appear as though they occurred before the market close. Explaining 'Late-Day Trading' For mutual funds, net asset value is...