What Is Present Value (PV)?Present value (PV) is the current value of a future sum of money or stream of cash flows given a specified rate of return. Future cash flows are discounted at the discount rate, and the higher the discount rate, the lower the present value of the future cash flows. Determining the appropriate discount rate is the key to properly valuing future cash flows, whether they be earnings or debt obligations.KEY TAKEAWAYSPresent value states that an amount of money today is ...

What Is Present Value (PV)?Present value (PV) is the current value of a future sum of money or stream of cash flows given a specified rate of return. Future cash flows are discounted at the discount rate, and the higher the discount rate, the lower the present value of the future cash flows. Determining the appropriate discount rate is the key to properly valuing future cash flows, whether they be earnings or debt obligations.KEY TAKEAWAYSPresent value states that an amount of money today is ...

What Is a Yearly Renewable Term (YRT)?A yearly renewable term is a one-year term life insurance policy. This type of policy gives policyholders a quote for the year the coverage is bought. When someone buys a yearly renewable term insurance policy, the premium quoted is for a one-year term, starting in the current year. At the same time next year, the insured will pay another annual premium for a person in the same situation, but one year older. In the following year, the premium increases ag...

What Is a Yearly Renewable Term (YRT)?A yearly renewable term is a one-year term life insurance policy. This type of policy gives policyholders a quote for the year the coverage is bought. When someone buys a yearly renewable term insurance policy, the premium quoted is for a one-year term, starting in the current year. At the same time next year, the insured will pay another annual premium for a person in the same situation, but one year older. In the following year, the premium increases ag...

What Is Nasdaq?Nasdaq is a global electronic marketplace for buying and selling securities. Its name was originally an acronym for "National Association of Securities Dealers Automated Quotations"—Nasdaq started as a subsidiary of the National Association of Securities Dealers (NASD), now known as the Financial Industry Regulatory Authority (FINRA). Nasdaq was launched after the Securities and Exchange Commission (SEC) urged NASD to automate the market for securities not listed on an exchange...

What Is Nasdaq?Nasdaq is a global electronic marketplace for buying and selling securities. Its name was originally an acronym for "National Association of Securities Dealers Automated Quotations"—Nasdaq started as a subsidiary of the National Association of Securities Dealers (NASD), now known as the Financial Industry Regulatory Authority (FINRA). Nasdaq was launched after the Securities and Exchange Commission (SEC) urged NASD to automate the market for securities not listed on an exchange...

What Is Return on Invested Capital (ROIC)?Return on invested capital (ROIC) is a calculation used to assess a company's efficiency at allocating the capital under its control to profitable investments. ROIC gives a sense of how well a company is using its capital to generate profits. Comparing a company's return on invested capital with its weighted average cost of capital (WACC) reveals whether invested capital is being used effectively.1KEY TAKEAWAYSReturn on invested capital (ROI...

What Is Return on Invested Capital (ROIC)?Return on invested capital (ROIC) is a calculation used to assess a company's efficiency at allocating the capital under its control to profitable investments. ROIC gives a sense of how well a company is using its capital to generate profits. Comparing a company's return on invested capital with its weighted average cost of capital (WACC) reveals whether invested capital is being used effectively.1KEY TAKEAWAYSReturn on invested capital (ROI...

What Are the 4 Ps?The four Ps of marketing are the key factors that are involved in the marketing of a good or service. They are the product, price, place, and promotion of a good or service. Often referred to as the marketing mix, the four Ps are constrained by internal and external factors in the overall business environment, and they interact significantly with one another. The 4 Ps are used by companies to identify some key factors for their business, including what consumers want from th...

What Are the 4 Ps?The four Ps of marketing are the key factors that are involved in the marketing of a good or service. They are the product, price, place, and promotion of a good or service. Often referred to as the marketing mix, the four Ps are constrained by internal and external factors in the overall business environment, and they interact significantly with one another. The 4 Ps are used by companies to identify some key factors for their business, including what consumers want from th...

What Is a Code of Ethics?A code of ethics is a guide of principles designed to help professionals conduct business honestly and with integrity. A code of ethics document may outline the mission and values of the business or organization, how professionals are supposed to approach problems, the ethical principles based on the organization's core values, and the standards to which the professional is held. A code of ethics, also referred to as an "ethical code," may encompass areas such as...

What Is a Code of Ethics?A code of ethics is a guide of principles designed to help professionals conduct business honestly and with integrity. A code of ethics document may outline the mission and values of the business or organization, how professionals are supposed to approach problems, the ethical principles based on the organization's core values, and the standards to which the professional is held. A code of ethics, also referred to as an "ethical code," may encompass areas such as...

What Is a Zero-Lot-Line House?A zero-lot-line house is a piece of residential real estate in which the structure comes up to, or very near to, the edge of the property line. Rowhouses, garden homes, patio homes, and townhomes are all types of properties that may be zero-lot-line homes. They may be attached (as in a townhouse) or a detached single story or multistory residence.KEY TAKEAWAYSA zero-lot-line house is a piece of residential real estate in which the structure comes up to, or very n...

What Is a Zero-Lot-Line House?A zero-lot-line house is a piece of residential real estate in which the structure comes up to, or very near to, the edge of the property line. Rowhouses, garden homes, patio homes, and townhomes are all types of properties that may be zero-lot-line homes. They may be attached (as in a townhouse) or a detached single story or multistory residence.KEY TAKEAWAYSA zero-lot-line house is a piece of residential real estate in which the structure comes up to, or very n...

What Is Yield?"Yield" refers to the earnings generated and realized on an investment over a particular period of time. It's expressed as a percentage based on the invested amount, current market value, or face value of the security. Yield includes the interest earned or dividends received from holding a particular security. Depending on the valuation (fixed vs. fluctuating) of the security, yields may be classified as known or anticipated.KEY TAKEAWAYSYield is a return measure for an inv...

What Is Yield?"Yield" refers to the earnings generated and realized on an investment over a particular period of time. It's expressed as a percentage based on the invested amount, current market value, or face value of the security. Yield includes the interest earned or dividends received from holding a particular security. Depending on the valuation (fixed vs. fluctuating) of the security, yields may be classified as known or anticipated.KEY TAKEAWAYSYield is a return measure for an inv...

What Is a Mixed Economic System?A mixed economic system is a system that combines aspects of both capitalism and socialism. A mixed economic system protects private property and allows a level of economic freedom in the use of capital, but also allows for governments to interfere in economic activities in order to achieve social aims. According to neoclassical theory, mixed economies are less efficient than pure free markets, but proponents of government interventions argue that the base cond...

What Is a Mixed Economic System?A mixed economic system is a system that combines aspects of both capitalism and socialism. A mixed economic system protects private property and allows a level of economic freedom in the use of capital, but also allows for governments to interfere in economic activities in order to achieve social aims. According to neoclassical theory, mixed economies are less efficient than pure free markets, but proponents of government interventions argue that the base cond...

What Is Delivered-at-Place (DAP)?Delivered-at-place (DAP) is an international trade term used to describe a deal in which a seller agrees to pay all costs and suffer any potential losses of moving goods sold to a specific location. In delivered-at-place agreements, the buyer is responsible for paying import duties and any applicable taxes, including clearance and local taxes, once the shipment has arrived at the specified destination. The phrase "delivered-at-place" was introduced in the Inte...

What Is Delivered-at-Place (DAP)?Delivered-at-place (DAP) is an international trade term used to describe a deal in which a seller agrees to pay all costs and suffer any potential losses of moving goods sold to a specific location. In delivered-at-place agreements, the buyer is responsible for paying import duties and any applicable taxes, including clearance and local taxes, once the shipment has arrived at the specified destination. The phrase "delivered-at-place" was introduced in the Inte...

What Is the Automated Clearing House (ACH)?The Automated Clearing House (ACH) Network is an electronic funds-transfer system run by the former National Automated Clearing House Association (NACHA) since 1974. The ACH payment system provides ACH transactions for use with payroll, direct deposit, tax refunds, consumer bills, tax payments, and many more payment services in the U.S.KEY TAKEAWAYSThe Automated Clearing House (ACH) is an electronic funds-transfer system that facilitates payments in ...

What Is the Automated Clearing House (ACH)?The Automated Clearing House (ACH) Network is an electronic funds-transfer system run by the former National Automated Clearing House Association (NACHA) since 1974. The ACH payment system provides ACH transactions for use with payroll, direct deposit, tax refunds, consumer bills, tax payments, and many more payment services in the U.S.KEY TAKEAWAYSThe Automated Clearing House (ACH) is an electronic funds-transfer system that facilitates payments in ...

What Is Keynesian Economics?Keynesian economics is a macroeconomic economic theory of total spending in the economy and its effects on output, employment, and inflation. Keynesian economics was developed by the British economist John Maynard Keynes during the 1930s in an attempt to understand the Great Depression. Keynesian economics is considered a "demand-side" theory that focuses on changes in the economy over the short run. Keynes’s theory was the first to sharply separate the study of ec...

What Is Keynesian Economics?Keynesian economics is a macroeconomic economic theory of total spending in the economy and its effects on output, employment, and inflation. Keynesian economics was developed by the British economist John Maynard Keynes during the 1930s in an attempt to understand the Great Depression. Keynesian economics is considered a "demand-side" theory that focuses on changes in the economy over the short run. Keynes’s theory was the first to sharply separate the study of ec...