Conditional Prepayment Rate, or CPR for short, is a percentage rate used in the investing world. It pertains to some special types of investments called mortgage-backed securities and collateralized mortgage obligations. Those are fancy names, but all they really mean is bundles of home loans that are packaged and sold to investors. See, when people…
Facultative reinsurance is a type of reinsurance. Reinsurance is insurance for insurance companies. With facultative reinsurance, an insurance company buys reinsurance for individual insurance policies one at a time. This is different from treaty reinsurance, where an insurance company has an agreement with a reinsurance company to reinsure many insurance policies automatically. How facultative reinsurance…
Insurance companies buy special insurance for themselves. They call this reinsurance. Reinsurance protects insurance companies if they have to pay a lot to the people and businesses they insure. Insurance companies and reinsurance companies make deals called reinsurance contracts. The reinsurance contracts say what the insurance and reinsurance companies must do. The contracts also say…
A concert party is a group of speculators who work together to buy a lot of common stock in a company without attracting much attention. They do this because they want to take over the company. Sometimes this is legal, and sometimes it is not. Legal Concert Parties When a concert party wants to take…
Concentration risk is the chance of losing money because you have put too much of your wealth into one asset or market. Concentrating your investments like this can lead to significant losses if something terrible happens to that asset or market. Concentration risk usually comes from having a massive position in a single asset. This…
MeldaProduction just released a new add-on called Analog Empire: Pads & Strings. This is the first in a new series for the MSoundFactory platform. The add-on gives users 32 new sounds that mimic classic analog synthesizers. These sounds are warm and deep. The new add-on is designed to help users create music easily. It lets…
Compulsory liquidation happens when a court orders a company to shut down and sell everything it owns. This usually occurs because the company can’t pay its debts. The court steps in and makes sure everything is done correctly and fairly. Unlike when company owners choose to close their business, compulsory liquidation comes from outside pressure….
German businesses come in different shapes and sizes, but two popular types stand out: AG and GmbH. These represent how companies run their operations in Germany and other German-speaking countries. The AG explained AG stands for “Aktiengesellschaft,” a company that sells shares to the public. Think of big German names like BMW or Volkswagen –…
Many company names end with “Ltd.” but most people don’t know precisely what this means. When a business has “Ltd.” after its name, it tells us something important about how the company works and what happens if things go wrong. Let’s explore what this common business term means and why it matters. Basic Definition Ltd….
High Minus Low, often written as HML, measures how much better high book-to-market stocks perform than low book-to-market stocks. Investment experts created this tool to help understand what makes some stocks give better returns than others. The name comes from taking the returns of high book-to-market stocks and subtracting the returns of low book-to-market stocks….
