Business is war.
An annual aggregate limit is the most money an insurance company will pay you in one year. It does not matter how many times you claim in that year. Once the insurance company has paid you that maximum amount, they will not pay you anymore until the following year starts. Example of an annual aggregate…
An ankle biter stock is a small company stock. The market capitalization of an ankle-biter stock is less than 1 billion dollars. Market capitalization means the total dollar value of all the company’s shares. How Market Capitalization Works To calculate market capitalization, multiply the total number of a company’s shares by the current price of…
An angel investor is a person who invests their own money in a new, private company to own a part of it. The company is usually a startup that could grow fast. How Angel Investors Help Companies Angel investors help these new companies in a few critical ways: How Angel Investors Make Money Angel investors…
Analysis of Accounts Method is a way for a company to guess what its financial statements will look like. Financial statements are essential reports that show how much money a company made and spent and what it owns and owes. The two main financial statements are: Companies want to predict what their future financial statements…
The amount at risk is essential for insurance and banking. It means two different but related things, depending on whether you discuss insurance policies or loans. Amount at Risk in Insurance When we’re talking about insurance, the amount at risk means whichever of these two numbers is smaller: So, let’s say a business bought fire…
Amortization is a way to reduce the value of something over time slowly. This “something” could be money that a person or company owes, which is called a liability, or something valuable that a person or company owns, which is called an asset. The word “amortization” sounds fancy, but it just means spreading the value…
An American Depository Receipt, or ADR for short, is a piece of paper representing shares of a non-US company. It allows people in the United States to buy shares in foreign companies without complicated hassles. Here’s how it works: A US bank buys many shares in a foreign company. The bank then issues ADRs for…
An all-share index measures the performance of a whole stock market. It includes the prices of almost all the stocks traded on that market. You can think of an index as a big basket. The basket holds a little bit of every company in the stock market. Some companies are big, so they take up…
Alternative Risk Transfer, or ART for short, is a fancy way of saying there are different ways to handle risk besides regular insurance. Risk is the chance that something terrible might happen. Insurance companies constantly deal with risk—their job—but sometimes, they want to share that risk with others. Sharing risk between insurance and financial markets…
An All-Risk Policy is insurance covering your stuff from almost any bad thing that could happen, except for a few specific things the insurance company says it won’t cover. It’s also called “All-Risks Coverage.” It’s different from a “Named Peril Policy,” which only covers your things for bad events that are specifically listed. How All…
