What is a Prepaid-Variable Forward? A prepaid variable forward contract (PVFC) is a strategy employed by investors who have large stocks and want to generate liquidity. Under a PVFC, an investors agrees to sell certain amount of shares at a discount, usually between 75-90% of the prevailing market value, but the buyer doesn't take ownership of the s...

What is the Face Value of a Security?  Face value is referred to as the dollar value or simply put, the nominal value of a security which is given by the issuer. As regards stocks or shares, face value is considered to be the total cost associated with the stock as revealed on the certificate. However, it is different for bonds as face value is take...

What is a Straw Buyer? Straw buying involves another party making a purchase of property, automobile and other items on behalf of the real buyer. A straw buyer is that individual, usually an agent that agrees to make a purchase of goods for the real buyer.  Once the straw buyer makes the purchase, the goods are transferred to the real buyer. Individ...

What are Bases of Social Power? The Bases of Social Power, proposed by French and Raven, is a theory that identifies five (six) bases or sources of social (organizational) power. The Five Bases of Social Power theory starts from the assumption that power and influence involve relations between at least two agents.  The theory argues that the reactio...

What is an Accommodation Endorsement? An accommodation endorsement is a written note of acknowledgement that an entity would back another entity for its credit liability. The entity backing the other is more creditworthy. This allows the entity with weaker credit to secure credit from a bank or lender.  Who is an Accommodation Endorser? An accommoda...

What is an Actuary? An actuary is a person conversant in the profession of mitigating and managing the risks associated with financial investments and other ventures that are potentially risky. Actuaries have excellent knowledge and skills in mathematics, statistics and business management. The aid managers in making strategic decisions that help in...

What are Power tactics in a Negotiation?  Power is an overarching theme that guides the selection of a strategic orientation, objective, plan, and tactics employed in a negotiation.  Asserting or demonstrating power would be a strategic objective. Actually employing a type or using a source of power to achieve a strategic objective is a tactic. As d...

What is an A Fortiori Analysis? A Fortiori analysis is an analysis done to deliberately favor other sets of solutions when compared to that which has already been declared to be the best. It helps one to extensively compare the benefits and limitations of other existing alternative solutions to be able to identify the one which is much better. If af...

What is International Product Cycle? The international product cycle concerns the stages of product development in the international market. It is best explained by the Product Life Cycle theory, developed by researcher  Raymond Vernon. According to Vernon, products go through five stages of production:  Introduction,  Growth,  Maturity,  Saturation...

What is a Red Herring (Securities)? A red herring is a preliminary prospectus or registration statement filed with the Security and Exchange Commission of the United States (SEC) by a company as part of a public offering of securities. A red herring prospectus is generally associated with a company's initial public offering. What is a Red Herring Pr...