What is the CBOE Volatility Index (VIX)? The CBOE Volatility Index (CBOE VIX) is a measurement of the 30-day expected volatility of the US stock market. This index measures the possible future volatility in the stock market in the period of 30 days. This index was created by the Chicago Board Options Exchange (CBOE), it is otherwise called the "Fear...

What is a Bow-Tie Loan? Bow-tie loans are primarily short term variable rate loans. Bow-tie loan is issued with a predetermined interest rate. It delays any unpaid interest charges above a predetermined interest rate by rolling the interest into the principal amount. This may lead to an extension of time for repayment since there will be an incremen...

What is Stress Testing? Stress testing refers to a computerized process of testing the ability of companies (primarily financial institutions) and investment portfolios to maintain a level of efficiency in unfavorable future financial or economic situations. Corporations carry out stress testing so as to know how strong they will be and how reliable...

What are Treble Damages? Treble damage is a financial or monetary compensation which is awarded by a court to a victorious plaintiff that are thrice the value of damages originally dealt. It also refers to three times the value of compensatory damages. These compensations are awarded on some occasions depending on the agreement or statute that was v...

What is a Coverage Ratio? Coverage ratio refers to a group of financial ratios that measures the ability of the company to meet its financial obligations such as debt, dividends, or interest. A higher ratio is an indication that the company has a greater ability to pay its debt interest or dividends. Lower indicates less ability. The coverage ratio ...

What are the Characteristics of a Business Relationship? Business to Business (B2B) relationships often entail the following characteristics:  Cooperative Problem Solving - A customer may seek assistance in finding a solution to this problem or to seek knowledge, experience, or guidance in a situation.  Exchange of Information - Partners in a B2B re...

What is Filing a Patent? Obtaining patent protection for a new creation requires filing an application with the USPTO. Unlike trademark and copyright, there are no common law rights in a patent. Each type of patent application (utility, design, and plant) is broken down into the specifications section and claims section. Each type of patent also has...

What is a Structured Investment Vehicle? A structured investment vehicle (SIV) is a type of fund or investment pool that seeks to generate profit from credit spreads short-term liabilities or debts and long-term assets. Conduits is another name structured investment vehicles are called, SIVs purchase investment assets set up to profit from the diver...

What is Stuffing in a Sale of Securities? In the trade of securities, stuffing refers to an act of trading an unpleasant security. It is a situation in which a broker dealer sells an undesirable security to a client. Once the security is moved from the broker dealer's account to the client's account, all losses and risks associated to the security a...

What is a Freeze Out? In its literal meaning, a freeze-out is an act of preventing someone from participating in an activity by being hostile to them or acting in a cruel or unfriendly manner. A trader can be freezed-out of trade in the market. A free-out is otherwise known as a squeeze-out. This action can be taken by a firms majority shareholders ...