Risk-Free Asset – Explained

by TheBusinessProfessor | Feb 23, 2025 | Investments, Trading, and Financial Markets

What is a Risk-Free Asset?An asset which an indubitable return is a risk-free asset. This type of asset has a definite future return, regardless of what the risk of the assets are. An asset with a certain return that gives an investor a level of assurance over the...

Risk Curve – Explained

by TheBusinessProfessor | Feb 23, 2025 | Investments, Trading, and Financial Markets

What is the Risk Curve? The Risk Curve is a graphical presentation of the risks and returns of two variables. The risk curve plots two variables on a graph to reflect their financial risks and returns, this graph creates visuals on how returns are made on the assets...

Capital Accumulation – Explained

by TheBusinessProfessor | Feb 23, 2025 | Business Finance, Personal Finance, and Valuation Principles

What is Capital Accumulation?Capital accumulation refers to a rise in the value of an asset as a result of investment or profits generated. The sole aim of capital accumulation is to create profit or revenue for a company. Therefore, when a business acquires assets...

Endowment Effect – Explained

by TheBusinessProfessor | Feb 23, 2025 | Management, Leadership, & Organizational Behavior

What is the Endowment Effect?The endowment effect is a term used in behavioral research where a person finds something worthy because he or she already owns or possesses it. This results in the individual investing greater effort to avoid losing the possession than...

Endowment – Explained

by TheBusinessProfessor | Feb 23, 2025 | Business Finance, Personal Finance, and Valuation Principles

What is an Endowment?An endowment refers to donating funds or property to a non-profit based organization that invests the received amount in meeting a particular objective. It can also be considered as the total investable or liquid assets of non-profit organization,...

Economics – Explained

by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy

What is Economics?Economics is a field of social science that seeks to understand how individuals make decisions or take actions concerning the allocation of finite or limited resources. What are the Elements of Economics?Economics involves three elements including...

Subprime – Explained

by TheBusinessProfessor | Feb 23, 2025 | Banking, Lending, and Credit Industry

Update Table of Contents What is Subprime?How Does Subprime Work?Subprime Mortgages and the Global Financial Crisis What is Subprime?Subprime refers to a category of borrowers with poor credit rating or bad credit history. Lenders who offer subprime loans call this...

Structural Unemployment – Explained

by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy

What is Structural Unemployment?Structural unemployment refers to a type of unemployment resulting from technological change, structural rearrangement of organizations, competition by firms, and government policy. Structural unemployment is not caused by mere...

Economic Efficiency – Explained

by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy

What is Economic Efficiency?Economic efficiency refers to an economic situation where there is an optimum allocation or distribution of resources with minimum waste and inefficiency. What is Allocative Efficiency?Allocative efficiency seeks to produce an amount that...

Strong Form Efficiency (Economics) – Explained

by TheBusinessProfessor | Feb 23, 2025 | Investments, Trading, and Financial Markets

What is Strong Form Efficiency? Strong form efficiency refers to a market efficiency in which prices of stocks reflects all the information in a market, be it private or public. In strong form efficiency, stock prices reflect public and private information about a...