Redeemable Bonds – Explained

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

What is a Callable Bond?Callable or redeemable bonds can be redeemed or paid off by the issuer before it reaches the date of its maturity. The issuer of such bonds is allowed to pay back its obligation to the bondholder before maturity. The issuer can buy back the...

Recourse Loan – Explained

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

Update Table of Contents What is a Recourse Loan?How Does a Recourse Loan Work? What is a Recourse Loan?A Recourse Loan or recourse debt is a loan agreement that allows the lender to seize and sell the borrowers assets (beyond the collateral identified in the...

Recapture of Depreciation – Explained

by TheBusinessProfessor | Feb 23, 2025 | Business Taxation

What is Depreciation Recapture?Depreciation Recapture is a procedure by the Internal Revenue Service (IRS) to collect taxes on property that has been depreciated and is later sold for a gain. More specifically, it requires the businesses to report the gain realized...

Rabbi Trust – Explained

by TheBusinessProfessor | Feb 23, 2025 | Business Taxation

What is a Rabbi Trust?In the United States, the rabbi trust is a non-qualified, deferred compensation arrangement created by employers for their employees. The first Internal Revenue Service Letter ruling approved the use of this type of trust involved a Rabbi; thus,...

Risk Premium – Explained

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

What is a Risk Premium?The risk premium is the difference between the risk-free rate of return and the rate of return of an individual stock that carries risk. The stocks with a higher amount of risk offer additional returns to compensate for the risk and entice the...

Risk Free Rate of Return – Explained

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

What is the Risk-Free Rate of Return?The risk-free rate of return is the optimum rate of return on an investment with zero risk of default or loss. Restated, it is a hypothetical rate of interest that an investor would expect from an investment without incurring any...

Ratchet Effect – Explained

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

What is the Ratchet Effect?The Ratchet Effect refers to the escalation of production, price, or wage that tends to self-perpetuate and resist fall back. People are influenced by the previous best or highest level, which makes it difficult to reverse the change. For...

Right of Rescission (Truth in Lending Act) – Explained

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

Update Table of Contents What is Right of Rescission?How Does the Right of Rescission Work? What is Right of Rescission?The Right of Rescission is a contract term. It grants the holder the right to rescind or undo a contract. The Right of Rescission is a right...

Request for Quote – Explained

by TheBusinessProfessor | Feb 23, 2025 | Operations, Project, & Supply Chain Management

What is a Request for Quote (RFQ)?Request for Quote is a document issued by an organization or a company inviting suppliers or vendors to bid for supplying a specific product or service. When a company needs to procure some product or service from outside suppliers,...

Revolving Credit – Explained

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

Update Table of Contents What is Revolving Credit?How Does a Revolving Line of Credit Work? What is Revolving Credit?Revolving credit, also known as a line of credit, is a line of credit where the customers can access the money until they have borrowed up to the...