What Is a Catastrophe Bond (CAT)? A catastrophe bond (CAT) is a high-yield debt instrument that is designed to raise money for companies in the insurance industry in the event of a natural disaster. A CAT bond allows the issuer to receive funding from the bond only if specific conditions, such as an earthquake or…
The forward price to earnings (P/E) is a valuation metric for measuring and comparing a company’s earnings–using expected earnings per share–to the current stock price. Companies forecast their earnings for each quarter using earnings per share (EPS)which is a company’s profit divided by the number of outstanding common stock shares. If a company’s EPS is…
What Is a Zero-Beta Portfolio? A zero-beta portfolio is a portfolio constructed to have zero systematic risk, or in other words, a beta of zero. A zero-beta portfolio would have the same expected return as the risk-free rate. Such a portfolio would have zero correlation with market movements, given that its expected return equals the…
Berkshire Hathaway Inc. (BRK.A, BRK.B) released its annual report on Feb. 22, 2020. As usual, Chair Warren Buffett‘s letter is of interest to Berkshire’s shareholders and other investors alike who look to the investing sage for pearls of wisdom. Here are five key takeaways from this year’s letter: Warren Buffett’s 2019 Annual Letter: Five Takeaways…
In the United States, credit unions are divided into two categories: state-chartered and federally chartered. Though they share many characteristics, requirements, and purposes, the difference in charters impacts the regulation and titling of a given credit union. State-chartered credit unions fall under the regulatory authority of their respective state’s division of financial services. Federally chartered…
Working capital is the money used to cover all of a company’s short-term expenses, including inventory, payments on short-term debt, and day-to-day expenses—called operating expenses. Working capital is critical since it is used to keep a business operating smoothly and meet all its financial obligations within the coming year. Key Takeaways Working capital is the…
What Is GoHenry? GoHenry is an online app and debit card designed to help children from age six to 18 manage their allowances through intuitive budgeting and responsible spending. Launched in 2012, the United Kingdom-based company offers unique parental controls, letting moms and dads individually monitor the debit card transactions for each of their children….
What Is a Payroll Card? A payroll card is a prepaid card on which an employer loads an employee’s wages or salary each payday. Payroll cards are an alternative to direct deposit or paper checks. These cards are manufactured by major payment processors, such as Visa, allowing workers to use them anywhere electronic payment cards…
What Is a Portfolio Investment? A portfolio investment is ownership of a stock, bond, or other financial asset with the expectation that it will earn a return or grow in value over time, or both. It entails passive or hands-off ownership of assets as opposed to direct investment, which would involve an active management role….