Term of The Day

sunandaC

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Demand Curve.

Graph curve that normally slopes downward towards the right of the chart (except for a Giffen good, where it slopes toward the left), showing quantity of a product (good or service) demanded at different price levels. Customarily, the price is plotted on vertical ('Y') axis and quantity on the horizontal ('X') axis, and it is assumed that (in the short run) income levels, price of substitutes, and customer preferences, remain unchanged. Demand curves of the individual products are aggregated to give a market demand curve and, when drawn together with the supply curves, show the equilibrium price at the intersection of the two curves.

Buyout
Purchase of the controlling stock or shares of a firm by its own management. If borrowed funds are used in the buyout, it is called a 'leveraged buyout.'

Duty of Care
Responsibility or the legal obligation of a person or organization to avoid acts or omissions (which can be reasonably foreseen) to be likely to cause harm to others. Duty of care is owed by an accountant in correctly preparing a firm's accounts, by an auditor in confirming an firm's financial statements correctly present its financial position, by a director to shareholders in husbanding the enterprise's resources, by a manufacturer to consumers for the safety of product, and by every party to a contract to the other contracting parties

agency shop clause
Provision in a collective bargaining agreement that all employees of the firm (whether or not members of the union) pay a fixed monthly sum to the union as a condition of employment. This arrangement (where it is legal) serves as a compromise between the union's objective to eliminate free riders, and management's objective to make union membership a voluntary decision of each employee


Every day come up with a new Buzz Term... thus enhancing knowledge everyday.
 

sunandaC

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Today's new buzz

jointly and severally


Term used commonly in loan agreements involving two or more borrowers. Under the legal concept of joint and several liability, a lender has the freedom to claim the full loan balance from the signatories as a group (not necessarily on a proportional or pro-rata basis) or from each of them individually. The lender may sue any signatory who has enough free assets to satisfy the lender's claim, without taking any action against the others.
 

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Recourse

Negotiable instrument: Legal right of the holder to demand and require payment from the drawer, maker, or endorser if the instrument (such as a check, draft, promissory note) is dishonored. See also with recourse and without recourse.
 

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Escalation Clause

1. Construction: Provision in a contract for increasing or decreasing the contracted price for labor, material, etc., in step with the market prices or an agreed upon benchmark such as consumer price index (CPI).

2. Leasing: Provision in property lease agreements that allows a landlord to raise rent if the cost of maintaining or operating the building goes up.

3. Lending: Provision in loan agreements that permits a lender to raise interest rate if the market interest rates go over a certain ceiling, or if some contingency occurs (such as a fall in the borrower's credit rating). Also called escalator clause.
 

adiaditya

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This is a post in order to increase my count to one so that i can download a attachment. sorry for the inconvenience,thankyou
 

sunandaC

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investment banking group

A group of investment banks which jointly underwrite and distribute a new security offering, or jointly lend money to a specific borrower. A syndicate does not work together permanently, they are formed for specific deals that might be too difficult or too risky for a single underwriter or borrower to handle. also called underwriting group or purchase group or banking syndicate or investment banking syndicate or distributing syndicate
 

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Unsecured Lender

Lender who advances a loan on the basis of a borrower's signatures only, and does not hold a charge on borrower's asset(s). In case of a default, the unsecured lender may apply to the courts for recovery of the loan and, in case of a liquidation sale of the borrower firm's property, is paid after the secured lenders but before stockholders (shareholders)
 

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3P

The total amount of reserves that a company estimates having access to, calculated as the sum of all proved and unproved reserves. Unproved reserves are broken into two segments: those based on geological and engineering estimates from proved sources (probable) and those that are less likely to be extracted due to financial or technical difficulties (possible). Therefore, 3P refers to proved plus probable plus possible reserves.
 

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Acceleration Clause

Provision normally included in loan documents, mortgage agreements, and other debt instruments (such as bonds and notes). It gives the lender the right to demand the entire loan amount (principal plus interest) to be paid at once, in case the borrower fails to make payments (defaults) or gets into serious financial difficulties. A loan document details (often in fine print) which actions or events can trigger the acceleration clause. Some banks include unspecific terms such as "if the bank otherwise deems itself insecure" to widen the scope of default
 
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