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B-Share
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A class in a family of multi-class mutual funds that is characterized by a Back-End Load structure that is paid only when the fund is sold.
Class B funds Will generally have higher management Expense ratios compared to front load funds within the same...
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Baby bond
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A Bond that has a Par value less than $1,000.
Bond is a Debt instrument or IOU issued by corporations or units of government. IOU means a note and acknowledgment of personal Debt (from the phrase "I owe you" or "I owe unto").
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Baccalaureate Bond
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A zero-Coupon Bond issued by certain states to assist families save for college tuition by means of added Tax benefits.
These bonds are typically issued in small denominations and are offered in several maturities, making them more convenient for investing...
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Back door financing
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When a government agency borrows from the U.S. Treasury instead of relying on congressional appropriations.
Back door means the U.S treasury. The United States Constitution vests all legislative power in the Congress. The Congress meets in the U.S. Capitol...
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Back Testing
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The process of designing a trading strategy according to historical data and then testing the strategy by applying it to fresh data.
Instead of applying a strategy for the time period Forward, which could take years, a trader can do a simulation of his...
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Back-End Load
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A fee (sales charge or load) that investors pay when selling Mutual Fund shares within a specified number of years, which usually ranges between five to ten years.
The fee amounts to a percentage of the value of the share being sold. The fee percentage...
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Backing Away
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The act of a market maker failing to honor a posted Bid or ask even though the price and quantity are valid.
The NASD does not condone the act of backing away from transactions and Will take disciplinary action if certain regulations are broken. For example,...
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Backup withholding
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Tax withheld from investment income, such as Interest and dividends, to ensure that Tax is collected on the income.
Banks and other organizations are required to report to the IRS all Interest and Dividend payments you received, along with your Social...
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Bad will
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The negative effect felt by a company when shareholders and the investment community find out that is has done something that is not in accordance with good business practices.
Although typically not expressed in a dollar amount, bad Will can play out...
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Bag Man
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Any person in charge of organizing and collecting contributions to political parties or raising funds for political reasons.
These contributions may be legitimate or illegitimate.
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Bailout Provision
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A provision in some annuity contracts whereby, if the Interest rate being credited to the annuity fund ever falls below a specified rate, the policyholder may withdraw the initial Premium amount paid without a surrender charge.
Bailing out is also selling...
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Balance Sheet
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A financial Statement that summarizes a company's assets, liabilities and shareholders' Equity at a specific point in time.
These three balance sheet segments give investors an idea as to what the company's assets and debts are and investment by share...
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Balanced Scorecard
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A strategic-management method of identifying and improving various internal functions and their resulting external outcomes.
The balanced scorecard tries to measure and provide feedback to organizations in order to help in enforcing strategies and objectives....
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Balloon Payment
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A large extra payment that may be charged at the end of a loan or lease.
With a balloon loan, a balloon payment is paid back when the loan comes to its contractual maturity, e.g. reaches the deadline set to repayment at the time the loan was granted, representing...
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Baltic Dry Index - BDI
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It is a shipping and trade index created by the London-based Baltic Exchange that measures changes in the cost to transport raw materials such as metals, grains and fossil fuels by sea.
The Baltic Exchange directly contacts shipping brokers to assess price...
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Banc assurance
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The sale of insurance and other similar products through a bank.
The usage of the word picked up as banks and insurance companies merged and banks sought to provide insurance, especially in markets that have been liberalized recently. It is a controversial...
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Bank Examiner
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Individual who reviews a bank's operations, such as lending policies, guidelines, and practices.
Bank examiners are employed by a Federal Reserve Bank, and typically have had extensive education in finance or accounting. A Bank Examiner's work involves...
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Bank Run
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A situation in which numerous bank customers try to withdraw their bank deposits simultaneously and the bank's reserves are not sufficient to cover the withdrawals
A bank run (also known as a run on the bank) is a type of financial crisis. It is a panic...
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Bank Secrecy Act
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The Bank Secrecy Act was designed to help identify the source, Volume and movement of Currency and other monetary instruments transported into or out of the U.S. or deposited in financial institutions.
Government legislation was created in 1970 to prevent...
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Bank Trust Department
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The part of a bank which settles estates, performs agency services, and administers trusts and guardianships.
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Banker's year
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A 360-day year, used so the year can be divided into 12 equal months of 30 days each. This makes Interest calculations simpler and more consistent.
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Bankruptcy
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A legal ruling that cancels some of a person's debts in Exchange for giving up some assets.
Bankruptcy is a legally declared inability or impairment of ability of an individual or organizations to pay their creditors. Creditors may file a bankruptcy petition...
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Banner Advertising
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A common form of advertising on the internet.
The banner is an advertisement of 460x68 pixels, usually placed at the top of the page .For an example, just look at the top of a page on almost any popular web site. Online advertising is a form of advertising...
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Baptism of Fire
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A difficult situation that a company or individual experiences that Will result in either success or failure.
Examples include Initial Public Offerings (IPOs), a new CEO to a struggling company or a company that has survived hostile takeover attempts....
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Barometer
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An instrument used to forecast trends.
For example, a Barometer Stock is a stock that has a price trend indicative of the market. And, the stock market as a whole is said to be a barometer because it can be used to forecast the growth or slowdown in the...
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Barometer Stock
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A Security whose price pattern is regarded as an indicator of the state of the overall market.
A stock or Bond that is widely believed to be an indicator of the overall market's condition. Also called bellwether. A Barometer stock is simply any stock...
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Bear Hug
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An Offer made by one company to buy the shares of another for a much higher per-share price than what that company is worth.
A bear hug Offer is usually made when there is doubt that the target company's management Will be willing to sell. By offering...
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Bear market
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A market in which traders and investors are feeling negative and prices are falling or static.
Market trends are described as periods when bulls (buyers) consistently outnumber bears (sellers), or vice versa. The terms "Bull market" and "bear market" describe...
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Benchmark
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The performance of a financial instrument used as a reference to compare the performances of similar instruments. To measure performance in this way you need a benchmark relative to an index.
A benchmark is something that the performance of something else...
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Beneficial ownership
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The state of having the benefits of owning a property or Security, without actually being the one who has his or her name on the title.
Beneficial ownership is enjoyed by anyone who has the benefits of ownership of a Security or property, and yet does...
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Beneficiaries
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The Beneficiaries are the persons or companies who may benefit from the assets held in a Trust. Or the person to whom an inheritance passes after being named in a Will.
A beneficiary in the broadest sense is a natural person or other legal entity who receives...
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Bermuda Option
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A type of Option that can only be exercised on predetermined dates, usually every month.
Like the mixed culture of Bermuda, Bermuda options are a combination of American and European style options. An American Option is that can be exercised anytime during...
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Berry Ratio
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The ratio of a company's gross profits to operating expenses.
Dr. Charles Berry an American economist is well known for his derivation of the Berry Ratio, an analytical tool used extensively by Tax and transfer pricing analysts the world over. Berry consulted...
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Big Bath
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A business strategy with which a company manipulates its income Statement to make poor results look even worse.
The big bath is often implemented in a bad year to enhance next year's Earnings artificially. The big rise in Earnings might result in a larger...
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Big Five Banks
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A reference used in Canada to describe Royal Bank, The Bank of Montreal, Canadian Imperial Bank of Commerce, The Bank of Nova Scotia and TD Canada Trust, which are the five largest banks in the country.
All five banks are headquartered in Toronto or in...
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Bimetallism
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A government's Commission to Exchange its Currency on demand for stated amounts of either of two metals, usually gold or silver. Also bimetallic standard.
Bimetallic Standard is a monetary system in which a government recognizes coins composed of gold...
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Black Thursday
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The name given to Thursday, October 24th, 1929, when the New York Stock Exchange plummeted, leading to the Great Depression of the 1930's.
As a result of this day, the Securities Act of 1933 and the Securities Exchange Act of 1934 were formed in order...
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Blank check
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A check that is signed by the payer but with no specific amount indicated, leaving this determination up to the drawer.
More generally, a term used for any situation in which a usually High level of Trust is afforded by one party to another. Blank cheek...
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Blank endorsement
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An endorsement consisting of nothing but a signature and allowing any party in possession of the endorsed item to execute a claim.
Blank endorsement of a financial instrument such as a check is only a signature, not indicating the payee. The effect of...
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Blend Fund
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A category of Equity mutual funds with portfolios that are made up of a mix of value and growth stocks.
Also known as a "hybrid fund".
A blend Mutual Fund has its origins in the graphical representation of a fund's essential characteristics in an Equity...
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Block House
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A brokerage whose major concern is finding potential buyers and sellers of block trades.
These guys deal with the big boys, not individual investors. Transactions are typically well into the millions of dollars.
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Blue Chip Stock
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A blue chip stock is the stock of a well-established company having stable Earnings and no extensive liabilities.
The term derives from casino, where blue CHIPS stand for counters of the highest value. Most blue chip stocks pay regular dividends, even...
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Blue Sheets
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Requests for information sent out by the Securities and Exchange Commission to market makers.
Blue sheets provide the SEC with detailed information about trades performed by a firm and its clients. The information includes the Security's name, the date...
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Bogey
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A buzzword that refers to a Benchmark used to evaluate a fund's performance.
The Benchmark is an index that reflects the investment scope of the funds investment. Comparing a fund's performance to a Benchmark index gives investors an idea of how well the...
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Bond
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Bonds are Debt and are issued for a period of more than one year.
National governments, Local governments, water districts, companies and many other types of institutions sell bonds. When an investor buys bonds, he or she is lending money. The seller of...
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Boom
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A period of time during which sales or business activity increases rapidly.
In the stock market, booms are associated with bull markets. Conversely, busts are associated with bear markets. The cyclical nature of the market and the economy in general suggests...
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Boomerang
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An American slang term that refers to an adult who has moved back in with his or her parents (who are part of the baby boomer generation) instead of living independently.
Boomerang refers to an individual, who lived independently for a period, but later...
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Bottom Fisher
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An investor who looks for bargains among stocks whose prices have recently dropped dramatically.
Bottom fisher believes that the recent price drop is temporary and a recovery is soon to follow. He attempts to find stocks that the market has undervalued....
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Bounced check
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A check which a bank returns because it is not payable due to insufficient funds. It is also Rubber check.
A demand for payment (a check) cannot be honored because insufficient funds are available in the account on which the instrument was drawn. In simplified...
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BPM - Bull shit per Minute
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The industry norm measuring a banker's ability to awe clients.
The more bullshit a banker utters in the course of a limited time period 9a minute) the more (s) he is able to amaze the client. This effect is achieved by ensuring the BPM is above the cutoff...
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Bracket Creep
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A situation where Inflation pushes income into higher Tax brackets.
Bracket creep is the process by which Inflation takes wages and salaries into higher Tax brackets resulting in an increase in income taxes but no increase in real purchasing power. This...
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Brain Drain
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A slang term for a significant emigration of educated or talented individuals.
A brain drain can result from turmoil within a nation, from there being better professional opportunities in other countries or from people seeking a better standard of living....
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Brand
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A printed symbol of ownership that a company hopes consumers Will Associate with quality.
Brand is a distinguishing symbol, mark, logo, name, word, sentence or a combination of these items that distinguish a company's product from others in the market.
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Brazil, Russia, India And China - BRIC
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An acronym for the economies of Brazil, Russia, India and China combined.
The general belief is that the term was first prominently used in a Goldman Sachs report from 2003, which speculated that by 2050 these four economies would be wealthier than most...
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Bridge loan
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A kind of Short-term financing that allows a company to continue running until it can arrange longer-term financing.
A Short-term loan that is used until a person or company can secure permanent financing. Companies sometimes seek this because they run...
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British Bankers Association - BBA
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The leading trade association that represents the views of those involved in the banking and financial services industry within the U.K.
Among other things, the BBA is responsible for continually improving the Banking Code, Small Business Code, accounting...
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Broker
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An Agent who handles the public's orders to buy and sell securities, commodities, or other property.
Broker can be an individual or firm that charges a fee or Commission for executing buy and sell orders submitted by an investor. A Broker firm acts as...
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Buba
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Nickname given to Bundesbank, the Central Bank of Germany.
Both the Deutsche Bundesbank and the European Central Bank (ECB) are located in Frankfurt am Main. It is sometimes referred to as "Buba" for Bundesbank.
The Deutsche Bundesbank (German for...
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Bubble
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A speculative venture that has little chance of making a profit.
When this fact becomes evident, the bubble burst and prices fall. The cause of bubbles remains a mystery to economic theory. It has been recently shown that bubbles appear even without uncertainty,...
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Bull market
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A market in which traders and investors are feeling positive and prices are rising.
A bull market is usually associated with increasing investor confidence, motivating investors to buy in anticipation of further capital gains.
The longest and most...
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Bulldog Bond
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A sterling denominated Bond that is issued in London by a company that is not British.
These sterling bonds are referred to as bulldog bonds as the bulldog is a national symbol of England .A bulldog Bond would usually be issued because the issuer has (or...
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Bullion
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Gold and silver that is officially recognized as High quality (at least 99.5% pure), and is in the form of bars rather than coins.
Precious metals in bulk form are known as bullion, and are traded on commodity markets. These metals may be cast into ingots,...
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Burn rate
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The rate at which a start-up uses its Venture capital funding before it begins earning any revenue.
The rate at which a new company uses up its Venture capital to finance overhead before generating positive Cash flow from operations is called burn rate...
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Business Cycle
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The recurring and fluctuating levels of economic activity that an economy experiences over a Long period of time.
The five stages of the business cycle are growth (expansion), peak, Recession (contraction), trough and recovery. At one time, business cycles...
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