A liability is anything that an individual or organization owes to someone else. Liabilities can be salaries owed to employees, dividends owed to shareholders, taxes owed to the government, fixed or long-term debt such as bonds (which must be repaid with interest to the holder) or bank loans (which must be repaid with interest to the bank). Liabilities are the opposite of assets.
Archive for the ‘Level 1’ Category
A Liability is…
Wednesday, October 6th, 2010Monetary Policy is…
Wednesday, October 6th, 2010Monetary policy is a plan of action that a Central Bank (like the Federal Reserve) sets in order to keep an economy stable. It’s really important to the overall health of a nation’s finances. The goal is to manage demand by manipulating a company’s money supply and tweaking interest rates.
Central Banks implement monetary policy using a few different methods:
- Open-Market Operations – Directly buying and selling securities in the open market
- Reserve Requirements – Setting regulations that dictate the minimum amount of money a bank must hold in reserve to back up its deposits
- Discount Rate – Changing the rate of interest banks charge other banks to borrow money
Benchmarks are…
Wednesday, July 14th, 2010Benchmarks are measurements used for comparison purposes, often to track the performance of a certain set of securities. A benchmark may be a published securities index or a customized one that serves a particular investment strategy. A popular benchmark used as a reference point for comparing stock performance is Standard & Poor’s 500 Composite Index.
How much are trees worth?
Wednesday, July 14th, 2010Typically when you think of our green arboreal friends, you don’t think about monetary values. But with mounting insecurity about the environment and the potentially disastrous effects of global warming, people have put a premium on tree conservation. Specifically, Norway and Guyana (a tiny country in the northern part of South America) recently agreed to a deal that will net Guyana $30 million in 2010 for its efforts in conserving and maintaining its natural forests, which take up 75% of its landmass.
Guyana could earn up to $250 million by 2015, if everything goes well and the preservation results in curbing global carbon emissions. This novel concept could serve as a paradigm for limiting carbon emissions by contracting with developing countries with pristine forests, while simultaneously helping those same countries develop and grow in a prudent, sustainable, ecologically-friendly fashion.
Who is the United States’ biggest philanthropist?
Wednesday, July 14th, 2010There are many big-time philanthropists in the U.S., but the biggest is none other than Bill Gates, founder of Microsoft. He and his wife, Melinda, started the Bill and Melinda Gates Foundation, which, among other things, spends approximately $800 million a year on medical research. In January 2010, the foundation pledged $10 billion towards vaccine research over the next ten years in an effort to vaccinate 90% of the un-vaccinated children in Third World countries. Melinda Gates estimates that the research will help save 8 million children’s lives over the next decade. The $10 billion dollars is a substantial increase over the $4.5 billion (approximately) that the charity allocated towards vaccine research in the previous decade.
Sales Tax is…
Wednesday, July 14th, 2010Sales tax is a set-percentage tax applied to the selling of goods and services. For example, in New York City, the sales tax is 8.875%. So if you buy a chair for $100 in Manhattan, you’ll actually end up paying $108.89 with the sales tax included.
Can a nonprofit go out of business?
Friday, June 18th, 2010Yes! A nonprofit can “go out of business,” so to speak. There are all sorts of reasons why an organization would shut down. The most common reason is lack of funding. Almost all nonprofits rely on donors and foundations to cover the costs of staff salaries and all other overhead expenses. If and when funding sources dry up, many nonprofits have no option but to close their doors. Additionally, some nonprofits are actually formed with the intention of “going out of business” at a certain point – once their mission has been accomplished and they no longer need to exist.
Savings Bonds are…
Friday, June 18th, 2010Savings bonds are government-issued debt securities (doled out by the U.S. Department of the Treasury) that help pay for the U.S. government’s borrowing needs. They are supplied in face-value denominations from $50 – $10,000, with local and state tax-free interest and semiannually adjusted interest rates. Savings bonds are considered to be among the safest of investments, as they are backed by the U.S. government.
How can you look at your credit score?
Friday, June 18th, 2010Checking your credit score is a lot simpler than you may think — in fact, everyone in America is entitled to one free credit report each year from all of the three credit reporting agencies. You can request them online at the fishy-sounding but totally legit and official www.annualcreditreport.com.
You can also buy your credit report, for a nominal fee, directly from each one of these agencies. Make sure you type in the correct website address, because fake websites have similar names and will try to trick you into giving away personal information or signing up for services you don’t want or need.