What is a Credit Reporting Agency? Credit reporting/rating agencies are independent bodies that analyze the credit quality of public and private issuers. With so many debt issuers, these agencies were created with the aim of issuing ratings on the risk of securities remaining unpaid. These companies consider fixed income. How Does a Credit Reporting...

What is Mercantalism? Mercantilism is an economic theory that holds that a nation's wealth can increase when the government regulates the nation's wealth by maximizing exports and reducing imports. Mercantilism was developed in the 16th and 18th centuries. This economic theory maintains that the government should get more involved in international t...

What is Quality Control? Quality control refers to a set of procedures through which businesses review their manufactured products to ensure they meet standard quality requirements. There are certain standards or qualities that products must meet. Failure of the products to meet the stipulated qualities means they must be junked, reworked, or improv...

What is the Over-The-Counter Market? An OTC market is a market where two parties directly trade financial instruments like stocks, commodities, and currencies without any supervision. Small companies often use OTC markets to trade because they are unable to make it to the exchange listings. OTC trading does not need a physical location like at the L...

What is the Fixed Amortization Method? The fixed amortization method is a method in which an account balance is amortized over a period of years and is equal to the life expectancy as required by the IRS. Through the fixed amortization method, a retiree can have early access to his retirement funds before turning 59 without attracting any penalty fr...

What are the Advantages of Administrative Agencies? Delegating regulatory and executive authority to administrative agencies has numerous advantages: Exactness Expertise Public Protection Each of these is discussed further below. What is Exactness of an administrative agency? Congress cannot effectively pass statutes that are sufficiently detailed t...

What is Financial Analysis of a Business Idea? This part of the feasibility analysis involves evaluating the potential profitability of the venture. That is, does the proposed business have the potential to return sufficient revenue in excess of costs so that it is financially feasible? So lets take a look at the information you have and the informa...

What happens when a business wants to do business in more than one state? A business must choose its state of formation or organization. The home state may be the location where the business is headquartered or it may be any other state where the business organizes and establishes a registered agent. If a business chooses Delaware as its state of fo...

What is Regulation SHO? Regulation SHO is an administrative regulation promulgated by the SEC in 2005 to regulate the short sale of securities. How does Regulation SHO Work? Regulation SHO serves to prevent traders from unethical practices in short selling. It establishes a "locate" and "close-out" standard for short-sale transactions. Locating mean...

What is a Startup? Entrepreneurship is one of the oldest, and often least understood, areas of business. As a professor of entrepreneurship, I am constantly looking for teaching points that commonly misunderstood by students.  The first point that we cover in my course deals with the main types of entrepreneurship for new businesses.  In this articl...