What Is a Traditional IRA? A traditional individual retirement account (IRA) allows individuals to direct pre-tax income toward investments that can grow tax-deferred. The IRS assesses no capital gains or dividend income taxes until the beneficiary makes a withdrawal. Individual taxpayers can contribute 100% of any earned compensation up to a specified maximum dollar amount. Income thresholds may
What Is a Traditional Whole Life Policy? A traditional whole life policy is a type of life insurance contract that provides for insurance coverage of the contract holder for their entire life. Unlike term life insurance, which covers the contract holder until a specified age limit, a traditional whole life policy never runs out. Upon the
What Is Traffic Acquisition Cost (TAC)? Traffic acquisition cost (TAC) consists of payments made by internet search companies to affiliates and online firms that direct consumer and business traffic to their websites. Key Takeaways Traffic acquisition costs are payments that internet search companies make to affiliates and online companies for directing traffic to their websites.TAC
What Is Tragedy of the Commons? The tragedy of the commons is an economics problem in which every individual has an incentive to consume a resource, but at the expense of every other individual—with no way to exclude anyone from consuming. Initially it was formulated by asking what would happen if every shepherd, acting in
What Is a Trailer Fee? A trailer fee is a fee that a mutual fund manager pays to a salesperson who sells the fund to investors. The trailer fee is paid to the salesperson for providing the investor with ongoing investment advice and services. This fee will be paid annually to the advisor for as
What Is Trailing? Trailing refers to the property of a measurement, indicator, or data series that reflects a past event or observation. It is usually attached to a specified time interval by which the data trail or over which that data are aggregated, summed, or averaged. Trailing data and indicators are used to reveal underlying
What Is Trailing Price-To-Earnings? Trailing price-to-earnings (P/E) is a relative valuation multiple that is based on the last 12 months of actual earnings. It is calculated by taking the current stock price and dividing it by the trailing earnings per share (EPS) for the past 12 months. Trailing P/E can be contrasted with the forward P/E
What Are Tranches? Tranches are segments created from a pool of securities—usually debt instruments such as bonds or mortgages—that are divvied up by risk, time to maturity, or other characteristics in order to be marketable to different investors. Each portion or tranche of a securitized or structured product is one of several related securities offered
What is a Transaction Authentication Number (TAN) A transaction authentication number is a one-time code used in the processing of online transactions. A transaction authorization number (TAN) represents an additional layer of security beyond a password to securely log into an account or conduct a transaction. BREAKING DOWN Transaction Authentication Number (TAN) Transaction authentication numbers (TANs)
What Are Transaction Costs? Transaction costs are expenses incurred when buying or selling a good or service. Transaction costs represent the labor required to bring a good or service to market, giving rise to entire industries dedicated to facilitating exchanges. In a financial sense, transaction costs include brokers’ commissions and spreads, which are the differences
