Friedrich Hayek was a famous economist, well-known for his numerous contributions to the field of economics and political philosophy. Hayek’s approach mostly stems from the Austrian school of economics and emphasizes the limited nature of knowledge. He is particularly famous for his defense of free-market capitalism and is remembered as one of the greatest critics of
What Is a Friendly Takeover? A friendly takeover is the act of a target company’s management and board of directors agreeing to be absorbed by an acquiring company. Key Takeaways A friendly takeover is a scenario in which a target company is willingly acquired by another company.Friendly takeovers are subject to approval by the target
What Are Fringe Benefits? Fringe benefits are additions to compensation that companies give their employees. Some fringe benefits are given universally to all employees of a company while others may be offered only to those at executive levels. Some benefits are awarded to compensate employees for costs related to their work while others are geared to
What Is the Front-End Debt-to-Income (DTI) Ratio? The front-end debt-to-income (DTI) ratio is a variation of the DTI that calculates how much of a person’s gross income is going toward housing costs. If a homeowner has a mortgage, the front-end DTI is typically calculated as housing expenses (such as mortgage payments, mortgage insurance, etc.) divided by gross
What Is a Front-End Load? A front-end load is a commission or sales charge applied at the time of the initial purchase of an investment. The term most often applies to mutual fund investments, but may also apply to insurance policies or annuities. The front-end load is deducted from the initial deposit, or purchase funds
What Is a Front Fee? The front fee is the option premium paid by an investor upon the initial purchase of a compound option. A compound option is one where the underlying asset is also an option; it is an option on an option. The front fee gives the investor the right, but not the
What Are Fronting Policies? A fronting policy is a risk management technique in which an insurer underwrites a policy to cover a specific risk, but then cedes the risk to a reinsurer. Fronting policies, which are a type of alternative risk transfer (ART), are most commonly used by large organizations. Because the reinsurer takes on the
What Is the Front Office? The front office represents the customer-facing division of a firm. For example, customer service, sales, and industry experts who provide advisory services are considered part of a firm’s front office operations. The functions of the front office generally generate the majority of revenue for a firm. Key Takeaways On a
What Is Front-Running? Front-running is trading stock or any other financial asset by a broker who has inside knowledge of a future transaction that is about to affect its price substantially. A broker may also front-run based on insider knowledge that their firm is about to issue a buy or sell recommendation to clients that
What Is a Franchised Monopoly? A franchised monopoly refers to a company, or individual, that is sheltered from competition by virtue of an exclusive license or patent granted by the government, as the government believes it to be a beneficial component of the economy. Key Takeaways A franchised monopoly refers to a company, or individual
