What Is an Expense Constant? An expense constant is an additional fee added to the monthly premium of an insurance policy. It is most commonly associated with workers’ compensation insurance policies. The expense constant varies by state based on whether the state follows the manuals and rate-setting policies of the National Council on Compensation Insurance
What Is an Expense Ratio? The expense ratio measures how much of a fund’s assets are used for administrative and other operating expenses. For investors, the expense ratio is deducted from the fund’s gross return and paid to the fund manager. An expense ratio is determined by dividing a fund’s operating expenses by the average
What Is an Experience Rating? An experience rating is the amount of loss that an insured party experiences compared to the amount of loss that similar insured parties have. Experience rating is most commonly associated with workers’ compensation insurance. It is used to calculate the experience modification factor. Key Takeaways Insurance experience ratings are losses
What Is Experience Refund? Experience refund is the portion of an insurance company’s premiums or profits that is returned to the policyholder if the insurer’s loss experience is better than expected. An experience refund is provided to a policyholder by the insurer, or to a ceding insurer by a reinsurer. Experience Refund Explained When an
What Is the Expiration Date of a Derivative? An expiration date in derivatives is the last day that derivative contracts, such as options or futures, are valid. On or before this day, investors will have already decided what to do with their expiring position. Before an option expires, its owners can choose to exercise the option, close the
What Is Expiration Time? The expiration time of an options contract or other derivative is the exact date and time when it is rendered null and void. Derivatives contracts that finish out of the money (OTM) at the time of expiration will become worthless, while in-the-money (ITM) contracts will be evaluated based on the settlement
What Is an Expired Card? An expired card is a credit card that is no longer usable because its expiration date has passed. An expired card would be rejected if a consumer tries to use it to make a purchase. But in some cases, it may continue to work, so consumers should shred their expired credit
What Is Explicit Cost? Explicit costs are normal business costs that appear in a company’s general ledger and directly affect its profitability. They have clearly defined dollar amounts that flow through to the income statement. Examples of explicit costs include wages, lease payments, utilities, raw materials, and other direct costs. Key Takeaways In accounting, explicit
What Is Exploration & Production (E&P)? Exploration & production (E&P) is a specific sector within the oil and gas industry linked to the early stage of energy production, which generally involves searching for and extracting oil and gas. An E&P company finds and extracts the raw materials used in the energy business. Typically they do
What Is an Executing Broker? An executing broker is a broker or dealer that processes a buy or sell order on behalf of a client. For retail customers, the order sent to an executing broker is first assessed for appropriateness (automated through parameters for a particular client), and if the order is accepted, the executing
