What Is an Equity Swap? An equity swap is an exchange of future cash flows between two parties that allows each party to diversify its income for a specified period of time while still holding its original assets. An equity swap is similar to an interest rate swap, but rather than one leg being the
What Is an Equity Unit Investment Trust (EUIT)? An equity unit investment trust (EUIT) is a closed-end, publicly offered pooled trust fund managed by an investment company. In particular, an EUIT will only invest in the stocks of publicly traded corporations. Key Takeaways An equity unit investment trust (EUIT) is a type of closed-end investment
What Is the Equivalent Annual Annuity Approach? The equivalent annual annuity approach is one of two methods used in capital budgeting to compare mutually exclusive projects with unequal lives. The EAA approach calculates the constant annual cash flow generated by a project over its lifespan if it was an annuity. When used to compare projects with unequal
What Is an Equivalent Flat Rate? The term “equivalent flat rate” is used in the context of the insurance industry within the European Union (EU). Specifically, it relates to the methods used by the EU to regulate the insurance industry in order to ensure that insurance policyholders will have their claims honored even if their
Eric S. Maskin is an economist, mathematician, and Nobel prize winner. His areas of research include game theory, incentives, auction design, contract theory, social choice theory, political economy, and intellectual property. In 2007, he shared the Nobel Memorial Prize in Economic Sciences with Leonid Hurwicz and Roger Myerson for their work on the foundations of
What Is the Employee Retirement Income Security Act (ERISA)? The Employee Retirement Income Security Act (ERISA) is a federal law that protects the retirement assets of American workers. The law, which was enacted in 1974, implemented rules that qualified plans must follow to ensure that plan fiduciaries do not misuse plan assets. It also covers certain non-retirement
What Is Enterprise Resource Planning (ERP)? Enterprise resource planning (ERP) is a platform companies use to manage and integrate the essential parts of their businesses. Many ERP software applications are critical to companies because they help them implement resource planning by integrating all the processes needed to run their companies with a single system. An
What Is an Emissions Reduction Purchase Agreement (ERPA)? An Emissions Reduction Purchase Agreement (ERPA) is a legal contract between entities who buy and sell carbon credits. A carbon credit is a permit or certificate that allows the holder to emit carbon dioxide (CO2) or other greenhouse gases (GHG) into the atmosphere. In a type of
What is an Erroneous Trade? An erroneous trade is a stock transaction that deviates so much from the current market price that it is considered an error. Erroneous trades are caused by a variety of factors including computer malfunctions or human error. These trades are often reversed, or broken, because they do not reflect the
What Is an Error of Principle? An error of principle is an accounting mistake in which an entry violates a fundamental principle of accounting or a fundamental accounting principle established by a company. Key Takeaways Errors of principle typically include correct amounts but violations of company accounting principles.Common errors of principle can include: mixing up debits and credits
