What Was the Black Liquor Tax Credit? The so-called black liquor tax credit was a tax loophole in the Alternative Fuel Mixture Credit (AFMC) that was exploited by some companies in the forest-products industry beginning in 2005. The federal tax credit was intended to encourage companies to use biofuels by rewarding them for mixing them
What Is a Blacklist? The term blacklist refers to a list of people, organizations, or countries that are shunned or excluded by others because they are alleged to have engaged in unacceptable or unethical behavior or activities. A blacklist is considered retaliatory as it is intended to create financial hardship for those named on the
What Is the Black-Litterman Model? The Black-Litterman (BL) Model is an analytical tool used by portfolio managers to optimize asset allocation within an investor’s risk tolerance and market views. Global investors, such as pension funds and insurance companies, need to decide how to allocate their investments across different asset classes and countries. The BL model
What Is Black Money? Black money includes all funds earned through illegal activity and otherwise legal income that is not recorded for tax purposes. Black money proceeds are usually received in cash from underground economic activity and, as such, are not taxed. Recipients of black money must hide it, spend it only in the underground
What Is the Black-Scholes Model? The Black-Scholes model, also known as the Black-Scholes-Merton (BSM) model, is one of the most important concepts in modern financial theory. This mathematical equation estimates the theoretical value of derivatives based on other investment instruments, taking into account the impact of time and other risk factors. Developed in 1973, it
What Is a Black Swan? A black swan is an unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences. Black swan events are characterized by their extreme rarity, severe impact, and the widespread insistence they were obvious in hindsight. Key Takeaways A black swan is an extremely
What Is Black Tuesday? Black Tuesday was Oct. 29, 1929, and it was marked by a sharp fall in the stock market, with the Dow Jones Industrial Average (DJIA) especially hard hit in high trading volume. The DJIA fell 12%, one of the largest one-day drops in stock market history. More than 16 million shares were
What Was Black Wednesday? Black Wednesday refers to September 16, 1992, when a collapse in the pound sterling forced Britain to withdraw from the European Exchange Rate Mechanism (ERM). The U.K. was forced out of the ERM because it could not prevent the value of the pound from falling below the lower limit specified by
What Is Blank Check Preferred Stock? Blank check preferred stock is a method companies use to simplify the process of creating new classes of preferred stock and to raise additional funds from sophisticated investors without obtaining separate shareholder approval. In effect, a company’s shareholders pre-approve the new class to be issued at some point in
What Is a Blank Endorsement? A blank endorsement is a signature on a financial instrument such as a check. No payee is specified, so any holder of the instrument could claim payment. The signature essentially turns the instrument into a bearer security. That is, it is not registered to any individual but is payable to
