What Is Actuarial Risk? Actuarial risk refers to the risk that the assumptions actuaries implement into models used to price specific insurance policies may prove to be inaccurate or wrong. Possible assumptions include the frequency of losses, the severity of losses, and the correlation of losses between contracts. Actuarial risk is also known as “insurance risk.” Key
What Is Actuarial Science? Actuarial science is a discipline that assesses financial risks in the insurance and finance fields, using mathematical and statistical methods. Actuarial science applies the mathematics of probability and statistics to define, analyze, and solve the financial implications of uncertain future events. Traditional actuarial science largely revolves around the analysis of mortality and the
What Is Actuarial Valuation? An actuarial valuation is a type of appraisal of a pension fund’s assets versus liabilities, using investment, economic, and demographic assumptions for the model to determine the funded status of a pension plan. The assumptions are based on a mix of statistical studies and experienced judgment. Since assumptions are often derived from
What Is Additional Living Expense (ALE) Insurance? Additional living expense (ALE) insurance refers to coverage under a homeowners, condominium owner’s, or renter’s insurance policy that covers the additional costs of living incurred by a policyholder should they be temporarily displaced from their place of residence. Such coverage usually amounts to about 10% to 20% of the insurance
What Is the Acid-Test Ratio? The acid-test ratio, commonly known as the quick ratio, uses a firm’s balance sheet data as an indicator of whether it has sufficient short-term assets to cover its short-term liabilities. Key Takeaways The acid-test, or quick ratio, compares a company’s most short-term assets to its most short-term liabilities to see if
What Was the Acorn Collective? The Acorn Collective was an attempt to build a blockchain crowdfunding platform with a native cryptocurrency, OAK. The cryptocurrency project was founded by Moritz Kurtz and Peter-Andreas Kurtz in 2017. The project was active until March 2019, when it ceased operations: shorty after receiving funding in the first round of
What Are Acquired Fund Fees and Expenses (AFFE)? Acquired fund fees and expenses (AFFE) are a line item in a multi-manager or fund-of-funds (FOF) prospectus that shows the operating expenses of the underlying funds. This became a requirement as of January 2007. This line item is now included with the fund’s fee schedule under the
What Is an Acquiree? An acquiree is a company that is purchased in a merger or acquisition. In a takeover scenario, the acquiree is also known as a “target firm.” Key Takeaways An acquiree, also known as a target firm, is a company that is purchased under a corporate acquisition.Acquirees drive a hard bargain and will seldom
What Is an Acquirer? An acquirer is a company that obtains the rights to another company or business relationship through a deal. These deals are usually mergers or acquisitions, but can also be other structured agreements. Acquirers buy out a company and take over their ownership typically through a purchase of a large portion of
What Is an Acquisition? An acquisition is when one company purchases most or all of another company’s shares to gain control of that company. Purchasing more than 50% of a target firm’s stock and other assets allows the acquirer to make decisions about the newly acquired assets without the approval of the company’s other shareholders. Acquisitions
