What Is Residual Interest? The term residual interest refers to the interest that may accrue on an interest-bearing account like a credit card, loan, line of credit, or mortgage. Credit card residual interest is normally charged on balances incurred between billing cycles. In this case, it may also be referred to as trailing interest. The
What Is Residual Standard Deviation? Residual standard deviation is a statistical term used to describe the difference in standard deviations of observed values versus predicted values as shown by points in a regression analysis. Regression analysis is a method used in statistics to show a relationship between two different variables, and to describe how well
What Is Residual Value? The residual value, also known as salvage value, is the estimated value of a fixed asset at the end of its lease term or useful life. In lease situations, the lessor uses the residual value as one of its primary methods for determining how much the lessee pays in periodic lease
What Is the Resource Curse? The term resource curse refers to a paradoxical situation in which a country underperforms economically, despite being home to valuable natural resources. A resource curse is generally caused by too much of the country’s capital and labor force concentrated in just a few resource-dependent industries. By failing to make adequate investments
What Is a Registered Education Savings Plan? A Registered Education Savings Plan (RESP), sponsored by the Canadian government, encourages investing in a child’s future post-secondary education. Subscribers to an RESP make contributions that build up tax-free earnings. The government contributes a certain amount to these plans for children under age 18. Contributors do not receive
What Is Response Lag? Response lag, also known as impact lag, is the time it takes for monetary and fiscal policies, designed to smooth out the economic cycle or respond to an adverse economic event, to affect the economy once they have been implemented. Learn more about response lag and the timeframe before policy changes
What Is Restricted Cash? Restricted cash, in contrast to unrestricted cash, is not freely available for a company to spend or invest. Restricted cash refers to money that is held for a specific purpose and thus not available to the company for immediate or general business use. Restricted cash appears as a separate item from
What Is a Restricted Fund? A restricted fund is a reserve account that contains money that can be used only for specific purposes. Restricted funds provide reassurance to donors that their contributions are used in a manner that they have chosen. They most often appear in the context of funds held by certain nonprofits, universities
What Is a Restricted Stock Unit (RSU)? A restricted stock unit (RSU) is an award of stock shares, usually given as a form of employee compensation. The recipient must meet certain conditions before the restricted stock units are transferred to the owner. Restricted stock units are issued to employees through a vesting plan and distribution
What Is a Restrictive Covenant? A restrictive covenant is a condition that restricts, limits, prohibits, or prevents the actions of someone named in an enforceable agreement. In bond obligations, restrictive covenants limit the amount issuers can pay in dividends to investors. Restrictive covenants are common in real estate deeds and leases, where they restrict how
