What is a Private Good? A private good is a product that must be purchased to be consumed, and consumption by one individual prevents another individual from consuming it. In other words, a good is considered to be a private good if there is competition between individuals to obtain the good and if consuming the
What is a Private Investment Fund? A private investment fund is an investment company that does not solicit capital from retail investors or the general public. Members of a private investment company typically have deep knowledge of the industry as well as investments elsewhere. To be classified as a private fund, a fund must meet
What Is a Private Placement? A private placement is a sale of stock shares or bonds to pre-selected investors and institutions rather than publicly on the open market. It is an alternative to an initial public offering (IPO) for a company seeking to raise capital for expansion. Private placements are regulated by the U.S. Securities and
What Is a Private Purchase? Private purchase refers to an investment in which an individual or institutional investor purchases shares in a privately-held firm. The investor may buy all of the company’s shares, or just a portion of them. The fact that a private purchase does not involve the use of capital markets means that
What is the Private Sector? The private sector is the part of the economy that is run by individuals and companies for profit and is not state controlled. Therefore, it encompasses all for-profit businesses that are not owned or operated by the government. Companies and corporations that are government run are part of what is known
What Is the Private Sector Adjustment Factor (PSAF)? The term private sector adjustment factor (PSAF) refers to the method used by the Federal Reserve Board to calculate the costs associated with services provided to depository institutions as if they were provided by private banks. These services include checks and Automated Clearing House (ACH) among others.
What Is Privatization? Privatization occurs when a government-owned business, operation, or property becomes owned by a private, non-government party. Privatization may also describe a transition that takes a company from being publicly traded to becoming privately held. This is referred to as corporate privatization. Key Takeaways Privatization describes the process by which a piece of
What Is Privileged Communication? Privileged communication is an interaction between two parties in which the law recognizes a private, protected relationship. Whatever is communicated between the two parties must remain confidential, and the law cannot force their disclosure. Even disclosure by one of the parties comes with legal limitations. There are, however, exceptions that can
What is Prize Indemnity Insurance Prize indemnity insurance is insurance for promotional events in which companies award attractive and expensive prizes to winners. They help offload the substantial risk involved in having to pay out the reward. Typical prizes at such events are cars, vacations or large cash payouts. Prize indemnity insurance is also known
What Is a Probability Distribution? A probability distribution is a statistical function that describes all the possible values and likelihoods that a random variable can take within a given range. This range will be bounded between the minimum and maximum possible values, but precisely where the possible value is likely to be plotted on the
