What Is Pareto Analysis? Pareto analysis is a technique used for business decision-making, but which also has applications in several different fields from welfare economics to quality control. It is based largely on the “80-20 rule.” As a decision-making technique, Pareto analysis statistically separates a limited number of input factors—either desirable or undesirable—which have the
What Is Pareto Efficiency? Pareto efficiency, or Pareto optimality, is an economic state where resources cannot be reallocated to make one individual better off without making at least one individual worse off. Pareto efficiency implies that resources are allocated in the most economically efficient manner, but does not imply equality or fairness. An economy is
What Is the Pareto Principle? The Pareto Principle, named after economist Vilfredo Pareto, specifies that 80% of consequences come from 20% of the causes, asserting an unequal relationship between inputs and outputs. This principle serves as a general reminder that the relationship between inputs and outputs is not balanced. The Pareto Principle is also known
What Is Pari-Passu? Pari-passu is a Latin phrase meaning “equal footing” that describes situations where two or more assets, securities, creditors, or obligations are equally managed without preference. An example of pari-passu occurs during bankruptcy proceedings: When the court reaches a verdict, the court regards all creditors equally, and the trustee will repay them the same fractional
What Is the Paris Agreement/COP21? The Paris Agreement, also known as the Paris Climate Accord, is an agreement among the leaders of over 180 countries to reduce greenhouse gas emissions and limit the global temperature increase to below 2 degrees Celsius (3.6 Fahrenheit) above preindustrial levels by the year 2100. Ideally, the agreement aims to keep the
What Is the Paris Club? The Paris Club is an informal group of creditor nations whose objective is to find workable solutions to payment problems faced by debtor nations. The Paris Club has 22 permanent members, including most of the western European and Scandinavian nations, the United States, the United Kingdom, and Japan. The Paris Club
What Is Parity Price? Parity price refers to a price level that sets two assets or securities equal in value to one another. It is a concept that is used in several markets, including fixed income, equities, commodities, and convertible bonds. For convertible bonds, the parity price concept is used to determine when it is
What Is Stock Parking? Stock parking is the illegal practice of selling shares to another party with the understanding that the original owner will buy them back after a short time. The goal of stock parking is to conceal a stock’s real ownership while maintaining the appearance of regulatory compliance. Key Takeaways Stock parking occurs
What Is Partial Redemption? A partial redemption is the retirement or payment of a portion of a callable (or redeemable) security before its maturity date. Call (or prepayment) provisions govern how early redemptions, whether whole or partial, are handled. Issues may utilize a a redemption schedule that spells out the partial redemption over time, which
What Is Participating Preferred Stock? Participating preferred stock is a type of preferred stock that gives the holder the right to receive dividends equal to the customarily specified rate that preferred dividends are paid to preferred shareholders, as well as an additional dividend based on some predetermined condition. Participating preferred stock can also have liquidation
