What Is a Microenterprise? The term microenterprise, also known as a microbusiness, refers to a small business that employs few people. A microenterprise usually operates with fewer than 10 people and is started with a small amount of capital advanced from a bank or other organization. Most microenterprises specialize in providing goods or services for
What Is a Micro-Hedge? A micro-hedge is an investment technique used to eliminate the risk of a single asset from a larger portfolio. In most cases, a micro-hedge involves taking an offsetting position in that single asset. Offsetting positions can include taking short positions in similar shares, or options or futures contracts of that same
What is Microinsurance? Microinsurance products offer coverage to low-income households or to individuals who have little savings. It is tailored specifically for lower valued assets and compensation for illness, injury, or death. How Microinsurance Works As a division of microfinance, microinsurance looks to aid low-income families by offering insurance plans tailored to their needs. Microinsurance is often
What Is a Micro-Investing Platform? A micro-investing platform is an application that allows users to regularly save small sums of money. Micro-investing platforms aim to remove traditional barriers to investing, such as brokerage account minimums, and encourage people to invest even if they have limited incomes and assets. Key Takeaways By making investing simple and
What Is a Merchant Account? A merchant account is a type of business bank account that allows a business to accept and process electronic payment card transactions. Merchant accounts require a business to partner with a merchant acquiring bank who facilitates all communications in an electronic payment transaction. Merchant account relationships are essential for online
What Is a Merchant Agreement? A merchant agreement is a contract governing the relationship between a business and the merchant acquiring bank it partners with. This document details the full range of electronic payment services that the merchant acquiring bank agrees to provide. In most cases, such banks are responsible for facilitating every aspect of
What Are Merchant Category Codes (MCCs)? Merchant category codes (MCCs) are four-digit numbers that a credit card issuer uses to categorize the transactions consumers complete using a particular card. Payment brands use merchant category codes to classify merchants and businesses by the type of goods or services provided in order to track and restrict transactions.
What Is a Merger? A merger is an agreement that unites two existing companies into one new company. There are several types of mergers and also several reasons why companies complete mergers. Mergers and acquisitions (M&A) are commonly done to expand a company’s reach, expand into new segments, or gain market share. All of these
What Is a Merger of Equals? A merger of equals is when two firms of about the same size come together to form a single new company. In a merger of equals, shareholders from both firms surrender their shares and receive securities issued by the new company. Companies may merge to gain market share or
What Is Merger Arbitrage? Merger arbitrage, often considered a hedge fund strategy, involves simultaneously purchasing and selling the respective stock of two merging companies to create “riskless” profits. Because there is the uncertainty of the deal being completed, the stock price of the target company typically sells at a price below the acquisition price. A merger
