What Is Consumption Smoothing? Consumption smoothing is the practice of optimizing our standard of living by ensuring a proper balance between spending and saving during the different phases of our lives. Those who overspend and put off saving for retirement to enjoy a higher standard of living often have to work longer or reduce their
What Is a Consumption Tax? A consumption tax is a tax on the purchase of a good or service. Consumption taxes can take the form of sales taxes, tariffs, excise, and other taxes on consumed goods and services. A consumption tax can also refer to a taxing system as a whole in which people are
What Is Contempt of Court? Contempt of court is an act of disrespect or disobedience toward a court or interference with its orderly process. Examples include disrupting court proceedings, interfering with attempts to obtain evidence, destroying evidence, disobeying a court order, and intimidating witnesses. A contempt order may address behavior both in the courtroom and
What Is Contestable Market Theory? The contestable market theory is an economic concept stating that companies with few rivals behave in a competitive manner when the market they operate in has weak barriers to entry. The theory assumes that even in a monopoly or oligopoly, incumbents will act competitively when there is a lack of
What Is a Contingency Order? A contingency order is a buy or sell order that is executed from a broker’s trading platform only when specific, trader-defined conditions have been met. These prerequisite conditions range in scope and depth. A simple example of a contingency order is a limit order to buy or sell a security
What Is a Contingent Beneficiary? A contingent beneficiary is specified by an insurance contract holder or retirement account owner as the person or entity receiving proceeds if the primary beneficiary is deceased, unable to be located, or refuses the inheritance at the time when the proceeds are to be paid. A contingent beneficiary is entitled
What Is a Contingent Annuitant? A contingent annuitant is someone designated by an annuitant to receive the annuitant’s payments when they pass away. When an annuity has a contingent annuitant, the annuity does not stop making payments until both the annuitant and the contingent annuitant have passed away. If the policy does not allow for
What Is a Contingent Liability? A contingent liability is a liability that may occur depending on the outcome of an uncertain future event. Contingent liabilities are recorded if the contingency is likely and the amount of the liability can be reasonably estimated. The liability may be disclosed in a footnote on the financial statements unless
What Is a Contingent Order? A contingent order is an order that is linked to, and requires, the execution of another event. The contingent order becomes live, or is executed, when the event occurs. An example is a stop loss order. The stop loss to sell is contingent upon a security first being bought. A
What Are Contingent Shares? The term contingent shares refers to company stock that is issued to certain shareholders under special circumstances. They act just like regular common stock, except that companies issue them when they meet certain conditions, such as making a profit, meeting earnings expectations, or during mergers and acquisitions (M&A). When a company
