What Is a Consortium Bank? A consortium bank is a subsidiary bank, which numerous other banks create. These banks might create a consortium bank to fund a large-scale project that is too large for one bank to complete itself, such as providing affordable homeownership for low- and moderate-income home buyers or to execute a large
What Is Conspicuous Consumption? Conspicuous consumption is the purchase of goods or services for the specific purpose of displaying one’s wealth. Conspicuous consumption is a means to show one’s social status, especially when publicly displayed goods and services are too expensive for other members of a person’s class. This type of consumption is typically associated
What are Constant Currencies? Constant currencies are exchange rates used to eliminate the effect of fluctuations when calculating financial performance numbers for publication in financial statements. Companies with overseas operations often supplement mandatory, reported figures with optional, constant currency numbers. Basically, it enables them to show investors how they performed, independently of foreign currency movements. How Constant
What Is the Constant Default Rate (CDR)? The constant default rate (CDR) is the percentage of mortgages within a pool of loans in which the mortgagors (borrowers) have fallen more than 90 days behind in making payments to their lenders. These pools of individual outstanding mortgages are created by financial institutions that combine various loans
What is a Constant Dollar? A constant dollar is an adjusted value of currency used to compare dollar values from one period to another. Due to inflation, the purchasing power of the dollar changes over time, so in order to compare dollar values from one year to another, they need to be converted from nominal
What Is Constant Maturity? Constant maturity is an adjustment for equivalent maturity, used by the Federal Reserve Board to compute an index based on the average yield of various Treasury securities maturing at different periods. Constant maturity yields are used as a reference for pricing various kinds of debt or fixed-income securities. The most common
What Is a Construction Bond? A construction bond is a type of surety bond used by investors in construction projects. Construction bonds are a type of surety bond that protects against disruptions or financial loss due to a contractor’s failure to complete a project or failure to meet contract specifications. These bonds ensure a construction
What Is Construction Interest Expense? Construction interest expense is an interest that accumulates on a construction loan used to construct a building or other long-lived business asset. Typically, interest paid on a loan is immediately expensed and is tax deductible but that isn’t always the case. For example, construction interest expense that is incurred during
What Is a Construction Lien? A construction lien is a claim made against a property by a contractor or subcontractor who has not been paid for work done on that property. Construction liens are designed to protect professionals from the risk of not being paid for services rendered. A construction lien makes it difficult or
What Is a Construction Loan? A construction loan (also known as a “self-build loan”) is a short-term loan used to finance the building of a home or another real estate project. The builder or home buyer takes out a construction loan to cover the costs of the project before obtaining long-term funding. Because they are considered
