What Is Black Box Accounting? Black box accounting is the deliberate use of complex bookkeeping methodologies to make interpreting financial statements challenging and time-consuming. This approach is more likely to be adopted by companies seeking to hide information that they do not want investors to readily see, such as large amounts of debt, which could negatively affect
What Is Black Box Car Insurance? Black box car insurance, also known as telematics insurance, is a type of auto insurance that uses technology to track and record a policyholder’s driving behavior. The goal is to base the driver’s insurance premiums on how much they drive and how safe (or risky) they are behind the
What Is Black Friday? Black Friday refers to the day after the U.S. Thanksgiving holiday, which has also traditionally been a holiday itself for many employees. It is typically a day full of special shopping deals and big discounts and is considered the beginning of the holiday shopping season. The sales made on Black Friday
What Is a Black Knight? A black knight is a company that makes an unwelcome, hostile takeover bid. Management of the target company often doesn’t want to sell to a black knight company because they typically have sinister goals. As a result, black knight companies attempt to bypass the board of directors of a company
What Was the Black Liquor Tax Credit? The so-called black liquor tax credit was a tax loophole in the Alternative Fuel Mixture Credit (AFMC) that was exploited by some companies in the forest-products industry beginning in 2005. The federal tax credit was intended to encourage companies to use biofuels by rewarding them for mixing them
What Is a Blacklist? The term blacklist refers to a list of people, organizations, or countries that are shunned or excluded by others because they are alleged to have engaged in unacceptable or unethical behavior or activities. A blacklist is considered retaliatory as it is intended to create financial hardship for those named on the
What Is the Black-Litterman Model? The Black-Litterman (BL) Model is an analytical tool used by portfolio managers to optimize asset allocation within an investor’s risk tolerance and market views. Global investors, such as pension funds and insurance companies, need to decide how to allocate their investments across different asset classes and countries. The BL model
What Is Black Money? Black money includes all funds earned through illegal activity and otherwise legal income that is not recorded for tax purposes. Black money proceeds are usually received in cash from underground economic activity and, as such, are not taxed. Recipients of black money must hide it, spend it only in the underground
What Is the Black-Scholes Model? The Black-Scholes model, also known as the Black-Scholes-Merton (BSM) model, is one of the most important concepts in modern financial theory. This mathematical equation estimates the theoretical value of derivatives based on other investment instruments, taking into account the impact of time and other risk factors. Developed in 1973, it
What Is a Black Swan? A black swan is an unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences. Black swan events are characterized by their extreme rarity, severe impact, and the widespread insistence they were obvious in hindsight. Key Takeaways A black swan is an extremely
