What Is an Accommodative Monetary Policy? Accommodative monetary policy, also known as loose credit or easy monetary policy, occurs when a central bank (such as the Federal Reserve) attempts to expand the overall money supply to boost the economy when growth is slowing (as measured by GDP). The policy is implemented to allow the money
What Is an Absolute Auction? An absolute auction is a type of auction in which the sale is awarded to the highest bidder. Absolute auctions do not have a reserve price, which sets a minimum required bid for the item to be sold. Key Takeaways Absolute auctions are a popular type of auction, especially for
What Is an Absolute Beneficiary? An absolute beneficiary is a designation of a beneficiary that can not be changed without the written consent of that beneficiary. This term is often used in connection with an insurance policy when a beneficiary is named. The terms of the policy or agreement will specify whether the beneficiary is
What Is Absolute Pollution Exclusion? Absolute pollution exclusion is a commercial liability insurance policy clause that removes coverage of pollution resulting from regular business operations. Absolute pollution exclusions to comprehensive general liability insurance policies became common after 1986 when standard pollution exclusions no longer contained “sudden and accidental” pollution incidents. Understanding Absolute Pollution Exclusion Absolute
What Is the Absolute Rate? The absolute rate, also known as the absolute swap yield, is the total yield earned by both parties to an interest rate swap. It is calculated as the sum of the fixed and variable components of the interest rate swap. For example, if an interest rate swap has a fixed
What Is Absolute Priority? Absolute priority, also known as “liquidation preference,” is a rule governing the order of payment among creditors and shareholders in the event of a corporate liquidation. The absolute priority rule is used in corporate bankruptcies to decide the portion of payment that will be made to each participant. Debts to creditors
What Is the Absolute Return Index? The term absolute return index refers to a stock index designed to measure absolute returns on investments in hedge funds. Hedge funds are considered alternative investments that use pooled funds to earn returns for their investors. The index was created to compare the performance of an individual hedge fund against
What Is an Absolute Title? An absolute title to a property (also known as a perfect title) is free of any encumbrances or deficiencies. An absolute title gives an unequivocal right of ownership to the owner and cannot be disputed or challenged by anyone else. This is opposed to titles with liens, attachments, or judgments
What Is Absolute Value? Absolute value, also known as an intrinsic value, refers to a business valuation method that uses discounted cash flow (DCF) analysis to determine a company’s financial worth. The absolute value method differs from the relative value models that examine what a company is worth compared to its competitors. Absolute value models
What Is Absorption Costing? Absorption costing, sometimes called “full costing,” is a managerial accounting method for capturing all costs associated with manufacturing a particular product. All direct and indirect costs, such as direct materials, direct labor, rent, and insurance, are accounted for when using this method. Under generally accepted accounting principles (GAAP), U.S. companies may
