Author: user

Sensitivity Analysis Sensitivity analysis evaluates how changes in one or more independent variables affect a dependent outcome under a fixed set of assumptions. Often called “what‑if” analysis, it helps organizations anticipate how different inputs—price, volume, interest rates, costs, etc.—alter financial results or project viability. How it works Build a baseline model that links inputs (independent…

What is the Sensex? The Sensex (S&P BSE Sensex) is the benchmark stock index of the Bombay Stock Exchange (BSE) in India. It tracks 30 of the largest and most actively traded companies listed on the BSE and serves as a bellwether for the Indian economy. The index is float-adjusted and market-capitalization weighted, and its…

Senior Bank Loan: Definition, How It Works, Rates & Risks What is a senior bank loan? A senior bank loan is a corporate loan made by a bank or similar financial institution, often secured by the borrower’s assets and legally senior to other claims on those assets. Banks commonly repackage multiple such loans into a…

Selling, General, and Administrative Expense (SG&A) Selling, general, and administrative expenses (SG&A) are the non-production costs a company incurs to run its business. Recorded below gross profit on the income statement, SG&A—often called overhead—includes costs that support operations but are not directly tied to manufacturing goods or delivering services. Key points * SG&A covers all…

Seller Financing: Definition, How It Works, Benefits, and Risks What is seller financing? Seller financing (also called owner financing or a purchase-money mortgage) is an arrangement in which the property seller acts as the lender, extending credit to the buyer to purchase the property. Instead of obtaining a mortgage from a bank, the buyer makes…

Understanding the Sell‑Side The sell‑side of finance comprises firms and professionals that create, promote, underwrite, trade, and sell financial instruments—stocks, bonds, derivatives, and private placements—to investors. It serves as the bridge between issuers of securities and the buy‑side (asset managers, hedge funds, pension funds, mutual funds, and individual investors), and provides essential market functions such…

“Sell in May and Go Away”: definition, evidence, and what investors should know What the phrase means “Sell in May and go away” is an old market adage suggesting stocks tend to underperform from May through October, and that investors might raise cash or move to bonds over the summer months (May 1–Oct 31), then…

Self-Regulatory Organization (SRO) A self-regulatory organization (SRO) is a private, membership-based entity that creates and enforces industry rules and professional standards. SROs are common in finance but also exist in other sectors (law, accounting, insurance, energy). They aim to promote ethical conduct, protect clients and investors, and reduce industry misconduct through internal oversight. Key takeaways…

What is self-employment? Self-employment means working for yourself rather than for an employer. Self-employed people earn pay from clients or customers and typically control how, when, and where they perform their work. They may operate as sole proprietors, independent contractors, freelancers, business owners, or other legal business entities. Over 16 million people in the U.S….

Self-Employed Contributions Act (SECA) Tax: What It Is and How It Works Key takeaways * SECA requires self-employed individuals to pay the Social Security and Medicare taxes that employers and employees normally share. * The combined self-employment tax rate is 15.3% (12.4% Social Security + 2.9% Medicare); an additional 0.9% Medicare surtax can apply at…

Self-Directed IRA (SDIRA) Key takeaways A self-directed IRA (SDIRA) lets you hold a wider range of investments than typical IRAs, including real estate, private equity, promissory notes, precious metals, and certain cryptocurrencies. SDIRAs are subject to the same tax structure as traditional and Roth IRAs, but they carry additional rules (prohibited transactions, disqualified persons) and…

Seigniorage Explained: Impact on Inflation and Government Revenue Key takeaways Seigniorage is the profit a government earns when the face value of money exceeds its production cost. Excessive reliance on seigniorage to fund spending can be inflationary; moderate inflation can temporarily boost seigniorage revenue. Coin production can produce losses when metal and manufacturing costs exceed…

Seed Capital: Definition, How It Works, and an Example Seed capital (also called seed money or seed financing) is the initial funding used to start a business or develop a new product. It supports a startup’s earliest activities—turning an idea on paper into a workable prototype or business plan—and helps the company reach milestones that…

Security Market Line (SML): Definition and Characteristics Overview The Security Market Line (SML) is a graphical representation of the Capital Asset Pricing Model (CAPM) that shows the relationship between expected return and systematic risk for marketable securities. The x-axis measures risk using beta (β), and the y-axis measures expected return. The SML illustrates the required…

What Is a Security? A security is a tradable financial instrument that represents an ownership interest, a creditor relationship, or rights to ownership. Common examples include stocks, bonds, options, and other contracts whose value depends on underlying assets. How Securities Work Securities allow issuers (corporations, governments, municipalities) to raise capital and investors to gain exposure…

Securitization Securitization transforms illiquid financial assets—like mortgages, auto loans, credit-card receivables, or student loans—into tradable securities. By pooling assets and issuing claims against their cash flows, originators convert loans into marketable instruments that provide investors with interest and principal payments. Key takeaways Securitization creates marketable securities backed by pools of underlying loans or receivables. Common…

Securities Lending: Overview, How It Works, Benefits, and Risks Securities lending is the temporary transfer of securities (stocks, bonds, or other instruments) from one party (the lender) to another (the borrower) in exchange for collateral. It supports short selling, hedging, arbitrage, and market liquidity while allowing lenders to earn fees on otherwise idle assets. Participation…

What Is the Securities Exchange Act of 1934? Reach and History Overview The Securities Exchange Act of 1934 (the Exchange Act or SEA) regulates trading of securities on the secondary market (after they are issued). Its primary goals are to prevent fraud and manipulation, and to increase transparency so investors can make informed decisions. The…

Securities and Exchange Commission (SEC) Definition The U.S. Securities and Exchange Commission (SEC) is an independent federal agency charged with protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation. It oversees securities offerings, exchanges, broker-dealers, investment advisers, and public companies to ensure accurate disclosure and reduce fraud. Key takeaways The SEC was…

Understanding the Securities Act of 1933: Key Takeaways and Significance Overview The Securities Act of 1933 was the first major federal law governing the sale of securities in the United States. Enacted in the wake of the 1929 stock market crash, its primary purpose is to protect investors by requiring companies to provide full and…

Securities and Exchange Board of India (SEBI) The Securities and Exchange Board of India (SEBI) is the primary regulator of India’s securities markets. Its stated objectives are to protect the interests of investors, to promote the development of the securities market, and to regulate the market and related activities. Key roles and powers Regulator: drafts…

Secular: What It Means in Stock Investing, With Examples Key takeaways * “Secular” describes long-term market movements or trends that persist regardless of short-term or cyclical fluctuations. * Secular trends can be positive, negative, or neutral and can last many years or decades. * Secular stocks tend to have revenue and earnings that are resilient…

Sector Breakdown: What It Is and How It’s Used A sector breakdown shows how a portfolio’s investments are distributed across industry sectors, usually expressed as percentages. It helps investors understand asset allocation, concentration, and diversification by indicating which parts of the economy a portfolio is exposed to (for example, technology, healthcare, or consumer staples). Why…

What Is a Sector? A sector is a broad segment of the economy made up of businesses that engage in similar or related activities. Economists and investors use sectors to classify economic activity, compare companies, and track which parts of the economy are expanding or contracting. Key Takeaways Sectors group companies by similar business activities,…

Section 1250: Taxation of Depreciated Real Property What is Section 1250? Section 1250 of the Internal Revenue Code addresses how gains from the sale of depreciable real property are taxed when depreciation taken on the property exceeds what would have been allowed under the straight-line method. When accelerated depreciation methods have produced larger earlier deductions,…

Section 1245: Definition, Tax Treatment, and Example Key takeaways Section 1245 of the Internal Revenue Code requires “recapture” of depreciation or amortization taken on certain business property when that property is sold at a gain. Depreciation recapture under Section 1245 is taxed as ordinary income to the extent of the allowable or allowed depreciation or…

Understanding Section 1231 Property: Definition, Examples, and Tax Benefits What is Section 1231 property? Section 1231 of the Internal Revenue Code covers depreciable business property and real property held for more than one year. When such property is sold, gains and losses receive special tax treatment: Net gains are treated as long-term capital gains (subject…

Understanding 1035 Exchanges: Tax-Free Insurance and Annuity Transfers A 1035 exchange, named for Internal Revenue Code section 1035, lets policyholders transfer certain insurance and annuity contracts to like-kind contracts without immediate tax consequences. It’s a tax-deferral tool intended to allow owners to replace outdated or underperforming products while preserving the original contract’s tax basis—provided specific…

The Secondary Market Definition and key takeaways The secondary market is where investors buy and sell securities after those securities have been issued in the primary market. Trades occur between investors or through intermediaries, not with the issuing company. Key takeaways: * Provides liquidity and enables investors to enter and exit positions. * Drives price…

Second World What “Second World” means “Second world” is an outdated geopolitical term originally used during the Cold War to describe the Soviet Union and its communist bloc allies. In that context, second-world countries were characterized by centrally planned economies and one-party political systems. The term largely fell out of use after the end of…

SEC Yield What it is The SEC 30‑day yield is a standardized measure, required by the U.S. Securities and Exchange Commission, that annualizes a fund’s recent income return. It reflects interest and dividends earned over a recent 30‑day period, after subtracting fund expenses, and is expressed as an annualized percentage. This makes it a useful,…

What Is SEC Form S-1? Filing Steps & Amendment Guidelines SEC Form S-1 is the registration statement that U.S.-based companies file with the Securities and Exchange Commission (SEC) when offering new securities to the public, most commonly for an initial public offering (IPO). The form provides investors with detailed information about the company, its finances,…

Seasonally Adjusted Annual Rate (SAAR) What is SAAR? A seasonally adjusted annual rate (SAAR) is an annualized statistic that removes predictable seasonal effects from economic or business data (sales, employment, production, etc.) so that values from different periods can be compared meaningfully. SAAR shows what the yearly rate would be if the current period’s seasonally…

Understanding Seasonality What is seasonality? Seasonality is a recurring, predictable pattern in time-series data that repeats within each calendar year. It reflects regular changes tied to seasons (winter, summer), commercial periods (back-to-school, holidays), or other annual events that affect demand, production, employment, and economic activity. Key takeaways Seasonality causes predictable annual swings in business and…

Scrip: Definition, Types, Uses, and Pros & Cons Key takeaways * A scrip is a substitute for legal tender that entitles the holder to receive goods, services, cash, or equity. * Common modern examples include gift cards, reward points, coupons, and store credit. * Historically, scrip paid workers in company towns and was restricted by…