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Offering Memorandum What it is An offering memorandum—also called a private placement memorandum (PPM)—is a legal disclosure document used to market a private securities offering. It describes the investment’s objectives, terms, risks, and material facts about the issuer to help prospective investors evaluate the opportunity. Explore More Resources › Read more Government Exam Guru ›…

Offering Circular: What it Means, How it Works An offering circular is a condensed prospectus provided to potential investors when a new security is being issued. It summarizes the issuer’s business and finances, the terms of the offering, risk factors, and how the proceeds will be used. While shorter than a full prospectus, it is…

Offering: Definition, Types, and How It Works Key takeaways * An offering is the issuance or sale of a security (stock, bond, or other instrument) by a company to raise capital. * The most common form is an initial public offering (IPO), when a company’s shares are sold to the public for the first time….

Offer in Compromise An Offer in Compromise (OIC) is an IRS program that lets eligible taxpayers settle a tax debt for less than the full amount owed when paying the full amount would create financial hardship or is otherwise unaffordable. The IRS evaluates each case based on the taxpayer’s unique financial circumstances. How the IRS…

Offer to Buy an Asset: Types and Examples Key takeaways * An offer is a conditional proposal to buy or sell an asset that becomes legally binding if accepted. * Offers vary by purpose and form — e.g., real estate purchase offers, securities offerings, tender offers, and employment offers — and differ in pricing, time…

Offensive Competitive Strategy What it is An offensive competitive strategy is a proactive corporate approach aimed at reshaping an industry or market position by taking aggressive actions against competitors. Rather than protecting existing advantages, the offensive player seeks to capture new customers, close off opportunities to rivals, and set the terms of competition. Common elements…

Off-the-Run Treasuries: What They Are and Why They Matter Key takeaways * Off-the-run Treasuries are previously issued U.S. Treasury notes or bonds that have been superseded by a newer issue of the same maturity (the on-the-run issue). * They are generally less liquid than on-the-run securities and typically trade at slightly lower prices and higher…

Off-Chain Transactions: Definition, How They Work, and Key Tradeoffs Key takeaways * Off-chain transactions are cryptocurrency transfers executed outside a blockchain’s main ledger, typically on second-layer networks or separate chains. * They reduce fees and settlement times and can improve privacy and scalability. * Off-chain operations are later recorded or settled on the primary blockchain,…

Off-Balance Sheet Financing (OBSF) Key takeaways * Off-balance sheet financing (OBSF) is an accounting practice that keeps certain assets, liabilities, or obligations off a company’s balance sheet while still economically relating to the company. * Companies use OBSF to improve apparent leverage and debt ratios, which can lower borrowing costs or avoid breaching covenants. *…

Off-Balance Sheet (OBS) Key takeaways * Off-balance sheet (OBS) items are assets, liabilities, or arrangements not recorded on a company’s main balance sheet but disclosed in financial statement notes. * OBS techniques can improve reported financial ratios and preserve borrowing covenants, but they can also obscure risk if not properly disclosed. * Common OBS items…

OEX (S&P 100 Index): Overview The OEX is the ticker symbol used on the Chicago Board Options Exchange (CBOE) to identify options on the Standard & Poor’s 100 Index—an index that tracks 100 of the largest U.S. publicly traded companies. It serves as a benchmark for large-cap, blue‑chip stocks and a tradable vehicle for investors…

Odious Debt: Meaning, Mechanisms, and Implications Key takeaways Odious debt describes loans or bonds taken on by a prior regime that a successor government seeks to repudiate on moral or political grounds. It is not an established principle of international law; no international court has nullified sovereign obligations solely on that basis. Whether debt is…

Odd Lot Theory: What It Is and Why It’s Largely Fallen Out of Favor Key takeaways * Odd-lot trades are orders for fewer than 100 shares (or not a multiple of 100); round lots are multiples of 100 shares. * Historically, odd-lot activity was treated as a contrarian signal on the assumption that small retail…

Odd Lot An odd lot is a securities order composed of fewer shares than the market’s standard trading unit — typically any quantity under 100 shares for U.S. stocks. Odd lots arise from corporate actions or investor behavior and can affect execution, visibility in market data, and transaction costs. Key points Odd lot = fewer…

October Effect: Definition, Evidence, and What Investors Should Know Key takeaways * The “October effect” is the belief that stocks tend to fall in October. Historical data do not support it as a reliable anomaly; over the long run October has been slightly positive on average. October is unusually volatile—more large daily swings have historically…

Ocean Bill of Lading Key takeaways * An ocean bill of lading (B/L) is a legally binding shipping document used for transporting goods by sea. * It functions as (1) a contract of carriage between shipper and carrier, (2) a receipt for goods, and (3) evidence of title (when negotiable). * Common variants include non‑negotiable…

Occurrence Policy: What It Is, How It Works, Pros and Cons Key takeaways An occurrence policy covers claims for injuries or damages that happened while the policy was in force, even if the claim is filed years later. It’s useful for exposures that produce delayed harm (e.g., chemical exposure). Unlike claims-made policies, occurrence policies respond…

Occupational Safety and Health Act (OSH Act) Definition and purpose The Occupational Safety and Health Act (OSH Act) of 1970 is U.S. federal legislation that requires employers to provide safe and healthful workplaces. It was enacted to reduce workplace injuries, illnesses, and deaths by establishing national standards, research, education, and enforcement mechanisms. Key components Establishes…

Occupational Labor Mobility What it is Occupational labor mobility is the ability of workers to move between different occupations or career fields to find employment. High occupational mobility allows labor to shift where it’s most needed, supporting productivity, innovation, and economic growth. It is distinct from geographical mobility, which concerns moving between locations for work….

Occupancy Rate: Definition, Calculation, and Uses What is occupancy rate? Occupancy rate measures the proportion of available space or capacity that is actually occupied or in use. It is commonly applied to real estate (apartments, offices, malls, hotels), healthcare (hospital or nursing home beds), and operations (call-center agent time). Formula: Occupancy rate = (Occupied units…

Obsolete Inventory: Definition, Risks, Accounting Treatment, and Impact What is obsolete inventory? Obsolete inventory (also called dead or excess inventory) is stock that has reached the end of its product life cycle and is no longer sellable or expected to be sold. When inventory loses market value or becomes unsalable, GAAP requires companies to reduce…

Obsolescence Risk What it is Obsolescence risk is the possibility that a product, process, or technology a company relies on will become outdated or noncompetitive. When obsolescence occurs, revenue and profitability can decline unless the firm adapts. This risk is especially acute for businesses that depend on technological advantages. How it works Obsolescence is driven…

Obligor: Definition, Roles, and Examples What is an obligor? An obligor is a person or entity legally or contractually required to provide a payment or other benefit to a recipient (the obligee). Common examples include corporate bond issuers, borrowers, parents ordered to pay child support, and principals on surety bonds. Failure to meet obligations can…

Obligatory Reinsurance: Definition, How It Works, Types, Pros & Cons What is obligatory reinsurance? Obligatory reinsurance — also called an automatic treaty — is an agreement that requires an insurer (the cedent) to cede, and a reinsurer to accept, all policies that meet a predefined set of criteria. Once a risk falls within the treaty’s…

Obligation: Definition, Types, and Examples Key takeaways An obligation is a responsibility to fulfill terms of an agreement or duty; failure to do so typically allows legal or contractual remedies. Financial obligations include debts and scheduled payments such as mortgages, loans, taxes, and recurring bills. In finance, obligations and rights differ: options grant rights without…

Objective Probability What it is Objective probability quantifies the chance that an event will occur based on measurable data, recorded observations, experiments, or long-run frequencies. It is calculated using statistical and mathematical methods rather than intuition, anecdote, or personal judgment. How it works Collect empirical data from repeated, unbiased observations or experiments. Use statistical formulas…

Obamanomics What it means Obamanomics refers to the economic policies enacted during Barack Obama’s presidency, particularly those adopted in response to the 2008 Great Recession. The term bundles fiscal stimulus, regulatory measures, tax changes, and health-care reform intended to stabilize the economy, preserve jobs, and promote recovery. Key takeaways Centered on active government intervention to…

NYSE Composite Index What it is The NYSE Composite Index (ticker: NYA) tracks the performance of common stocks listed on the New York Stock Exchange. It includes U.S. and foreign common stocks, American Depositary Receipts (ADRs), real estate investment trusts (REITs), and tracking stocks. Constituents are weighted by free‑float market capitalization and the index is…

NYSE Arca What it is NYSE Arca is a U.S. electronic securities exchange and order‑matching platform that specializes in exchange‑traded products (ETPs) and equities. Its listings include exchange‑traded funds (ETFs), exchange‑traded notes (ETNs), and other exchange‑traded vehicles (ETVs). The platform supports conventional order types and also lets participants take part in ETF opening and closing…

N.V. (Naamloze Vennootschap) What is an N.V.? An N.V. (Naamloze Vennootschap) is a public limited liability company used in the Netherlands and several Dutch-influenced jurisdictions (Belgium, Aruba, Curaçao, Suriname, Indonesia, Sint Maarten). It issues shares to the public to raise capital. The literal translation is “nameless venture,” reflecting that shareholder names need not be publicly…

Unlocking Numismatics: Coin Study, Qualifications, and Value Key takeaways Numismatics is the systematic study of money—especially coins—focusing on production, physical attributes, rarity, and historical context. Numismatics goes beyond casual collecting: it emphasizes research, documentation, and grading. Rare coins often trade far above face or melt value because of scarcity, provenance, or collector demand. Formal training…

Numeraire: Definition, History, and How It Works Key takeaways A numeraire is a standard unit used to measure and compare the value of goods, assets, or financial instruments. It is typically a single good or currency chosen as the base for an index or market. The U.S. dollar functions as the numeraire for most global…

Null Hypothesis A null hypothesis is a statistical statement that assumes no real effect or difference exists in the population being studied — that any observed variation in sample data is due to chance. It is the baseline proposition used in hypothesis testing and is denoted H0. How it works Hypothesis testing evaluates whether sample…

Novation Definition Novation is the replacement of one party in an existing contract with a third party, with the consent of all parties involved. The original contract is extinguished and replaced by a new contract that transfers both the rights (benefits) and the obligations (burdens) from the original party to the incoming party. Key takeaways…

Notional Value: Definition and Practical Uses Notional value (or face value) is the total value of the underlying asset that a financial contract controls. It’s commonly used in derivatives markets—futures, options, forwards, swaps, and FX—to express the scale of exposures and to calculate payments or hedge sizes. Notional value differs from market value: notional is…