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Notional Principal Amount Key takeaways The notional principal amount is the predetermined (theoretical) dollar value used to calculate interest payments in derivative contracts, most commonly interest rate swaps. The notional is not exchanged; only the interest payments calculated on it are exchanged. For bonds, the face value functions as the notional for interest calculations. Notional…

Notice to Creditors What it is A notice to creditors is an official announcement that a person has died and that their estate is in probate (or that bankruptcy proceedings are underway). It alerts anyone who may be owed money by the decedent (or the debtor) that they must present claims within a specified time…

Notice of Termination A notice of termination is a formal communication that informs an employee or contractual party that their employment or contract will end on a specified date. It clarifies the end date, the reasons (when appropriate), and practical next steps such as pay, benefits, and return of company property. Key points Employers in…

Notice of Deficiency: What it Means and How to Respond Definition A notice of deficiency (also called a statutory notice of deficiency or commonly CP3219A) is an official IRS communication that states the agency’s proposed increase to a taxpayer’s tax liability. It represents the IRS’s legal determination that additional tax is owed based on discrepancies…

Notice of Default: What It Means and What to Do Key takeaways * A notice of default (NOD) is a public filing that notifies a borrower they have breached their mortgage contract by falling behind on payments. * It is often the first formal step a lender takes toward foreclosure, though in some cases it…

Notice of Assessment (NOA) A Notice of Assessment (NOA) is an annual statement issued by the Canada Revenue Agency (CRA) that confirms how your tax return was processed and shows the CRA’s calculation of your tax position for the year. What an NOA includes An NOA summarizes key tax information based on the return you…

Note A note is a written promise to repay borrowed money with interest by a specified date. Functionally similar to a bond, notes are debt securities that typically occupy the middle ground between short-term bills and longer-term bonds. They are used for personal loans, corporate financing, government borrowing, and structured investment products. How notes work…

Notching Notching is the practice by credit rating agencies of assigning different credit ratings to specific debts or obligations of the same issuer based on their relative risk and priority in the capital structure. Key takeaways Notching adjusts an issuer’s overall rating up or down for particular instruments (e.g., senior vs. subordinated debt). Senior, secured…

Key Takeaways * A notary public is an impartial, state‑commissioned official who verifies identities, witnesses signatures, and authenticates certain documents to help prevent fraud. * Commonly notarized documents include real estate deeds, wills, powers of attorney, affidavits, trusts, and bills of sale. * Notary rules and requirements vary by state but typically include minimum age…

Not-Held Order: Definition, Uses, Types, Benefits, and Limitations A not-held order gives a broker discretion over the timing and price of execution. Instead of requiring immediate execution at the prevailing market price, the investor allows the broker to seek a better fill within any limits specified. Because the broker is granted discretion, they are generally…

Not for Profit: Definition, Activities, and Taxes Key takeaways * Not-for-profit organizations do not distribute profits to owners or members; all funds must support the organization’s objectives and operations. * They can be tax-exempt, but not all are 501(c)(3) charities and not all donations to them are tax-deductible. * Common activities include fundraising, program delivery,…

Understanding Nostro Accounts: Banking Abroad in Foreign Currencies Key takeaways A nostro account is a bank’s account held in a foreign bank in the foreign currency. It simplifies international payments, foreign exchange settlement, and trade transactions. Nostro accounts are used by banks, businesses, and governments — not individual retail customers. They are typically maintained in…

Norwegian Krone (NOK) Key takeaways The Norwegian krone (NOK, symbol: kr) is Norway’s official currency, issued and regulated by Norges Bank. It was introduced in 1875, replacing the speciedaler. Coins: 1, 5, 10, 20 kroner. Banknotes: 50, 100, 200, 500, 1,000 kroner. The krone’s value is influenced by oil prices, interest-rate differentials, and broader global…

North Sea Brent Crude Key points North Sea Brent Crude is a blended light, sweet crude oil produced from several fields in the North Sea. Its low sulfur content and relatively low density make it easier and cheaper to refine into gasoline and other high-value products. Brent pricing is one of the primary global benchmarks…

North American Securities Administrators Association (NASAA) What NASAA Is The North American Securities Administrators Association (NASAA), organized in 1919, is the oldest international regulatory organization focused on investor protection. It is a voluntary association of securities regulators that coordinates state, provincial, and territorial efforts across North America to prevent fraud and ensure integrity in the…

North American Industry Classification System (NAICS) The North American Industry Classification System (NAICS) is a standardized system for classifying business establishments across the United States, Canada, and Mexico. It groups companies by similar production processes to enable consistent collection, analysis, and comparison of economic data across North America. Key points NAICS is a tri-national classification…

North American Free Trade Agreement (NAFTA) Key takeaways * NAFTA created a free-trade zone among the United States, Canada, and Mexico, eliminating most tariffs on trade among the three countries and coming into force on Jan. 1, 1994. * It boosted trilateral trade and investment, introduced stronger intellectual property protections, and added side agreements on…

Normative Economics: Definition, Characteristics, and Examples Normative economics is the branch of economic thought that expresses value judgments about what economic outcomes ought to be. Unlike positive economics, which describes and tests how economies function using observable data, normative economics prescribes goals and policies based on opinions, ethics, or political beliefs. Normative statements cannot be…

Normalized Earnings: Definition, Purpose, Benefits, and Examples What are normalized earnings? Normalized earnings (or normalized income) are a company’s earnings adjusted to exclude nonrecurring, unusual, or seasonal items. The goal is to show the company’s underlying, recurring profitability from core operations by removing one‑time gains or losses and smoothing periodic swings. Explore More Resources ›…

Normal Yield Curve: What It Is and How It Works What is a normal yield curve? A normal yield curve (also called a positive yield curve) slopes upward: short-term debt instruments yield less than long-term instruments of the same credit quality. This reflects the market’s typical expectation that longer maturities should pay higher yields to…

Normal Retirement Age (NRA) / Full Retirement Age (FRA) Full (or normal) retirement age (FRA) is the age at which you become eligible to receive your full Social Security retirement benefit. FRA varies by birth year and also refers more broadly to the age at which a worker qualifies for full pension benefits in other…

Normal Profit Key takeaways Normal profit occurs when a firm’s economic profit is zero: total revenue equals the sum of explicit and implicit costs. It differs from accounting profit because it includes implicit (opportunity) costs. A firm can report a positive accounting profit yet still be at normal profit if opportunity costs absorb that profit….

Normal Goods: Definition, Measurement, and Examples What is a normal good? A normal good is a product or service whose demand rises when consumer income increases and falls when income decreases. The term describes the relationship between income and demand, not the quality of the good. Everyday items such as food, clothing, household appliances, and…

Normal Distribution The normal distribution, or Gaussian distribution, is a foundational probability distribution in statistics, appearing as the familiar “bell curve.” It is symmetric about its mean and widely used to model natural phenomena and underpin statistical theory, including the Central Limit Theorem. Key takeaways Symmetric, bell-shaped distribution centered at the mean; mean = median…

Normal-Course Issuer Bid (NCIB) Key takeaways An NCIB is a Canadian stock buyback program through which a public company repurchases its own shares for cancellation. Companies can generally repurchase between about 5% and 10% of their shares, depending on how the transaction is conducted. NCIBs require advance approval from the stock exchanges and are executed…

Nordic Model: Comparing the Economic System to the U.S. What the Nordic Model Is The Nordic model combines a market-based economy with an extensive welfare state. Predominant in Sweden, Norway, Denmark, Finland, and Iceland, it mixes capitalist mechanisms—competition, private enterprise, open trade—with broad public provision of services and risk-sharing across society. Core Features Universal social…

Nontariff Barrier Key points Nontariff barriers (NTBs) are trade restrictions that do not take the form of tariffs. Common NTBs include quotas, licenses, embargoes, sanctions, voluntary export restraints, and product standards. NTBs can protect domestic industries, public health, and national security, but they also can distort trade, raise costs, and reduce consumer choice. Their legality…

Nonresident Alien: Meaning and Tax Implications What is a nonresident alien? A nonresident alien is a foreign national who is not a U.S. citizen and does not meet either the Green Card test or the substantial presence test. Typical examples include visiting teachers, students, temporary workers, and people in the U.S. for medical treatment. Nonresident…

Understanding Nonrenewable Resources: Definition, Examples, and Impacts Key takeaways * Nonrenewable resources are natural substances that form over geological time and cannot be replenished at the rate they are consumed. * Major examples include fossil fuels (oil, natural gas, coal), uranium, certain groundwater aquifers, and many mined minerals. * Burning fossil fuels is a primary…

Nonprofit Organization (NPO): Definition, Funding, and Differences from Not‑for‑Profit Key takeaways A nonprofit’s primary purpose is to serve a public or social good, not to distribute profits to owners or shareholders. Many nonprofits obtain IRS tax‑exempt status (commonly under 501(c)(3)), which can make donations tax‑deductible for donors and relieve the organization of federal income tax….

Nonperforming Loan (NPL) What is a nonperforming loan (NPL)? A nonperforming loan (NPL) is a loan on which the borrower has failed to make scheduled principal or interest payments for a specified period—commonly 90 to 180 days. Once classified as nonperforming, the loan is considered at heightened risk of default and can harm the borrower’s…

Nonperforming Asset: Definition, Impacts, and Recovery Strategies A nonperforming asset (NPA) is a loan or debt instrument on which the borrower has stopped making required payments for an extended period. Lenders no longer receive interest or principal payments, which can lead to income loss, increased loan-loss provisions, and potential write-offs. For borrowers, defaulting can damage…

Nonpassive Income and Losses What they are Nonpassive income and losses arise from activities in which a taxpayer materially participates. Nonpassive income includes wages, active business profits, self-employment earnings, and certain investment proceeds when the taxpayer is actively involved. Nonpassive losses are losses tied to those same actively managed activities and generally can be deducted…

Nonparametric Statistics Overview Nonparametric statistics encompass methods that do not assume data follow a specific parametric distribution (like the normal distribution) or depend on a fixed set of distributional parameters. These methods are flexible and often used with ordinal data, rankings, or when the underlying data-generating process is unknown or clearly non-normal. Key takeaways Do…

Nonmonetary Assets Key takeaways * Nonmonetary assets cannot be readily converted to a precise cash amount; examples include property, equipment, inventory, patents, and goodwill. * Monetary assets are cash or claims that convert to a determinable cash amount (cash, bank deposits, accounts receivable). * Nonmonetary assets may be tangible (physical) or intangible (nonphysical) and their…