Category: Financial Terms

Endogenous Variable Definition An endogenous variable is a variable within a statistical or mathematical model whose value is determined by other variables in the same model. In typical use, an endogenous variable is the dependent variable whose changes correlate with—and may be caused by—other variables included in the system. How it works Endogenous variables change…

Endogenous Growth Theory: Key Concepts and Critiques What it is Endogenous growth theory holds that long‑run economic growth is driven primarily by factors internal to the economy—especially human capital, technological innovation, and strategic investment—rather than by exogenous forces. It emphasizes that policy choices and private‑sector decisions (for example, on research and development, education, and intellectual…

End-to-End End-to-end describes a process, service, or product that is managed from initial concept through final delivery without relying on third-party providers. The approach gives a single organization responsibility and control over every stage, reducing handoffs, improving coordination, and often cutting costs. Key takeaways End-to-end means ownership of the entire workflow from start to finish….

Encumbrance: Definition, Types, and How It Affects Property Ownership Key takeaways * An encumbrance is a third-party claim or right that limits a property owner’s use, transfer, or full control of the property. * Common encumbrances include easements, liens, mortgages, leases, restrictive covenants, and encroachments. * Encumbrances can be financial (liens, mortgages) or non-financial (easements,…

Encroachment: What it Means and How to Handle It Encroachment in real estate occurs when a property owner builds or extends a structure onto a neighbor’s land—either intentionally or unintentionally—thereby violating the neighbor’s property rights. Common examples include fences, additions, driveways, hedges, or tree limbs that cross a property line. Key takeaways Encroachment can be…

Employment-to-Population Ratio What it is The employment-to-population ratio (E/P) measures the share of a region’s working-age population that is currently employed. It provides a broad snapshot of how much of the potential labor pool is actually working and is commonly used to assess labor market strength. How it’s calculated E/P = (Number of employed people…

Employment Insurance (EI) in Canada Employment Insurance (EI) is a federal program that provides temporary financial assistance and employment services to people who are out of work or unable to work for specific reasons. It also supports those who are sick, pregnant, caring for a newborn or newly adopted child, or providing care for a…

Employment Agency Fees Overview Employment agency fees are payments made to recruitment or staffing agencies for matching a worker with an employer. Fees are typically charged only when a placement is successful and vary depending on the agency, role, industry, and market conditions. Two primary fee arrangements exist: employer-paid fees and applicant-paid fees. How fees…

Employers’ Liability Insurance What it is Employers’ liability insurance protects businesses from legal claims made by employees for job-related injuries, illnesses, or deaths that fall outside standard workers’ compensation coverage. It is typically sold together with workers’ compensation (often called “Part 2” of a workers’ comp policy) and helps pay damages and legal defense costs…

Employer Identification Number (EIN) An Employer Identification Number (EIN) is a unique nine-digit number (formatted as XX-XXXXXXX) issued by the Internal Revenue Service (IRS) to identify a business for federal tax and reporting purposes. It functions similarly to a Social Security number for individuals and is often called a Federal Tax Identification Number. Why an…

Employee Stock Purchase Plan (ESPP) An Employee Stock Purchase Plan (ESPP) lets employees buy their employer’s stock through payroll deductions, typically at a discount. It’s a common equity benefit that can offer a straightforward way to invest in the company and potentially earn tax-advantaged gains if certain holding-period rules are met. Key takeaways ESPPs let…

Employee Stock Ownership Plan (ESOP) An Employee Stock Ownership Plan (ESOP) is a qualified retirement and compensation plan that gives employees an ownership interest in their company through shares of stock. Employers use ESOPs to align employee and shareholder incentives, support succession planning in closely held firms, and provide a retirement benefit. Key takeaways ESOPs…

Understanding Employee Stock Options (ESOs) Key takeaways * ESOs give employees the right to buy company shares at a set exercise (strike) price for a limited time. They are a common form of equity compensation designed to align employee and shareholder interests. * Two main types: Incentive Stock Options (ISOs) — often favorable tax treatment…

Employee Retirement Income Security Act (ERISA) What is ERISA? ERISA is a federal law that establishes standards for many employer-sponsored retirement and certain private-sector health plans. Its primary purpose is to protect participants’ benefits by imposing rules on plan administration, fiduciary conduct, disclosure, vesting, funding, and claims procedures. Key takeaways ERISA applies to most private…

Employee Buyout (EBO) An employee buyout (EBO) can refer to two related but distinct arrangements: – A voluntary severance offer from an employer to select employees as a cost-cutting alternative to layoffs. – A worker-led purchase of a company (or a majority stake) so employees gain ownership and control, often implemented through an employee stock…

Empirical Rule: Definition, Formula, and Example Definition The empirical rule (also called the three-sigma or 68–95–99.7 rule) describes how data are distributed in a normal (bell‑shaped) distribution. It states: About 68% of observations lie within one standard deviation of the mean (µ ± σ). About 95% lie within two standard deviations (µ ± 2σ). About…

Empire Building Key takeaways * Empire building is the pursuit of enlarging an individual’s or organization’s size, scope, and influence. * Common methods include mergers and acquisitions, vertical integration, and strategic alliances. * It can create economies of scale and prestige but often introduces conflicts between management and shareholders (agency costs). What is empire building?…

Eminent Domain Explained: Types, Compensation, and Legal Implications Key takeaways * Eminent domain is the government’s power to take private property for public use, with an obligation to provide just compensation. * Takings can be complete, partial, temporary, or regulatory; each type affects valuation and remedies differently. * Just compensation is typically measured by fair…

Emigration: Definition, Causes, and Economic Effects What is emigration? Emigration is the act of leaving one’s home country to settle in another. It is the mirror concept to immigration: emigrants are people who depart a country, while immigrants are those who arrive. People emigrate for many reasons—economic opportunity, safety, family reunification, education, or a higher…

MSCI Emerging Markets Index Overview The MSCI Emerging Markets Index tracks the performance of large-cap and mid-cap companies across emerging-market economies. It serves as a widely used benchmark for funds and ETFs that provide exposure to developing markets, offering investors access to companies in fast-growing regions with higher growth potential—and higher risk—than developed markets. Explore…

Emerging Markets Bond Index (EMBI) What is the EMBI? The Emerging Markets Bond Index (EMBI) is a benchmark for measuring the return performance of government and corporate bonds issued by emerging-market countries. EMBI-style indices are widely used to track dollar-denominated sovereign and quasi‑sovereign debt from developing economies and to benchmark funds and ETFs that invest…

Emerging Market Economies What they are Emerging market economies are countries transitioning from low-income, agrarian-based systems toward more industrialized, service-oriented, and globally integrated economies. They typically show faster GDP growth, expanding trade and investment flows, and developing financial and regulatory institutions—but they remain less mature than developed markets. Key characteristics Rapid economic growth and rising…

Emerging Industries: Meaning, Overview, and Examples What is an emerging industry? An emerging industry is a cluster of companies built around a new product, technology, or idea that is still in the early stages of development. These industries are often small, centered on innovation, and can grow rapidly if the underlying technology or business model…

Emergency Fund What is an emergency fund? An emergency fund is a dedicated cash reserve set aside to cover unexpected expenses so you don’t have to rely on credit, loans, or other savings earmarked for different goals. Typical uses include covering living expenses after a job loss, emergency medical bills, urgent home or car repairs,…

Emergency Banking Act of 1933 The Emergency Banking Act of 1933 was emergency legislation enacted to halt bank runs and restore public confidence in the U.S. banking system during the depths of the Great Depression. Passed by Congress and signed shortly after Franklin D. Roosevelt took office, it introduced immediate measures to stabilize banks and…

Embezzlement: Definition, Examples, and Prevention Embezzlement is a white‑collar crime in which a person entrusted with property or funds misappropriates them for personal use. It represents a breach of fiduciary duty and can carry both civil and criminal consequences, including restitution, fines, and imprisonment. Key takeaways Embezzlement occurs when someone with lawful access to assets…

Understanding Embargoes: Definition, Mechanisms, and Impact Key takeaways * An embargo is a government-imposed trade restriction used as an economic sanction to punish or pressure another country. * Embargoes can bar all trade or target specific sectors (e.g., arms, technology, oil). * They are more effective at inflicting economic pain than at forcing political change…

Email Money Transfer (EMT): How It Works and How to Stay Secure Key takeaways * EMTs (commonly Interac e-Transfers in Canada) let users move money between personal accounts using online banking and email notifications. * The email contains retrieval instructions; the funds move between banks, not through email, and are protected by encryption and security…

Elliott Wave Theory Elliott Wave Theory interprets financial market price movements as recurring, fractal wave patterns driven by investor psychology. Developed by Ralph Nelson Elliott in the 1930s, it groups market action into motive (impulse) and corrective phases and uses wave relationships—often aligned with Fibonacci ratios—to help forecast likely price behavior. The method is probabilistic…

Elevator Pitch What is an elevator pitch? An elevator pitch is a brief, persuasive summary of an idea, product, service, or personal value—designed to be delivered in the time span of an elevator ride. Aim for about 30–60 seconds. The goal is to capture attention and prompt a follow-up action: a meeting, contact exchange, or…

Electronic Retailing (E-tailing) Electronic retailing, or e-tailing, is the sale of goods and services over the internet. It covers both business-to-consumer (B2C) and business-to-business (B2B) transactions and requires businesses to adapt their operations—website, distribution, marketing, and customer support—to serve online customers effectively. How E-tailing Works Successful e-tailers combine several core elements: * Engaging, easy-to-navigate websites…

Electronic Payments Network (EPN) What is the EPN? The Electronic Payments Network (EPN) is a private-sector automated clearinghouse (ACH) in the United States that processes electronic funds transfers. Along with the Federal Reserve’s ACH system, the EPN handles bulk credit and debit transactions between financial institutions for businesses and individuals. Common uses Payroll direct deposits…

Electronic Money (eMoney): Overview Electronic money, or eMoney, is currency represented as digital balances in banking and payment systems. Backed by fiat currency, it can be converted to physical cash but is primarily used to make and receive payments electronically. eMoney is regulated and overseen by central banks and financial authorities, which distinguishes it from…

Electronic Fund Transfer Act (EFTA) What the EFTA is The Electronic Fund Transfer Act (EFTA) is a federal law that protects consumers who transfer funds electronically. It covers transactions made with debit cards, ATMs, point-of-sale (POS) systems, telephone and online banking, direct deposits, automated clearing house (ACH) transfers, and preauthorized withdrawals. The EFTA establishes consumer…

Electronic Filing (E-File) What is e-filing? Electronic filing (e-file) is submitting tax returns online using tax-preparation software or through a tax professional who transmits the return electronically. Most U.S. taxpayers now file electronically because it’s faster, more accurate, and more convenient than mailing paper forms. Key options: * Commercial tax software (e.g., TurboTax, TaxSlayer, TaxAct)….