Your Free Online Legal Dictionary • Featuring Black’s Law Dictionary, 2nd Ed.

Category: Finance Dictionary

HARD COST

The price of a hard asset like land. It is different from any costs associated with financial issues.

HARDNESS

1. the resistance of a material to changes and drilling. It is a hardness test with no standard scale. Each test has its own measure. Refer to Mohs’ hardness scale. 2. the

HAWTHORNE EFFECT

How employee motivation is affected by show of concern and change in work conditions. The better the conditions the happier and more efficient the worker. If the manager shows concern the employee

HEALTH MAINTENANCE ORGANIZATION (HMO)

A firm that gives basic long term care through volunteering. All manner of personnel are on the board. They pay a fee that lets them use services. Supplemental services are also offered.

HEDGING

Limited or offsetting the loss from changes in price. It transfers risk without buying insurance.

HERD INSTINCT

A group of investors that are vulnerable to stock prices and sell as a group.

HIGH PRICE STRATEGY

Used when a super premium segment is near the top of a market, a cheaper product is crowding the bottom, and when the scope is a prestige brand.

HIGHLY TOXIC

A chemical swallowed that is lethal or can burn skin in the right concentration. It can also be a mist, dust, or fume if breathed for an hour. It is tested on

HISTORICAL METHOD

A CREDIT RISK exposure computation methodology for SWAPS using historical INTEREST RATES. Under the historical method past interest rate (or swap rate) data is used to create a statistical distribution of rates.

HOLDING PERIOD

1. the time an asset is held by the woner for tax benefits. 2. When a check is held before it is deposited. 3. the time a hotel keeps a room for

HOME DEPOT

A retailer of home improvement products. It allows customers to do it themselves.

HOMEOSTASIS

The ability of the living things in a system to survive despite changes in a limit. Feedback mechanisms make self regulation possible keeping things balanced.

HORIZONTAL CONFLICT

When more competition among retailers occurs. It lowers profit and causes crowding to reduce supply.

HOT SITE

An alternate computer center chat is made available to continue should a disaster occur in the primary lab. Refer to cold site and warm site.

FACILITATION PAYMENT

A payment to an official to get approval for business activities. It can be an unofficial fees not a bribe.

FAD

A trend that is short lived but intense. It happens during the holidays.

FALLEN ANGEL

A bond that was investment grade but has a lower rating now.

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