Finance

What is the Additional Compensation Arrangement Standard?

Employees may receive additional rewards, bonuses, gifts, and cash from employers and clients for certain performance achievements. These additional compensation arrangements must not affect employees’ professional integrity, objectivity, and independence. Let us discuss additional compensation arrangements and how the CFA institute guides dealing under such scenarios. Additional Compensation Arrangements Standard – Definition The Chartered Financial …

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What is the Addition Rule of Probabilities? Definition, Calculation, Examples, and More

Probability refers to the chances of an event happening in statistical terms. The probability of two events means the chances of both events happening at the same time, one at a time, or one after the other. The rule of addition describes the relationship between the probability of two events when they can be mutually …

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Active Vs. Passive Portfolio Management – What’s the Difference?

Active and passive portfolio management styles are two contrasting investing strategies. One involves active participation and management of the portfolio while the other requires fewer movements. Let us discuss what active and passive portfolio management styles are and what are the key differences between them. What is Active Portfolio Management? Active portfolio management refers to …

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Index Funds Vs Actively Managed Funds – What are the Key Differences?

Index funds are often passively managed funds following a benchmark index like NASDAQ 100. They aim to generate similar returns to their benchmarks. An actively managed fund incurs higher costs and is a riskier option. However, it offers an incentive for higher returns. What is an Index Fund? An index fund is a fund that …

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What is Active Investing? Definition, Strategies, Vs Passive Income

Traders can choose between active and passive investing styles. Both contrasting trading methodologies offer unique benefits and risks to investors. Let us discuss what active and passive investing styles and strategies are and which is a better choice for investors. What is Active Investing? Active investing is an investing style where the investors are actively …

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