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Investments glossary

Normal Distribution

Normal distribution, also known as the Gaussian distribution, is a probability distribution that is symmetric about the mean, showing that data near the mean are more frequent in occurrence than data far from the mean. In graph form, normal distribution read more

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Investments glossary

Qualified Eligible Participant (QEP)

A qualified eligible participant (QEP) is an individual who meets the requirements to trade in sophisticated investment funds such as futures and hedge funds. These requirements are defined by Rule 4.7 of the Commodity Exchange Act (CEA).

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Investments glossary

Float Definition

In financial terms, the float is money within the banking system that is briefly counted twice due to time gaps in the registering of a deposit or withdrawal, usually due to the delay in processing paper checks. A bank credits a customer’s account read more

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Investments glossary

Modified Endowment Contract (MEC)

A modified endowment contract (MEC) is a tax qualification of a life insurance policy whose cumulative premiums exceed federal tax law limits. The taxation structure and IRS policy classification changes after a life insurance policy has morphed into read more

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Investments glossary

Kurtosis

Like skewness, kurtosis is a statistical measure that is used to describe the distribution. Whereas skewness differentiates extreme values in one versus the other tail, kurtosis measures extreme values in either tail. Distributions with large kurtosis read more

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Investments glossary

Perpetual Inventory

Perpetual inventory is a method of accounting for inventory that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software. Perpetual inventory provides a highly read more

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Investments glossary

Peter Principle

The Peter Principle is an observation that the tendency in most organizational hierarchies, such as that of a corporation, is for every employee to rise in the hierarchy through promotion until they reach a level of respective incompetence. In other read more

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Investments glossary

Form 4506: Request for Copy of Tax Return

Form 4506: Request for Copy of Tax Return is filed by taxpayers to request exact copies of one or more previously filed tax returns and tax information from the Internal Revenue Service (IRS). Copies may be needed to complete a current year tax return, read more

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Investments glossary

Systematic Investment Plan (SIP)

A systematic investment plan (SIP) is a plan where investors make regular, equal payments into a mutual fund, trading account, or retirement account such as a 401(k). SIPs allow investors to save regularly with a smaller amount of money while benefiting read more

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Investments glossary

Peter Principle

The Peter Principle is an observation that the tendency in most organizational hierarchies, such as that of a corporation, is for every employee to rise in the hierarchy through promotion until they reach a level of respective incompetence. In other read more