Category: A – Definitions

1.  Business:  a cost that is treated as an expense rather than passed on to a consumer
2.  cost accounting:  indirect manufacturing costs such as property taxes and insurance are called absorbed cost they are distinguished from variable costs such as direct labor and materials 
3. Finance:  an account that has been combined with relative accounts in preparing a financial statement and has lost its separate identity also called absorption account or adjunct account
4.  Security:  issue that an underwriter has completely sold to the public also in Market trading Securities are absorbed as long as there are corresponding orders to buy and sell the market has reached the absorption point when further a simulation is impossible without an adjustment in price. 

1.  Total return of a portfolio design to perform without reference to any Market measure although the objective is to make money regardless of market conditions the word absolute in this context means independent not positive the relevant distinction is with relative return which aims to outperform a market Benchmark or mutual fund grouping the classic example of an absolute return is that of a hedge fund held by wealthy investors and using strategies such as selling short Arbitrage and Leverage since 2008 however the uncertainty of financial markets have spurred the rise of ordinary mutual funds combining asset classes that characteristically respond in opposite ways to different economic scenarios known by such names as absolute return funds absolute value funds market mutual funds and permanent portfolios they hold assets that correlation analysis show move either in the same direction positive correlation or in a negative Direction opposite direction depending on market conditions for example in a market influence by Rising inflation Cass related Investments would fall in value reflecting the dollars declining purchasing power while gold being a time-honored store of value would probably rise cast by a correlation coefficient which would be somewhere between -1 representing perfect negative correlation and 1 representing a perfect random relationship at the other end of the range is plus one meaning perfect positive correlation correlation is a statistical computation and the resulting coefficient is a measure of degree perfect correlation is very rare
2.  the concept of a permanent portfolio for average investors was championed by the late Harry Brown in his 1998 book Fail-Safe investing which post related that all possible economic outcomes could be reduced to four categories
   1.  Prosperity
   2.  Inflation
   3.  deflation
   4.  Recession
3.  an unmanaged portfolio of equal dollar Investments That respond to each of those conditions some correlating positively others negatively would it an early rebalance and held long-term be both profitable and protected from serious losses his choice of assets was stocks long-term bonds gold and cash t-bills historical evidence was strong that overbroad. Of time the winning Investments would add more than the losing Investments would subtract and Browns fund average 6.38% over a 25 year. With only three losing years mutual funds using variations of Brown’s concept usually with enhancements adding some degree of risk have not been around long enough to provide meaningful long-term history In a few tumultuous  years they have been popular they have had both gains and losses but generally have tended to experience less variability then Relative return portfolios

 rule that creditor claims have precedence over shareholder claims in bankruptcy or liquidation

to nullify a contract or law

1. Finance borrower’s ability to meet principal and interest payment on long-term obligations out of earnings also called ability to service
2.  Industrial relations ability of an employer especially a financial organization to meet a Union Financial demands from operating income
3.  Municipal Bond issuers present and future ability to generate enough tax revenue to meet its contractual obligations taking into account all factors concerned with Municipal income and property values
4.  taxation the concept that tax rates should vary with levels of wealth or income for example the progressive income tax 

 indefinite legal status of real estate and title when lawful ownership is in question and still to be determined

 voluntarily giving up all rights title or claims to property that rightfully belongs to the owner and example of abandoned property would be stocks bonds or mutual funds held in a brokerage account for which the firm is unable to locate the listed owner over a specified. Amount Of time usually a few years it ruled to be abandoned The property May revert to the state under the laws of escheat. In addition to financial assets other kinds of property that are subject to abandonment include patents inventions leases trademarks contracts and copyrights.