A rule of thumb is a general guide for behavior or a quick calculation. Its origins are uncertain, with theories including wife-beating and measurements. The phrase likely originated from a lost form of measurement. A rule of thumb is defined as a general guide for determining behavior, or a rule that enables a person to […]
The Rule of 70 estimates how long it takes for something growing at an exponential rate to double. It can be used for investments, GDP growth, inflation, and more. The formula is 70 divided by the growth rate, but it is not always reliable. The Rule of 70 is a quick rule of thumb used […]
Work to rule is a labor practice where employees only perform tasks explicitly associated with their job position, avoiding ancillary activities. This is used to show dissatisfaction with employers, but some contracts allow for a broader interpretation of duties, leading to potential termination. Work to rule is a labor practice that is sometimes employed as […]
The tax benefit rule in the US requires taxpayers to pay tax on recovered money that wasn’t counted in previous taxable earnings, with exceptions that can reduce tax bills. It applies only if there was a tax benefit, and taxpayers must itemize the situation on their tax return. The tax benefit rule is a feature […]
Rules of inference are used in logic and philosophy to determine the truth of an argument in a given context. They are used in many fields of thought, including symbolic logic and calculus. Nine basic rules guide the correction of statements in natural inference, including modus ponens and modus tollens. Inference rules are useful in […]
The business judgment rule in the US means that a board of directors won’t be held liable for mistakes made in good faith. Decisions must be reasonable and made in the best interests of the company. The rule is used to determine if shareholders have a lawsuit. Some argue it can be abused. In the […]
The Golden Rule, “Do unto others as you would have them do unto you,” promotes treating others with kindness and respect. It has been found in many religions and cultures throughout history, but interpretations vary. The goal is to promote empathy, but there is no guarantee of reciprocity or reward. The golden rule is the […]
The Volcker Rule restricts banks’ trading activities to prevent speculation and limit the risk of another financial crisis. It was proposed by Paul Volcker as a member of the Presidential Economic Advisory Board. Banks cannot make speculative investments for their own account, but can do so for the benefit of their customers. The original proposal […]
“As a rule” means usually or for the most part and is used to express routine or habit. It can describe personal, social, or defined rules and may introduce exceptions or examples. It can add flow or authority to speech but may also be used to legitimize objectionable things or lend credibility to weak arguments. […]
Crossover rules help investors determine whether to go long or short based on the movement of a financial instrument. The rule is based on technical analysis and common sense, with the investor establishing a long position if the DMI indicates positive movement and a short position if negative movement is expected. The rule maximizes gains […]
Rule 144A allows qualified institutional buyers to trade restricted securities without registration requirements, increasing liquidity on the exchange. The SEC monitors and regulates the securities market to protect investors and promote growth. Trading in 144 stocks is limited to savvy investors, while others are limited to more regulated securities markets. Rule 144A is a financial […]
Taylor’s Rule is an economic concept that suggests how central banks should set short-term interest rates based on balancing employment and inflation. The US Federal Reserve has generally adhered to the rule, which has helped keep inflation in check and maintain healthy levels of growth. Taylor’s Rule is an economic concept that suggests how the […]
The collateral source rule prevents defendants from deducting compensation paid by third parties from damages awarded to plaintiffs. Some states have reformed or eliminated the rule, allowing consideration of previous damages. Some collateral sources have subrogation clauses, allowing them to collect money from plaintiffs who win lawsuits. The collateral source rule, also called the collateral […]
The Red Flags Rule is a system developed by the FTC to prevent identity theft. Financial institutions and creditors must have a written program to identify and prevent identity theft, including identifying red flags, having a plan for detecting them, and committing to updating the plan. The rule affects businesses that let people pay later […]
