ACCOUNTING TERMS - ACCOUNTING DICTIONARY - ACCOUNTING GLOSSARY
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WHITE COLLAR CRIME Definition
WHITE COLLAR CRIME is a number of miscellaneous nonviolent crimes lumped together as white collar crimes. There is no fixed definition of white collar crime, although it usually includes bribery, embezzlement, fraud, forgery, and violations of trust committed by corporations or individuals engaged in commerce. Historically, in the U.S. many white collar crimes have received lenient punishment from a criminal justice system that considered white collar crimes to be less serious than more violent crimes. Today, the trend is for stricter punishment of white collar crimes in recognition of the financial damage they inflict on society.
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HIGH YIELD (JUNK) is bonds and preferred stocks having an S&P/Moody's rating of BB+/Ba1 or lower, and NAIC ratings of"3", "4", "5", or "6". Below investment grade securities have greater risk and therefore compensate investors with higher market yields. In addition to new issues, high yield securities can evolve from older issues with declining ratings, or can be created through leveraged buyouts where management uses the assets of the company as collateral for the issue.
MARGIN OF SAFETY, in accounting, is how much output or sales level can fall before a business starts making a loss. In investing, it is the difference between the intrinsic value of a stock, i.e. value based on stock valuation and what the company is actually worth and the price that the market sets on a stock, i.e. a stock price is a matter of the market participants opinions.