ACTIVE MANAGEMENT Definition

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ACTIVE MANAGEMENT, in securities, is the trading of securities to take advantage of market opportunities as they occur, in contrast to a buy-and-hold strategy.

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RESIDUAL CLAIM is a claim to a share of earnings after debt obligations have been satisfied.

ENGAGEMENT LETTER is a letter that represents the understanding about the engagement between the client and the CPA. The letter identifies the financial statements and describes the nature of procedures to be performed. It includes the objectives of the procedures, an explanation that the financial information is the responsibility of the company's management, and a description of the form of report.

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