Terms Starting with L

Laissez-faire is an economic philosophy advocating minimal government intervention in the market and the economy.

The Law of Demand states that, all else being equal, as the price of a product decreases, the quantity demanded increases, and vice versa.

The law of supply states that, all else being equal, an increase in price results in an increase in the quantity supplied.

The law of supply and demand is a fundamental economic principle stating that the price of a good or service is determined by the quantity available (supply) and the desire of buyers for it (demand).

Leadership in finance refers to the ability of individuals or groups to guide financial strategies and manage financial resources effectively to achieve organizational goals.

A Letter of Intent (LOI) is a document outlining the preliminary agreements between two parties before a formal contract is finalized. It is commonly used in real estate and business transactions to clarify the terms of a deal.

A letter of credit is a financial document issued by a bank that guarantees a buyer's payment to a seller will be received on time and for the correct amount.

Leverage in finance refers to the use of borrowed funds to increase the potential return of an investment.

A leverage ratio is a financial metric used to assess a company's ability to meet its financial obligations with its available assets. It indicates the extent to which a business is using borrowed money.

A leveraged buyout (LBO) is a financial transaction where a company is acquired using a significant amount of borrowed money to meet the cost of acquisition. The assets of the company being acquired and those of the acquiring company are often used as collateral.

A liability is a financial obligation or debt that an individual or entity owes, which must be settled in the future.

Liability insurance is a type of insurance coverage that protects an individual or business from the risk of being sued and held legally liable for something such as malpractice, injury or negligence.

A limit order is an instruction to buy or sell a security at a specified price or better.

A Limited Liability Company (LLC) is a business structure in the United States that offers personal liability protection to its owners, known as members, while allowing profits and losses to be passed through to their personal income without facing corporate taxes.

A Limited Partnership (LP) is a business structure where one or more general partners manage the business and are personally liable for its debts, while one or more limited partners contribute capital and have liability limited to their investment.

A line of credit (LOC) is a flexible loan from a bank or financial institution that allows a borrower to draw funds up to a predetermined limit as needed, with interest paid only on the amount used.

Liquidation is the process of bringing a business to an end and distributing its assets to claimants, typically occurring when a company is insolvent.

Liquidity refers to how quickly and easily an asset can be converted into cash without significantly affecting its price.

The Liquidity Coverage Ratio (LCR) is a regulatory standard that measures a bank's ability to meet its short-term obligations using highly liquid assets.

Liquidity ratios measure a company's ability to meet its short-term obligations using its most liquid assets.

The Loan-to-Value Ratio (LTV) is a financial metric used by lenders to assess the risk of a loan by comparing the amount of the loan to the value of the asset securing the loan.

LIBOR is a benchmark interest rate at which major global banks lend to one another in the international interbank market for short-term loans.

Ltd., or Limited, refers to a type of corporate structure where the shareholders' liability is limited to the capital they have invested in the company.