Definition: A hedge fund that used a risk arbitrage strategy to make very large, leveraged bets on credit spreads.Advice: LTCM was a very high-performing hedge fund for a number of years. The fund created theoretically "riskless" profits but its incredible leverage and temporary market forces destroyed the hedge fund and lots its investors billions of dollars. Because of the extreme leverage, the Federal Reserve and Wall Street investment banks had to bail the fund out in order to prevent widespread financial havoc.If you want to read a fantastic story about LTCM, we recommend you check out When Genius Failed.
Employee Stock Ownership
Plan - an Employee stock ownership plan is a trust by a corporation
to its employees. It is a plan to make the employees part owners of
the company by allowing them to purchase shares of the company.
Contributions are made by the employee to the...