Quantcast

Special-Purpose Entity

Definition:

A financing technique in which a company decreases its risk by creating separate partnerships, rather than subsidiaries, for certain holdings and solicits outside investors to take on the risk. In order to qualify as a special-purpose entity, whose financial results are not carried on the company's books, the unit must meet strict accounting guidelines. Compare to subsidary.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Fixed annuities

Contracts in which an insurance company or issuing financial institution pays a fixed dollar amount of money per period.

Subscribe to the Term of the Day via email Get the Term of the Day in your inbox!





Create your free portfolio




Investing Tools

stock screener icon
Stock Screener

Find opportunities in the market using criteria based on 145 data elements.

portfolio tracker icon
Portfolio Tracker

Create a portfolio of selected assets that are updated dynamically intraday.

guru icon
Guru

Evaluate stocks that meet the investment criteria of the greatest investors.