A investment trust that usually generates cash flows from one business or operating company, unlike an investment fund, which generates income from a diversified pool or portfolio. The trust holds debt and equity interests of an operating business. Businesses that exhibit these characteristics may opt for a trust structure over a corporate structure to take advantage of tax efficiency.
Term of the Minute
- Call Option
An option contract that gives its holder the right (but not the obligation) to purchase a specified number of shares of the underlying stock at the given strike price, on or before the expiration date of the contract.