Disposition
What it is:
How it works (Example):
When an investor sells stock or bonds in a particular company, the sale is referred to as a disposition of the stock or bonds. Insider trades are reported by a company as the disposition of shares to board members and executives. When a bank reviews its loans and decides to sell the collateral that has been taken in a foreclosure, it is referred to as a disposition of the loan assets.
Why it Matters:
Disposition indicates a transfer of ownership of the asset. The asset is sold or relinquished. Disposition can also describe an asset held as collateral on a loan.
