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TermDefinition
Law of Large Numbers

An economical law which states that growth rates will decline when companies become bigger. A high growth rate is unsustainable, simply because the company would otherwise become bigger than the entire world economy at one point. This law implies that investing in small-cap stocks offers more growth potential.

Liability

A liability is something a company owns which is costing money. This includes loans, accounts payable, accrued expenses, and all other money the company owes to other parties.