Financial Terms Main Page

This site contains comprehensive definitions for a wide range of terms that cover topics such as financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit...

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Cumulative probability distribution

A function that shows the probability that the random variable will
attain a value less than or equal to each value that the random variable can take on.

Equity floor

An agreement in which one party agrees to pay the other at specific time periods if a specific
stock market benchmark is less than a predetermined level.

Limited partner

A partner who has limited legal liability for the obligations of the partnership.

OPEC (Organization of Petroleum Exporting Countries)

A cartel of oil-producing countries.

Pure expectations theory

A theory that asserts that the forward rates exclusively represent the expected
future rates. In other words, the entire term structure reflects the markets expectations of future short-term
rates. For example, an increasing sloping term structure implies increasing short-term interest rates. Related:
biased expectations theories

Repurchase of stock

Device to pay cash to firm's shareholders that provides more preferable tax treatment
for shareholders than dividends. Treasury stock is the name given to previously issued stock that has been
repurchased by the firm. A repurchase is achieved through either a dutch auction, open market, or tender offer.

Retail credit

Credit granted by a firm to consumers for the purchase of goods or services.
See: consumer credit.

Interest income

Income that a company receives in the form of interest, usually as the result of keeping money in interest-bearing accounts at financial institutions and the lending of money to other companies.

Liquidity

The ease with which assets or securities can be sold for cash on
short notice at a fair price

Valuation

The process of estimating the value of financial assets or
securities

design for manufacturability (DFM)

a process that is part of the project management of a new product; concerned with finding optimal solutions to minimizing product failures
and other adversities in the delivery of a new product
to customers

Aggregate Expenditure Curve

Aggregate demand for goods and services drawn as a function of the level of national income.

Boom

The expansionary part of a business cycle in which GDP is growing rapidly.

Intermediate Good

A good used in producing another good.

Equity Security

An ownership interest in an enterprise, including preferred and common stock.