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Financial Terms | |
Actuary |
Information about financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit.
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Definition of ActuaryActuaryOne who uses statistical information to evaluate the probability of future events and prices insurance products.
Related Terms:Accidental Dismemberment: (Credit Insurance)Provides additional financial security should an insured person be dismembered or lose the use of a limb as the result of an accident. All or noneRequirement that nOne of an order be executed unless all of it can be executed at the specified price. All-or-none underwritingAn arrangement whereby a security issue is canceled if the underwriter is unable Amortization (Credit Insurance)Refers to the reduction of debt by regular payments of interest and principal in order to pay off a loan by maturity. Asymmetric informationinformation that is known to some people but not to other people. At-the-moneyAn option is at-the-mOney if the strike price of the option is equal to the market price of the Base probability of lossThe probability of not achieving a portfolio expected return. ![]() Beneficiary (Credit Insurance)The person or party designated to receive proceeds entitled by a benefit. Payment of a benefit is triggered by an event. In the case of credit insurance, the beneficiary will always be the creditor. Borrower (Credit Insurance)A consumer who borrows mOney from a lender. Call money rateAlso called the broker loan rate , the interest rate that banks charge brokers to finance Canadian Deposit Insurance CorporationBetter known as CDIC, this is an organization which insures qualifying deposits and GICs at savings institutions, mainly banks and trust companys, which belong to the CDIC for amounts up to $60,000 and for terms of up to five years. Many types of deposits are not insured, such as mortgage-backed deposits, annuities of duration of more than five years, and mutual funds. Canadian Life and Health Insurance Association (CLHIA)An association of most of the life and health insurance companies in Canada that conducts research and compiles information about the life and health insurance industry in Canada. Child Insurance Rider (CIR)insurance or insurability provided on current or future children of insured. Co-insuranceIn medical insurance, the insured person and the insurer sometimes share the cost of services under a policy in a specified ratio, for example 80% by the insurer and 20% by the insured. By this means, the cost of coverage to the insured is reduced. Coinsurance effectRefers to the fact that the merger of two firms decreases the probability of default on Commercial Business Loan (Credit Insurance)An agreement between a creditor and a borrower, where the creditor has loaned an amount to the borrower for business purposes. ![]() ComponentRaw materials or subassemblies used to make either finished goods Cost of InsuranceThe cost of insuring a particular individual under the policy. It is based on the amount of coverage, as well as the underwriting class, age, sex and tobacco consumption of that individual. Creditor (Credit Insurance)A lender or lending institution that offers financing and loans to a borrower, for the purpose of acquiring a commodity. Critical Illness InsuranceCoverage that provides a lump-sum payment should you be diagnosed with a critical illness and survive a pre-determined period of time. There are no restrictions on how you use your benefit. Critical Illness Insurance (Credit Insurance)Coverage that provides a lump-sum payment should you become seriously ill with a specified illness. The payment is made to your creditors to pay off your debt owing. Cumulative probability distributionA function that shows the probability that the random variable will Currency futureA financial future contract for the delivery of a specified foreign currency. Dead Peasants InsuranceAlso known as "Dead Janitors insurance", this is the practice, where allowed, in several U.S. states, of numerous well known large American Corporations taking out corporate owned life insurance policies on millions of their regular employees, often without the knowledge or consent of those employees. Corporations profiting from the deaths of their employees [and sometimes ex-employees] have attracted adverse publicity because ultimate death benefits are seldom, even partially passed down to surviving families. Debt (Credit Insurance)MOney, goods or services that someOne is obligated to pay someOne else in accordance with an expressed or implied agreement. Debt may or may not be secured. Deferred futuresThe most distant months of a futures contract. A bond that sells at a discount and does not Disability Insuranceinsurance that pays you an ongoing income if you become disabled and are unable to pursue employment or business activities. There are limits to how much you can receive based on your pre-disability earnings. Rates will vary based on occupational duties and length of time in a particular industry. This kind of coverage has a waiting period before you can begin collecting benefits, usually 30, 60 or 90 days. The benefit paying period also varies from 2 years to age 65. A short waiting period will cost more that a longer waiting period. As well, a long benefit paying period will cost more than a short benefit paying period. Disability Insurance (Credit Insurance)Group insurance designed to cover monthly obligations due to a borrower being unable to work due to sickness or injury. Dow Jones industrial averageThis is the best known U.S.index of stocks. It contains 30 stocks that trade on Dow Jones Industrial AverageIndex of the investment performance of a portfolio of 30 “blue-chip” stocks. economic components modelAbrams’ model for calculating DLOM based on the interaction of discounts from four economic compOnents. Equity-based insuranceLife insurance or annuity product in which the cash value and benefit level fluctuate according to the performance of an equity portfolio. Errors and Omissions Insuranceinsurance coverage purchased by the agent/broker which provides protection against loss incurred by a client because of some negligent act, error, oversight, or omission by the agent/broker. European Monetary System (EMS)An exchange arrangement formed in 1979 that involves the currencies Events of defaultContractually specified events that allow lenders to demand immediate repayment of a debt. Expected future cash flowsProjected future cash flows associated with an asset of decision. Expected future returnThe return that is expected to be earned on an asset in the future. Also called the Expected value of perfect informationThe expected value if the future uncertain outcomes could be known Export Credit InsuranceThe granting of insurance to cover the commercial and political risks of selling in foreign markets. Extrapolative statistical modelsModels that apply a formula to historical data and project results for a Federal Deposit Insurance Corporation (FDIC)A federal institution that insures bank deposits. Federal Insurance Contributions Act of 1935 (FICA)A federal Act authorizing the government to collect Social Security and Medicare payroll taxes. Fiat MoneyFiat MOney is paper currency made legal tender by law or fiat. It is not backed by gold or silver and is not necessarily redeemable in coin. This practice has had widespread use for about the last 70 years. If governments produce too much of it, there is a loss of confidence. Even so, governments print it routinely when they need it. The value of fiat mOney is dependent upon the performance of the economy of the country which issued it. Canada's currency falls into this category. Financial futureA contract entered into now that provides for the delivery of a specified asset in exchange FutureA term used to designate all contracts covering the sale of financial instruments or physical Future investment opportunitiesThe options to identify additional, more valuable investment opportunities Future-Oriented Financial Informationinformation about prospective results of operations, financial position and/or changes in financial position, based on assumptions about future economic conditions and courses of action. future-oriented financial information is presented as either a forecast or a projection. Future valueThe amount of cash at a specified date in the future that is equivalent in value to a specified Future ValueThe amount a given payment, or series of payments, will be worth future valuethe amount to which One or more sums of Future valueThe value that a sum of mOney (the present value) earning future valueAmount to which an investment will grow after earning interest. Future ValueThe amount to which a payment or series of payments will grow by a given future date when compounded by a given interest rate. FVIF future value interest factor. FuturesA term used to designate all contracts covering the sale of financial instruments or physical Futures commission merchantA firm or person engaged in soliciting or accepting and handling orders for Futures contractAgreement to buy or sell a set number of shares of a specific stock in a designated future futures contractExchange-traded promise to buy or sell an asset in the future at a prespecified price. Futures ContractA contract in which the seller agrees to provide something to a buyer at a specified future date at an agreed price. Futures contract multipleA constant, set by an exchange, which when multiplied by the futures price gives Futures marketA market in which contracts for future delivery of a commodity or a security are bought or sold. Futures optionAn option on a futures contract. Related: options on physicals. Futures priceThe price at which the parties to a futures contract agree to transact on the settlement date. Group Life InsuranceThis is a very common form of life insurance which is found in employee benefit plans and bank mortgage insurance. In employee benefit plans the form of this insurance is usually One year renewable term insurance. The cost of this coverage is based on the average age of everyOne in the group. Therefore a group of young people would have inexpensive rates and an older group would have more expensive rates. Guaranteed insurance contractA contract promising a stated nominal interest rate over some specific time Health Insurance Portability and Accountability Act of 1996 (HIPAA)A federal Act expanding upon many of the insurance reforms created by High-Powered MoneySee mOney base. Hot moneyMOney that moves across country borders in response to interest rate differences and that moves In-the-moneyA put option that has a strike price higher than the underlying futures price, or a call option Individual Insuranceinsurance that is offered to individuals rather than groups. informationbits of knowledge or fact that have been carefully Information asymmetryA situation involving information that is known to some, but not all, participants. Information Coefficient (IC)The correlation between predicted and actual stock returns, sometimes used to Information-content effectThe rise in the stock price following the dividend signal. information content of dividendsDividend increases send good news about cash flow and earnings. Dividend cuts send bad news. Information costsTransaction costs that include the assessment of the investment merits of a financial asset. Information-motivated tradesTrades in which an investor believes he or she possesses pertinent Information servicesOrganizations that furnish investment and other types of information, such as Informational efficiencyThe speed and accuracy with which prices reflect new information. Informationless tradesTrades that are the result of either a reallocation of wealth or an implementation of an Insider informationRelevant information about a company that has not yet been made public. It is illegal for Insurance ActIn Canada, a general statute that contains most of the insurance law of a common law province, and regulates the conduct of insurers and insurance agents within the province. Insurance CompanyA firm licensed to sell insurance to the public. Insurance Policy (Credit Insurance)A policy under which the insurance company promises to pay a benefit of the person who is insured. Insurance principleThe law of averages. The average outcome for many independent trials of an experiment International Monetary FundAn organization founded in 1944 to oversee exchange arrangements of International Monetary Fund (IMF)Organization originally established to manage the postwar fixed exchange rate system. International Monetary Market (IMM)A division of the CME established in 1972 for trading financial Job Loss Insurance (Credit Insurance)Coverage that can pay down your debt should you become involuntarily unemployed. The payment is made to your creditors to reduce your debt owing. Law of one priceAn economic rule stating that a given security must have the same price regardless of the law of one priceTheory that prices of goods in all countries should be equal when translated to a common currency. Lease (Credit Insurance)Contract granting use of real estate, equipment or other fixed assets for a specified period of time in exchange for payment. The owner or a leased property is the lessor and the user the lessee. Lender (Credit Insurance)Individual or firm that extends mOney to a borrower with the expectation of being repaid, usually with interest. Lenders create debt in the form of loans. Lenders include financial institutions, leasing companies government lending agencies and automobile dealers. Level Premium Life InsuranceThis is a type of insurance for which the cost is distributed evenly over the premium payment period. The premium remains the same from year to year and is more than actual cost of protection in the earlier years of the policy and less than the actual cost of protection in the later years. The excess paid in the early years builds up a reserve to cover the higher cost in the later years. Life Insuranceinsurance that provides protection against an economic loss caused by death of the person insured. Life Insurance (Credit Insurance)Group Term life insurance that pays or reduces the balance due on a loan if the borrower dies before the loan is repaid. London International Financial Futures Exchange (LIFFE)A London exchange where Eurodollar futures London International Financial Futures Exchange (LIFFE)London exchange where Eurodollar futures as well as futures-style options are traded. management information system (MIS)a structure of interrelated elements that collects, organizes, and communicates Market pricesThe amount of mOney that a willing buyer pays to acquire something from a willing seller, Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |