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Financial Terms | |
Asset-backed security |
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Definition of Asset-backed securityAsset-backed securityA security that is collateralized by loans, leases, receivables, or installment contracts
Related Terms:Acquisition of assetsA merger or consolidation in which an acquirer purchases the selling firm's assets. AssetAny possession that has value in an exchange. AssetA resource, recorded through a transaction, that is expected to yield a benefit to a AssetSomething that is owned; a financial claim or a piece of property that is a store of value. AssetProbable future economic benefit that is obtained or controlled by an entity as a result of assetAnything owned by, or owed to, an individual or business which has commercial or exchange value (e.g., cash, property, etc.). AssetAll things of value owned by an individual or organization. ![]() Asset activity ratiosRatios that measure how effectively the firm is managing its assets. Asset allocation decisionThe decision regarding how an institution's funds should be distributed among the Asset-Backed SecuritiesBond or note secured by assets of company. Asset-based financingMethods of financing in which lenders and equity investors look principally to the Asset-Based FinancingLoans granted usually by a financial institution where the asset being financed constitutes the sole security given to the lender. Asset classesCategories of assets, such as stocks, bonds, real estate and foreign securities. Asset CoverageExtent to which a company's net assets cover a particular debt obligation, class of preferred stock, or equity position. Asset-coverage testA bond indenture restriction that permits additional borrowing on if the ratio of assets to Asset/equity ratioThe ratio of total assets to stockholder equity. ![]() Asset for asset swapCreditors exchange the debt of one defaulting borrower for the debt of another Asset/liability managementAlso called surplus management, the task of managing funds of a financial asset mixThe weighting of assets in an investment portfolio among different asset classes (e.g. shares, bonds, property, cash, overseas investments. Asset pricing modelA model for determining the required rate of return on an asset. Asset pricing modelA model, such as the Capital asset Pricing Model (CAPM), that determines the required Asset-specific RiskThe amount of total risk that can be eliminated by diversification by Asset substitutionA firm's investing in assets that are riskier than those that the debtholders expected. Asset substitution problemArises when the stockholders substitute riskier assets for the firm's existing Asset swapAn interest rate swap used to alter the cash flow characteristics of an institution's assets so as to Asset turnoverThe ratio of net sales to total assets. asset turnovera ratio measuring asset productivity and showing the number of sales dollars generated by each dollar of assets asset turnover ratioA broad-gauge ratio computed by dividing annual AssetsA firm's productive resources. ASSETSAnything of value that a company owns. AssetsThings that the business owns. AssetsItems owned by the company or expenses that have been paid for but have not been used up. Assets requirementsA common element of a financial plan that describes projected capital spending and the Available-for-Sale SecurityA debt or equity security not classified as a held-to-maturity security or a trading security. Can be classified as a current or noncurrent investment depending on the intended holding period. capital assetan asset used to generate revenues or cost savings Capital assetA fixed asset, something that is expected to have long-term usage within Capital asset pricing model (CAPM)An economic theory that describes the relationship between risk and Capital Asset Pricing Model (CAPM)A model for estimating equilibrium rates of return and values of capital asset pricing model (CAPM)Theory of the relationship between risk and return which states that the expected risk Capitalized Cost An expenditure or accrual that is reported as an asset to be amortized againstfuture-period revenue. Contra-asset accountAn offset to an asset account that reduces the balance of the asset account. Convertible securityA security that can be converted into common stock at the option of the security holder, Current assetTypically the cash, accounts receivable, and inventory accounts on the Current assetsValue of cash, accounts receivable, inventories, marketable securities and other assets that Current assetsCash, things that will be converted into cash within a year (such as accounts receivable), and inventory. Current assetsAmounts receivable by the business within a period of 12 months, including bank, debtors, inventory and prepayments. current assetsCurrent refers to cash and those assets that will be turned Current AssetsCash and other company assets that can be readily turned into cash within one year. Debt SecurityA security representing a debt relationship with an enterprise, including a government Deferred Tax AssetFuture tax benefit that results from (1) the origination of a temporary difference Derivative securityA financial security, such as an option, or future, whose value is derived in part from the Dynamic asset allocationAn asset allocation strategy in which the asset mix is mechanistically shifted in Employee Retirement Income Security Act of 1974 (ERISA)A federal Act that sets minimum operational and funding standards for employee benefit Equity SecurityAn ownership interest in an enterprise, including preferred and common stock. Exchange of assetsAcquisition of another company by purchase of its assets in exchange for cash or stock. Exchangeable Securitysecurity that grants the security holder the right to exchange the security for the Financial assetsClaims on real assets. financial assetsClaims to the income generated by real assets. Also called securities. Fixed assetLong-lived property owned by a firm that is used by a firm in the production of its income. Fixed assetAn item with a longevity greater than one year, and which exceeds a company’s Fixed asset turnover ratioThe ratio of sales to fixed assets. Fixed assetsThings that the business owns and are part of the business infrastructure – fixed assets may be fixed assetsAn informal term that refers to the variety of long-term operating Fixed AssetsLand, buildings, plant, equipment, and other assets acquired for carrying on the business of a company with a life exceeding one year. Normally expressed in financial accounts at cost, less accumulated depreciation. Fixed Assets Turnover RatioA measure of the utilization of a company's fixed assets to Fixed-dollar securityA nonnegotiable debt security that can be redeemed at some fixed price or according to Fixed-income securityA security that pays a specified cash flow over a floating-rate securitysecurity paying dividends or interest that vary with short-term interest rates. Held-to-Maturity SecurityA debt security for which the investing entity has both the positive Host securityThe security to which a warrant is attached. Hybrid securityA convertible security whose optioned common stock is trading in a middle range, causing Intangible assetA legal claim to some future benefit, typically a claim to future cash. Goodwill, intellectual Intangible assetA nonphysical asset with a life greater than one year. Examples are Intangible assetsassets owned by the company that do not possess physical substance; they usually take the form of rights and privileges such as patents, copyrights, and franchises. Intangible fixed assetsNon-physical assets, e.g. customer goodwill or intellectual property (patents and trademarks). Limitation on asset dispositionsA bond covenant that restricts in some way a firm's ability to sell major assets. Liquid assetasset that is easily and cheaply turned into cash - notably cash itself and short-term securities. Long-term assetsValue of property, equipment and other capital assets minus the depreciation. This is an Longer-Term Fixed Assetsassets having a useful life greater than one year but the duration of the 'long term' will vary with the context in which the term is applied. Marketable securityAn easily traded investment, such as treasury bills, which is Monthly income preferred security (MIP)Preferred stock issued by a subsidiary located in a tax haven. Mortgage-backed securitiesSecurities backed by a pool of mortgage loans. Mortgage-Backed Securities Clearing CorporationA wholly owned subsidiary of the Midwest Stock Mortgage pass-through securityAlso called a passthrough, a security created when one or more mortgage net asset valueThe value of all the holdings of a mutual fund, less the fund's liabilities. Net asset value (NAV)The value of a fund's investments. For a mutual fund, the net asset value per share Net assetsThe difference between total assets on the one hand and current liabilities and noncapitalized longterm Non-reproducible assetsA tangible asset with unique physical properties, like a parcel of land, a mine, or a Nonmarketable SecurityA debt or equity security for which there is no posted price or bidand- Other assetsA cluster of accounts that are listed after fixed assets on the balance sheet, Other current assetsValue of non-cash assets, including prepaid expenses and accounts receivable, due Personal Assetsassets, the title of which are held personally rather than in the name of some other legal entity. Policy asset allocationA long-term asset allocation method, in which the investor seeks to assess an Preferred Stock Stock that has a claim on assets and dividends of a corporation that are priorto that of common stock. Preferred stock typically does not carry the right to vote. Primitive securityAn instrument such as a stock or bond for which payments depend only on the financial Publicly traded assetsassets that can be traded in a public market, such as the stock market. Quick assetAny asset that can be converted into cash on short notice. This is a subset Quick assetsCurrent assets minus inventories. RATE OF RETURN ON TOTAL ASSETSThe percentage return or profit that management made on each dollar of assets. The formula is: Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |