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Definition of Backdating
A procedure for making the effective date of a policy earlier than the application date. backdating is often used to make the age of the consumer at policy issue lower than it actually was in order to get a lower premium.
The ability to produce a good or service with fewer resources than competitors. See also comparative advantage.
The use of various forms of gimmickry to distort a company's true financial performance in order to achieve a desired result.
A characterization used by the Securities and Exchange
A monetary policy of matching wage and price increases with money supply increases so that the real money supply does not fall and push the economy into recession.
A method of budgeting that develops budgets based on expected activities and cost drivers – see also activity-based costing.
planning approach applying activity drivers to estimate the levels and costs of activities necessary to provide the budgeted quantity and
a discipline that focuses on the activities incurred during the production/performance process as the way to improve the value received
Federal agency securities.
A grouping of sales producers according to region. Compare with Branch.
A form of organization commonly used by foreign banks to enter the U.S. market. An agency
A means of compensating the broker of a program trade solely on the basis of commission
The argument that specifies that the various agency costs create a complex environment in
The incremental costs of having an agent make decisions for a principal.
Mortgage pass-through securities whose principal and interest payments are
Conflicts of interest among stockholders, bondholders, and managers.
Conflicts of interest between the firm’s owners and managers.
The analysis of principal-agent relationships, wherein one person, an agent, acts on behalf of
The decision-maker in a principal-agent relationship.
One who represents Canada Life when providing services to clients
Alternative mortgage instruments
Variations of mortgage instruments such as adjustable-rate and variablerate
date on which particular news concerning a given company is announced to the public.
Annual percentage rate (APR)
The periodic rate times the number of periods in a year. For example, a 5%
annual percentage rate (APR)
Interest rate that is annualized using simple interest.
Annual percentage yield (APY)
The effective, or true, annual rate of return. The APY is the rate actually
Yearly amount payable by a client for a policy or component.
A signed statement of facts made by a person applying for life insurance and then used by the insurance company to decide whether or not to issue a policy. The application becomes part of the insurance contract when the policy is issued.
The simultaneous buying and selling of a security at two different prices in two different markets,
The purchase of securities on one market for immediate resale on
Transactions designed to make a sure profit from inconsistent prices.
Arbitrage-free option-pricing models
Yield curve option-pricing models.
Arbitrage Pricing Theory (APT)
An alternative model to the capital asset pricing model developed by
People who search for and exploit arbitrage opportunities.
Arithmetic average (mean) rate of return
Arithmetic mean return.
Extent to which a company's net assets cover a particular debt obligation, class of preferred stock, or equity position.
A bond indenture restriction that permits additional borrowing on if the ratio of assets to
Also called surplus management, the task of managing funds of a financial
Automated storage/retrieval system
A racking system using automated systems
Automatic Waiver of Premium
A benefit that automatically forfeits premium payments.
An arithmetic mean of selected stocks intended to represent the behavior of the market or some
Average accounting return
The average project earnings after taxes and depreciation divided by the average
Average (across-day) measures
An estimation of price that uses the average or representative price of a
Average age of accounts receivable
The weighted-average age of all of the firm's outstanding invoices.
Average Amortization Period
The average useful life of a company's collective amortizable asset base.
Average Collection Period
Average number of days necessary to receive cash for the sale of
Average collection period, or days' receivables
The ratio of accounts receivables to sales, or the total
Average-Cost Inventory Method
The inventory cost-flow assumption that assigns the average
Average cost of capital
A firm's required payout to the bondholders and to the stockholders expressed as a
The beginning inventory for a period, plus the amount at the end of
Also referred to as the weighted-average life (WAL). The average number of years that each
The average time to maturity of securities held by a mutual fund. Changes in interest rates
Average Propensity to Consume
Ratio of consumption to disposable income. See also marginal propensity to consume.
Average Propensity to Save
Ratio of saving to disposable income. See also marginal propensity to save.
Average rate of return (ARR)
The ratio of the average cash inflow to the amount invested.
Average tax rate
Taxes as a fraction of income; total taxes divided by total taxable income.
average tax rate
Total taxes owed divided by total income.
The multiplier associated with a change in government spending financed by an equal change in taxes.
A policy designed to increase an economy's prosperity at the expense of another country's prosperity.
Also called on-the-run or current coupon issues or bellwether issues. In the secondary
Benefit Wage Ratio Method
The proportion of total taxable wages for laid off
Blue Ribbon Committee on Improving the Effectiveness of Corporate Audit Committees
A committee formed in response to SEC chairman Arthur Levitt's initiative to improve the financial
Bottom-up equity management style
A management style that de-emphasizes the significance of economic
A detailed schedule of financial activity, such as an advertising budget, a sales budget, or a capital budget.
A plan expressed in monetary terms covering a future period of time and based on a defined
a financial plan for the future based on a single level
A set of interlinked plans that quantitatively describe a company’s projected
The annual period over which budgets are prepared.
The amount by which government spending exceeds government revenues.
The excess of government spending over tax receipts.
a detailed set of documents that provides information
an intentional underestimation of revenues
the difference between total actual overhead
The process of ensuring that actual financial results are in line with targets – see variance
a planned expenditure
the process of formalizing plans and committing
Buy limit order
A conditional trading order that indicates a security may be purchased only at the designated
A date before maturity, specified at issuance, when the issuer of a bond may retire part of the bond
agency banks established by Canadian banks in the U.S.
A firm's set of planned capital expenditures.
management’s plan for investments in longterm
List of planned investment projects.
The process of choosing the firm's long-term capital assets.
Refers generally to analysis procedures for ranking
The process of ranking and selecting investment alternatives and
a process of evaluating an entity’s proposed
The series of steps one follows when justifying the decision to purchase
capital budgeting decision
Decision as to which real assets the firm should acquire.
A licensed insurance agent who sells insurance for only one company.
A forecasted summary of a firm's expected cash inflows and cash outflows as well as its
Cash flow coverage ratio
The number of times that financial obligations (for interest, principal payments,
Cash Flow Provided or Used from Financing Activities
Cash receipts and payments involving
Cash Flow Provided or Used from Investing Activities
Cash receipts and payments involving
Cash management bill
Very short maturity bills that the Treasury occasionally sells because its cash
Certified Management Accountant (CMA)
a professional designation in the area of management accounting that
Cheapest to deliver issue
The acceptable Treasury security with the highest implied repo rate; the rate that a
Mortgage against which no additional debt may be issued.
Decreasing inflation by immediately decreasing the money growth rate to a new, low rate. Contrast with gradualism.
Collateralized mortgage obligation (CMO)
A security backed by a pool of pass-throughs , structured so that
procedures followed by a firm in attempting to collect accounts receivables.
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