|Bank discount basis|
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Definition of Bank discount basis
Bank discount basis
A convention used for quoting bids and offers for treasury bills in terms of annualized
A bank machine, sometimes referred to as an automated teller machine (ATM).
In portfolio accounting, a straight-line accumulation of capital gains on discount
Well, frankly, accrual is not a good descriptive
a price concession made under competitive pressure (real or imagined) that does not relate to quantity purchased
the present value of a finite stream of cash flows for every beginning $1 of cash flow.
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
Notes issued by states and municipalities to obtain interim financing for
Money in a bank cheque account, the difference between receipts and payments.
The time that elapses between when a check is deposited into a bank account and when the funds are available to the depositor, during which period the bank is collecting payment from the payer's bank.
A draft addressed to a bank.
A guaranteed form of payment which is issued in amounts over $5,000.
An international bank headquartered in Basel, Switzerland, which
Line of credit granted by a bank to a customer.
Money owed to the bank in a cheque account where payments exceed receipts.
The process of taking the balances from the bank statement and the general ledger and making adjustments so that they agree.
A comparison between the cash position recorded on a company’s
A computer message system linking major banks. It is used not for effecting payments, but as a
A short-term credit investment created by a non-financial firm and guaranteed by a
A bill of exchange, or draft, drawn by the borrower for payment on a specified date, and accepted by a chartered bank. Upon acceptance, the bill becomes, in effect, a postdated certified cheque.
State of being unable to pay debts. Thus, the ownership of the firm's assets is transferred from
The reorganization or liquidation of a firm that cannot pay its debts.
Bankruptcy cost view
The argument that expected indirect and direct bankruptcy costs offset the other
The risk that a firm will be unable to meet its debt obligations. Also referred to as default or insolvency risk.
The argument that expected bankruptcy costs preclude firms from being financed entirely
Regarding a futures contract, the difference between the cash price and the futures price observed in the
In the bond market, the smallest measure used for quoting yields is a basis point. Each percentage
One one-hundredth of one percent
One hundredth of one percentage point, or 0.0001.
One one-hundredth of a percentage point, used to express variations in yields. For example, the difference between 5.36 percent and 5.38 percent is 2 basis points.
Price expressed in terms of yield to maturity or annual rate of return.
The uncertainty about the basis at the time a hedge may be lifted. Hedging substitutes basis risk for
The method used for computing the bond-equivalent yield.
An incentive offered to purchasers of a firm's product for payment within a specified time
A public agency responsible for regulating and controlling an economy's monetary and financial institutions. It is the sole money-issuing authority.
Clearing House Interbank Payments System (CHIPS)
An international wire transfer system for high-value
A privately owned, profit-seeking firm that accepts deposits and makes loans.
System whereby customers make payments to a regional collection center which transfers funds to
A merchant banking subsidiary set up by several banks that may or may not be of the
constant-growth dividend discount model
Version of the dividend discount model in which dividends grow at a constant rate.
The process of calculating the present value of a stream of future
An asset’s purchase price, plus costs associated with the purchase, like installation fees, taxes, etc.
A bond issued with a very low coupon or no coupon and selling at a price far below par
Referring to the selling price of a bond, a price below its par value. Related: premium.
The percentage amount at which bonds sell below their par value. Also the percentage amount at which a currency sells on the forward market below its current rate on the spot market.
Debt sold for less than its principal value. If a discount bond pays no interest, it is called a
A bond with no coupons, priced below its face value; the return on this bond comes from the difference between its face value and its current price.
The curve of discount rates vs. maturity dates for bonds.
Present value of $1 received at a stated future date.
Present value of a $1 future payment.
The period during which a customer can deduct the discount from the net amount of the bill
the rate of return on investment that would be required by a prudent investor to invest in an asset with a specific level risk. Also, a rate of return used to convert a monetary sum, payable or receivable in the future, into present value.
The interest rate that the Federal Reserve charges a bank to borrow funds when a bank is
The rate of interest used to calculate the present value of a stream
the rate of return used to discount future cash
Interest rate used to compute present values of future cash flows.
The interest rate at which the Fed is prepared to loan reserves to commercial banks.
A rate of return used to convert a monetary sum, payable or receivable in the future, into present value.
Non-interest-bearing money market instruments that are issued at a discount and
Facility provided by the Fed enabling member banks to borrow reserves against collateral
The Federal Reserve facility at which reserves are loaned to banks at the discount rate.
Selling something on a discounted basis is selling below what its value will be at maturity,
Discounted cash flow
A technique that determines the present value of future cash
Discounted Cash Flow
Techniques for establishing the relative worth of a future investment by discounting (at a required rate of return) the expected net cash flows from the project.
Discounted cash flow (DCF)
Future cash flows multiplied by discount factors to obtain present values.
Discounted cash flow (DCF)
A method of investment appraisal that discounts future cash flows to present value using a discount rate, which is the risk-adjusted cost of capital.
discounted cash flow (DCF)
Refers to a capital investment analysis technique
Discounted dividend model (DDM)
A formula to estimate the intrinsic value of a firm by figuring the
Discounted payback period rule
An investment decision rule in which the cash flows are discounted at an
Calculating the present value of a future amount. The process is opposite to compounding.
The process of calculating the present value of a stream of future
the process of reducing future cash flows to present value amounts
Calculating the present value of a future payment.
The process of finding the present value of a series of future cash flows. discounting is the reverse of compounding.
Discounting of Accounts Receivable
Short-term financing in which accounts receivable are used as collateral to secure a loan. The lender does not buy the accounts receivable but simply uses them as collateral for the loan. Also called pledging of accounts receivable.
dividend discount model
Computation of today’s stock price which states that share value equals the present value of all expected future dividends.
Dividend discount model (DDM)
A model for valuing the common stock of a company, based on the
DLOC (discount for lack of control)
an amount or percentage deducted from a pro rata share of the value of 100% of an equity interest in a business, to reflect the absence of some or all of the powers of control.
DLOM (discount for lack of marketability)
an amount or percentage deducted from an equity interest to reflect lack of marketability.
Documented discount notes
Commercial paper backed by normal bank lines plus a letter of credit from a
Eligible bankers' acceptances
In the BA market, an acceptance may be referred to as eligible because it is
A bank that regularly accepts foreign currency denominated deposits and makes foreign currency loans.
Export-Import Bank (Ex-Im Bank)
The U.S. federal government agency that extends trade credits to U.S.
Federal Financing Bank
A federal institution that lends to a wide array of federal credit agencies funds it
Federal Home Loan Banks
The institutions that regulate and lend to savings and loan associations. The
Federal Reserve Banks
The twelve district banks in the Federal Reserve System.
Fixed price basis
An offering of securities at a fixed price.
An account for the investment credit to show all income statement benefits of the credit
Foreign banking market
That portion of domestic bank loans supplied to foreigners for use abroad.
A method of selling a new issue of common stock in which the SEC declares the registration
A currency trades at a forward discount when its forward price is lower than its spot price.
fractional interest discount
the combined discounts for lack of control and marketability. g the constant growth rate in cash flows or net income used in the ADF, Gordon model, or present value factor.
Fractional Reserve Banking
A banking system in which banks hold only a fraction of their outstanding deposits in cash or on deposit with the central bank.
International Bank for Reconstruction and Development - IBRD or World Bank
International bank for Reconstruction and Development makes loans at nearly conventional terms to countries for projects of high
International Banking Facility (IBF)
International banking Facility. A branch that an American bank
Financial intermediaries who perform a variety of services, including aiding in the sale of
Middleman between a corporation issuing new securities and the public. The middleman buys the securities issue outright and then resells it to customers. Also called an underwriter.
A legal proceeding for liquidating or reorganizing a business.
A British term for a bank that specializes not in lending out its own funds, but in providing
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