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Definition of Bundling, unbundling
A trend allowing creation of securities either by combining primitive and derivative
When a multinational firm unbundles its transfer of funds into separate flows for specific purposes.
Mutual funds that do not charge an upfront or back-end commission, but instead take out up to
Part of the return that is not due to systematic influences (market wide influences). In
A merger or consolidation in which an acquirer purchases the selling firm's assets.
A bond covenant that specifies certain actions the firm must take.
Requirement that none of an order be executed unless all of it can be executed at the specified price.
An arrangement whereby a security issue is canceled if the underwriter is unable
Any possession that has value in an exchange.
A resource, recorded through a transaction, that is expected to yield a benefit to a
Something that is owned; a financial claim or a piece of property that is a store of value.
Probable future economic benefit that is obtained or controlled by an entity as a result of
Anything owned by, or owed to, an individual or business which has commercial or exchange value (e.g., cash, property, etc.).
All things of value owned by an individual or organization.
Ratios that measure how effectively the firm is managing its assets.
The decision regarding how an institution's funds should be distributed among the
Bond or note secured by assets of company.
A security that is collateralized by loans, leases, receivables, or installment contracts
Methods of financing in which lenders and equity investors look principally to the
Loans granted usually by a financial institution where the asset being financed constitutes the sole security given to the lender.
Categories of assets, such as stocks, bonds, real estate and foreign securities.
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
The ratio of total assets to stockholder equity.
Asset for asset swap
Creditors exchange the debt of one defaulting borrower for the debt of another
Also called surplus management, the task of managing funds of a financial
The weighting of assets in an investment portfolio among different asset classes (e.g. shares, bonds, property, cash, overseas investments.
Asset pricing model
A model for determining the required rate of return on an asset.
Asset pricing model
A model, such as the Capital asset Pricing Model (CAPM), that determines the required
The amount of total risk that can be eliminated by diversification by
A firm's investing in assets that are riskier than those that the debtholders expected.
Asset substitution problem
Arises When the stockholders substitute riskier assets for the firm's existing
An interest rate swap used to alter the cash flow characteristics of an institution's assets so as to
The ratio of net sales to total assets.
a ratio measuring asset productivity and showing the number of sales dollars generated by each dollar of assets
asset turnover ratio
A broad-gauge ratio computed by dividing annual
A firm's productive resources.
Anything of value that a company owns.
Things that the business owns.
Items owned by the company or expenses that have been paid for but have not been used up.
A common element of a financial plan that describes projected capital spending and the
An option is at-the-money if the strike price of the option is equal to the market price of the
Beta equation (Mutual Funds)
The beta of a fund is determined as follows:
Beta (Mutual Funds)
The measure of a fund's or stocks risk in relation to the market. A beta of 0.7 means
A transaction to move inventory from one storage bin to another.
The Treasury and federal agencies are moving to a book-entry system in which securities are not represented by engraved pieces of paper but are maintained in computerized records at the
Book yield is the investment income earned in a year on a portfolio of assets purchased over a number of years and at different interest rates, divided by the book value of those assets.
Call money rate
Also called the broker loan rate , the interest rate that banks charge brokers to finance
an asset used to generate revenues or cost savings
A 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
Purchase by foreigners of our assets (capital inflows) or our purchase of foreign assets (capital outflows).
Capitalized Cost An expenditure or accrual that is reported as an asset to be amortized against
CARs (cumulative abnormal returns)
a measure used in academic finance articles to measure the excess returns an investor would have received over a particular time period if he or she were invested in a particular stock.
CASH FLOWS FROM FINANCING ACTIVITIES
A section on the cash-flow statement that shows how much cash a company raised by selling stocks or bonds this year and how much was paid out for cash dividends and other finance-related obligations.
CASH FLOWS FROM INVESTING ACTIVITIES
A section on the cashflow statement that shows how much cash came in and went out because of various investing activities like purchasing machinery.
CASH FLOWS FROM OPERATIONS
A section on the cash-flow Stockholders’ equity statement that shows how much cash came into a company and how much went out during the normal course of business.
Related: Unsystematic risk
See asset-specific risk
Raw materials or subassemblies used to make either finished goods
he written statement that follows any "trade" in the securities markets. Confirmation is issued
An offset to an asset account that reduces the balance of the asset account.
Cost of funds
Interest rate associated with borrowing money.
Typically the cash, accounts receivable, and inventory accounts on the
Value of cash, accounts receivable, inventories, marketable securities and other assets that
Cash, things that will be converted into cash within a year (such as accounts receivable), and inventory.
Amounts receivable by the business within a period of 12 months, including bank, debtors, inventory and prepayments.
Current refers to cash and those assets that will be turned
Cash and other company assets that can be readily turned into cash within one year.
IOUs created through loan-type transactions - commercial paper, bank CDs, bills, bonds, and
Deferred Tax Asset
Future tax benefit that results from (1) the origination of a temporary difference
The process whereby the banking system transforms a dollar of reserves into several dollars of money supply.
Depository transfer check (DTC)
Check made out directly by a local bank to a particular firm or person.
A financial instrument that is based on some underlying asset.
Contracts such as options and futures whose price is derived from the price of the
Markets for derivative instruments.
A financial security, such as an option, or future, whose value is derived in part from the
To remove the general drift, tendency or bent of a set of statistical data as related to time.
Non-interest-bearing money market instruments that are issued at a discount and
Dividend yield (Funds)
Indicated yield represents return on a share of a mutual fund held over the past 12
Dow Jones industrial average
This is the best known U.S.index of stocks. It contains 30 stocks that trade on
Dow Jones Industrial Average
Index of the investment performance of a portfolio of 30 “blue-chip” stocks.
Dynamic asset allocation
An asset allocation strategy in which the asset mix is mechanistically shifted in
economic components model
Abrams’ model for calculating DLOM based on the interaction of discounts from four economic components.
EFT (electronic funds transfer)
funds which are electronically credited to your account (e.g. direct deposit), or electronically debited from your account on an ongoing basis (e.g. a pre-authorized monthly bill payment, or a monthly loan or mortgage payment). A wire transfer is a form of EFT.
An agreement permitting a bank customer to borrow either domestic dollars from the
In the interbank Eurodollar deposit market, an either-way market is one in which the bid
Electronic depository transfers
The transfer of funds between bank accounts through the Automated
Investment funds established for the support of institutions such as colleges, private
European Monetary System (EMS)
An exchange arrangement formed in 1979 that involves the currencies
Also called abnormal returns, returns in excess of those required by some asset pricing model.
Exchange of assets
Acquisition of another company by purchase of its assets in exchange for cash or stock.
Instruments exempt from the registration requirements of the securities Act of 1933 or the
Expected future cash flows
Projected future cash flows associated with an asset of decision.
Federal agency securities
securities issued by corporations and agencies created by the U.S. government,
Non-interest bearing deposits held in reserve for depository institutions at their district Federal
Federal funds market
The market where banks can borrow or lend reserves, allowing banks temporarily
Federal funds rate
This is the interest rate that banks with excess reserves at a Federal Reserve district bank
Federal Funds Rate
The interest rate at which banks lend deposits at the Federal Reserve to one another overnight.
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