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Definition of Cable

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Cable

Exchange rate between British pounds sterling and the U.S.$.



Related Terms:

Irrevocable Beneficiary

Legal designation that cannot be contested. (See beneficiary)


Beneficiary

This is the person who benefits from the terms of a trust, a will, an RRSP, a RRIF, a LIF, an annuity or a life insurance policy. In relation to RRSP's, RRIF's, LIF's, Annuities and of course life insurance, if the beneficiary is a spouse, parent, offspring or grand-child, they are considered to be a preferred beneficiary. If the insured has named a preferred beneficiary, the death benefit is invariably protected from creditors. There have been some court challenges of this right of protection but so far they have been unsuccessful. See "Creditor Protection" below. A beneficiary under the age of 18 must be represented by an individual guardian over the age of 18 or a public official who represents minors generally. A policy owner may, in the designation of a beneficiary, appoint someone to act as trustee for a minor. Death benefits are not subject to income taxes. If you make your beneficiary your estate, the death benefit will be included in your assets for probate. Probate filing fees are currently $14 per thousand of estate value in British Columbia and $15 per thousand of estate value in Ontario.
Another way to avoid probate fees or creditor claims against life insurance proceeds is for the insured person to designate and register with his/her insurance company's head office an irrevocable beneficiary. By making such a designation, the insured gives up the right to make any changes to his/her policy without the consent of the irrevocable beneficiary. Because of the seriousness of the implications, an irrevocable designation should only be made for good reason and where the insured fully understands the consequences.
NoteA successful challenge of the rules relating to beneficiaries was concluded in an Ontario court in 1996. The Insurance Act says its provisions relating to beneficiaries are made "notwithstanding the Succession Law Reform Act." There are two relevent provisions of the Succession Law Reform Act. One section of the act gives a judge the power to make any order concerning an estate if the deceased person has failed to provide for a dependant. Another section says money from a life insurance policy can be considered part of the estate if an order is made to support a dependant. In the case in question, the deceased had attempted to deceive his lawful dependents by making his common-law-spouse the beneficiary of an insurance policy which by court order was supposed to name his ex-spouse and children as beneficiaries.


diluted earnings per share (EPS)

This measure of earnings per share
recognizes additional stock shares that may be issued in the future for
stock options and as may be required by other contracts a business has
entered into, such as convertible features in its debt securities and preferred
stock. Both basic earnings per share and, if applicable, diluted
earnings per share are reported by publicly owned business corporations.
Often the two EPS figures are not far apart, but in some cases the
gap is significant. Privately owned businesses do not have to report earnings
per share. See also basic earnings per share.


Legal defeasance

The deposit of cash and permitted securities, as specified in the bond indenture, into an
irrevocable trust sufficient to enable the issuer to discharge fully its obligations under the bond indenture.


Margin Tax Rate

The tax rate applicable to the last unit of income.



Matching Principle

An accounting principle that ties expense recognition to revenue recognition,
dictating that efforts, as represented by expenses, are to be matched with accomplishments,
that is, revenue, whenever it is reasonable and practicable to do so.


Preferred Beneficiary

Used in older contracts to confer the same rights as an irrevocable beneficiary. Applied to family members.


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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.


Contingent Beneficiary

This is the person designated to receive the death benefit of a life insurance policy if the primary beneficiary dies before the life insured. This is a consideration when husband and wife make each other the beneficiary of their coverage. Should they both die in the same car accident or plane crash, the death benefits would go to each others estate and creditor claims could be made against them. Particularly if minor children could be survivors, then a trustee contingent beneficiary should be named.


Income beneficiary

One who receives income from a trust.


Preferred Beneficiary

Used in older contracts to confer the same rights as an irrevocable beneficiary. Applied to family members.


"Soft" Capital Rationing

Capital rationing that under certain circumstances can be violated or even viewed
as made up of targets rather than absolute constraints.


12B-1 fees

The percent of a mutual fund's assets used to defray marketing and distribution expenses. The
amount of the fee is stated in the fund's prospectus. The SEC has recently proposed that 12B-1 fees in excess
of 0.25% be classed as a load. A true " no load" fund has neither a sales charge nor 12b-1 fee.


Absolute Advantage

The ability to produce a good or service with fewer resources than competitors. See also comparative advantage.


Absolute priority

Rule in bankruptcy proceedings whereby senior creditors are required to be paid in full
before junior creditors receive any payment.


Absolute Right of Return

goods may be returned to the seller by the purchaser without restrictions.


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Absorption costing

A method of costing in which all fixed and variable production costs are charged to products or services using an allocation base.


absorption costing

a cost accumulation and reporting
method that treats the costs of all manufActuring compOnents
(direct material, direct labor, variable overhead, and
fixed overhead) as inventoriable or product costs; it is the
traditional approach to product costing; it must be used for
external financial statements and tax returns



Absorption costing

A methodology under which all manufActuring costs are assigned
to products, while all non-manufActuring costs are expensed in the current period.


Abusive Earnings Management

The use of various forms of gimmickry to distort a company's true financial performance in order to achieve a desired result.


Abusive Earnings Management

A charActerization used by the Securities and exchange
Commission to designate earnings management that results in an intentional and material misrepresentation
of results.


Accelerated cost recovery system (ACRS)

Schedule of depreciation rates allowed for tax purposes.


Accelerated depreciation

any depreciation method that produces larger deductions for depreciation in the
early years of a project's LIFe. Accelerated cost recovery system (ACRS), which is a depreciation schedule
allowed for tax purposes, is One such example.


accelerated depreciation

(1) The estimated useful LIFe of the fixed asset being depreciated is
shorter than a realistic forecast of its probable Actual service LIFe;
(2) more of the total cost of the fixed asset is allocated to the first
half of its useful LIFe than to the second half (i.e., There is a
front-end loading of depreciation expense).


Accelerated depreciation

any of several methods that recognize an increased amount
of depreciation in the earliest years of asset usage. this results in increased tax benefits
in the first few years of asset usage.


Accidental Death and Dismemberment

Coverage that provides a lump-sum payment to you or your survivors if an accident results in the loss of a limb, paralysis or your Death.


Accidental Death Benefit (ADB)

Coverage against accidental Death usually payable in addition to base amount of coverage.


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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.



Accomodating Policy

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.


Account Value

The sum of all the interest options in your policy, including interest.


Accounting exposure

The change in the value of a firm's foreign currency denominated accounts due to a
change in exchange rates.


Accounting insolvency

Total liabilities exceed total assets. A firm with a negative net worth is insolvent on
the books.


Accounting period

The period of time for which financial statements are produced – see also financial year.


Accounting rate of return (ARR)

A method of investment appraisal that measures
the profit generated as a percentage of the
investment – see return on investment.


accounting rate of return (ARR)

the rate of earnings obtained on the average capital investment over the LIFe of a capital project; computed as average annual profits divided by average investment; not based on cash flow


Accounts receivable turnover

The ratio of net credit sales to average accounts receivable, a measure of how
quickly customers pay their bills.


accounts receivable turnover ratio

A ratio computed by dividing annual
sales revenue by the year-end balance of accounts receivable. Technically
speaking, to calculate this ratio the amount of annual credit sales should
be divided by the average accounts receivable balance, but this information
is not readily available from external financial statements. For
reporting internally to managers, this ratio should be refined and finetuned
to be as accurate as possible.


Accrued expenses payable

expenses that have to be recorded in order for the financial statements to be accurate. Accrued expenses usually do not involve the receipt of an invoice from the company providing the goods or services.


accrued expenses payable

The account that records the short-term, noninterest-
bearing liabilities of a business that accumulate over time, such
as vacation pay owed to employees. this liability is different than
accounts payable, which is the liability account for bills that have been
received by a business from purchases on credit.


Accrued Income

income that has been earned but not yet received. For instance, if you have a non-registered Guaranteed Investment Certificate (GIC), Mutual Fund or Segregated Equity Fund, growth accrues annually or semi-annually and is taxable annually even though the gain is only paid at maturity of your investment.


Accumulated Benefit Obligation (ABO)

An approximate measure of the liability of a plan in the event of a
termination at the date the calculation is performed. Related: projected benefit obligation.


Accumulated Other Comprehensive Income

Cumulative gains or losses reported in shareholders'
equity that arise from changes in the fair value of available-for-sale securities, from the
effects of changes in foreign-currency exchange rates on consolidated foreign-currency financial
statements, certain gains and losses on financial derivatives, and from adjustments for underfunded
pension plans.


Accumulated Value

An amount of mOney invested plus the interest earned on that mOney.


acid test ratio (also called the quick ratio)

The sum of cash, accounts receivable, and short-term marketable
investments (if any) is divided by
total current liabilities to compute this ratio. Suppose that the short-term
creditors were to pounce on a business and not agree to roll over the
debts owed to them by the business. In this rather extreme scenario, the
acid test ratio reveals whether its cash and near-cash assets are enough
to pay its short-term current liabilities. this ratio is an extreme test that
is not likely to be imposed on a business unless it is in financial straits.
this ratio is quite relevant when a business is in a liquidation situation
or bankruptcy proceedings.


Acquisition of assets

A merger or consolidation in which an acquirer purchases the selling firm's assets.


Act of state doctrine

this doctrine says that a nation is sovereign within its own borders and its domestic
Actions may not be questiOned in the courts of Another nation.


Active

A market in which There is much trading.


Active portfolio strategy

A strategy that uses available information and forecasting techniques to seek a
better performance than a portfolio that is simply diversified broadly. Related: passive portfolio strategy


activity

a repetitive Action performed in fulfillment of business functions


activity analysis

the process of detailing the various repetitive Actions that are performed in making a product or
providing a service, classifying them as value-added and
non-value-added, and devising ways of minimizing or eliminating
non-value-added Activities


Activity-based budgeting

A method of budgeting that develops budgets based on expected Activities and cost drivers – see also Activity-based costing.


activity-based budgeting (ABB)

planning approach applying Activity drivers to estimate the levels and costs of Activities necessary to provide the budgeted quantity and
quality of production


Activity-based costing

A method of costing that uses cost pools to accumulate the cost of significant business Activities and then assigns the costs from the cost pools to products or services based on cost drivers.


activity based costing (ABC)

A relatively new method advocated for the
allocation of indirect costs. The key idea is to classify indirect costs,
many of which are fixed in amount for a period of time, into separate
Activities and to develop a measure for each Activity called a cost driver.
The products or other functions in the business that benefit from the
Activity are allocated shares of the total indirect cost for the period based
on their usage as measured by the cost driver.


activity-based costing (ABC)

a process using multiple cost drivers to predict and allocate costs to products and services;
an accounting system collecting financial and operational
data on the basis of the underlying nature and extent
of business Activities; an accounting information and
costing system that identifies the various Activities performed
in an organization, collects costs on the basis of
the underlying nature and extent of those Activities, and
assigns costs to products and services based on consumption
of those Activities by the products and services


Activity-based costing (ABC)

A cost allocation system that compiles costs and assigns
them to Activities based on relevant Activity drivers. The cost of these Activities can
then be charged to products or customers to arrive at a much more relevant allocation
of costs than was previously the case.


activity-based management (ABM)

a discipline that focuses on the Activities incurred during the production/performance process as the way to improve the value received
by a customer and the resulting profit achieved by providing
this value


activity center

a segment of the production or service
process for which management wants to separately report
the costs of the Activities performed


activity driver

a measure of the demands on Activities and,
thus, the resources consumed by products and services;
often indicates an Activity’s output


Actual cost

The Actual expenditure made to acquire an asset, which includes the supplierinvoiced
expense, plus the costs to deliver and set up the asset.


actual cost system

a valuation method that uses Actual direct
material, direct labor, and overhead charges in determining
the cost of Work in Process Inventory


Actuals

The physical commodity underlying a futures contrAct. Cash commodity, physical.


Actuary

One who uses statistical information to evaluate the probability of future events and prices Insurance products.


ADF (annuity discount factor)

the present value of a finite stream of cash flows for every beginning $1 of cash flow.


Adjustable rate preferred stock (ARPS)

publicly traded issues that may be collateralized by mortgages and MBSs.


Adjusted Cash Flow Provided by Continuing Operations

Cash flow provided by operating
Activities adjusted to provide a more recurring, sustainable measure. Adjustments to reported cash
provided by operating Activities are made to remove such nonrecurring cash items as: the operating
compOnent of discontinued operations, income taxes on items classified as investing or financing Activities, income tax benefits from nonquaLIFied employee stock options, the cash effects of purchases and sales of trading securities for nonfinancial firms, capitalized expenditures, and other nonrecurring cash inflows and outflows.


Adjusted Income from Continuing

Operations Reported income from continuing operations
adjusted to remove nonrecurring items.


Adjusted present value (APV)

The net present value analysis of an asset if financed solely by equity
(present value of un-levered cash flows), plus the present value of any financing decisions (levered cash
flows). In other words, the various tax shields provided by the deductibility of interest and the benefits of
other investment tax credits are calculated separately. this analysis is often used for highly leveraged
transActions such as a leverage buy-out.


administrative department

an organizational unit that performs management Activities benefiting the entire organization;
includes top management personnel and organization
headquarters


Administrative pricing rules

IRS rules used to allocate income on export sales to a foreign sales corporation.


After-tax real rate of return

MOney after-tax rate of return minus the inflation rate.


Agencies

Federal agency securities.


Agency

A grouping of sales producers according to region. Compare with Branch.


Agency bank

A form of organization commonly used by foreign banks to enter the U.S. market. An agency
bank cannot accept deposits or extend loans in its own name; it Acts as agent for the parent bank.


Agency basis

A means of compensating the broker of a program trade solely on the basis of commission
established through bids submitted by various brokerage firms. agency incentive arrangement. A means of
compensating the broker of a program trade using benchmark prices for issues to be traded in determining
commissions or fees.


Agency cost view

The argument that specifies that the various agency costs create a complex environment in
which total agency costs are at a minimum with some, but less than 100%, debt financing.


Agency costs

The incremental costs of having an agent make decisions for a principal.


Agency pass-throughs

Mortgage pass-through securities whose principal and interest payments are
guaranteed by government agencies, such as the Government National Mortgage Association ("Ginnie Mae"), Federal Home Loan Mortgage Corporation ("Freddie Mac") and Federal National Mortgage Association ("Fannie Mae").


Agency problem

Conflicts of interest among stockholders, bondholders, and managers.


agency problems

Conflicts of interest between the firm’s owners and managers.


Agency theory

The analysis of principal-agent relationships, wherein One person, an agent, Acts on behalf of
anther person, a principal.


Agent

The decision-maker in a principal-agent relationship.


Agent

One who represents Canada LIFe when providing services to clients


Aggregate Expenditure Curve

Aggregate demand for goods and services drawn as a function of the level of national income.


Aggregate Supply

Total quantity of goods and services supplied.


Aggregate Supply Curve

Combinations of price level and income for which the labor market is in equilibrium. The short-run aggregate supply curve incorporates information and price/wage inflexibilities in the labor market, whereas the long-run aggregate supply curve does not.


All equity rate

The discount rate that reflects only the business risks of a project and abstrActs from the
effects of financing.


All or none

Requirement that nOne of an order be executed unless all of it can be executed at the specified price.


All-or-none underwriting

An arrangement whereby a security issue is canceled if the underwriter is unable
to re-sell the entire issue.


Allocation base A measure of activity or volume such as labour

hours, machine hours or volume of production
used to apportion overheads to products and
services.


Alternative mortgage instruments

Variations of mortgage instruments such as adjustable-rate and variablerate
mortgages, graduated-payment mortgages, reverse-annuity mortgages, and several seldom-used
variations.


American Stock Exchange (AMEX)

The second-largest stock exchange in the United States. It trades
mostly in small-to medium-sized companies.


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.


Amortization factor

The pool fActor implied by the scheduled amortization assuming no prepayemts.


Amortizing interest rate swap

Swap in which the principal or national amount rises (falls) as interest rates
rise (decline).


Annual fund operating expenses

For investment companies, the management fee and "other expenses,"
including the expenses for maintaining shareholder records, providing shareholders with financial statements,
and providing custodial and accounting services. For 12b-1 funds, selling and marketing costs are included.


Annual percentage rate (APR)

The periodic rate times the number of periods in a year. For example, a 5%
quarterly return has an APR of 20%.


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
earned or paid in One year, taking into account the affect of compounding. The APY is calculated by taking
One plus the periodic rate and raising it to the number of periods in a year. For example, a 1% per month rate
has an APY of 12.68% (1.01^12).


Annualized holding period return

The annual rate of return that when compounded t times, would have
given the same t-period holding return as Actually occurred from period 1 to period t.


Annuity

A regular periodic payment made by an Insurance company to a policyholder for a specified period
of time.


Annuity

A series of payments or deposits of equal size spaced evenly over
a specified period of time


Annuity

A series of payments over a period of time. The payments are usually
in equal amounts and usually at regular intervals such as quarterly,
semi-annually, or annually.


annuity

Equally spaced level stream of cash flows.


Annuity

A contrAct which provides an income for a specified period of time, such as a certain number of years or for LIFe. An annuity is like a LIFe Insurance policy in reverse. The purchaser gives the LIFe Insurance company a lump sum of mOney and the LIFe Insurance company pays the purchaser a regular income, usually monthly.


Annuity

periodic payments made to an individual under the terms of the policy.


Annuity due

An annuity with n payments, wherein the first payment is made at time t = 0 and the last
payment is made at time t = n - 1.


Annuity Due

annuity where the payments are to be made at the beginning of
each period


annuity due

a series of equal cash flows being received or paid at the beginning of a period


annuity due

Level stream of cash flows starting immediately.


Annuity factor

Present value of $1 paid for each of t periods.



 

 

 

 

 

 

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