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Definition of Closed-end fund
An investment company that sells shares like any other corporation and usually does not
Issuance of "rights" to current shareholders allowing them to purchase additional shares,
For investment companies, the management fee and "other expenses,"
An investment company that invests in stocks and bonds. The same as a balanced mutual fund.
This is a fund that buys common stock, preferred stock and bonds. The same as a
The measure of a fund's or stocks risk in relation to the market. A beta of 0.7 means
The beta of a fund is determined as follows:
List of new issues scheduled to come to market shortly.
The tendency of stocks to perform differently at different times, including such anomalies as
Amount used during a particular period to acquire or improve long-term assets such as
A dividend paid in cash to a company's shareholders. The amount is normally based on
An amount the insurance company will pay if the policyholder ends a whole life
Mortgage against which no additional debt may be issued.
Interest rate associated with borrowing money.
A requirement that any missed preferred or preference stock dividends be paid
Acceptance of a capital budgeting project contingent on the acceptance of another project.
To remove the general drift, tendency or bent of a set of statistical data as related to time.
Discounted dividend model (DDM)
A formula to estimate the intrinsic value of a firm by figuring the
A dividend is a portion of a company's profit paid to common and preferred shareholders. A stock
With respect to a project financing, an arrangement under which the sponsors of a project
A group of shareholders who prefer that the firm follow a particular dividend policy. For
Dividend discount model (DDM)
A model for valuing the common stock of a company, based on the
Dividend growth model
A model wherein dividends are assumed to be at a constant rate in perpetuity.
A bond covenant that restricts in some way the firm's ability to pay cash dividends.
Dividend payout ratio
Percentage of earnings paid out as dividends.
Dividends per share
Amount of cash paid to shareholders expressed as dollars per share.
An established guide for the firm to determine the amount of money it will pay as dividends.
The fixed or floating rate paid on preferred stock based on par value.
Dividend reinvestment plan (DRP)
Automatic reinvestment of shareholder dividends in more shares of a
A shareholders' rights to receive per-share dividends identical to those other shareholders receive.
Dividend yield (Funds)
Indicated yield represents return on a share of a mutual fund held over the past 12
Dividend yield (Stocks)
Indicated yield represents annual dividends divided by current stock price.
Dividends per share
Dividends paid for the past 12 months divided by the number of common shares
Exists when the costs and/or revenues of one project depend on those of another.
Employee stock fund
A firm-sponsored program that enables employees to purchase shares of the firm's
A value determined within the context of a model.
Investment funds established for the support of institutions such as colleges, private
Treating cash flows as if they occur at the end of a year as opposed to the date
The firm makes a tender offer for a given amount of its own stock while excluding
Bond whose maturity can be extended at the option of the lender or issuer.
Note the maturity of which can be extended by mutual agreement of the issuer and
Extra or special dividends
A dividend that is paid in addition to a firm's "regular" quarterly dividend.
This literally means "without dividend." The buyer of shares when they are quoted ex-dividend
The first day of trading when the seller, rather than the buyer, of a stock will be entitled to
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
Fixed-price tender offer
A one-time offer to purchase a stated number of shares at a stated fixed price,
Forward Fed funds
Fed funds traded for future delivery.
Set of funds with different investment objectives offered by one management company. In many
Security analysis that seeks to detect misvalued securities by an analysis of the firm's
The product of a statistical model to predict the fundamental risk of a security using not
In the model for calculating fundamental beta, ratios in risk indexes other than
Debt maturing after more than one year.
The ratio of a pension plan's assets to its liabilities.
Related: interest rate risk
Funds From Operations (FFO)
Used by real estate and other investment trusts to define the cash flow from
A mutual fund that can invest anywhere in the world, including the U.S.
A fund that may employ a variety of techniques to enhance returns, such as both buying and
High-coupon bond refunding
Refunding of a high-coupon bond with a new, lower coupon bond.
Sale of some shares of stock to get cash that would be similar to receiving a cash dividend.
A mutual fund providing for liberal current income from investments.
A project whose acceptance or rejection is independent of the acceptance or rejection of
Investment fund designed to match the returns on a stockmarket index.
Total amount of dividends that would be paid on a share of stock over the next 12 months
A mutual fund that can invest only outside the United States.
International Monetary Fund
An organization founded in 1944 to oversee exchange arrangements of
To provide money temporarily on the condition that it or its equivalent will be returned, often with an
Liability funding strategies
Investment strategies that select assets so that cash flows will equal or exceed
A mutual fund with shares sold at a price including a large sales charge -- typically 4% to 8% of
Low-coupon bond refunding
Refunding of a low coupon bond with a new, higher coupon bond.
Payment by a firm to its owners from capital rather than from earnings.
A bank is said to match fund a loan or other asset when it does so by buying (taking) a deposit of
Money market fund
A mutual fund that invests only in short term securities, such as bankers' acceptances,
Mutual funds are pools of money that are managed by an investment company. They offer
Mutual fund theorem
A result associated with the CAPM, asserting that investors will choose to invest their
Net advantage of refunding
The net present value of the savings from a refunding.
No load mutual fund
An open-end investment company, shares of which are sold without a sales charge.
A mutual fund that does not impose a sales commission. Related: load fund
Not permitted, under the terms of indenture, to be refundable.
Objective (mutual fund)
The fund's investment strategy category as stated in the prospectus. There are
Also called a mutual fund, an investment company that stands ready to sell new shares to the
Mortgage against which additional debts may be issued. Related: closed-end mortgage.
Overfunded pension plan
A pension plan that has a positive surplus (i.e., assets exceed liabilities).
Path dependent option
An option whose value depends on the sequence of prices of the underlying asset
Perfect market view (of dividend policy)
Analysis of a decision on dividend policy, in a perfect capital
Planned capital expenditure program
Capital expenditure program as outlined in the corporate financial plan.
Private Export Funding Corporation (PEFCO)
Company that mobilizes private capital for financing the
Resembles a sinking fund except that money is used only to purchase bonds if they are selling
Pure index fund
A portfolio that is managed so as to perfectly replicate the performance of the market portfolio.
Eligible for refunding under the terms of indenture.
Also called a prerefunded bond, one that originally may have been issued as a general
The redemption of a bond with proceeds received from issuing lower-cost debt obligations
A mutual fund that invests in a specific geographical area overseas, such as Asia or Europe.
Residual dividend approach
An approach that suggests that a firm pay dividends if and only if acceptable
A fund accounting for all revenues from an enterprise financed by a municipal revenue bond.
Single country fund
A mutual fund that invests in individual countries outside the United States.
Signaling view (on dividend policy)
The argument that dividend changes are important signals to investors
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