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Definition of Consortium banks
A merchant banking subsidiary set up by several banks that may or may not be of the
The institutions that regulate and lend to savings and loan associations. The
banks that raise most of their funds from the domestic and international money markets, relying less on depositors for funds.
The twelve district banks in the Federal Reserve System.
An option is at-the-money if the strike price of the option is equal to the market price of the
A loan in which two companies in separate countries borrow each other's currency for a
Related: Call money rate.
A mortgage loan on newly developed property that the builder subsidizes during the
A bank term loan that calls for no amortization.
Also called the broker loan rate , the interest rate that banks charge brokers to finance
The location of five New York futures exchanges: Commodity
Overnight, collateralized loan made to a dealer financing his position by borrowing from a
Given the after-tax stream associated with a lease, the maximum amount of conventional
Securities issued by corporations and agencies created by the U.S. government,
Agencies of the federal government set up to supply credit to various classes of
A federal institution that insures bank deposits.
Federal Financing Bank
A federal institution that lends to a wide array of federal credit agencies funds it
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 Reserve System
The central bank of the U.S., established in 1913, and governed by the federal
Federally related institutions
Arms of the federal government that are exempt from SEC registration and
A loan on which the rate paid by the borrower is fixed for the life of the loan.
Freddie Mac (Federal Home Loan Mortgage Corporation)
A Congressionally chartered corporation that
Sale of some shares of stock to get cash that would be similar to receiving a cash dividend.
Idea that as long as individuals borrow (or lend) on the same terms as the firm, they can
money that moves across country borders in response to interest rate differences and that moves
loan made by one unit of a corporation to another unit of the same corporation.
A put option that has a strike price higher than the underlying futures price, or a call option
A secured short-term loan to purchase inventory. The three basic forms are a blanket
loans of $1 billion or more. Or, loans that exceed the statutory size limit eligible for purchase or
Loan amortization schedule
The schedule for repaying the interest and principal on a loan.
Group of banks sharing a loan. See: syndicate.
The amount a policyholder may borrow against a whole life insurance policy at the interest rate
Composed of currency and coins outside the banking system plus liabilities to the deposit money banks.
Related: Investment management.
Related: Investment manager.
money markets are for borrowing and lending money for three years or less. The securities in
Money market demand account
An account that pays interest based on short-term interest rates.
Money market fund
A mutual fund that invests only in short term securities, such as bankers' acceptances,
Money market hedge
The use of borrowing and lending transactions in foreign currencies to lock in the
Money market notes
Publicly traded issues that may be collateralized by mortgages and MBSs.
Money purchase plan
A defined benefit contribution plan in which the participant contributes some part and
Money rate of return
Annual money return as a percentage of asset value.
M1-A: Currency plus demand deposits
Give the borrower the possibility of drawing a loan in different currencies.
loans usually represented by conventional mortgages on multi-family rental apartments.
In a Treasury auction, the amount by which the par value of the securities offered exceeds that of
A call option is out-of-the-money if the strike price is greater than the market price
A process whereby two companies in different countries borrow each other's currency for a
Precautionary demand (for money)
The need to meet unexpected or extraordinary contingencies with a
Project loan certificate (PLC)
A primary program of Ginnie Mae for securitizing FHA-insured and coinsured
Project loan securities
Securities backed by a variety of FHA-insured loan types - primarily multi-family
Usually FHA-insured and HUD-guaranteed mortgages on multiple-family housing complexes,
A central financial subsidiary used by an MNC to reduce transaction exposure by having
Savings and Loan association
National- or state-chartered institution that accepts savings deposits and
loan to finance current assets, The sale of the current assets provides the cash to repay
Speculative demand (for money)
The need for cash to take advantage of investment opportunities that may arise.
A bank loan, typically with a floating interest rate, for a specified amount that matures in between
Time value of money
The idea that a dollar today is worth more than a dollar in the future, because the dollar
A loan extended by a bank for a specific purpose. In contrast, lines of credit and revolving
Transaction demand (for money)
The need to accommodate a firm's expected cash transactions.
Variable rate loan
loan made at an interest rate that fluctuates based on a base interest rate such as the
Amounts that have been loaned to the company and that it still owes.
A market that specializes in trading short-term, low-risk, very liquid
a segment of the production or service
a responsibility center in which the manager has
a responsibility center in which the manager
a responsibility center in which managers are responsible for generating revenues and planning and controlling all expenses
pseudo microprofit center
a center for which a surrogate
real microprofit center
a center whose output has a market value
a cost object under the control of a manager
a responsibility center for which a manager is accountable only for the generation of revenues and has no control over setting selling prices, or budgeting or incurring costs
An entity within a corporation against which both revenues and costs are
Federal Reserve (the Fed)
The central bank in the United States, responsible for setting interest rates.
Market for short-term financial assets.
Federal Funds Rate
The interest rate at which banks lend deposits at the federal Reserve to one another overnight.
Federal Open Market Committee (FOMC)
Fed committee that makes decisions about open-market operations.
Federal Reserve Banks
The twelve district banks in the federal Reserve System.
Federal Reserve Board
Board of Governors of the federal Reserve System.
Federal Reserve System
The central banking authority responsible for monetary policy in the United States.
See money base.
Any item that serves as a medium of exchange, a store of value, and a unit of account. See medium of exchange.
Cash plus deposits of the commercial banks with the central bank.
A financial market in which short-term (maturity of less than a year) debt instruments such as bonds are traded.
Change in the money supply per change in the money base.
Money Rate of Interest
See interest rate, nominal.
Neutrality of Money
The doctrine that the money supply affects only the price level, with no long-run impact on real variables.
Sale of bonds by the government to the central bank.
Quantity Theory of Money
Theory that velocity is constant, and so a change in money supply will change nominal income by the same percentage. Formalized by the equation Mv = PQ.
Real Money Supply
money supply expressed in base-year dollars, calculated by dividing the money supply by a price index.
Electronic Federal Tax Payment Systems (EFTPS)
An electronic funds transfer system used by businesses to remit taxes to the government.
Federal Employer Identification Number
A unique identification number issued
Federal Insurance Contributions Act of 1935 (FICA)
A federal Act authorizing the government to collect Social Security and Medicare payroll taxes.
Federal Unemployment Tax Act (FUTA)
A federal Act requiring employers to pay a tax on the wages paid to their employees, which is then used to create a
Express stipulations included in loan agreements that are designed to monitor
Negative Loan Covenants
loan covenants designed to limit a corporate borrower's behavior
Positive Loan Covenants
loan covenants expressing minimum and maximum financial measures
A branch warehouse containing finished goods and service
Fiat money is paper currency made legal tender by law or fiat. It is not backed by gold or silver and is not necessarily redeemable in coin. This practice has had widespread use for about the last 70 years. If governments produce too much of it, there is a loss of confidence. Even so, governments print it routinely when they need it. The value of fiat money is dependent upon the performance of the economy of the country which issued it. Canada's currency falls into this category.
This is the process by which "dirty money" generated by criminal activities is converted through legitimate businesses into assets that cannot be easily traced back to their illegal origins.
A short term loan to cover the immediate cash requirements until permanent financing is received.
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