Information about financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit.
Main Page: investment, tax advisor, inventory control, payroll, financial, business, financial advisor, stock trading,
Definition of Crawling peg
An automatic system for revising the exchange rate. It involves establishing a par value around
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 period after an announcement of a takeover bid in which stock prices typically rise until a merger or acquisition is made (or until it falls through).
Same as PV, but usually includes a subtraction for an initial cash outlay.
the value in todayâ€™s dollars of cash flows that occur in different time periods.
the period before a formal announcement of a takeover bid in which one or more bidders are either preparing to make an announcement or speculating that someone else will.
Schedule of depreciation rates allowed for tax purposes.
Any depreciation method that produces larger deductions for depreciation in the
A strategy that uses available information and forecasting techniques to seek a
Publicly traded issues that may be collateralized by mortgages and MBSs.
The net present value analysis of an asset if financed solely by equity
Money after-tax rate of return minus the inflation rate.
The discount rate that reflects only the business risks of a project and abstracts from the
The second-largest stock exchange in the United States. It trades
Swap in which the principal or national amount rises (falls) as interest rates
The periodic rate times the number of periods in a year. For example, a 5%
Annual percentage yield (APY)
The effective, or true, annual rate of return. The APY is the rate actually
Arithmetic average (mean) rate of return
Arithmetic mean return.
Auction rate preferred stock (ARPS)
Floating rate preferred stock, the dividend on which is adjusted every
The restricting of liability holders from collection efforts of collateral seizure, which is
Average rate of return (ARR)
The ratio of the average cash inflow to the amount invested.
Average tax rate
Taxes as a fraction of income; total taxes divided by total taxable income.
1) When bond yields and prices fall, the market is said to back-up.
State of being unable to pay debts. Thus, the ownership of the firm's assets is transferred from
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
A strategy in which the maturities of the securities included in the portfolio are concentrated
Base interest rate
Related: Benchmark interest rate.
Basic business strategies
Key strategies a firm intends to pursue in carrying out its business plan.
Benchmark interest rate
Also called the base interest rate, it is the minimum interest rate investors will
Bill of exchange
General term for a document demanding payment.
With respect to convertible bonds, the value the security would have if it were not convertible
A system that monitors and evaluates the performance of a fixed-income portfolio , as well as the
A company's book value is its total assets minus intangible assets and liabilities, such as debt. A
Book value per share
The ratio of stockholder equity to the average number of common shares. Book value
Bottom-up equity management style
A management style that de-emphasizes the significance of economic
Break-even payment rate
The prepayment rate of a MBS coupon that will produce the same CFY as that of
Break-even tax rate
The tax rate at which a party to a prospective transaction is indifferent between entering
Broker loan rate
Related: Call money rate.
A strategy in which a portfolio is constructed so that the maturities of its securities are highly
A passive investment strategy with no active buying and selling of stocks from the
Call money rate
Also called the broker loan rate , the interest rate that banks charge brokers to finance
An amount the insurance company will pay if the policyholder ends a whole life
Chicago Mercantile Exchange (CME)
A not-for-profit corporation owned by its members. Its primary
Clearing House Automated Payments System (CHAPS)
A computerized clearing system for sterling funds
Clearing House Interbank Payments System (CHIPS)
An international wire transfer system for high-value
A strategy in which a put and with the same strike price and expiration are either both
Commodities Exchange Center (CEC)
The location of five New York futures exchanges: Commodity
Comparative credit analysis
A method of analysis in which a firm is compared to others that have a desired
The collection of money managers of similar investment style used for assessing
A firm engaged in two or more unrelated businesses.
A merger involving two or more firms that are in unrelated businesses.
Conversion parity price
Related:Market conversion price
Also called parity value, the value of a convertible security if it is converted immediately.
Convertible exchangeable preferred stock
Convertible preferred stock that may be exchanged, at the
The acquisition of one firm by anther firm.
Debt obligations issued by corporations.
A legal document creating a corporation.
One of the three areas of the discipline of finance. It deals with the operation of the firm
Corporate financial management
The application of financial principals within a corporation to create and
Corporate financial planning
Financial planning conducted by a firm that encompasses preparation of both
Corporate processing float
The time that elapses between receipt of payment from a customer and the
Corporate tax view
The argument that double (corporate and individual) taxation of equity returns makes
Corporate taxable equivalent
rate of return required on a par bond to produce the same after-tax yield to
Cost of limited partner capital
The discount rate that equates the after-tax inflows with outflows for capital
In the balance of payments, counterpart items are analogous to unrequited transfers in the
The parties to an interest rate swap.
on the other side of a trade or transaction.
The risk that the other party to an agreement will default. In an options contract, the risk
The periodic interest payment made to the bondholders during the life of the bond.
Coupon equivalent yield
True interest cost expressed on the basis of a 365-day year.
A bond's interest payments.
In bonds, notes or other fixed income securities, the stated percentage rate of interest, usually
Covered call writing strategy
A strategy that involves writing a call option on securities that the investor
Covered or hedge option strategies
Strategies that involve a position in an option as well as a position in the
The interest rate offered on an investment type insurance policy.
The exchange rate between two currencies expressed as the ratio of two foreign exchange rates
The return at which two alternative projects have the same net present value.
A bond selling at or close to par, that is, a bond with a coupon close to the yields currently
Current rate method
Under this currency translation method, all foreign currency balance-sheet and income
Related: Benchmark issues
Debt service parity approach
An analysis wherein the alternatives under consideration will provide the firm
Refers to multi-period cash flow matching.
The interest rate that the Federal Reserve charges a bank to borrow funds when a bank is
The fixed or floating rate paid on preferred stock based on par value.
Dollar-weighted rate of return
Also called the internal rate of return, the interest rate that will make the
Dupont system of financial control
Highlights the fact that return on assets (ROA) can be expressed in terms
Effective annual interest rate
An annual measure of the time value of money that fully reflects the effects of
A measure of the time value of money that fully reflects the effects of compounding.
Equilibrium rate of interest
The interest rate that clears the market. Also called the market-clearing interest
European Monetary System (EMS)
An exchange arrangement formed in 1979 that involves the currencies
Buying or selling to offset an existing market position.
The marketplace in which shares, options and futures on stocks, bonds, commodities and indices
A nickname for the New York stock exchange. Also known as the Big Board. More than
Governmental restrictions on the purchase of foreign currencies by domestic citizens or
Exchange of assets
Acquisition of another company by purchase of its assets in exchange for cash or stock.
Exchange of stock
Acquisition of another company by purchase of its stock in exchange for cash or shares.
An offer by the firm to give one security, such as a bond or preferred stock, in exchange for
The price of one country's currency expressed in another country's currency.
Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit.