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Definition of Derivitive
An instrument with a value that is derived from the value of the
The sum of all the interest options in your policy, including interest.
An amount of money invested plus the interest earned on that money.
The net present value analysis of an asset if financed solely by equity
Variations of mortgage instruments such as adjustable-rate and variablerate
a method of allocating joint cost to joint products using a
A security that is collateralized by loans, leases, receivables, or installment contracts
A debt or equity security not classified as a held-to-maturity security or a trading security. Can be classified as a current or noncurrent investment depending on the intended holding period.
The amount of cash payable on a benefit.
With respect to convertible bonds, the value the security would have if it were not convertible
A company's book value is its total assets minus intangible assets and liabilities, such as debt. A
An asset’s cost basis minus accumulated depreciation.
The value of an asset as carried on the balance sheet of a
An asset’s original cost, less any depreciation that has been subsequently incurred.
Net worth of the firm’s assets or liabilities according
Generally speaking, these terms
BOOK VALUE OF COMMON STOCK
The theoretical amount per share that each stockholder would receive if a company’s assets were sold on the balance sheet’s date. Book value equals:
Book value per share
The ratio of stockholder equity to the average number of common shares. Book value
Book Value per Share
The book value of a company divided by the number of shares
an activity that is necessary for the operation of the business but for which a customer would not want to pay
CAPITAL IN EXCESS OF PAR VALUE
What a company collected when it sold stock for more than the par value per share.
An amount the insurance company will pay if the policyholder ends a whole life
Cash Surrender Value
This is the amount available to the owner of a life insurance policy upon voluntary termination of the policy before it becomes payable by the death of the life insured. This does not apply to term insurance but only to those policies which have reduced paid up values and cash surrender values. A cash surrender in lieu of death benefit usually has tax implications.
Cash Surrender Value
Benefit that entitles a policy owner to an amount of money upon cancellation of a policy.
Cash value added (CVA)
A method of investment appraisal that calculates the ratio of the net present value of an
Also called parity value, the value of a convertible security if it is converted immediately.
A security that can be converted into common stock at the option of the security holder,
An asset requiring fixed dollar payments, such as a government or corporate bond.
Any financial asset corresponding to a debt, such as a bond or a treasury bill.
A security representing a debt relationship with an enterprise, including a government
The asset in a forward contract that will be delivered in the future at an agree-upon price.
Contracts such as options and futures whose price is derived from the price of the
A financial security, such as an option, or future, whose value is derived in part from the
Economic Value Added (EVA)
Operating profit, adjusted to remove distortions caused by certain accounting rules, less a charge
economic value added (EVA)
a measure of the extent to which income exceeds the dollar cost of capital; calculated
economic value added (EVA)
Term used by the consulting firm Stern Stewart for profit remaining after deduction of the cost
Employee Retirement Income Security Act of 1974 (ERISA)
A federal Act that sets minimum operational and funding standards for employee benefit
An ownership interest in an enterprise, including preferred and common stock.
security that grants the security holder the right to exchange the security for the
The amount of advantage over a current market transaction provided by an in-the-money
The value that an asset is expected to have at the time it is sold at a predetermined
The weighted average of a probability distribution.
The value of the possible outcomes of a variable weighted by the
Expected value of perfect information
The expected value if the future uncertain outcomes could be known
Extraordinary positive value
A positive net present value.
See: Par value.
The nominal value of a security. Also called the par value.
The maturity value of a security. Also known as par value,
Payment at the maturity of the bond. Also called par value or maturity value.
The payoff value of a bond upon maturity. Also called par value. See principal.
The nominal value which appears on the face of a document recording an entitlement, generally an amount of money that has to be repaid on the maturity of a debt instrument.
Fair market value
The price that an asset or service will fetch on the open market.
Fair Market Value
The highest price available, expressed in terms of cash, in an open and unrestricted market between informed, prudent parties acting at arm's length and under no compulsion to transact.
The amount at which an asset could be purchased or sold or a liability incurred or
This is a generic term that refers to the many different forms of financing a business may use. For example - loans, shares, and bonds are all considered financing instruments.
Firm's net value of debt
Total firm value minus total firm debt.
A nonnegotiable debt security that can be redeemed at some fixed price or according to
Assets that pay a fixed-dollar amount, such as bonds and preferred stock.
A security that pays a specified cash flow over a
security paying dividends or interest that vary with short-term interest rates.
The amount of cash at a specified date in the future that is equivalent in value to a specified
The amount a given payment, or series of payments, will be worth
the amount to which one or more sums of
The value that a sum of money (the present value) earning
Amount to which an investment will grow after earning interest.
The amount to which a payment or series of payments will grow by a given future date when compounded by a given interest rate. FVIF future value interest factor.
A debt security for which the investing entity has both the positive
The security to which a warrant is attached.
A convertible security whose optioned common stock is trading in a middle range, causing
See debt instrument.
Financial securities, such as money market instruments or capital market insturments.
Intrinsic value of a firm
The present value of a firm's expected future net cash flows discounted by the
Intrinsic value of an option
The amount by which an option is in-the-money. An option which is not in-themoney
A security, such as a call option, in which the owner can only lose his initial
A security, such as a call option, in which the owner can only lose his initial investment.
Net amount that could be realized by selling the assets of a firm after paying the debt.
The net proceeds (after taxes and expenses) of selling the assets
Net proceeds that would be realized by selling the firm’s assets and paying off its creditors.
The amount a policyholder may borrow against a whole life insurance policy at the interest rate
1) The price at which a security is trading and could presumably be purchased or sold.
The price at which a product or service could be sold on the open market.
A quoted market price per unit times the number of units being valued. Synonymous
market value added
Market value of equity minus book value.
market-value balance sheet
Financial statement that uses the market value of all assets and liabilities.
Market value ratios
Ratios that relate the market price of the firm's common stock to selected financial
Market value-weighted index
An index of a group of securities computed by calculating a weighted average
An easily traded investment, such as treasury bills, which is
Related: par value.
Monthly income preferred security (MIP)
Preferred stock issued by a subsidiary located in a tax haven.
Mortgage pass-through security
Also called a passthrough, a security created when one or more mortgage
Net adjusted present value
The adjusted present value minus the initial cost of an investment.
net asset value
The value of all the holdings of a mutual fund, less the fund's liabilities.
Net asset value (NAV)
The value of a fund's investments. For a mutual fund, the net asset value per share
Net book value
The current book value of an asset or liability; that is, its original book value net of any
Net present value
A discounted cash flow methodology that uses a required rate of
net present value method
a process that uses the discounted
Net present value (NPV)
The present value of the expected future cash flows minus the cost.
Net present value (NPV)
A discounted cash flow technique used for investment appraisal that calculates the present value of future cash flows and deducts the initial capital investment.
net present value (NPV)
Equals the present value (PV) of a capital investment
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