|Eligible bankers' acceptances|
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Definition of Eligible bankers' acceptances
Eligible bankers' acceptances
In the BA market, an acceptance may be referred to as eligible because it is
A bill of exchange, or draft, drawn by the borrower for payment on a specified date, and accepted by a chartered bank. Upon acceptance, the bill becomes, in effect, a postdated certified cheque.
the present value of a finite stream of cash flows for every beginning $1 of cash flow.
an amount or percentage deducted from a pro rata share of the value of 100% of an equity interest in a business, to reflect the absence of some or all of the powers of control.
an amount or percentage deducted from an equity interest to reflect lack of marketability.
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 combined discounts for lack of control and marketability. g the constant growth rate in cash flows or net income used in the ADF, Gordon model, or present value factor.
model for calculating DLOM for minority interests r the discount rate
The option of terminating an investment earlier than originally planned.
In portfolio accounting, a straight-line accumulation of capital gains on discount
Publicly traded issues that may be collateralized by mortgages and MBSs.
A form of organization commonly used by foreign BAnks to enter the U.S. market. An agency
A means of compensating the broker of a program trade solely on the BAsis of commission
The second-largest stock exchange in the United States. It trades
date on which particular news concerning a given company is announced to the public.
Result of a transaction that increases earnings per common share (e.g. by decreasing the
A security that is collateralized by loans, leases, receivables, or installment contracts
Methods of financing in which lenders and equity investors look principally to the
A common element of a financial plan that describes projected capital spending and the
markets in which the prevailing price is determined through the free interaction of
Auction rate preferred stock (ARPS)
Floating rate preferred stock, the dividend on which is adjusted every
The fee paid on the extension date if the buyer wishes to continue the option.
Brokerage house clerical operations that support, but do not include, the trading of stocks and
An intercompany loan channeled through a BAnk.
A loan in which two companies in separate countries borrow each other's currency for a
1) When bond yields and prices fall, the market is said to BAck-up.
A market condition in which futures prices are lower in the distant delivery months than in
A plan by U.S. Treasury Secretary James BAker under which 15 principal middle-income debtor
Balance of payments
A statistical compilation formulated by a sovereign nation of all economic transactions
Balance of trade
Net flow of goods (exports minus imports) between countries.
Also called the statement of financial condition, it is a summary of the assets, liabilities, and
Balance sheet exposure
Balance sheet identity
Total Assets = Total Liabilities + Total Stockholders' Equity
An investment company that invests in stocks and bonds. The same as a BAlanced mutual fund.
Balanced mutual fund
This is a fund that buys common stock, preferred stock and bonds. The same as a
Any large principal payment due at maturity for a bond or loan with or without a a sinking
BAN (Bank anticipation notes)
Notes issued by states and municipalities to obtain interim financing for
In the words of Warren Buffet, bill BAne Sr., is, "a great American and one of the last real traders
Bank collection float
The time that elapses between when a check is deposited into a BAnk account and when the funds are available to the depositor, during which period the BAnk is collecting payment from the payer's BAnk.
Bank discount basis
A convention used for quoting bids and offers for treasury bills in terms of annualized
A draft addressed to a BAnk.
Line of credit granted by a BAnk to a customer.
A computer message system linking major BAnks. It is used not for effecting payments, but as a
A short-term credit investment created by a non-financial firm and guaranteed by a
Bank for International Settlements (BIS)
An international BAnk headquartered in BAsel, Switzerland, which
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
Slang for one million dollars.
A strategy in which the maturities of the securities included in the portfolio are concentrated
Gives the lessee the option to purchase the asset at a price below fair market
BARRA's performance analysis (PERFAN)
A method developed by BARRA, a consulting firm in
Contracts with trigger points that, when crossed, automatically generate buying or selling of
Base interest rate
Related: Benchmark interest rate.
Base probability of loss
The proBAbility of not achieving a portfolio expected return.
In a BAlance of payments, the BAsic BAlance is the net BAlance of the combination of the current
Basic business strategies
Key strategies a firm intends to pursue in carrying out its business plan.
Basic IRR rule
Accept the project if IRR is greater than the discount rate; reject the project is lower than the
Regarding a futures contract, the difference between the cash price and the futures price observed in the
In the bond market, the smallest measure used for quoting yields is a BAsis point. Each percentage
Price expressed in terms of yield to maturity or annual rate of return.
The uncertainty about the BAsis at the time a hedge may be lifted. Hedging substitutes BAsis risk for
Packages that involve the exchange of more than two currencies against a BAse currency at
Related: Program trades.
Any market in which prices are in a declining trend.
The term applied to the liberalization in 1986 of the London Stock exchange in which trading was
Bill of exchange
General term for a document demanding payment.
Bill of lading
A contract between the exporter and a transportation company in which the latter agrees to
An illegal market.
The method used for computing the bond-equivalent yield.
In the mortgage pipeline, the risk that prospective borrowers of loans committed to be
Break-even lease payment
The lease payment at which a party to a prospective lease is indifferent between
Break-even payment rate
The prepayment rate of a MBS coUpon that will produce the same CFY as that of
A market where an intermediary offers search services to buyers and sellers.
Any market in which prices are in an upward trend.
The foreign market in the United Kingdom.
Another term for a repo.
The tendency of stocks to perform differently at different times, including such anomalies as
A date before maturity, specified at issuance, when the issuer of a bond may retire part of the bond
The market for trading long-term debt instruments (those that mature in more than one year).
Capital market efficiency
Reflects the relative amount of wealth wasted in making transactions. An efficient
Capital market imperfections view
The view that issuing debt is generally valuable but that the firm's
Capital market line (CML)
The line defined by every combination of the risk-free asset and the market portfolio.
An incentive offered to purchasers of a firm's product for payment within a specified time
Cash management bill
Very short maturity bills that the Treasury occasionally sells because its cash
Also called spot markets, these are markets that involve the immediate delivery of a security
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
The grouping of investors who have a preference that the firm follow a particular financing
Refers to the fact that the merger of two firms decreases the proBAbility of default on
Assets than can be repossessed if a borrower defaults.
Collateral trust bonds
A bond in which the issuer (often a holding company) grants investors a lien on
Collateralized mortgage obligation (CMO)
A security BAcked by a pool of pass-throughs , structured so that
Demand for payment.
Commodities Exchange Center (CEC)
The location of five New York futures exchanges: Commodity
An agreement between two or more countries that permits the free movement of capital
Common stock market
The market for trading equities, not including preferred stock.
The representing of accounting information over multiple years as percentages
An excess BAlance that is left in a BAnk to provide indirect compensation for loans
Complete capital market
A market in which there is a distinct marketable security for each and every
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