|Employee Retirement Income Security Act of 1974 (ERISA)
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Definition of Employee Retirement Income Security Act of 1974 (ERISA)
Employee Retirement Income Security Act of 1974 (ERISA)
A federal act that sets minimum operational and funding standards for employee benefit
the present value of a finite stream of cash flows for every beginning $1 of cash flow.
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.
a generalization formula invented by Abrams that is the present value of regular but noncontiguous cash flows that have constant growth to perpetuity.
This doctrine says that a nation is sovereign within its own borders and its domestic
A market in which there is much trading.
A strategy that uses available information and forecasting techniques to seek a
The physical commodity underlying a futures contract. Cash commodity, physical.
The pool factor implied by the scheduled amortization assuming no prepayemts.
Present value of $1 paid for each of t periods.
Ratios that measure how effectively the firm is managing its assets.
A security that is collateralized by loans, leases, receivables, or installment contracts
A guaranteed investment contract purchased with a single (one-shot) premium. Related:
Futures contracts, such as stock index futures, that settle for cash, not involving
A transaction where exchange is immediate, as contrasted to a forward contract, which
The market model applied to a single security. The slope of the line is a security's beta.
The percentage of a given month's sales collected during the month of sale and each
Conditional sales contracts
Similar to equipment trust certificates except that the lender is either the
A term of reference describing a unit of trading for a financial or commodity future. Also, the actual
The month in which futures contracts may be satisfied by making or accepting a delivery.
Rules set by the Chicago Board of Trade for determining the invoice price of each
A security that can be converted into common stock at the option of the security holder,
Existing in actual fact although not by official recognition.
A financial security, such as an option, or future, whose value is derived in part from the
Present value of $1 received at a stated future date.
Cash flow plus change in present value.
Employee stock fund
A firm-sponsored program that enables employees to purchase shares of the firm's
Employee stock ownership plan (ESOP)
A company contributes to a trust fund that buys stock on behalf of
A bond portfolio management strategy that involves finding the lowest cost portfolio
security that grants the security holder the right to exchange the security for the
A financial institution that buys a firm's accounts receivables and collects the debt.
A statistical procedure that seeks to explain a certain phenomenon, such as the return on a
A way of decomposing the factors that influence a security's rate of return into common and
A well-diversified portfolio constructed to have a beta of 1.0 on one factor and a beta of
Sale of a firm's accounts receivable to a financial institution known as a factor.
A nonnegotiable debt security that can be redeemed at some fixed price or according to
Also called a busted convertible, a convertible security that is trading like a straight
Assets that pay a fixed-dollar amount, such as bonds and preferred stock.
The market for trading bonds and preferred stock.
A guaranteed investment contract where the credit rating is tied to some variable
A cash market transaction in which delivery of the commodity is deferred until after the
Forward forward contract
In Eurocurrencies, a contract under which a deposit of fixed maturity is agreed to
Agreement to buy or sell a set number of shares of a specific stock in a designated future
Futures contract multiple
A constant, set by an exchange, which when multiplied by the futures price gives
A 1933 act in which Congress forbade commercial banks to own, underwrite, or deal in
Publicly owned stock in a firm is replaced with complete equity ownership by a
Guaranteed insurance contract
A contract promising a stated nominal interest rate over some specific time
Guaranteed investment contract (GIC)
A pure investment product in which a life company agrees, for a
A contract that obligates a purchaser of a project's output to make cash
Highly leveraged transaction (HLT)
Bank loan to a highly leveraged firm.
The security to which a warrant is attached.
A convertible security whose optioned common stock is trading in a middle range, causing
One who receives income from a trust.
A bond on which the payment of interest is contingent on sufficient earnings. These bonds are
A mutual fund providing for liberal current income from investments.
Income statement (statement of operations)
A statement showing the revenues, expenses, and income (the
Common stock with a high dividend yield and few profitable investment opportunities.
Transaction carried out between two units of the same corporation.
The revenue from a portfolio of invested assets.
Manufactured housing securities (MHSs)
Loans on manufactured homes - that is, factory-built or
Market impact costs
Also called price impact costs, the result of a bid/ask spread and a dealer's price concession.
Factoring arrangement that provides collection and insurance of accounts receivable.
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
Most distant futures contract
When several futures contracts are considered, the contract settling last.
A version of the capital asset pricing model derived by Merton that includes extramarket
Nearby futures contract
When several futures contracts are considered, the contract with the closest
Net benefit to leverage factor
A linear approximation of a factor, T*, that enables one to operationalize the
The company's total earnings, reflecting revenues adjusted for costs of doing business,
Next futures contract
The contract settling immediately after the nearby futures contract.
Nexus (of contracts)
A set or collection of something.
Factoring arrangement that provides collection, insurance, and finance for accounts receivable.
A special case of the arbitrage pricing theory that is derived from the one-factor model by
Contracts which have been bought or sold without the transaction having been completed by
The contract that balances the three types of agency costs (contracting, monitoring, and
A contract that, in exchange for the option price, gives the option buyer the right, but not
Options contract multiple
A constant, set at $100, which when multiplied by the cash index value gives the
The supposition that investors overreact to unanticipated news, resulting in
The outstanding principal balance divided by the original principal balance with the result
Present value factor
Factor used to calculate an estimate of the present value of an amount to be received in
Price impact costs
Related: market impact costs
An instrument such as a stock or bond for which payments depend only on the financial
A decline in prices following an advance. Opposite of rally.
Receivables balance fractions
The percentage of a month's sales that remain uncollected (and part of
The pool factor as reported by the bond buyer for a given amortization period.
Round-trip transactions costs
Costs of completing a transaction, including commissions, market impact
Piece of paper that proves ownership of stocks, bonds and other investments.
Security characteristic line
A plot of the excess return on a security over the risk-free rate as a function of
Security deposit (initial)
Synonymous with the term margin. A cash amount of funds that must be deposited
Security deposit (maintenance)
Related: Maintenance margin security market line (SML). A description of
Security market line
Line representing the relationship between expected return and market risk.
Security selection decision
Choosing the particular securities to include in a portfolio.
Set of contracts perspective
View of corporation as a set of contracting relationships, among individuals
Short-run operating activities
Events and decisions concerning the short-term finance of a firm, such as
Single factor model
A model of security returns that acknowledges only one common factor.
Also called margin income, the difference between income and cost. For a depository
Structured arbitrage transaction
A self-funding, self-hedged series of transactions that usually utilize
Tactical Asset Allocation (TAA)
An asset allocation strategy that allows active departures from the normal
A contract that obligates the purchaser to take any product that is offered to it (and pay
Tax Reform Act of 1986
A 1986 law involving a major overhaul of the U.S. tax code.
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