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Definition of Euroclear
One of two principal clearing systems in the Eurobond market. It began operations in 1968, is
A Bank machine, sometimes referred to as an automated teller machine (ATM).
Cash flow provided by operating
A form of organization commonly used by foreign Banks to enter the U.S. market. An agency
Requirement that nOne of an order be executed unless all of it can be executed at the specified price.
An arrangement whereby a security issue is canceled if the underwriter is unable
An option is at-the-mOney if the strike price of the option is equal to the market price of the
markets in which the prevailing price is determined through the free interaction of
A collection of 32 regional electronic interBank networks used to
A Banking clearinghouse that processes direct
Notes issued by states and municipalities to obtain interim financing for
MOney in a Bank cheque account, the difference between receipts and payments.
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.
A convention used for quoting bids and offers for treasury bills in terms of annualized
A draft addressed to a Bank.
A guaranteed form of payment which is issued in amounts over $5,000.
Bank for International Settlements (BIS)
An international Bank headquartered in Basel, Switzerland, which
Line of credit granted by a Bank to a customer.
MOney owed to the Bank in a cheque account where payments exceed receipts.
The process of taking the balances from the Bank statement and the general ledger and making adjustments so that they agree.
A comparison between the cash position recorded on a company’s
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
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.
State of being unable to pay debts. Thus, the ownership of the firm's assets is transferred from
The reorganization or liquidation of a firm that cannot pay its debts.
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
Any market in which prices are in a declining trend.
A market in which stock or bond prices are generally
A prolonged period of falling stock market prices.
An illegal market.
A market where an intermediary offers search services to buyers and sellers.
Any market in which prices are in an upward trend.
A market in which stock or bond prices are generally rising.
A prolonged period of rising stock market prices.
The foreign market in the United Kingdom.
Call money rate
Also called the broker loan rate , the interest rate that Banks charge brokers to finance
The market for trading long-term debt instruments (those that mature in more than One year).
The market in which investors buy and sell shares of companies, normally associated with a Stock Exchange.
A market that specializes in trading long-term, relatively high risk
The market in which savings are made available to those needing funds to undertake investment projects. A financial market in which longer-term (maturity greater than One year) bonds and stocks are traded.
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.
markets for long-term financing.
Cash flow from operations
A firm's net cash inflow resulting directly from its regular operations
CASH FLOWS FROM OPERATIONS
A section on the cash-flow Stockholders’ equity statement that shows how much cash came into a company and how much went out during the normal course of business.
Also called spot markets, these are markets that involve the immediate delivery of a security
A public agency responsible for regulating and controlling an economy's mOnetary and financial institutions. It is the sole mOney-issuing authority.
Clearing House Automated Payments System (CHAPS)
A computerized clearing system for sterling funds
Clearing house / Clearinghouse
An adjunct to a futures exchange through which transactions executed its floor are settled by a
Clearing House Interbank Payments System (CHIPS)
An international wire transfer system for high-value
A member firm of a clearing house. Each clearing member must also be a member of the
A privately owned, profit-seeking firm that accepts deposits and makes loans.
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.
Complete capital market
A market in which there is a distinct marketable security for each and every
Raw materials or subassemblies used to make either finished goods
System whereby customers make payments to a regional collection center which transfers funds to
A merchant Banking subsidiary set up by several Banks that may or may not be of the
A Eurobond that can be converted into another asset, often through exercise of
Corner A Market
To purchase enough of the available supply of a commodity or stock in order to
A market where traders specializing in particular commodities buy and sell assets for their
The market for trading debt instruments.
markets for derivative instruments.
Direct search market
Buyers and sellers seek each other directly and transact directly.
Net income and the gain or loss on disposal of a business segment whose assets and operations are clearly distinguishable from the other assets and operations of an entity.
DLOM (discount for lack of marketability)
an amount or percentage deducted from an equity interest to reflect lack of marketability.
Part of a nation's internal market representing the mechanisms for issuing and trading
Dow Jones industrial average
This is the best known U.S.index of stocks. It contains 30 stocks that trade on
Dow Jones Industrial Average
Index of the investment performance of a portfolio of 30 “blue-chip” stocks.
economic components model
Abrams’ model for calculating DLOM based on the interaction of discounts from four economic compOnents.
Efficient capital market
A market in which new information is very quickly reflected accurately in share
efficient capital markets
Financial markets in which security prices rapidly reflect all relevant information about asset values.
Efficient Market Hypothesis
In general the hypothesis states that all relevant information is fully and
Efficient Markets Hypothesis
The hypothesis that securities are typically in equilibrium--that they are fairly priced in the sense that the price reflects all publicly available information on the security.
In the interBank Eurodollar deposit market, an either-way market is One in which the bid
Electronic Federal Tax Payment Systems (EFTPS)
An electronic funds transfer system used by businesses to remit taxes to the government.
Eligible bankers' acceptances
In the BA market, an acceptance may be referred to as eligible because it is
The financial markets of developing economies.
Equilibrium market price of risk
The slope of the capital market line (CML). Since the CML represents the
A Bank that regularly accepts foreign currency denominated deposits and makes foreign currency loans.
A bond that is (1) underwritten by an international syndicate, (2) offered at issuance
A debt security issued in a market other than the home market of
Bond that is marketed internationally.
The mOney market for borrowing and lending currencies that are held in the form of
European Monetary System (EMS)
An exchange arrangement formed in 1979 that involves the currencies
Excess return on the market portfolio
The difference between the return on the market portfolio and the
Export-Import Bank (Ex-Im Bank)
The U.S. federal government agency that extends trade credits to U.S.
Also referred to as the international market, the offshore market, or, more popularly, the
Fair market price
Amount at which an asset would change hands between two parties, both having
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.
Farm Improvement and Marketing Cooperatives Loans Act
Federal Financing Bank
A federal institution that lends to a wide array of federal credit agencies funds it
Federal funds market
The market where Banks can borrow or lend reserves, allowing Banks temporarily
Federal Home Loan Banks
The institutions that regulate and lend to savings and loan associations. The
Federal Open Market Committee (FOMC)
Fed committee that makes decisions about open-market operations.
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