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Definition of Factor
A financial institution that buys a firm's accounts receivables and collects the debt.
An agent who buys and sells goods on behalf of others for a commission.
the present value of a finite stream of cash flows for every beginning $1 of cash flow.
The pool factor implied by the scheduled amortization assuming no prepayemts.
Present value of $1 paid for each of t periods.
Present value of an annuity of $1 per period.
Rules set by the Chicago Board of Trade for determining the invoice price of each
any item (such as quality, customer
Present value of $1 received at a stated future date.
Present value of a $1 future payment.
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 resource used to produce a good or service. The main macroeconomic factors of production are capital and labor.
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.
The sale of accounts receivable to a third party, with the third party bearing
The discounting, or sale at a discount, of receivables on a nonrecourse, notification
Type of financial service whereby a firm sells or transfers title to its accounts receivable to a factoring company, which then acts as principal, not as agent.
All the costs incurred during the manufacturing process, minus the
Numbers found in compound interest and annuity tables. Usually called the FVIF or PVIF.
The production resource that, as a result of scarce resources, limits the production of goods
factoring arrangement that provides collection and insurance of accounts receivable.
A version of the capital asset pricing model derived by Merton that includes extramarket
Net benefit to leverage factor
A linear approximation of a factor, T*, that enables one to operationalize the
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
The outstanding principal balance divided by the original principal balance with the result
PPF (periodic perpetuity factor)
a generalization formula invented by Abrams that is the present value of regular but noncontiguous cash flows that have constant growth to perpetuity.
Present value factor
factor used to calculate an estimate of the present value of an amount to be received in
The pool factor as reported by the bond buyer for a given amortization period.
An anticipated loss percentage included in the bill of material and
The expected loss of some proportion of an item during the
Single factor model
A model of security returns that acknowledges only one common factor.
Black's zero-beta version of the capital asset pricing model.
an increase in units or volume caused by the addition
A measure of selection risk (also known as residual risk) of a mutual fund in relation to the market. A
Income payments to factors of production are spent to buy output. The receipts from these sales are used to pay factors of production, creating a circular flow of income.
The relationship between consumption demand and disposable income. More generally, it refers to the relationship between consumption demand and all factors that affect this demand.
This is the principle which specifies the factors that must be taken into account when calculating dividends. At Canada Life, the key factors are: interest earnings, mortality, and operating expense.
a factor that has a direct cause-effect relationship
A factor that directly impacts the incidence of a cost, and which is generally
degree of operating leverage
a factor that indicates how a percentage change in sales, from the existing or current
Discounted cash flow (DCF)
Future cash flows multiplied by discount factors to obtain present values.
A factor that has a direct impact on the incurring of a cost. For example, adding
a measure of the degree to which tasks were performed
any limitation on strategy options
Expectations hypothesis theories
Theories of the term structure of interest rates which include the pure
extraordinary gains and losses
No pun intended, but these types of gains
flexible manufacturing system (FMS)
a production system in which a single factory manufactures numerous variations
Force majeure risk
The risk that there will be an interruption of operations for a prolonged period after a
The future interest rate of a bond inferred from the term
fractional interest discount
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.
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.
For an option, the variance that makes a call option price
a process of evaluating changes that
A model of stock returns using a market index such as the S&P 500 to represent common or
The fact that future inflation rates are not known. It is a possible contributing factor to
A shortfall between inventory based on actual physical counts and inventory
a critical factor that management believes will
a method of mathematical programming used to solve a problem that involves an objective function and multiple limiting factors or constraints long-term variable cost a cost that was traditionally viewed as a fixed cost
Manufactured housing securities (MHSs)
Loans on manufactured homes - that is, factory-built or
A modification of standard duration to account for the impact on duration of MBSs of
Nonmarket or firm-specific risk factors that can be eliminated by diversification. Also
Changes in employment give rise to greater-than-proportional changes in output, by a factor of about 2.5.
The amount of money the company must spend on overhead, distribution, taxes, underwriting the risk and servicing the policy. It is a factor in calculating premium rates.
any factory or production cost that is indirect to
Performance attribution analysis
The decomposition of a money manager's performance results to explain
As non-smoking rates caused a major reduction in the cost of life insurance in the early 1980's, the emergence of preferred non-smoker rates in 1998 has caused another noteworthy reduction in rates. A growing number of insurance companies are offering better rates which go beyond simply looking at gender or smoking habits. Other health related factors such as physical build, lifestyle, avocation and personal and family health history indicating longer life expectancy can add up to significant cost savings to new life insurance applicants. Make certain to ask about these new preferred rates.
This is a key factor in the profit model of a business. Product
Periodic payments to a supplier, contractor or subcontractor for work satisfactorily performed to date.
A legal document that must be filed with securities regulators in order to distribute securities, including mutual funds. Mutual fund dealers are required by law to distribute this document to investors before the purchase of any units. It contains all key information, such as investment objectives and strategies, risk factors and financial highlights.
PV (present value of cash flows)
the value in today’s dollars of cash flows that occur in different time periods.
Costs associated with restructuring activities, including the consolidation and/or relocation of operations or the disposition or abandonment of operations or productive assets.
A key input to a firm's financial planning process. External sales forecasts are based on
Security market line
Line representing the relationship between expected return and market risk.
The extent of influence of an investor over the operating and financial
Single index model
A model of stock returns that decomposes influences on returns into a systematic factor,
Technical condition of a market
Demand and supply factors affecting price, in particular the net position,
An indexing strategy that is linked to active management through the emphasis of a
Risk factors affecting only that firm. Also called diversifiable risk.
Expenses that vary in close proportion to changes
Weighted average coupon
The weighted average of the gross interest rate of the mortgages underlying the
Weighted average maturity
The WAM of a MBS is the weighted average of the remaining terms to maturity
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