|Federal funds market|
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Definition of Federal funds market
Federal funds market
The market where banks can borrow or lend reserves, allowing banks temporarily
Mutual funds that do not charge an upfront or back-end commission, but instead take out up to
markets in which the prevailing price is determined through the free interaction of
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.
The beta of a fund is determined as follows:
The measure of a fund's or stocks risk in relation to the market. A beta of 0.7 means
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.
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.
Also called spot markets, these are markets that involve the immediate delivery of a security
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
Corner A Market
To purchase enough of the available supply of a commodity or stock in order to
Cost of funds
Interest rate associated with borrowing money.
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.
Dividend yield (Funds)
Indicated yield represents return on a share of a mutual fund held over the past 12
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
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.
EFT (electronic funds transfer)
funds which are electronically credited to your account (e.g. direct deposit), or electronically debited from your account on an ongoing basis (e.g. a pre-authorized monthly bill payment, or a monthly loan or mortgage payment). A wire transfer is a form of EFT.
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.
The financial markets of developing economies.
Investment funds established for the support of institutions such as colleges, private
Equilibrium market price of risk
The slope of the capital market line (CML). Since the CML represents the
The money market for borrowing and lending currencies that are held in the form of
Excess return on the market portfolio
The difference between the return on the market portfolio and the
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 agency securities
Securities issued by corporations and agencies created by the U.S. government,
Federal credit agencies
Agencies of the federal government set up to supply credit to various classes of
Federal Deposit Insurance Corporation (FDIC)
A federal institution that insures bank deposits.
Federal Employer Identification Number
A unique identification number issued
Federal Financing Bank
A federal institution that lends to a wide array of federal credit agencies funds it
Non-interest bearing deposits held in reserve for depository institutions at their district federal
Federal funds rate
This is the interest rate that banks with excess reserves at a federal Reserve district bank
Federal Funds Rate
The interest rate at which banks lend deposits at the federal Reserve to one another overnight.
Federal Home Loan Banks
The institutions that regulate and lend to savings and loan associations. The
Federal Insurance Contributions Act of 1935 (FICA)
A federal Act authorizing the government to collect Social Security and Medicare payroll taxes.
Federal Open Market Committee (FOMC)
Fed committee that makes decisions about open-market operations.
Federal Reserve Banks
The twelve district banks in the federal Reserve System.
Federal Reserve Board
Board of Governors of the federal Reserve System.
Federal Reserve System
The central bank of the U.S., established in 1913, and governed by the federal
Federal Reserve System
The central banking authority responsible for monetary policy in the United States.
Federal Reserve (the Fed)
The central bank in the United States, responsible for setting interest rates.
Federal Unemployment Tax Act (FUTA)
A federal Act requiring employers to pay a tax on the wages paid to their employees, which is then used to create a
Federally related institutions
Arms of the federal government that are exempt from SEC registration and
An organized institutional structure or mechanism for creating and exchanging financial assets.
markets in which financial assets are traded.
The market for trading bonds and preferred stock.
Foreign banking market
That portion of domestic bank loans supplied to foreigners for use abroad.
Foreign bond market
That portion of the domestic bond market that represents issues floated by foreign
Foreign equity market
That portion of the domestic equity market that represents issues floated by foreign companies.
Foreign Exchange Market
A worldwide market in which one country's currency is bought or sold in exchange for another country's currency.
Part of a nation's internal market, representing the mechanisms for issuing and trading
Foreign market beta
A measure of foreign market risk that is derived from the capital asset pricing model.
Forward Exchange Market
A market in which foreign exchange can be bought or sold for delivery (and payment) at some specified future date but at a price agreed upon now.
Forward Fed funds
Fed funds traded for future delivery.
A market in which participants agree to trade some commodity, security, or foreign
Direct trading in exchange-listed securities between investors without the use of a broker.
Freddie Mac (Federal Home Loan Mortgage Corporation)
A Congressionally chartered corporation that
Funds From Operations (FFO)
Used by real estate and other investment trusts to define the cash flow from
A market in which contracts for future delivery of a commodity or a security are bought or sold.
Purchases and sales of eurobonds that occur before the issue price is finally set.
Mutual funds that seek long-term capital growth. This type of fund invests primarily in equity securities.
Mutual funds that seek regular income. This type of fund invests primarily in government, corporate and other types of bonds, debt securities, and other income producing securities and in certain circumstances can also hold common and preferred shares.
Index and Option Market (IOM)
A division of the CME established in 1982 for trading stock index
Mutual funds that aim to track the performance of a specific stock or bond index. This process is also referred to as indexing and passive management.
spread The spread between the interest rate offered in two sectors of the bond market for
Intermarket spread swaps
An exchange of one bond for another based on the manager's projection of a
The mechanisms for issuing and trading securities within a nation, including its domestic
Internally efficient market
Operationally efficient market.
internally generated funds
Cash reinvested in the firm; depreciation plus earnings not paid out as dividends.
Related: See external market.
International Monetary Market (IMM)
A division of the CME established in 1972 for trading financial
Intramarket sector spread
The spread between two issues of the same maturity within a market sector. For
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