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Definition of Floater
Floating rate bond.
Floating rate bond that can be sold back periodically to the issuer.
Schedule of depreciation rates allowed for tax purposes.
Any depreciation method that produces larger deductions for depreciation in the
(1) The estimated useful life of the fixed asset being depreciated is
Any of several methods that recognize an increased amount
A method of investment appraisal that measures
the rate of earnings obtained on the average capital investment over the life of a capital project; computed as average annual profits divided by average investment; not based on cash flow
A bond on which interest accrues, but is not paid to the investor during the time of accrual.
A strategy that uses available information and forecasting techniques to seek a
Publicly traded issues that may be collateralized by mortgages and MBSs.
Money after-tax rate of return minus the inflation rate.
The discount rate that reflects only the business risks of a project and abstracts from the
Swap in which the principal or national amount rises (falls) as interest rates
The periodic rate times the number of periods in a year. For example, a 5%
Interest rate that is annualized using simple interest.
Arithmetic average (mean) rate of return
Arithmetic mean return.
Auction rate preferred stock (ARPS)
Floating rate preferred stock, the dividend on which is adjusted every
Average rate of return (ARR)
The ratio of the average cash inflow to the amount invested.
Average tax rate
Taxes as a fraction of income; total taxes divided by total taxable income.
average tax rate
Total taxes owed divided by total income.
A strategy in which the maturities of the securities included in the portfolio are concentrated
Base interest rate
Related: Benchmark interest rate.
Basic business strategies
Key strategies a firm intends to pursue in carrying out its business plan.
bonds that are not registered on the books of the issuer. Such bonds are held in physical form by
Benchmark interest rate
Also called the base interest rate, it is the minimum interest rate investors will
Blue Ribbon Committee on Improving the Effectiveness of Corporate Audit Committees
A committee formed in response to SEC chairman Arthur Levitt's initiative to improve the financial
bonds are debt and are issued for a period of more than one year. The U.S. government, local
A long-term, interest-bearing promissory note that companies may use to borrow money for periods of time such as five, ten, or twenty years.
A long-term debt instrument in which the issuer (borrower) is
Security that obligates the issuer to make specified payments
A financial asset taking the form of a promise by a borrower to repay a specified amount (the bond's face value) on a maturity date and to make fixed periodic interest payments.
Usually a fixed interest security under which the issuer contracts to pay the lender a fixed principal amount at a stated date in the future, and a series of interest payments, either semi-annually or annually. Interest payments may vary through the life of bond.
A debt security issued by a government or company. You receive regular interest payments at specified rates while you hold the bond and you receive the face value when it matures. Short-term bonds mature in less than five years; medium-term bonds mature in six to ten years; and long-term bonds mature in eleven years or greater.
Fixed interest security issued by a corporation or government, having a specific maturity date.
A contract for privately placed debt.
A contractual provision in a bond indenture. A positive covenant requires certain actions, and
The method used for computing the bond-equivalent yield.
Bond equivalent yield
bond yield calculated on an annual percentage rate method. Differs from annual
The annualized yield to maturity computed by doubling the semiannual yield.
Bond Equivalent Yield
bond yield calculated on an annual percentage rate method
The contract that sets forth the promises of a corporate bond issuer and the rights of
Designing a portfolio so that its performance will match the performance of some bond index.
A conventional unit of measure for bond prices set at $10 and equivalent to 1% of the $100 face
With respect to convertible bonds, the value the security would have if it were not convertible
A system that monitors and evaluates the performance of a fixed-income portfolio , as well as the
Amounts owed by the company that have been formalized by a legal document called a bond.
book rate of return
Accounting income divided by book value.
bonds issued by emerging countries under a debt reduction plan.
Break-even payment rate
The prepayment rate of a MBS coupon that will produce the same CFY as that of
Break-even tax rate
The tax rate at which a party to a prospective transaction is indifferent between entering
Broker loan rate
Related: Call money rate.
bond whose principal repayment is linked to the price of another security. The bonds are
Foreign bond issue made in London.
A strategy in which a portfolio is constructed so that the maturities of its securities are highly
A passive investment strategy with no active buying and selling of stocks from the
Call money rate
Also called the broker loan rate , the interest rate that banks charge brokers to finance
A bond that allows the issuer to buy back the bond at a
bond that may be repurchased by the issuer before maturity at specified call price.
Canada Savings Bonds
A bond issued each year by the federal government. These bonds can be cashed in at any time for their full face value.
A discount rate used to find the present value of a series of future cash receipts. Sometimes called discount rate.
cash burn rate
A relatively recent term that refers to how fast a business
Collateral trust bonds
A bond in which the issuer (often a holding company) grants investors a lien on
A strategy in which a put and with the same strike price and expiration are either both
a foundation for the compensation plan that addresses the role compensation should play in the organization
Insurance that a construction contract will be successfully completed.
computer integrated manufacturing (CIM)
the integration of two or more flexible manufacturing systems through the use of a host computer and an information networking system
Conflict between bondholders and stockholders
These two groups may have interests in a corporation that
an organizational strategy in which company management decides to confront, rather than avoid, competition; an organizational strategy in which company management still attempts to differentiate company
A firm engaged in two or more unrelated businesses.
A merger involving two or more firms that are in unrelated businesses.
The percentage tax charged by a state to an employer to
bond that the holder may exchange for a specified number of shares.
bonds that can be converted into common stock at the option of the holder.
A eurobond that can be converted into another asset, often through exercise of
The acquisition of one firm by anther firm.
Debt obligations issued by corporations.
A legal document creating a corporation.
One of the three areas of the discipline of finance. It deals with the operation of the firm
Corporate financial management
The application of financial principals within a corporation to create and
Corporate financial planning
Financial planning conducted by a firm that encompasses preparation of both
Corporate processing float
The time that elapses between receipt of payment from a customer and the
Corporate tax view
The argument that double (corporate and individual) taxation of equity returns makes
Corporate taxable equivalent
rate of return required on a par bond to produce the same after-tax yield to
cost leadership strategy
a plan to achieve the position in a
Any bond with a coupon. Contrast with discount bond.
In bonds, notes or other fixed income securities, the stated percentage rate of interest, usually
The rate of interest paid on a debt security. Generally stated on an
The nominal interest rate that the issuer promises to pay the
Annual interest payment as a percentage of face value.
Covered call writing strategy
A strategy that involves writing a call option on securities that the investor
Covered or hedge option strategies
Strategies that involve a position in an option as well as a position in the
The interest rate offered on an investment type insurance policy.
The exchange rate between two currencies expressed as the ratio of two foreign exchange rates
The return at which two alternative projects have the same net present value.
Current rate method
Under this currency translation method, all foreign currency balance-sheet and income
High-coupon bonds that sell at only at a moderate premium because they are callable at a
An unsecured bond whose holder has the claim of a general creditor on all assets of the
Refers to multi-period cash flow matching.
A bond issued with a very low coupon or no coupon and selling at a price far below par
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