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Definition of Give up
The loss in yield that occurs when a block of bonds is swapped for another block of lower-coupon
give up certain rights under a policy, or give up the policy itself.
Total quantity of goods and services supplied.
Combinations of price level and income for which the labor market is in equilibrium. The short-run aggregate supply curve incorporates information and price/wage inflexibilities in the labor market, whereas the long-run aggregate supply curve does not.
1) When bond yields and prices fall, the market is said to back-up.
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.
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
A management style that de-emphasizes the significance of economic
The periodic interest payment made to the bondholders during the life of the bond.
Detachable certificate attached to a bond that shows the amount of
The interest payments paid to the bondholder.
The annual interest payment associated with a bond.
Any bond with a coupon. Contrast with discount bond.
Coupon / Coupons
The periodic interest payment(s) made by the issuer of a bond
The dates when the coupons are paid. Typically a bond pays
Coupon equivalent yield
True interest cost expressed on the basis of a 365-day year.
A bond's interest payments.
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.
A bond selling at or close to par, that is, a bond with a coupon close to the yields currently
Related: Benchmark issues
Dupont system of financial control
Highlights the fact that return on assets (ROA) can be expressed in terms
equivalent units of production (EUP)
an approximation of the number of whole units of output that could have been
Buying or selling to offset an existing market position.
A situation in which supply exceeds demand.
The amount of securities believed to be available for immediate purchase, that is, in the
Foreign Corrupt Practices Act (FCPA)
a law passed by U.S. Congress in 1977 that makes it illegal for a U.S. company to engage in various “questionable” foreign payments and
Full coupon bond
A bond with a coupon equal to the going market rate, thereby, the bond is selling at par.
Group Life Insurance
This is a very common form of life insurance which is found in employee benefit plans and bank mortgage insurance. In employee benefit plans the form of this insurance is usually one year renewable term insurance. The cost of this coverage is based on the average age of everyone in the group. Therefore a group of young people would have inexpensive rates and an older group would have more expensive rates.
Group of five (G5/G-5)
The five leading countries (France, Germany, Japan, United Kingdom, and the U.S.) that
Group of seven (G7/G-7)
The G-5 countries plus Canada and Italy.
Group rotation manager
A top-down manager who infers the phases of the business cycle and allocates
High-coupon bond refunding
Refunding of a high-coupon bond with a new, lower coupon bond.
A legal proceeding for liquidating or reorganizing a business.
Bond with a stream of coupon payments that are the same throughout the life of the bond.
CDs that are issued with the tacit understanding that the buyer will not trade the certificate.
1) Bonds or notes with a long current maturity.
1) Bonds or notes with a long current maturity.
Low-coupon bond refunding
Refunding of a low coupon bond with a new, higher coupon bond.
The amount added to a lower figure to reach a higher figure, expressed as a percentage of the
the period after an announcement of a takeover bid in which stock prices typically rise until a merger or acquisition is made (or until it falls through).
An increase in the cost of a product to arrive at its selling price.
M1-A: Currency plus demand deposits
The cost of the supplies used in running an office.
A type of insurance policy or annuity in which the owner receives dividends, typically increases the death.
That part of the issued capital of a company that has been paid up by the shareholders.
Pass-through coupon rate
The interest rate paid on a securitized pool of assets, which is less than the rate
The loss of cash resulting from a swap into higher price bonds or the need/willingness of a bank or
The gain in yield that occurs when a block of bonds is swapped for another block of higher-coupon bonds.
A bankruptcy in which a debtor and its creditors pre-negotiate a plan or
Pure yield pickup swap
Moving to higher yield bonds.
Raw material supply agreement
As used in connection with project financing, an agreement to furnish a
Real Money Supply
Money supply expressed in base-year dollars, calculated by dividing the money supply by a price index.
the period before a formal announcement of a takeover bid in which one or more bidders are either preparing to make an announcement or speculating that someone else will.
All banks involved in selling or marketing a new issue of stock or bonds
The time required to make ready a machine or process for production, e.g. changing equipment
the direct or indirect cost of getting equipment
The cluster of one-time costs incurred whenever a production batch is run,
Costs related to such onetime activities as opening a new facility, introducing
To increase, as in step up the tax basis of an asset.
A bond that pays a lower coupon rate for an initial period which then increases to a higher
Provision in a company's charter requiring a majority of, say, 80% of shareholders to approve
Period of delay allowed by a firm's supplier to pay its invoices. Frequently, the terms are : 2% discount on invoice if paid in 10 days or net if paid in 30 days.
An amount deducted from an invoice by a supplier in exchange for quick payment (a typical example might be a 2% discount if paid in 10 days or the full amount of the invoice in 30 days).
General supplies used throughout a company and expensed at the time
An amount made available for sale, always associated with a given price.
the cooperative strategic planning,
n event that influences production capacity and costs in an economy.
View that incentives to work, save, and invest play an important role in determining economic activity by affecting the supply side of the economy.
A price level below which it is supposedly difficult for a security or market to fall.
A fee paid to an underwriter in connection with an underwritten rights offering or an
Uniform Interstate Family Support Act
A federal Act specifying which jurisdiction
A network of trading desks for the major brokerage firms and institutional investors that
A term used to describe a transaction that took place at a higher price than the preceding transaction
New muni bond issues scheduled to come to market within the next 30 days.
Weighted average coupon
The weighted average of the gross interest rate of the mortgages underlying the
Zero coupon bond
Such a debt security pays an investor no interest. It is sold at a discount to its face price
A bond in which no periodic coupon is paid over the life of the contract. Instead, both the
A security that makes no interest payments; it is sold at a discount
See discount bond.
Zero-coupon bond, or Zero
A bond that, instead of carrying a coupon, is sold
Zero curve, zero-coupon yield curve
A yield curve for zero-coupon bonds;
Related: tick-test rules.
Advance material request
Very early orders for materials before the completion
Back To Back Annuity
This term refers to the simultaneous issue of a life annuity with a non-guaranteed period and a guaranteed life insurance policy [usually whole life or term to 100]. The face value of the life insurance would be the same amount that was used to purchase the annuity. This combination of life annuity providing the highest payout of all types of annuities, along with a guaranteed life insurance policy allowed an uninsurable person to convert his/her RRSP into the best choice of annuity and guarantee that upon his/her death, the full value of the annuity would be paid tax free through the life insurance policy to his family members. However, in the early 1990's, the Federal tax authorities put a stop to the issuing of standard life rates to rated or uninsurable applicants. Insuring a life annuity in this manner is still an excellent way to provide guaranteed tax free funds to family members but the application for the annuity and the application for the life insurance are separate transactions and today, most likely conducted through two different insurance companies so that there is no suspicion of preferential treatment given to the life insurance application.
This is the person who benefits from the terms of a trust, a will, an RRSP, a RRIF, a LIF, an annuity or a life insurance policy. In relation to RRSP's, RRIF's, LIF's, Annuities and of course life insurance, if the beneficiary is a spouse, parent, offspring or grand-child, they are considered to be a preferred beneficiary. If the insured has named a preferred beneficiary, the death benefit is invariably protected from creditors. There have been some court challenges of this right of protection but so far they have been unsuccessful. See "Creditor Protection" below. A beneficiary under the age of 18 must be represented by an individual guardian over the age of 18 or a public official who represents minors generally. A policy owner may, in the designation of a beneficiary, appoint someone to act as trustee for a minor. Death benefits are not subject to income taxes. If you make your beneficiary your estate, the death benefit will be included in your assets for probate. Probate filing fees are currently $14 per thousand of estate value in British Columbia and $15 per thousand of estate value in Ontario.
An automatic system for revising the exchange rate. It involves establishing a par value around
An unemployed person who gives up looking for work and so is no longer counted as in the labor force.
given the after-tax stream associated with a lease, the maximum amount of conventional
Full Credit Period
The period of trade credit given by a supplier to its customer.
The average number of years of life remaining for a group of people of a given age and gender according to a particular mortality table.
Commonly sold in the form of reducing term life insurance by lending institutions, this is life insurance with a death benefit reducing to zero over a specific period of time, usually 20 to 25 years. In most instances, the cost of coverage remains level, while the death benefit continues to decline. Re-stated, the cost of this kind of insurance is actually increasing since less death benefit is paid as the outstanding mortgage balance decreases while the cost remains the same. Lending institutions are the most popular sources for this kind of coverage because it is usually sold during the purchase of a new mortgage. The untrained institution mortgage sales person often gives the impression that this is the only place mortgage insurance can be purchased but it is more efficiently purchased at a lower cost and with more flexibility, directly from traditional life insurance companies. No matter where it is purchased, the reducing term insurance death benefit reduces over a set period of years. Most consumers are up-sizing their residences, not down-sizing, so it is likely that more coverage is required as years pass, rather than less coverage.
opportunity cost of capital
Expected rate of return given up by investing in a project.
The difference in the performance of an actual investment and a desired investment
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