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Definition of GNMA Midget
A gnma pass-through certificate backed by fixed rate mortgages with a 15 year maturity.
Mortgage-backed securities (MBS) on which registered holders receive separate principal and
Mortgage-backed securities (MBS) on which registered holders receive an aggregate principal and
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
The number of days it would take to pay the ending balance
The number of days it would take to collect the ending
The accumulated coupon interest earned but not yet paid to the seller of a bond by the
The amount of interest accumulated on a debt security between
The amount of interest owing but not paid.
The sum of cash, accounts receivable, and short-term marketable
A strategy that uses available information and forecasting techniques to seek a
Adjustable rate preferred stock (ARPS)
Publicly traded issues that may be collateralized by mortgages and MBSs.
After-tax real rate of return
Money after-tax rate of return minus the inflation rate.
mortgage pass-through securities whose Principal and interest payments are
The decision-maker in a Principal-agent relationship.
one who represents Canada Life when providing services to clients
Total quantity of goods and services demanded.
Aggregate Demand Curve
Combinations of the price level and income for which the goods and services market is in equilibrium, or for which both the goods and services market and the money market are in equilibrium.
Aggregate Expenditure Curve
aggregate demand for goods and services drawn as a function of the level of national income.
A budgeting process using summary-level information to
Aggregate Production Function
An equation determining aggregate output as a function of aggregate inputs such as labor and capital.
Total quantity of goods and services supplied.
Aggregate Supply Curve
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.
All equity rate
The discount rate that reflects only the business risks of a project and abstracts from the
Total costs, explicit and implicit.
All or none
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
assign based on the use of a cost driver, a cost predictor,
the systematic assignment of an amount to a recipient
The process of storing costs in one account and shifting them to other
Allocation base A measure of activity or volume such as labour
hours, machine hours or volume of production
Allowance for bad debts
An offset to the accounts receivable balance, against which
Allowance for doubtful accounts
A contra account related to accounts receivable that represents the amounts that the company expects will not be collected.
Allowance for Doubtful Accounts
An estimate of the uncollectible portion of accounts receivable
A method of adjusting accounts receivable to the amount that is expected to be collected based on company experience.
Alternative mortgage instruments
Variations of mortgage instruments such as adjustable-rate and variablerate
Amortizing interest rate swap
Swap in which the Principal or national amount rises (falls) as interest rates
Annual percentage rate (APR)
The periodic rate times the number of periods in a year. For example, a 5%
annual percentage rate (APR)
interest rate that is annualized using simple interest.
Annual percentage yield (APY)
The effective, or true, annual rate of return. The APY is the rate actually
approximated net realizable value at split-off allocation
a method of allocating joint cost to joint products using a
Arithmetic average (mean) rate of return
Arithmetic mean return.
Asset allocation decision
The decision regarding how an institution's funds should be distributed among the
Bond or note secured by assets of company.
A security that is collateralized by loans, leases, receivables, or installment contracts
An option is at-the-money if the strike price of the option is equal to the market price of the
attribute-based costing (ABC II)
an extension of activitybased costing using cost-benefit analysis (based on increased customer utility) to choose the product attribute
Auction rate preferred stock (ARPS)
Floating rate preferred stock, the dividend on which is adjusted every
Automatic Benefits Payment
Automatic payment of moneys derived from a benefit.
Average (across-day) measures
An estimation of price that uses the average or representative price of a
Average collection period, or days' receivables
The ratio of accounts receivables to sales, or the total
The average time to maturity of securities held by a mutual fund. Changes in interest rates
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.
Balance of payments
A statistical compilation formulated by a sovereign nation of all economic transactions
Balance of Payments
The difference between the demand for and supply of a country's currency on the foreign exchange market.
Balance of Payments Accounts
A statement of a country's transactions with other countries.
Any large Principal payment due at maturity for a bond or loan with or without a a sinking
A strategy in which the maturities of the securities included in the portfolio are concentrated
Base interest rate
Related: Benchmark interest rate.
The reference year when constructing a price index. By tradition it is given the value 100.
Basic business strategies
Key strategies a firm intends to pursue in carrying out its business plan.
In the bond market, the smallest measure used for quoting yields is a basis point. each percentage
one one-hundredth of one percent
one hundredth of one percentage point, or 0.0001.
one one-hundredth of a percentage point, used to express variations in yields. For example, the difference between 5.36 percent and 5.38 percent is 2 basis points.
Benchmark interest rate
Also called the base interest rate, it is the minimum interest rate investors will
The requirement that a claim holder voting against a plan of reorganization
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
A conventional unit of measure for bond prices set at $10 and equivalent to 1% of the $100 face
The Treasury and federal agencies are moving to a book-entry system in which securities are not represented by engraved pieces of paper but are maintained in computerized records at the
book rate of return
Accounting income divided by book value.
In the mortgage pipeline, the risk that prospective borrowers of loans committed to be
Break-even lease payment
The lease payment at which a party to a prospective lease is indifferent between
Break-even payment rate
The prepayment rate of a MBS coupon that will produce the same CFY as that of
break-even point (BEP)
the level of activity, in units or dollars, at which total revenues equal total costs
Break-even tax rate
The tax rate at which a party to a prospective transaction is indifferent between entering
The point at which total costs equal total revenue, i.e. where there is neither a profit nor a loss.
The annual sales volume level at which total contribution
The sales level at which a company, division, or product line makes a
Broker loan rate
Related: Call money rate.
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
An option that gives the right to buy the underlying futures contract.
a. An option to buy a certain quantity of a stock or commodity for a
Call an option
To exercise a call option.
A date before maturity, specified at issuance, when the issuer of a bond may retire part of the bond
Call money rate
Also called the broker loan rate , the interest rate that banks charge brokers to finance
An option contract that gives its holder the right (but not the obligation) to purchase a specified
A contract that gives the holder the right to buy an asset for a
Right to buy an asset at a specified exercise price on or before the exercise date.
The price, specified at issuance, at which the issuer of a bond may retire part of the bond at a
The price for which a bond can be repaid before maturity under a call provision.
A feature of some callable bonds that establishes an initial period when the bonds may not be
An embedded option granting a bond issuer the right to buy back all or part of the issue prior
The combination of cash flow uncertainty and reinvestment risk introduced by a call provision.
A swaption in which the buyer has the right to enter into a swap as a fixed-rate payer. The
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