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Definition of Greeks
Collectively, "greeks" refer to the financial measures delta, gamma,
Publicly traded issues that may be collateralized by mortgages and MBSs.
Floating rate preferred stock, the dividend on which is adjusted every
An estimation of price that uses the average or representative price of a
Cash receipts and payments involving
Cash receipts and payments involving
Sources of funds internally provided from operations that alter a company's
Officer who oversees the treasurer and controller and sets overall financial strategy.
Convertible preferred stock that may be exchanged, at the
Preferred stock that can be converted into common stock at the option of the holder.
The application of financial principals within a corporation to create and
financial planning conducted by a firm that encompasses preparation of both
The rate of return required by the investors in the preferred stock of
Costs arising from bankruptcy or distorted business decisions before bankruptcy.
The ability of the national economy to generate enough foreign exchange to meet
Preferred stock whose dividends accrue, should the issuer not make timely
Also called the hedge ratio, the ratio of the change in price of a call option to the change in price of the
The rate of change of the price of a derivative security relative to the
A dynamic hedging strategy using options with continuous adjustment of the number of options
The value of the portfolio is not affected by changes in the value of the asset on which the
Dupont system of financial control
Highlights the fact that return on assets (ROA) can be expressed in terms
Elasticity - See Lambda
External Financial Statements
Corporate financial statements that have been reported on by an external independent accountant.
The production of financial statements, primarily for those interested parties who are external to the business.
a discipline in which historical, monetary
Also called securities analysts and investment analysts, professionals who analyze
Claims on real assets.
Claims to the income generated by real assets. Also called securities.
Economic assistance provided by unrelated third parties, typically government agencies. They may take the form of loans, loan guarantees, subsidies, tax allowances, contributions, or cost-sharing arrangements.
a plan that aggregates monetary details
The management of a firm's costs and expenses in order to control them in relation to
A feature of a debt or credit agreement that is designed to protect the lender or creditor. It is common to characterize covenants as either positive or negative covenants.
A promise made related to financial conditions or events. Often a promise not to allow certain balance sheet items or ratios to fall below an agreed level. Usually found in loan documents, as a protection mechanism.
Events preceding and including bankruptcy, such as violation of loan contracts.
Financial distress costs
Legal and administrative costs of liquidation or reorganization. Also includes
Combining or dividing existing instruments to create new financial products.
A contract entered into now that provides for the delivery of a specified asset in exchange
a monetary reward provided for performance
An expression of economic benefit that motivates behavior that might otherwise not take place.
Institutions that provide the market function of matching borrowers and lenders or
Firm that raises money from many small investors and provides financing to businesses or other
Any institution, such as a bank, that takes deposits from savers and loans them to borrowers.
The process whereby financial intermediaries channel funds from lender/savers to borrower/spenders.
Long-term, non-cancelable lease.
Lease in which the service provided by the lessor to the lessee is limited to financing equipment. All other responsibilities related to the possession of equipment, such as maintenance, insurance, and taxes, are borne by the lessee. A financial lease is usually noncancellable and is fully paid out amortized over its term.
Use of debt to increase the expected return on equity. financial leverage is measured by
The equity (ownership) capital of a business can serve
Debt financing amplifies the effects of changes in operating income on the returns to stockholders.
Financial leverage clientele
A group of investors who have a preference for investing in firms that adhere to
Financial leverage ratios
Related: capitalization ratios.
An organized institutional structure or mechanism for creating and exchanging financial assets.
Markets in which financial assets are traded.
Financial Numbers Game
The use of creative accounting practices to alter a financial statement
Objectives of a financial nature that the firm will strive to accomplish during the period
A financial blueprint for the financial future of a firm.
The process of evaluating the investing and financing options available to a firm. It
Status of a firm's assets, liabilities, and equity accounts as of a certain time, as shown in its financial statement.
That portion of the media devoted to reporting financial news.
The result of dividing one financial statement item by another. Ratios help analysts interpret
financial reports and statements
financial means having to do with
Financial reports or statements
The Profit and Loss account, Balance Sheet and Cash Flow statement of a business.
The risk that the cash flow of an issuer will not be adequate to meet its financial obligations.
Risk to shareholders resulting from the use of debt.
Ready access to cash or debt financing.
Financial Trend Analysis
Process of analyzing financial statements of a company for any continuing relationship.
The accounting period adopted by a business for the production of its financial statements.
Preferred stock paying dividends that vary with short-term interest rates.
Fraudulent Financial Reporting
Intentional misstatements or omissions of amounts or disclosures
Future-Oriented Financial Information
Information about prospective results of operations, financial position and/or changes in financial position, based on assumptions about future economic conditions and courses of action. Future-oriented financial information is presented as either a forecast or a projection.
The ratio of a change in the option delta to a small change in the price of the asset on which the
The rate of change of delta for a derivative security relative to the
Hedge ratio (delta)
The ratio of volatility of the portfolio to be hedged and the return of the volatility of the
Involuntary liquidation preference
A premium that must be paid to preferred or preference stockholders if
The ratio of a change in the option price to a small change in the option volatility. It is the partial
The percentage change in the price of an option relative to a 1%
Liquidity preference hypothesis
The argument that greater liquidity is valuable, all else equal. Also, the
London International Financial Futures Exchange (LIFFE)
A London exchange where Eurodollar futures
London International Financial Futures Exchange (LIFFE)
London exchange where Eurodollar futures as well as futures-style options are traded.
Long-term financial plan
financial plan covering two or more years of future operations.
Market segmentation theory or preferred habitat theory
A biased expectations theory that asserts that the
Monthly income preferred security (MIP)
Preferred stock issued by a subsidiary located in a tax haven.
Non-cumulative preferred stock
Preferred stock whose holders must forgo dividend payments when the
Include such things as freight, insurance, passenger services, and travel.
Notes to the financial statements
A detailed set of notes immediately following the financial statements in
Perfectly competitive financial markets
Markets in which no trader has the power to change the price of
the second decision made in capital project evaluation in which projects are ranked according to their impact on the achievement of company objectives
A security that ranks junior to preferred stock but senior to common stock in the right to
used in older contracts to confer the same rights as an irrevocable beneficiary. Applied to family members.
Preferred equity redemption stock (PERC)
Preferred stock that converts automatically into equity at a
Preferred habitat theory
A biased expectations theory that believes the term structure reflects the
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.
Preferred shares give investors a fixed dividend from the company's earnings. And more
Are equity instruments that take no security against assets, have flexible terms of repayment and pay fixed or floating dividends.
A security that shows ownership in a corporation and gives the holder a claim, prior to the
A type of equity security where holders have a claim on the assets
A type of stock that usually pays a fixed dividend prior to any distributions
Stock that takes priority over common stock in regard to dividends.
Preferred stock agreement
A contract for preferred stock.
Preferred Stock Stock that has a claim on assets and dividends of a corporation that are prior
to that of common stock. Preferred stock typically does not carry the right to vote.
Pro forma financial statements
financial statements as adjusted to reflect a projected or planned transaction.
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