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Financial Terms | |
Greeks |
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Definition of GreeksGreeksCollectively, "greeks" refer to the financial measures delta, gamma,
Related Terms:Adjustable rate preferred stock (ARPS)Publicly traded issues that may be collateralized by mortgages and MBSs. Auction rate preferred stock (ARPS)Floating rate preferred stock, the dividend on which is adjusted every Average (across-day) measuresAn estimation of price that uses the average or representative price of a Cash Flow Provided or Used from Financing ActivitiesCash receipts and payments involving Cash Flow Provided or Used from Investing ActivitiesCash receipts and payments involving Changes in Financial PositionSources of funds internally provided from operations that alter a company's chief financial officer (CFO)Officer who oversees the treasurer and controller and sets overall financial strategy. ![]() Convertible exchangeable preferred stockConvertible preferred stock that may be exchanged, at the Convertible preferred stockPreferred stock that can be converted into common stock at the option of the holder. Corporate financial managementThe application of financial principals within a corporation to create and Corporate financial planningfinancial planning conducted by a firm that encompasses preparation of both Cost of Preferred StockThe rate of return required by the investors in the preferred stock of costs of financial distressCosts arising from bankruptcy or distorted business decisions before bankruptcy. Country financial riskThe ability of the national economy to generate enough foreign exchange to meet Cumulative preferred stockPreferred stock whose dividends accrue, should the issuer not make timely DeltaAlso called the hedge ratio, the ratio of the change in price of a call option to the change in price of the ![]() DeltaThe rate of change of the price of a derivative security relative to the Delta hedgeA dynamic hedging strategy using options with continuous adjustment of the number of options Delta neutralThe value of the portfolio is not affected by changes in the value of the asset on which the Dupont system of financial controlHighlights the fact that return on assets (ROA) can be expressed in terms Elasticity - See Lambda
External Financial StatementsCorporate financial statements that have been reported on by an external independent accountant. Financial accountingThe production of financial statements, primarily for those interested parties who are external to the business. financial accountinga discipline in which historical, monetary Financial analystsAlso called securities analysts and investment analysts, professionals who analyze Financial assetsClaims on real assets. financial assetsClaims to the income generated by real assets. Also called securities. ![]() Financial AssistanceEconomic 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. financial budgeta plan that aggregates monetary details Financial controlThe management of a firm's costs and expenses in order to control them in relation to Financial CovenantA 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. Financial CovenantsA 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. Financial distressEvents preceding and including bankruptcy, such as violation of loan contracts. Financial distress costsLegal and administrative costs of liquidation or reorganization. Also includes Financial engineeringCombining or dividing existing instruments to create new financial products. Financial futureA contract entered into now that provides for the delivery of a specified asset in exchange financial incentivea monetary reward provided for performance Financial IncentiveAn expression of economic benefit that motivates behavior that might otherwise not take place. Financial intermediariesInstitutions that provide the market function of matching borrowers and lenders or financial intermediaryFirm that raises money from many small investors and provides financing to businesses or other Financial IntermediaryAny institution, such as a bank, that takes deposits from savers and loans them to borrowers. Financial IntermediationThe process whereby financial intermediaries channel funds from lender/savers to borrower/spenders. Financial leaseLong-term, non-cancelable lease. Financial LeaseLease 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. Financial leverageUse of debt to increase the expected return on equity. financial leverage is measured by financial leverageThe equity (ownership) capital of a business can serve financial leverageDebt financing amplifies the effects of changes in operating income on the returns to stockholders. Financial leverage clienteleA group of investors who have a preference for investing in firms that adhere to Financial leverage ratiosRelated: capitalization ratios. Financial marketAn organized institutional structure or mechanism for creating and exchanging financial assets. financial marketsMarkets in which financial assets are traded. Financial Numbers GameThe use of creative accounting practices to alter a financial statement Financial objectivesObjectives of a financial nature that the firm will strive to accomplish during the period Financial planA financial blueprint for the financial future of a firm. Financial planningThe process of evaluating the investing and financing options available to a firm. It Financial PositionStatus of a firm's assets, liabilities, and equity accounts as of a certain time, as shown in its financial statement. Financial pressThat portion of the media devoted to reporting financial news. Financial ratioThe result of dividing one financial statement item by another. Ratios help analysts interpret financial reports and statementsfinancial means having to do with Financial reports or statementsThe Profit and Loss account, Balance Sheet and Cash Flow statement of a business. Financial riskThe risk that the cash flow of an issuer will not be adequate to meet its financial obligations. financial riskRisk to shareholders resulting from the use of debt. financial slackReady access to cash or debt financing. Financial Trend AnalysisProcess of analyzing financial statements of a company for any continuing relationship. Financial yearThe accounting period adopted by a business for the production of its financial statements. Floating-rate preferredPreferred stock paying dividends that vary with short-term interest rates. Fraudulent Financial ReportingIntentional misstatements or omissions of amounts or disclosures Future-Oriented Financial InformationInformation 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. GammaThe ratio of a change in the option delta to a small change in the price of the asset on which the GammaThe 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 preferenceA premium that must be paid to preferred or preference stockholders if LambdaThe ratio of a change in the option price to a small change in the option volatility. It is the partial LambdaThe percentage change in the price of an option relative to a 1% Liquidity preference hypothesisThe 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 planfinancial plan covering two or more years of future operations. Market segmentation theory or preferred habitat theoryA 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 stockPreferred stock whose holders must forgo dividend payments when the Non-financial servicesInclude such things as freight, insurance, passenger services, and travel. Notes to the financial statementsA detailed set of notes immediately following the financial statements in Perfectly competitive financial marketsMarkets in which no trader has the power to change the price of preference decisionthe second decision made in capital project evaluation in which projects are ranked according to their impact on the achievement of company objectives Preference stockA security that ranks junior to preferred stock but senior to common stock in the right to Preferred Beneficiaryused 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 theoryA biased expectations theory that believes the term structure reflects the Preferred RatesAs 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 sharesPreferred shares give investors a fixed dividend from the company's earnings. And more Preferred SharesAre equity instruments that take no security against assets, have flexible terms of repayment and pay fixed or floating dividends. Preferred stockA security that shows ownership in a corporation and gives the holder a claim, prior to the Preferred StockA type of equity security where holders have a claim on the assets Preferred stockA type of stock that usually pays a fixed dividend prior to any distributions preferred stockStock that takes priority over common stock in regard to dividends. Preferred stock agreementA contract for preferred stock. Preferred Stock Stock that has a claim on assets and dividends of a corporation that are priorto that of common stock. Preferred stock typically does not carry the right to vote. Pro forma financial statementsfinancial statements as adjusted to reflect a projected or planned transaction. 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