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Definition of Integer programming
Variant of linear programming whereby the solution values must be integers.
a mathematical programming technique in which all solutions for variables must be restricted to whole numbers
An analytical method that can be used to determine the solution to a capital
Technique for finding the maximum value of some equation subject to stated linear constraints.
An operations research technique that solves problems in which an optimal
A method of budgeting in which budgets are allocated to projects or programmes rather than to responsibility centres.
a method of mathematical programming used to solve a problem that involves an objective function and multiple limiting factors or constraints long-term variable cost a cost that was traditionally viewed as a fixed cost
a variety of techniques used
Abrams’ model for calculating DLOM based on the interaction of discounts from four economic components.
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
An option is at-the-money if the strike price of the option is equal to the market price of the
Also called the broker loan rate , the interest rate that banks charge brokers to finance
This is the best known U.S.index of stocks. It contains 30 stocks that trade on
An exchange arrangement formed in 1979 that involves the currencies
Money that moves across country borders in response to interest rate differences and that moves
An organization founded in 1944 to oversee exchange arrangements of
International Monetary Market (IMM)
A division of the CME established in 1972 for trading financial
A put option that has a strike price higher than the underlying futures price, or a call option
Law of one price
An economic rule stating that a given security must have the same price regardless of the
Gold held by governmental authorities as a financial asset.
Actions taken by the Board of Governors of the Federal Reserve System to influence the
Monetary / non-monetary method
Under this translation method, monetary items (e.g. cash, accounts
Composed of currency and coins outside the banking system plus liabilities to the deposit money banks.
Money center banks
Banks that raise most of their funds from the domestic and international money markets, relying less on depositors for funds.
Related: Investment management.
Related: Investment manager.
Money markets are for borrowing and lending money for three years or less. The securities in
Money market demand account
An account that pays interest based on short-term interest rates.
Money market fund
A mutual fund that invests only in short term securities, such as bankers' acceptances,
Money market hedge
The use of borrowing and lending transactions in foreign currencies to lock in the
Money market notes
Publicly traded issues that may be collateralized by mortgages and MBSs.
Money purchase plan
A defined benefit contribution plan in which the participant contributes some part and
Money rate of return
Annual money return as a percentage of asset value.
M1-A: Currency plus demand deposits
In a Treasury auction, the amount by which the par value of the securities offered exceeds that of
One man picture
The picture quoted by a broker is said to be a one-man picture if both the bid and offered
A special case of the arbitrage pricing theory that is derived from the one-factor model by
1) A market in which only one side, the bid or asked, is quoted or firm.
A call option is out-of-the-money if the strike price is greater than the market price
In mutual funds, the ability to transfer shares between funds in the same family by
The option of postponing a project without eliminating the possibility of undertaking it.
Precautionary demand (for money)
The need to meet unexpected or extraordinary contingencies with a
Willing to pay money to transfer risk from others.
Extended credit for customers who order goods in periods other than peak seasons.
Issue of a security for which there is an existing market. Related: Unseasoned issue.
Seasoned new issue
A new issue of stock after the company's securities have previously been issued. A
SIMEX (Singapore International Monetary Exchange)
A leading futures and options exchange in Singapore.
Speculative demand (for money)
The need for cash to take advantage of investment opportunities that may arise.
Investment principle that states a firm should accept or reject a project by comparing it
Target zone arrangement
A monetary system under which countries pledge to maintain their exchange rates
Time value of money
The idea that a dollar today is worth more than a dollar in the future, because the dollar
Advertisement listing the underwriters to a security issue.
Transaction demand (for money)
The need to accommodate a firm's expected cash transactions.
Issue of a security for which there is no existing market. See: seasoned issue.
Zero coupon bond
Such a debt security pays an investor no interest. It is sold at a discount to its face price
assumption The assumption of payment of scheduled principal and interest with no payments.
Related: tick-test rules.
Zero-balance account (ZBA)
A checking account in which zero balance is maintained by transfers of funds
A portfolio constructed to represent the risk-free asset, that is, having a beta of zero.
A bond in which no periodic coupon is paid over the life of the contract. Instead, both the
A portfolio of zero net value established by buying and shorting component
A type of game wherein one player can gain only at the expense of another player.
A method of budgeting that ignores historical budgetary allocations and identifies the costs that are necessary to implement agreed strategies.
A market that specializes in trading short-term, low-risk, very liquid
A security that makes no interest payments; it is sold at a discount
a comprehensive budgeting process
Zero curve, zero-coupon yield curve
A yield curve for zero-coupon bonds;
Zero-coupon bond, or Zero
A bond that, instead of carrying a coupon, is sold
Dow Jones Industrial Average
Index of the investment performance of a portfolio of 30 “blue-chip” stocks.
law of one price
Theory that prices of goods in all countries should be equal when translated to a common currency.
Market for short-term financial assets.
Sale of securities by a firm that is already publicly traded.
Regional bank account to which just enough funds are transferred daily to pay each day’s bills.
See money base.
International Monetary Fund (IMF)
Organization originally established to manage the postwar fixed exchange rate system.
School of economic thought stressing the importance of the money supply in the economy. Adherents believe that the economy is inherently stable, so that policy is best undertaken through adoption of a policy rule.
Proposal that the money supply be increased at a steady rate equal approximately to the real rate of growth of the economy. Contrast with discretionary policy.
Any measure of the economy's money supply.
See money base.
Actions taken by the central bank to change the supply of money and the interest rate and thereby affect economic activity.
Monetizing the Debt
See printing money.
Any item that serves as a medium of exchange, a store of value, and a unit of account. See medium of exchange.
Cash plus deposits of the commercial banks with the central bank.
A financial market in which short-term (maturity of less than a year) debt instruments such as bonds are traded.
Change in the money supply per change in the money base.
Money Rate of Interest
See interest rate, nominal.
Neutrality of Money
The doctrine that the money supply affects only the price level, with no long-run impact on real variables.
Sale of bonds by the government to the central bank.
Quantity Theory of Money
Theory that velocity is constant, and so a change in money supply will change nominal income by the same percentage. Formalized by the equation Mv = PQ.
Real Money Supply
Money supply expressed in base-year dollars, calculated by dividing the money supply by a price index.
See discount bond.
Raw materials or subassemblies used to make either finished goods
The practice of picking by area of the warehouse, rather than by
Fiat Money is paper currency made legal tender by law or fiat. It is not backed by gold or silver and is not necessarily redeemable in coin. This practice has had widespread use for about the last 70 years. If governments produce too much of it, there is a loss of confidence. Even so, governments print it routinely when they need it. The value of fiat money is dependent upon the performance of the economy of the country which issued it. Canada's currency falls into this category.
This is the process by which "dirty money" generated by criminal activities is converted through legitimate businesses into assets that cannot be easily traced back to their illegal origins.
Financial market in which funds are borrowed or lent for short periods. (The money market is distinguished from the capital market, which is the market for long term funds.)
money market fund
A type of mutual fund that invests primarily in short-term debt securities maturing in one year or less. These include treasury bills, bankers’ acceptances, commercial paper, discount notes and guaranteed investment certficates.
A guaranteed form of payment in amounts up to and including $5,000. You might request a money order in order to pay for tuition fees at a university or a college, or for a magazine subscription.
A well-diversified portfolio constructed to have a beta of 1.0 on one factor and a beta of
Multiple rates of return
More than one rate of return from the same project that make the net present value
A bond that will make only one payment of principal and interest. Also called a zerocoupon
Theoretical spot rate curve
A curve derived from theoretical considerations as applied to the yields of
a cost that is periodically reviewed by a
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.
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