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Financial Terms | |
Investment bank |
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Definition of Investment bankInvestment bankFinancial intermediaries who perform a variety of services, including aiding in the sale of
Related Terms:Investment BankerMiddleman between a corporation issuing new securities and the public. The middleman buys the securities issue outright and then resells it to customers. Also called an underwriter. Chinese wallCommunication barrier between financiers (investment bankers) and traders. This barrier is Firm commitment underwritingAn undewriting in which an investment banking firm commits to buy the Lead managerThe commercial or investment bank with the primary responsibility for organizing syndicated Merchant BankA financial institution that engages in investment banking functions, such as advising clients in mergers and acquisitions, underwriting securities and taking debt or equity positions. UnderwriterA party that guarantees the proceeds to the firm from a security sale, thereby in effect taking UnderwriterSee investment banker. ![]() Underwriting syndicateA group of investment banks that work together to sell new security offerings to ABM (automated banking machine)A bank machine, sometimes referred to as an automated teller machine (ATM). Agency bankA form of organization commonly used by foreign banks to enter the U.S. market. An agency BAN (Bank anticipation notes)Notes issued by states and municipalities to obtain interim financing for BankMoney in a bank cheque account, the difference between receipts and payments. Bank collection floatThe time that elapses between when a check is deposited into a bank account and when the funds are available to the depositor, during which period the bank is collecting payment from the payer's bank. Bank discount basisA convention used for quoting bids and offers for treasury bills in terms of annualized Bank draftA draft addressed to a bank. bank draftA guaranteed form of payment which is issued in amounts over $5,000. ![]() Bank for International Settlements (BIS)An international bank headquartered in Basel, Switzerland, which Bank lineLine of credit granted by a bank to a customer. Bank overdraftMoney owed to the bank in a cheque account where payments exceed receipts. Bank reconciliationThe process of taking the balances from the bank statement and the general ledger and making adjustments so that they agree. Bank reconciliationA comparison between the cash position recorded on a company’s Bank wireA computer message system linking major banks. It is used not for effecting payments, but as a Banker's acceptanceA short-term credit investment created by a non-financial firm and guaranteed by a Bankers AcceptancesA bill of exchange, or draft, drawn by the borrower for payment on a specified date, and accepted by a chartered bank. Upon acceptance, the bill becomes, in effect, a postdated certified cheque. BankruptcyState of being unable to pay debts. Thus, the ownership of the firm's assets is transferred from bankruptcyThe reorganization or liquidation of a firm that cannot pay its debts. Bankruptcy cost viewThe argument that expected indirect and direct bankruptcy costs offset the other Bankruptcy riskThe risk that a firm will be unable to meet its debt obligations. Also referred to as default or insolvency risk. Bankruptcy viewThe argument that expected bankruptcy costs preclude firms from being financed entirely Business Expansion InvestmentThe use of capital to create more money through the addition of fixed assets or through income producing vehicles. capital investment analysisRefers to various techniques and procedures Capital InvestmentsMoney used to purchase fixed assets for a business, such as land, buildings, or machinery. Also, money invested in a business on the understanding that it will be used to purchase permanent assets rather than to cover day-to-day operating expenses. Central BankA public agency responsible for regulating and controlling an economy's monetary and financial institutions. It is the sole money-issuing authority. Clearing House Interbank Payments System (CHIPS)An international wire transfer system for high-value Commercial BankA privately owned, profit-seeking firm that accepts deposits and makes loans. concentration bankingSystem whereby customers make payments to a regional collection center which transfers funds to Consortium banksA merchant banking subsidiary set up by several banks that may or may not be of the Dividend reinvestment plan (DRP)Automatic reinvestment of shareholder dividends in more shares of a Eligible bankers' acceptancesIn the BA market, an acceptance may be referred to as eligible because it is Equity investmentThrough equity investment, investors gain part ownership of the corporation. The primary type of equity investment is corporate stock. EurobankA bank that regularly accepts foreign currency denominated deposits and makes foreign currency loans. Expected return on investmentThe return one can expect to earn on an investment. See: capital asset Export-Import Bank (Ex-Im Bank)The U.S. federal government agency that extends trade credits to U.S. Federal Financing BankA federal institution that lends to a wide array of federal credit agencies funds it Federal Home Loan BanksThe institutions that regulate and lend to savings and loan associations. The Federal Reserve BanksThe twelve district banks in the Federal Reserve System. Foreign banking marketThat portion of domestic bank loans supplied to foreigners for use abroad. Foreign direct investment (FDI)The acquisition abroad of physical assets such as plant and equipment, with Fractional Reserve BankingA banking system in which banks hold only a fraction of their outstanding deposits in cash or on deposit with the central bank. Future investment opportunitiesThe options to identify additional, more valuable investment opportunities guaranteed investment certificate (GIC)A GIC is an investment that gives you a guaranteed rate of return over a fixed period of time, usually between 30 days and 5 years. GICs are available from banks, trust companies, and other financial institutions. Guaranteed investment contract (GIC)A pure investment product in which a life company agrees, for a International Bank for Reconstruction and Development - IBRD or World BankInternational bank for Reconstruction and Development makes loans at nearly conventional terms to countries for projects of high International Banking Facility (IBF)International banking Facility. A branch that an American bank InvestmentThe commitment of funds (capital) in anticipation of an increased Investment analystsRelated: financial analysts investment centera responsibility center in which the manager Investment centreA division or unit of an organization that is responsible for achieving an adequate return on investment decisiona judgment about which assets will be Investment decisionsDecisions concerning the asset side of a firm's balance sheet, such as the decision to investment gradeBonds rated Baa or above by Moody’s or BBB or above by Standard & Poor’s. Investment grade bondsA bond that is assigned a rating in the top four categories by commercial credit Investment incomeThe revenue from a portfolio of invested assets. Investment managerAlso called a portfolio manager and money manager, the individual who manages a Investment product line (IPML)The line of required returns for investment projects as a function of beta Investment SpendingExpenditures on capital goods including new housing. Financial ''investments" and sales of existing assets are not included. Investment tax creditProportion of new capital investment that can be used to reduce a company's tax bill Investment Tax CreditA reduction in taxes offered to firms to induce them to increase investment spending. Investment trustA closed-end fund regulated by the investment Company Act of 1940. These funds have a Investment valueRelated:straight value. InvestmentsAs a discipline, the study of financial securities, such as stocks and bonds, from the investor's Legal bankruptcyA legal proceeding for liquidating or reorganizing a business. Legal investmentsinvestments that a regulated entity is permitted to make under the rules and regulations Merchant bankA British term for a bank that specializes not in lending out its own funds, but in providing Money center banksbanks that raise most of their funds from the domestic and international money markets, relying less on depositors for funds. Mutually exclusive investment decisionsinvestment decisions in which the acceptance of a project Net investmentGross, or total, investment minus depreciation. Net Investmentinvestment spending minus depreciation. Net present value of future investmentsThe present value of the total sum of NPVs expected to result from Passive investment managementBuying a well-diversified portfolio to represent a broad-based market Passive investment strategySee: passive management. PIBOR (Paris Interbank Offer Rate)The deposit rate on interbank transactions in the Eurocurrency market postinvestment auditthe process of gathering information Prepackaged bankruptcyA bankruptcy in which a debtor and its creditors pre-negotiate a plan or qualified investments (Canada)Qualified investments is the term used for investments that can be held in an RSP. These investments generally include: Regular Investment Plan (RIP)A plan under which you may make regular deposits of the same amount to your Mutual Funds account once a month, once every 2 weeks, or once a week. You can also make regular deposits up to four times a month on any dates you choose. reinvestment assumptionan assumption made about the rates of return that will be earned by intermediate cash flows from a capital project; NPV and PI assume reinvestment at the discount rate; IRR assumes reinvestment at the IRR Reinvestment rateThe rate at which an investor assumes interest payments made on a debt security can be Reinvestment riskThe risk that proceeds received in the future will have to be reinvested at a lower potential REIT (real estate investment trust)Real estate investment trust, which is similar to a closed-end mutual REMIC (real estate mortgage investment conduit)A pass-through tax entity that can hold mortgages return on investmenta ratio that relates income generated Return on investment (ROI)Generally, book income as a proportion of net book value. RETURN ON INVESTMENT (ROI)In its most basic form, the rate of return equals net income divided by the amount of money invested. It can be applied to a particular product or piece of equipment, or to a business as a whole. Return on investment (ROI)The net profit after tax as a percentage of the shareholders’ investment in the business. return on investment (ROI)A very general concept that refers to some Short-term investment servicesServices that assist firms in making short-term investments. Society for Worldwide Interbank Financial Telecommunications (SWIFT)A dedicated computer network to support funds transfer messages internationally between over 900 member banks worldwide. Underinvestment problemThe mirror image of the asset substitution problem, wherein stockholders refuse Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |