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Definition of ISO 14000
a series of international standards that are designed
The collection of money managers of similar investment style used for assessing
Anit-takeover device that gives a prospective acquiree's shareholders the right to buy shares of the
A covenant allowing the bondholder to demand repayment in the event of a hostile merger.
a comprehensive series of international quality standards
Measure taken by a target firm to avoid acquisition;
A covenant allowing the bondholder to demand repayment in the event of a hostile merger.
the present value of a finite stream of cash flows for every beginning $1 of cash flow.
an amount or percentage deducted from a pro rata share of the value of 100% of an equity interest in a business, to reflect the absence of some or all of the powers of control.
an amount or percentage deducted from an equity interest to reflect lack of marketability.
the rate of return on investment that would be required by a prudent investor to invest in an asset with a specific level risk. Also, a rate of return used to convert a monetary sum, payable or receivable in the future, into present value.
the combined discounts for lack of control and marketability. g the constant growth rate in cash flows or net income used in the ADF, Gordon model, or present value factor.
Same as PV, but usually includes a subtraction for an initial cash outlay.
the value in today’s dollars of cash flows that occur in different time periods.
model for calculating DLOM for minority interests r the discount rate
In portfolio accounting, a straight-line accumulation of capital gains on discount
A firm that is being acquired.
Active portfolio strategy
A strategy that uses available information and forecasting techniques to seek a
Adjusted present value (APV)
The net present value analysis of an asset if financed solely by equity
A bond covenant that specifies certain actions the firm must take.
After-tax profit margin
The ratio of net income to net sales.
After-tax real rate of return
money after-tax rate of return minus the inflation rate.
Securities certificates issued in the U.S. by a transfer agent acting on behalf of the foreign
An option contract that can be exercised at any time between the date of purchase and
A right of shareholders in a merger to demand the payment of a fair price for their shares, as
An option is at-the-money if the strike price of the option is equal to the market price of the
markets in which the prevailing price is determined through the free interaction of
Number of shares authorized for issuance by a firm's corporate charter.
Average collection period, or days' receivables
The ratio of accounts receivables to sales, or the total
Balance of payments
A statistical compilation formulated by a sovereign nation of all economic transactions
Balance of trade
Net flow of goods (exports minus imports) between countries.
Also called the statement of financial condition, it is a summary of the assets, liabilities, and
Balance sheet exposure
Balance sheet identity
Total Assets = Total Liabilities + Total Stockholders' Equity
An investment company that invests in stocks and bonds. The same as a balanced mutual fund.
Balanced mutual fund
This is a fund that buys common stock, preferred stock and bonds. The same as a
Bank collection float
The 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 basis
A convention used for quoting bids and offers for treasury bills in terms of annualized
Bank for International Settlements (BIS)
An international bank headquartered in Basel, Switzerland, which
BARRA's performance analysis (PERFAN)
A method developed by BARRA, a consulting firm in
In a balance of payments, the basic balance is the net balance of the combination of the current
Any market in which prices are in a declining trend.
An illegal market.
Large and creditworthy company.
With respect to convertible bonds, the value the security would have if it were not convertible
A company's book value is its total assets minus intangible assets and liabilities, such as debt. A
Book value per share
The ratio of stockholder equity to the average number of common shares. Book value
Bottom-up equity management style
A management style that de-emphasizes the significance of economic
A market where an intermediary offers search services to buyers and sellers.
Builder buydown loan
A mortgage loan on newly developed property that the builder subsidizes during the
Any market in which prices are in an upward trend.
The foreign market in the United Kingdom.
To purchase an asset; taking a long position.
To cover, offset or close out a short position. Related: evening up, liquidation.
Buy limit order
A conditional trading order that indicates a security may be purchased only at the designated
Buy on close
To buy at the end of the trading session at a price within the closing range.
Buy on margin
A transaction in which an investor borrows to buy additional shares, using the shares
Buy on opening
To buy at the beginning of a trading session at a price within the opening range.
A passive investment strategy with no active buying and selling of stocks from the
Mortgages in which monthly payments consist of principal and interest, with portions of these
Buying the index
Purchasing the stocks in the S&P 500 in the same proportion as the index to achieve the
Purchase of a controlling interest (or percent of shares) of a company's stock. A leveraged buy-out is
Another term for a repo.
A financial analyst employed by a non-brokerage firm, typically one of the larger money
Call money rate
Also called the broker loan rate , the interest rate that banks charge brokers to finance
A feature of some callable bonds that establishes an initial period when the bonds may not be
The market for trading long-term debt instruments (those that mature in more than one year).
Capital market efficiency
Reflects the relative amount of wealth wasted in making transactions. An efficient
Capital market imperfections view
The view that issuing debt is generally valuable but that the firm's
Capital market line (CML)
The line defined by every combination of the risk-free asset and the market portfolio.
An incentive offered to purchasers of a firm's product for payment within a specified time
Cash flow after interest and taxes
Net income plus depreciation.
Also called spot markets, these are markets that involve the immediate delivery of a security
An amount the insurance company will pay if the policyholder ends a whole life
The negative float that is created between the time when you deposit a check in your account
The percentage of a given month's sales collected during the month of sale and each
Procedures followed by a firm in attempting to collect accounts receivables.
Committee, AIMR Performance Presentation Standards Implementation Committee
The Association for investment Management and Research (AIMR)'s performance Presentation standards Implementation
An agreement between two or more countries that permits the free movement of capital
Common stock market
The market for trading equities, not including preferred stock.
Related: Unsystematic risk
An excess balance that is left in a bank to provide indirect compensation for loans
Complete capital market
A market in which there is a distinct marketable security for each and every
The entire portfolio, including risky and risk-free assets.
he written statement that follows any "trade" in the securities markets. Confirmation is issued
Also called parity value, the value of a convertible security if it is converted immediately.
Corner A Market
To purchase enough of the available supply of a commodity or stock in order to
Cost company arrangement
Arrangement whereby the shareholders of a project receive output free of
A market where traders specializing in particular commodities buy and sell assets for their
The market for trading debt instruments.
Dedicating a portfolio
Related: cash flow matching.
A bond issued with a very low coupon or no coupon and selling at a price far below par
Depository Trust Company (DTC)
DTC is a user-owned securities depository which accepts deposits of
markets for derivative instruments.
Direct search market
buyers and sellers seek each other directly and transact directly.
Referring to the selling price of a bond, a price below its par value. Related: premium.
Debt sold for less than its principal value. If a discount bond pays no interest, it is called a
Present value of $1 received at a stated future date.
The period during which a customer can deduct the discount from the net amount of the bill
The interest rate that the Federal Reserve charges a bank to borrow funds when a bank is
Non-interest-bearing money market instruments that are issued at a discount and
Facility provided by the Fed enabling member banks to borrow reserves against collateral
Selling something on a discounted basis is selling below what its value will be at maturity,
Discounted cash flow (DCF)
Future cash flows multiplied by discount factors to obtain present values.
Discounted dividend model (DDM)
A formula to estimate the intrinsic value of a firm by figuring the
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