![]() |
|
Financial Terms | |
J-curve |
Information about financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit.
Main Page: finance, payroll, credit, accounting, financial advisor, business, inventory, inventory control, |
Definition of J-curveJ-curveTheory that says a country's trade deficit will initially worsen after its currency depreciates because
Related Terms:After-tax profit marginThe ratio of net income to net sales. After-tax real rate of returnMoney after-tax rate of return minus the inflation rate. Agency theoryThe analysis of principal-agent relationships, wherein one person, an agent, acts on behalf of Allocation base A measure of activity or volume such as labourhours, machine hours or volume of production Arbitrage Pricing Theory (APT)An alternative model to the capital asset pricing model developed by Asian currency units (ACUs)Dollar deposits held in Singapore or other Asian centers. Balance of Merchandise TradeThe difference between exports and imports of goods. ![]() Balance of tradeNet flow of goods (exports minus imports) between countries. Balance of TradeSee balance of merchandise trade. Basket tradesRelated: Program trades. Block tradeA large trading order, defined on the New York Stock Exchange as an order that consists of Blocked currencyA currency that is not freely convertible to other currencies due to exchange controls. Book runnerThe managing underwriter for a new issue. The book runner maintains the book of securities sold. Bubble theorySecurity prices sometimes move wildly above their true values. Budget deficitThe amount by which government spending exceeds government revenues. Budget DeficitThe excess of government spending over tax receipts. ![]() Cash flow after interest and taxesNet income plus depreciation. Controlled foreign corporation (CFC)A foreign corporation whose voting stock is more than 50% owned Cost–volume–profit analysis (CVP)A method for understanding the relationship between revenue, cost and sales volume. cost-volume-profit (CVP)analysis a procedure that examines Counter tradeThe exchange of goods for other goods rather than for cash; barter. Country betaCovariance of a national economy's rate of return and the rate of return the world economy Country financial riskThe ability of the national economy to generate enough foreign exchange to meet Country risk GeneralLevel of political and economic uncertainty in a country affecting the value of loans or Country selectionA type of active international management that measures the contribution to performance Credit CrunchA decline in the ability or willingness of banks to lend. CurrencyMoney. Currency arbitrageTaking advantage of divergences in exchange rates in different money markets by Currency basketThe value of a portfolio of specific amounts of individual currencies, used as the basis for Currency futureA financial future contract for the delivery of a specified foreign currency. Currency optionAn option to buy or sell a foreign currency. Currency riskRelated: Exchange rate risk Currency risk sharingAn agreement by the parties to a transaction to share the currency risk associated with Currency selectionAsset allocation in which the investor chooses among investments denominated in Currency swapAn agreement to swap a series of specified payment obligations denominated in one currency DeficitAn excess of liabilities over assets, of losses over profits, or of expenditure over income. DeficitAnegative balance in the retained earnings account that is caused by cumulative DeficitSee budget deficit. Devaluation A decrease in the spot price of the currency
Dual-currency issuesEurobonds that pay coupon interest in one currency but pay the principal in a different economic production run (EPR)an estimate of the number Eurocurrency depositA short-term fixed rate time deposit denominated in a currency other than the local Eurocurrency marketThe money market for borrowing and lending currencies that are held in the form of European Currency Unit (ECU)An index of foreign exchange consisting of about 10 European currencies, expectations theory of exchange ratesTheory that expected spot exchange rate equals the forward rate. fixed overhead volume variancesee volume variance Flat trades1) A bond in default trades flat; that is, the price quoted covers both principal and unpaid, Floor traderA member who generally trades only for his own account, for an account controlled by him or Foreign banking marketThat portion of domestic bank loans supplied to foreigners for use abroad. Foreign bondA bond issued on the domestic capital market of anther company. Foreign bond marketThat portion of the domestic bond market that represents issues floated by foreign Foreign Corrupt Practices Act (FCPA)a law passed by U.S. Congress in 1977 that makes it illegal for a U.S. company to engage in various “questionable” foreign payments and Foreign currencyforeign money. Foreign currency optionAn option that conveys the right to buy or sell a specified amount of foreign Foreign currency translationThe process of restating foreign currency accounts of subsidiaries into the Foreign direct investment (FDI)The acquisition abroad of physical assets such as plant and equipment, with Foreign equity marketThat portion of the domestic equity market that represents issues floated by foreign companies. Foreign exchangecurrency from another country. Foreign ExchangeThe currency of a foreign country. Foreign exchange controlsVarious forms of controls imposed by a government on the purchase/sale of Foreign exchange dealerA firm or individual that buys foreign exchange from one party and then sells it to Foreign Exchange MarketA worldwide market in which one country's currency is bought or sold in exchange for another country's currency. Foreign Exchange ReservesA fund containing the central bank's holdings of foreign currency or claims thereon. Foreign exchange riskThe risk that a long or short position in a foreign currency might have to be closed out Foreign exchange swapAn agreement to exchange stipulated amounts of one currency for another currency Foreign marketPart of a nation's internal market, representing the mechanisms for issuing and trading Foreign market betaA measure of foreign market risk that is derived from the capital asset pricing model. Foreign Sales Corporation (FSC)A special type of corporation created by the Tax Reform Act of 1984 that Foreign tax creditHome country credit against domestic income tax for foreign taxes paid on foreign Forward tradeA transaction in which the settlement will occur on a specified date in the future at a price Free TradeThe absence of any government restrictions, such as tariffs or quotas, on imports or exports. GoodwillExcess of the purchase price over the fair market value of the net assets acquired under purchase GoodwillThe excess of the price paid to buy another company over the book value of GoodwillIntangible assets of a firm established by the excess of the price paid for the going concern over the value of its assets. Hard currencyA freely convertible currency that is not expected to depreciate in value in the foreseeable future. Information-motivated tradestrades in which an investor believes he or she possesses pertinent Informationless tradestrades that are the result of either a reallocation of wealth or an implementation of an Liquidity theory of the term structureA biased expectations Theory that asserts that the implied forward Living WillThis is a will which specifically expresses the testator's desire not to be kept alive on life support machines, should the occasion arise. Local expectations theoryA form of the pure expectations Theory which suggests that the returns on bonds Long runA period of time in which all costs are variable; greater than one year. Long runA period of time in which all costs are variable; greater than one year. Market pricesThe amount of money that a willing buyer pays to acquire something from a willing seller, Market segmentation theory or preferred habitat theoryA biased expectations Theory that asserts that the Modern portfolio theoryPrinciples underlying the analysis and evaluation of rational portfolio choices Multicurrency clauseSuch a clause on a Euro loan permits the borrower to switch from one currency to Multicurrency loansGive the borrower the possibility of drawing a loan in different currencies. Mutual offsetA system, such as the arrangement between the CME and SIMEX, which allows trading Negative goodwillA term used to describe a situation in which a business combination Net Cash after OperationsCash flow available for debt service—the payment of interest and principal on loans. Generally calculated as cash provided by operating activities before interest Normal backwardation theoryHolds that the futures price will be bid down to a level below the expected North American Free Trade Agreement (NAFTA)an agreement among Canada, Mexico, and the United States establishing the North American Free trade Zone, with a resulting reduction in trade barriers OffsetElimination of a long or short position by making an opposite transaction. Related: liquidation. On the runThe most recently issued (and, therefore, typically the most liquid) government bond in a OverrunA manufactured or received quantity exceeding the planned amount. pecking order theoryFirms prefer to issue debt rather than equity if internal finance is insufficient. Posttrade benchmarksprices after the decision to trade. Pre-trade benchmarksprices occurring before or at the decision to trade. Preferred habitat theoryA biased expectations Theory that believes the term structure reflects the Premium Offsetafter premiums have been paid for a number of years, further annual premiums may be paid by the current dividends and the surrender of some of the paid-up additions which have built up in the policy. In effect, the policy can begin to pay for itself. Whether a policy becomes eligible for premium offset, the date on which it becomes eligible and whether it remains eligible once premium offset begins, will all depend on how the dividend scale changes over the years. Since dividends are not guaranteed, premium offset cannot be guaranteed either. Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |