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Lambda |
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Definition of LambdaLambdaThe percentage change in the price of an option relative to a 1% LambdaThe ratio of a change in the option price to a small change in the option volatility. It is the partial
Related Terms:Elasticity - See Lambda
GreeksCollectively, "greeks" refer to the financial measures delta, gamma, "Soft" Capital RationingCapital rationing that under certain circumstances can be violated or even viewed Abandonment optionThe option of terminating an investment earlier than originally planned. Acceleration ClauseClause causing repayment of a debt, if specified events occur or are not met. Accelerationist HypothesisBelief that an effort to keep unemployment below its natural rate results in an accelerating inflation. ![]() Accounting changeAn alteration in the accounting methodology or estimates used in accounts receivable turnover ratioA ratio computed by dividing annual Acid-test ratioAlso called the quick ratio, the ratio of current assets minus inventories, accruals, and prepaid ACID-TEST RATIOA ratio that shows how well a company could pay its current debts using only its most liquid or “quick” assets. It’s a more pessimistic—but Also realistic—measure of safety than the current ratio, because it ignores sluggish, hard-toliquidate current assets like inventory and notes receivable. Here’s the formula: Acid-test RatioSee quick ratio acid test ratio (also called the quick ratio)The sum of cash, accounts receivable, and short-term marketable Adjusted Cash Flow Provided by Continuing OperationsCash flow provided by operating American optionAn option that may be exercised at any time up to and including the expiration date. American optionAn option that can be exercised any time until its ![]() American Stock Exchange (AMEX)The second-largest stock exchange in the United States. It trades American-style optionAn option contract that can be exercised at any time between the date of purchase and Annual percentage rate (APR)The periodic rate times the number of periods in a year. For example, a 5% annual percentage rate (APR)Interest rate that is annualized using simple interest. Annual percentage yield (APY)The effective, or true, annual rate of return. The APY is the rate actually Appraisal ratioThe signal-to-noise ratio of an analyst's forecasts. The ratio of alpha to residual standard Arbitrage-free option-pricing modelsYield curve option-pricing models. Arm's length priceThe price at which a willing buyer and a willing unrelated seller would freely agree to Articles of incorporationLegal document establishing a corporation and its structure and purpose. Asian optionoption based on the average price of the asset during the life of the option. Ask priceA dealer's price to sell a security; Also called the offer price. Asset activity ratiosratios that measure how effectively the firm is managing its assets. Asset-backed securityA security that is collateralized by loans, leases, receivables, or installment contracts Asset/equity ratioThe ratio of total assets to stockholder equity. asset turnover ratioA broad-gauge ratio computed by dividing annual Available-for-Sale SecurityA debt or equity security not classified as a held-to-maturity security or a trading security. Can be classified as a current or noncurrent investment depending on the intended holding period. Bargain-purchase-price optionGives the lessee the option to purchase the asset at a price below fair market Barrier optionsContracts with trigger points that, when crossed, automatically generate buying or selling of Basic Earnings Power Ratiopercentage of earnings relative to total assets; indication of how Basis priceprice expressed in terms of yield to maturity or annual rate of return. Basket optionsPackages that involve the exchange of more than two currencies against a base currency at Benefit Ratio MethodThe proportion of unemployment benefits paid to a company’s Benefit Wage Ratio MethodThe proportion of total taxable wages for laid off Bid priceThis is the quoted bid, or the highest price an investor is willing to pay to buy a security. Practically Bill of exchangeGeneral term for a document demanding payment. Binomial option pricing modelAn option pricing model in which the underlying asset can take on only two Black-Scholes option-pricing modelA model for pricing call options based on arbitrage arguments that uses cafeteria plan a “menu” of fringe benefit options that includecash or nontaxable benefits Call an optionTo exercise a call option. Call optionAn option contract that gives its holder the right (but not the obligation) to purchase a specified Call OptionA contract that gives the holder the right to buy an asset for a call optionRight to buy an asset at a specified exercise price on or before the exercise date. Call priceThe price, specified at issuance, at which the issuer of a bond may retire part of the bond at a Call priceThe price for which a bond can be repaid before maturity under a call provision. Canadian Deposit Insurance CorporationBetter known as CDIC, this is an organization which insures qualifying deposits and GICs at savings institutions, mainly banks and trust companys, which belong to the CDIC for amounts up to $60,000 and for terms of up to five years. Many types of deposits are not insured, such as mortgage-backed deposits, annuities of duration of more than five years, and mutual funds. Capital rationingPlacing one or more limits on the amount of new investment undertaken by a firm, either capital rationinga condition that exists when there is an capital rationingLimit set on the amount of funds available for investment. Capitalization ratiosAlso called financial leverage ratios, these ratios compare debt to total capitalization Cash flow coverage ratioThe number of times that financial obligations (for interest, principal payments, Cash flow from operationsA firm's net cash inflow resulting directly from its regular operations Cash Flow–to–Income Ratio (CFI)Adjusted cash flow provided by continuing operations CASH FLOWS FROM OPERATIONSA section on the cash-flow Stockholders’ equity statement that shows how much cash came into a company and how much went out during the normal course of business. Cash ratioThe proportion of a firm's assets held as cash. Cash Ratioratio of cash and cash equivalents to liabilities; in the case of a bank, the ratio of cash to total deposit liabilities. Change in Accounting EstimateA change in accounting that occurs as the result of new information Change in Accounting EstimateA change in the implementation of an existing accounting Change in Accounting PrincipleA change from one generally accepted accounting principle to another generally accepted accounting principle—for example, a change from capitalizing expenditures Change in Reporting EntityA change in the scope of the entities included in a set of, typically, consolidated financial statements. Changes in Financial PositionSources of funds internally provided from operations that alter a company's Chicago Mercantile Exchange (CME)A not-for-profit corporation owned by its members. Its primary Clean priceBond price excluding accrued interest. Commodities Exchange Center (CEC)The location of five New York futures exchanges: Commodity Common stock ratiosratios that are designed to measure the relative claims of stockholders to earnings Compound optionoption on an option. Concentration accountA single centralized account into which funds collected at regional locations concentration bankingSystem whereby customers make payments to a regional collection center which transfers funds to Concentration servicesMovement of cash from different lockbox locations into a single concentration Configuration auditA review of all engineering documentation used as the basis Configuration controlVerifying that a delivered product matches authorizing Consumer Price Index (CPI)The CPI, as it is called, measures the prices of consumer goods and services and is a Consumer Price Index (CPI)An index calculated by tracking the cost of a typical bundle of consumer goods and services over time. It is commonly used to measure inflation. contribution margin ratiothe proportion of each revenue dollar remaining after variable costs have been covered; Controlled foreign corporation (CFC)A foreign corporation whose voting stock is more than 50% owned Conversion parity priceRelated:Market conversion price Conversion ratioThe number of shares of common stock that the security holder will receive from Convertible exchangeable preferred stockConvertible preferred stock that may be exchanged, at the Convertible priceThe contractually specified price per share at which a convertible security can be Convertible securityA security that can be converted into common stock at the option of the security holder, CorporationA legal "person" that is separate and distinct from its owners. A corporation is allowed to own CorporationA legal entity, organized under state laws, whose investors purchase corporationBusiness owned by stockholders who are not personally Cost-benefit ratioThe net present value of an investment divided by the investment's initial cost. Also called Coverage ratiosratios used to test the adequacy of cash flows generated through earnings for purposes of Covered or hedge option strategiesStrategies that involve a position in an option as well as a position in the Credit RationingRestriction of loans by lenders so that not all borrowers willing to pay the current interest rate are able to obtain loans. Cumulative Effect of a Change in Accounting PrincipleThe change in earnings of previous years Cumulative Effect of Accounting ChangeThe change in earnings of previous years assuming Currency optionAn option to buy or sell a foreign currency. Current ratioIndicator of short-term debt paying ability. Determined by dividing current assets by current Current ratioA ratio that shows how many times a company could pay its current debts if it used its current assets to pay them. The formula: current ratioCalculated to assess the short-term solvency, or debt-paying Current RatioA measure of the ability of a company to use its current assets to Current RatioCurrent assets divided by current liabilities. This ratio indicates the extent to which the claims of short-term creditors are covered by assets expected to be converted to cash in the near future. Customary payout ratiosA range of payout ratios that is typical based on an analysis of comparable firms. Days' sales in inventory ratioThe average number of days' worth of sales that is held in inventory. Dealer optionsOver-the-counter options, such as those offered by government and mortgage-backed Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |