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Definition of Lapses
Policies which are sold but do not remain in force because the policyholder fails to pay premiums.
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.
The length of the time period (for example, a quarter in the case of quarterly
The time that elapses between receipt of payment from a customer and the
A bank machine, sometimes referred to as an automated teller machine (ATM).
The period of time for which financial statements are produced – see also financial year.
A form of organization commonly used by foreign banks to enter the U.S. market. An agency
The annual rate of return that when compounded t times, would have
The time between each payment under an annuity.
Checks deposited by a company that have not yet been cleared.
Checks already deposited that have not yet been cleared.
The average useful life of a company's collective amortizable asset base.
Average number of days necessary to receive cash for the sale of
The ratio of accounts receivables to sales, or the total
Notes issued by states and municipalities to obtain interim financing for
Money in a bank cheque account, the difference between receipts and payments.
Bank discount basis
A convention used for quoting bids and offers for treasury bills in terms of annualized
A draft addressed to a bank.
A 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
Line of credit granted by a bank to a customer.
Money owed to the bank in a cheque account where payments exceed receipts.
The process of taking the balances from the bank statement and the general ledger and making adjustments so that they agree.
A comparison between the cash position recorded on a company’s
A computer message system linking major banks. It is used not for effecting payments, but as a
A short-term credit investment created by a non-financial firm and guaranteed by a
A 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.
State of being unable to pay debts. Thus, the ownership of the firm's assets is transferred from
The reorganization or liquidation of a firm that cannot pay its debts.
Bankruptcy cost view
The argument that expected indirect and direct bankruptcy costs offset the other
The risk that a firm will be unable to meet its debt obligations. Also referred to as default or insolvency risk.
The argument that expected bankruptcy costs preclude firms from being financed entirely
A public agency responsible for regulating and controlling an economy's monetary and financial institutions. It is the sole money-issuing authority.
A flexible exchange rate system in which the government does not intervene.
Clearing House Interbank Payments System (CHIPS)
An international wire transfer system for high-value
An internal department within a company staffed by specialists in collecting past due accounts or accounts receivable.
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.
Procedures to collect and monitor receivables.
A privately owned, profit-seeking firm that accepts deposits and makes loans.
The process of accumulating the time value of money forward in time. For example, interest
When an asset generates earnings that are then reinvested and generate their own earnings.
The number of compounding periods in a year. For example, quarterly
System whereby customers make payments to a regional collection center which transfers funds to
A merchant banking subsidiary set up by several banks that may or may not be of the
The process of accumulating the time value of money forward in time on a
The process of continuously adding interest to a principal plus
Corporate processing float
The time that elapses between receipt of payment from a customer and the
The length of time for which the customer is granted credit.
Critical Growth Periods
Times in a company's history when growth is essential and without which survival of the business might be in jeopardy.
A system of floating exchange rates in which the government occasionally intervenes to change
A flexible exchange rate system in which the government intervenes.
A decrease in book cash but no immediate change in bank cash, generated by checks
The period during which a customer can deduct the discount from the net amount of the bill
Discounted payback period rule
An investment decision rule in which the cash flows are discounted at an
compounding the time value of money for discrete time intervals.
The process of adding interest to a principal plus interest amount
Eligible bankers' acceptances
In the BA market, an acceptance may be referred to as eligible because it is
A bank that regularly accepts foreign currency denominated deposits and makes foreign currency loans.
The time interval over which a money manager's performance is evaluated.
Export-Import Bank (Ex-Im Bank)
The U.S. federal government agency that extends trade credits to U.S.
Extended Amortization Period
An amortization period that continues beyond a long-lived asset's economic useful life.
Extended Amortization Periods
Amortizing capitalized expenditures over estimated useful lives that are unduly optimistic.
Federal Financing Bank
A federal institution that lends to a wide array of federal credit agencies funds it
Federal Home Loan Banks
The institutions that regulate and lend to savings and loan associations. The
Federal Reserve Banks
The twelve district banks in the Federal Reserve System.
The number of shares that are actively tradable in the market, excluding shares that are held by officers
floating rate bond.
Charge or assignment on a company's total assets as security for a loan on total assets without specifying specific assets.
Floating exchange rate
A country's decision to allow its currency value to freely change. The currency is not
Floating Exchange Rate
See flexible exchange rate.
Floating Interest Rate
A rate that fluctuates with general market condition.
General lien against a company's assets or against a particular class of assets.
A guaranteed investment contract where the credit rating is tied to some variable
Floating-rate note (FRN)
Note whose interest payment varies with short-term interest rates.
In an interest rate swap, the counterparty who pays a rate based on a reference rate,
Preferred stock paying dividends that vary with short-term interest rates.
Security paying dividends or interest that vary with short-term interest rates.
The amount of securities believed to be available for immediate purchase, that is, in the
Foreign banking market
That portion of domestic bank loans supplied to foreigners for use abroad.
Fractional Reserve Banking
A banking system in which banks hold only a fraction of their outstanding deposits in cash or on deposit with the central bank.
An exchange rate system characterized by the absence of government intervention. Also known as
Full Credit Period
The period of trade credit given by a supplier to its customer.
A specific period of time after a premium payment is due during which the policy owner may make a payment, and during which, the protection of the policy continues. The grace period usually ends in 30 days.
Length of time during which repayments of loan principal are excused. Usually occurs at the start of the loan period.
Length of time that an individual holds a security.
Holding period return
The rate of return over a given period.
In-house processing float
Refers to the time it takes the receiver of a check to process the payment and
International Bank for Reconstruction and Development - IBRD or World Bank
International 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
Inverse floating rate note
A variable rate security whose coupon rate increases as a benchmark interest rate declines.
Financial intermediaries who perform a variety of services, including aiding in the sale of
Middleman 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.
A legal proceeding for liquidating or reorganizing a business.
Refers to the part of the collection and disbursement process where checks are trapped in the postal system.
Also known as "dirty" float, this is a system of floating exchange rates with central bank
A British term for a bank that specializes not in lending out its own funds, but in providing
A financial institution that engages in investment banking functions, such as advising clients in mergers and acquisitions, underwriting securities and taking debt or equity positions.
Money center banks
banks that raise most of their funds from the domestic and international money markets, relying less on depositors for funds.
A portfolio strategy in which a portfolio is created that will be capable of
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