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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 generalization formula invented by Abrams that is the present value of regular but noncontiguous cash flows that have constant growth to perpetuity.
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
Checks deposited by a company that have not yet been cleared.
The ratio of accounts receivables to sales, or the total
Notes issued by states and municipalities to obtain interim financing for
A convention used for quoting bids and offers for treasury bills in terms of annualized
A draft addressed to a bank.
Line of credit granted by a bank to a customer.
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
An international bank headquartered in Basel, Switzerland, which
State of being unable to pay debts. Thus, the ownership of the firm's assets is transferred from
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
Clearing House Interbank Payments System (CHIPS)
An international wire transfer system for high-value
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.
The process of accumulating the time value of money forward in time. For example, interest
The number of compounding periods in a year. For example, quarterly
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
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.
A system of floating exchange rates in which the government occasionally intervenes to change
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.
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.
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
The number of shares that are actively tradable in the market, excluding shares that are held by officers
floating rate bond.
Floating exchange rate
A country's decision to allow its currency value to freely change. The currency is not
General lien against a company's assets or against a particular class of assets.
The amount of securities believed to be available for immediate purchase, that is, in the
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.
Foreign banking market
That portion of domestic bank loans supplied to foreigners for use abroad.
An exchange rate system characterized by the absence of government intervention. Also known as
Length of time that an individual holds a security.
Holding period return
The rate of return over a given period.
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
In-house processing float
Refers to the time it takes the receiver of a check to process the payment and
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
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
Sum of disbursement float and collection float.
The period of time between the end of the discount period and the date payment is due.
In the Euromarket, a period over which Eurodollars are sold is said to be neutral if it does not
Company-written checks that have not yet cleared.
PIBOR (Paris Interbank Offer Rate)
The deposit rate on interbank transactions in the Eurocurrency market
A bankruptcy in which a debtor and its creditors pre-negotiate a plan or
Society for Worldwide Interbank Financial Telecommunications (SWIFT)
A dedicated computer network to support funds transfer messages internationally between over 900 member banks worldwide.
The return of a portfolio over a shorter period of time than the evaluation period.
T-period holding-period return
The percentage return over the T-year period an investment lasts.
Time during which the SEC studies a firm's registration statement. During this time the firm
Wholesale mortgage banking
The purchasing of loans originated by others, with the servicing rights
Realignment period of a temporary misaligned yield relationship that sometimes occurs in
A multilateral development finance agency created by the 1944 Bretton Woods, New
The period of time for which financial statements are produced â€“ see also financial year.
Money in a bank cheque account, the difference between receipts and payments.
Money owed to the bank in a cheque account where payments exceed receipts.
The costs that relate to a period of time.
The process of taking the balances from the bank statement and the general ledger and making adjustments so that they agree.
Periodic inventory system
An inventory system in which the balance in the Inventory account is adjusted for the units sold only at the end of the period.
Average Collection Period
Average number of days necessary to receive cash for the sale of
The process of continuously adding interest to a principal plus
The process of adding interest to a principal plus interest amount
The number of years necessary for the net cash flows of an
the time it takes an investor to recoup an
cost other than one associated with making or acquiring inventory
a pay plan based on the time spent on the task rather than the work accomplished
Odd first or last period
Fixed-income securities may be purchased on dates
A comparison between the cash position recorded on a companyâ€™s
The time period for which transactions are compiled into a set of financial statements.
Checks already deposited that have not yet been cleared.
The reorganization or liquidation of a firm that cannot pay its debts.
Procedures to collect and monitor receivables.
System whereby customers make payments to a regional collection center which transfers funds to
Security paying dividends or interest that vary with short-term interest rates.
Difference between payment float and availability float.
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