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Definition of loads
loads are sales fees (or commissions) that are charged when you buy a mutual fund.
For investment companies, the management fee and "other expenses,"
An investment company that invests in stocks and bonds. The same as a balanced mutual fund.
This is a fund that buys common stock, preferred stock and bonds. The same as a
The measure of a fund's or stocks risk in relation to the market. A beta of 0.7 means
The beta of a fund is determined as follows:
A mortgage loan on newly developed property that the builder subsidizes during the
To purchase an asset; taking a long position.
To cover, offset or close out a short position. Related: evening up, liquidation.
A conditional trading order that indicates a security may be purchased only at the designated
To buy at the end of the trading session at a price within the closing range.
A transaction in which an investor borrows to buy additional shares, using the shares
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
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
An investment company that sells shares like any other corporation and usually does not
Conditional sales contracts
Similar to equipment trust certificates except that the lender is either the
Contingent deferred sales charge (CDSC)
The formal name for the load of a back-end load fund.
Cost of funds
Interest rate associated with borrowing money.
Custodial fees Fees
charged by an institution that holds securities in safekeeping for an investor.
Customary payout ratios
A range of payout ratios that is typical based on an analysis of comparable firms.
Days' sales in inventory ratio
The average number of days' worth of sales that is held in inventory.
Days' sales outstanding
Average collection period.
Dividend payout ratio
Percentage of earnings paid out as dividends.
Dividend yield (Funds)
Indicated yield represents return on a share of a mutual fund held over the past 12
Domestic International Sales Corporation (DISC)
A U.S. corporation that receives a tax incentive for
Employee stock fund
A firm-sponsored program that enables employees to purchase shares of the firm's
Investment funds established for the support of institutions such as colleges, private
Feasible target payout ratios
Payout ratios that are consistent with the availability of excess funds to make
Non-interest bearing deposits held in reserve for depository institutions at their district Federal
Federal funds market
The market where banks can borrow or lend reserves, allowing banks temporarily
Federal funds rate
This is the interest rate that banks with excess reserves at a Federal Reserve district bank
Foreign Sales Corporation (FSC)
A special type of corporation created by the Tax Reform Act of 1984 that
Forward Fed funds
Fed funds traded for future delivery.
See: financial lease.
Set of funds with different investment objectives offered by one management company. In many
Security analysis that seeks to detect misvalued securities by an analysis of the firm's
The product of a statistical model to predict the fundamental risk of a security using not
In the model for calculating fundamental beta, ratios in risk indexes other than
Debt maturing after more than one year.
The ratio of a pension plan's assets to its liabilities.
Related: interest rate risk
Funds From Operations (FFO)
Used by real estate and other investment trusts to define the cash flow from
A mutual fund that can invest anywhere in the world, including the U.S.
A fund that may employ a variety of techniques to enhance returns, such as both buying and
High-coupon bond refunding
Refunding of a high-coupon bond with a new, lower coupon bond.
A mutual fund providing for liberal current income from investments.
Investment fund designed to match the returns on a stockmarket index.
A mutual fund that can invest only outside the United States.
International Monetary Fund
An organization founded in 1944 to oversee exchange arrangements of
Leveraged buyout (LBO)
A transaction used for taking a public corporation private financed through the use
Liability funding strategies
Investment strategies that select assets so that cash flows will equal or exceed
A mutual fund with shares sold at a price including a large sales charge -- typically 4% to 8% of
Low-coupon bond refunding
Refunding of a low coupon bond with a new, higher coupon bond.
Management buyout (MBO)
Leveraged buyout whereby the acquiring group is led by the firm's management.
A bank is said to match fund a loan or other asset when it does so by buying (taking) a deposit of
Money market fund
A mutual fund that invests only in short term securities, such as bankers' acceptances,
mutual funds are pools of money that are managed by an investment company. They offer
Mutual fund theorem
A result associated with the CAPM, asserting that investors will choose to invest their
A system, such as the arrangement between the CME and SIMEX, which allows trading
Mutually exclusive investment decisions
Investment decisions in which the acceptance of a project
Net advantage of refunding
The net present value of the savings from a refunding.
No load mutual fund
An open-end investment company, shares of which are sold without a sales charge.
A mutual fund that does not impose a sales commission. Related: load fund
Not permitted, under the terms of indenture, to be refundable.
Objective (mutual fund)
The fund's investment strategy category as stated in the prospectus. There are
Also called a mutual fund, an investment company that stands ready to sell new shares to the
Overfunded pension plan
A pension plan that has a positive surplus (i.e., assets exceed liabilities).
The portion of total fees in a syndicated credit that go to the participating banks.
Generally, the proportion of earnings paid out to the common stockholders as cash dividends.
Price/sales ratio (PS Ratio)
Determined by dividing current stock price by revenue per share (adjusted for stock splits).
Private Export Funding Corporation (PEFCO)
Company that mobilizes private capital for financing the
Protective put buying strategy
A strategy that involves buying a put option on the underlying security that is
Resembles a sinking fund except that money is used only to purchase bonds if they are selling
Pure index fund
A portfolio that is managed so as to perfectly replicate the performance of the market portfolio.
Eligible for refunding under the terms of indenture.
Also called a prerefunded bond, one that originally may have been issued as a general
The redemption of a bond with proceeds received from issuing lower-cost debt obligations
A mutual fund that invests in a specific geographical area overseas, such as Asia or Europe.
A fund accounting for all revenues from an enterprise financed by a municipal revenue bond.
The fee charged by a mutual fund when purchasing shares, usually payable as a commission to
A key input to a firm's financial planning process. External sales forecasts are based on
An arrangement whereby a firm leases its own equipment, such as IBM leasing its own
Single country fund
A mutual fund that invests in individual countries outside the United States.
Sinking fund requirement
A condition included in some corporate bond indentures that requires the issuer to
Stopping curve refunding rate
A refunding rate that falls on the stopping curve.
Cash flow available after payment of taxes in the project.
The sale of an interest rate swap by one counterparty to the other, effectively ending the swap.
Target payout ratio
A firm's long-run dividend-to-earnings ratio. The firm's policy is to attempt to pay out a
Term Fed Funds
Fed funds sold for a period of time longer than overnight.
The percent of a mutual fund's assets used to defray marketing and distribution expenses. The
mutual funds that do not charge an upfront or back-end commission, but instead take out up to
Two-fund separation theorem
The theoretical result that all investors will hold a combination of the riskfree
Underfunded pension plan
A pension plan that has a negative surplus (i.e., liabilities exceed assets).
Debt maturing within one year (short-term debt). See: funded debt.
NET SALES (revenue)
The amount sold after customers’ returns, sales discounts, and other allowances are taken away from
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