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Definition of maquiladora
a business (typically U.S.-owned on the Mexican
Same as PV, but usually includes a subtraction for an initial cash outlay.
the value in today’s dollars of cash flows that occur in different time periods.
Money owed to suppliers.
The net present value analysis of an asset if financed solely by equity
An arrangement whereby a security issue is canceled if the underwriter is unable
Yield curve option-pricing models.
A security that is collateralized by loans, leases, receivables, or installment contracts
The fee paid on the extension date if the buyer wishes to continue the option.
Brokerage house clerical operations that support, but do not include, the trading of stocks and
An intercompany loan channeled through a bank.
A loan in which two companies in separate countries borrow each other's currency for a
1) When bond yields and prices fall, the market is said to back-up.
A market condition in which futures prices are lower in the distant delivery months than in
A statistical compilation formulated by a sovereign nation of all economic transactions
Net flow of goods (exports minus imports) between countries.
Basic business strategies
Key strategies a firm intends to pursue in carrying out its business plan.
Related: Program trades.
Blanket inventory lien
A secured loan that gives the lender a lien against all the borrower's inventories.
A large trading order, defined on the New York Stock Exchange as an order that consists of
A contract for privately placed debt.
With respect to convertible bonds, the value the security would have if it were not convertible
A company's book value is its total assets minus intangible assets and liabilities, such as debt. A
Book value per share
The ratio of stockholder equity to the average number of common shares. Book value
In the mortgage pipeline, the risk that prospective borrowers of loans committed to be
Break-even lease payment
The lease payment at which a party to a prospective lease is indifferent between
Break-even payment rate
The prepayment rate of a MBS coupon that will produce the same CFY as that of
A rise in a security's price above a resistance level (commonly its previous high price) or drop
Bretton Woods Agreement
An agreement signed by the original United Nations members in 1944 that
Repetitive cycles of economic expansion and recession.
A business that has terminated with a loss to creditors.
The risk that the cash flow of an issuer will be impaired because of adverse economic
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
Cash deficiency agreement
An agreement to invest cash in a project to the extent required to cover any cash
An amount the insurance company will pay if the policyholder ends a whole life
Refers to a situation where a firm runs out of cash and cannot readily sell marketable securities.
Clearing House Automated Payments System (CHAPS)
A computerized clearing system for sterling funds
Clearing House Interbank Payments System (CHIPS)
An international wire transfer system for high-value
An undertaking either (1) to complete a project such that it meets certain specified
An understanding between a company and the host government that specifies the
Controlled foreign corporation (CFC)
A foreign corporation whose voting stock is more than 50% owned
Also called parity value, the value of a convertible security if it is converted immediately.
Corporate processing float
The time that elapses between receipt of payment from a customer and the
The exchange of goods for other goods rather than for cash; barter.
A bond's interest payments.
Refers to the volatility of returns on international investments caused by events associated
Customary payout ratios
A range of payout ratios that is typical based on an analysis of comparable firms.
Date of payment
Date dividend checks are mailed.
Days' sales in inventory ratio
The average number of days' worth of sales that is held in inventory.
Days' sales outstanding
Average collection period.
Delivery versus payment
A transaction in which the buyer's payment for securities is due at the time of
A conception of the way a stock's price changes that assumes that the price takes on all
Discounted payback period rule
An investment decision rule in which the cash flows are discounted at an
With respect to a project financing, an arrangement under which the sponsors of a project
Dividend payout ratio
Percentage of earnings paid out as dividends.
agreement between two countries that taxes paid abroad can be offset against
Barrier option that expires if asset price hits a barrier.
Equity contribution agreement
An agreement to contribute equity to a project under certain specified
The amount of advantage over a current market transaction provided by an in-the-money
The weighted average of a probability distribution.
Expected value of perfect information
The expected value if the future uncertain outcomes could be known
Export-Import Bank (Ex-Im Bank)
The U.S. federal government agency that extends trade credits to U.S.
Extra or special dividends
A dividend that is paid in addition to a firm's "regular" quarterly dividend.
Extraordinary positive value
A positive net present value.
See: Par value.
A type of mortgage pipeline risk that is generally created when the terms of the loan to be
Feasible target payout ratios
payout ratios that are consistent with the availability of excess funds to make
FHA prepayment experience
The percentage of loans in a pool of mortgages outstanding at the origination
Firm commitment underwriting
An undewriting in which an investment banking firm commits to buy the
Firm's net value of debt
Total firm value minus total firm debt.
A method of valuing the cost of goods sold that uses the cost of the oldest item in
Fiscal agency agreement
An alternative to a bond trust deed. Unlike the trustee, the fiscal agent acts as an
In an interest rate swap the counterparty who pays a fixed rate, usually in exchange for a
1) A bond in default trades flat; that is, the price quoted covers both principal and unpaid,
In an interest rate swap, the counterparty who pays a rate based on a reference rate,
A member who generally trades only for his own account, for an account controlled by him or
Foreign banking market
That portion of domestic bank loans supplied to foreigners for use abroad.
A bond issued on the domestic capital market of anther company.
Foreign bond market
That portion of the domestic bond market that represents issues floated by foreign
Foreign currency option
An option that conveys the right to buy or sell a specified amount of foreign
Foreign currency translation
The 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 market
That portion of the domestic equity market that represents issues floated by foreign companies.
Currency from another country.
Foreign exchange controls
Various forms of controls imposed by a government on the purchase/sale of
Foreign exchange dealer
A firm or individual that buys foreign exchange from one party and then sells it to
Foreign exchange risk
The risk that a long or short position in a foreign currency might have to be closed out
Foreign exchange swap
An agreement to exchange stipulated amounts of one currency for another currency
Part of a nation's internal market, representing the mechanisms for issuing and trading
Foreign market beta
A 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 credit
Home country credit against domestic income tax for foreign taxes paid on foreign
Forward rate agreement (FRA)
agreement to borrow or lend at a specified future date at an interest rate
A transaction in which the settlement will occur on a specified date in the future at a price
Free cash flows
Cash not required for operations or for reinvestment. Often defined as earnings before
An exchange rate system characterized by the absence of government intervention. Also known as
Free on board
Implies that distributive services like transport and handling performed on goods up to the
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