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Definition of Mark-up
The amount added to a lower figure to reach a higher figure, expressed as a percentage of the
the period after an announcement of a takeover bid in which stock prices typically rise until a merger or acquisition is made (or until it falls through).
An increase in the cost of a product to arrive at its selling price.
A network of trading desks for the major brokerage firms and institutional investors that
Total quantity of goods and services supplied.
Combinations of price level and income for which the labor market is in equilibrium. The short-run aggregate supply curve incorporates information and price/wage inflexibilities in the labor market, whereas the long-run aggregate supply curve does not.
markets in which the prevailing price is determined through the free interaction of
1) When bond yields and prices fall, the market is said to back-up.
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.
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
Any market in which prices are in a declining trend.
A market in which stock or bond prices are generally
A prolonged period of falling stock market prices.
The performance of a predetermined set of securities, for comparison purposes. Such sets may be
A standard by which something may be compared and measured
Use of an inappropriate proxy for the true market portfolio.
Benchmark interest rate
Also called the base interest rate, it is the minimum interest rate investors will
Also called on-the-run or current coupon issues or bellwether issues. In the secondary
the process of investigating how others do something better so that the investigating company can imitate,
An illegal market.
Bottom-up equity management style
A management style that de-emphasizes the significance of economic
A market where an intermediary offers search services to buyers and sellers.
Any market in which prices are in an upward trend.
A market in which stock or bond prices are generally rising.
A prolonged period of rising stock market prices.
The foreign market in the United Kingdom.
The market for trading long-term debt instruments (those that mature in more than one year).
The market in which investors buy and sell shares of companies, normally associated with a Stock Exchange.
A market that specializes in trading long-term, relatively high risk
The market in which savings are made available to those needing funds to undertake investment projects. A financial market in which longer-term (maturity greater than one year) bonds and stocks are traded.
Capital market efficiency
Reflects the relative amount of wealth wasted in making transactions. An efficient
Capital market imperfections view
The view that issuing debt is generally valuable but that the firm's
Capital market line (CML)
The line defined by every combination of the risk-free asset and the market portfolio.
markets for long-term financing.
Also called spot markets, these are markets that involve the immediate delivery of a security
An agreement between two or more countries that permits the free movement of capital
Common stock market
The market for trading equities, not including preferred stock.
Complete capital market
A market in which there is a distinct marketable security for each and every
Corner A Market
To purchase enough of the available supply of a commodity or stock in order to
The periodic interest payment made to the bondholders during the life of the bond.
Detachable certificate attached to a bond that shows the amount of
The interest payments paid to the bondholder.
The annual interest payment associated with a bond.
Any bond with a coupon. Contrast with discount bond.
Coupon / Coupons
The periodic interest payment(s) made by the issuer of a bond
The dates when the coupons are paid. Typically a bond pays
Coupon equivalent yield
True interest cost expressed on the basis of a 365-day year.
A bond's interest payments.
In bonds, notes or other fixed income securities, the stated percentage rate of interest, usually
The rate of interest paid on a debt security. Generally stated on an
The nominal interest rate that the issuer promises to pay the
Annual interest payment as a percentage of face value.
A bond selling at or close to par, that is, a bond with a coupon close to the yields currently
Related: Benchmark issues
A benchmark that is designed to meet a client's requirements and long-term
A market where traders specializing in particular commodities buy and sell assets for their
The market for trading debt instruments.
markets for derivative instruments.
Direct search market
Buyers and sellers seek each other directly and transact directly.
DLOM (discount for lack of marketability)
an amount or percentage deducted from an equity interest to reflect lack of marketability.
Part of a nation's internal market representing the mechanisms for issuing and trading
Dupont system of financial control
Highlights the fact that return on assets (ROA) can be expressed in terms
Inventory that has been physically marked as being for a
Efficient capital market
A market in which new information is very quickly reflected accurately in share
efficient capital markets
Financial markets in which security prices rapidly reflect all relevant information about asset values.
Efficient Market Hypothesis
In general the hypothesis states that all relevant information is fully and
Efficient Markets Hypothesis
The hypothesis that securities are typically in equilibrium--that they are fairly priced in the sense that the price reflects all publicly available information on the security.
In the interbank Eurodollar deposit market, an either-way market is one in which the bid
The financial markets of developing economies.
Equilibrium market price of risk
The slope of the capital market line (CML). Since the CML represents the
equivalent units of production (EUP)
an approximation of the number of whole units of output that could have been
The money market for borrowing and lending currencies that are held in the form of
Buying or selling to offset an existing market position.
Excess return on the market portfolio
The difference between the return on the market portfolio and the
A situation in which supply exceeds demand.
Also referred to as the international market, the offshore market, or, more popularly, the
Fair market price
Amount at which an asset would change hands between two parties, both having
Fair market value
The price that an asset or service will fetch on the open market.
Fair Market Value
The highest price available, expressed in terms of cash, in an open and unrestricted market between informed, prudent parties acting at arm's length and under no compulsion to transact.
Farm Improvement and Marketing Cooperatives Loans Act
Federal funds market
The market where banks can borrow or lend reserves, allowing banks temporarily
Federal Open Market Committee (FOMC)
Fed committee that makes decisions about open-market operations.
An organized institutional structure or mechanism for creating and exchanging financial assets.
markets in which financial assets are traded.
The market for trading bonds and preferred stock.
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.
Foreign bond market
That portion of the domestic bond market that represents issues floated by foreign
Foreign Corrupt Practices Act (FCPA)
a law passed by U.S. Congress in 1977 that makes it illegal for a U.S. company to engage in various “questionable” foreign payments and
Foreign equity market
That portion of the domestic equity market that represents issues floated by foreign companies.
Foreign Exchange Market
A worldwide market in which one country's currency is bought or sold in exchange for another country's 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.
Forward Exchange Market
A market in which foreign exchange can be bought or sold for delivery (and payment) at some specified future date but at a price agreed upon now.
A market in which participants agree to trade some commodity, security, or foreign
Direct trading in exchange-listed securities between investors without the use of a broker.
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