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Definition of New Classicals
Economists who, like classical economists, believe that wages and prices are sufficiently flexible to solve the unemployment problem without help from government policy.
Also known as the Big Board or The Exhange. More than 2,00 common
The market in which a new issue of securities is first sold to investors.
In a Treasury auction, the amount by which the par value of the securities offered exceeds that of
A new issue of stock after the company's securities have previously been issued. A
Economists who, like Keynes, believe that for good reason wages and prices are sticky and so prolong recessions, suggesting a need for government policy.
Sometimes, simply called YRT, this is a form of term life insurance that may be renewed annually without evidence of insurability to a stated age.
A promise that a life insurance policy will be renewed without penalty or medical examination after the term has expired. The renewal rate can also be guaranteed.
an amount or percentage deducted from an equity interest to reflect lack of marketability.
model for calculating DLOM for minority interests r the discount rate
A merger or consolidation in which an acquirer purchases the acquiree's stock.
Publicly traded issues that may be collateralized by mortgages and MBSs.
The second-largest stock exchange in the United States. It trades
markets in which the prevailing price is determined through the free interaction of
Floating rate preferred stock, the dividend on which is adjusted every
Any market in which prices are in a declining trend.
Also called on-the-run or current coupon issues or bellwether issues. In the secondary
Beta equation (Stocks)
The beta of a stock is determined as follows:
Bill of exchange
General term for a document demanding payment.
An illegal market.
A market where an intermediary offers search services to buyers and sellers.
Any market in which prices are in an upward trend.
The foreign market in the United Kingdom.
The market for trading long-term debt instruments (those that mature in more than one year).
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.
Also called spot markets, these are markets that involve the immediate delivery of a security
Chicago Mercantile Exchange (CME)
A not-for-profit corporation owned by its members. Its primary
Commodities Exchange Center (CEC)
The location of five New york futures exchanges: Commodity
An agreement between two or more countries that permits the free movement of capital
These are securities that represent equity ownership in a company. Common shares let an
Common stock/other equity
Value of outstanding common shares at par, plus accumulated retained
Common stock equivalent
A convertible security that is traded like an equity issue because the optioned
Common stock market
The market for trading equities, not including preferred stock.
Common stock ratios
Ratios that are designed to measure the relative claims of stockholders to earnings
Complete capital market
A market in which there is a distinct marketable security for each and every
Conflict between bondholders and stockholders
These two groups may have interests in a corporation that
Convertible exchangeable preferred stock
Convertible preferred stock that may be exchanged, at the
Convertible preferred stock
Preferred stock that can be converted into common stock at the option of the holder.
Corner A Market
To purchase enough of the available supply of a commodity or stock in order to
Cumulative preferred stock
Preferred stock whose dividends accrue, should the issuer not make timely
Related: Benchmark issues
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.
Direct stock-purchase programs
The purchase by investors of securities directly from the issuer.
Dividend yield (Stocks)
Indicated yield represents annual dividends divided by current stock price.
Part of a nation's internal market representing the mechanisms for issuing and trading
Eurobonds that pay coupon interest in one currency but pay the principal in a different
Efficient capital market
A market in which new information is very quickly reflected accurately in share
Efficient Market Hypothesis
In general the hypothesis states that all relevant information is fully and
In the interbank Eurodollar deposit market, an either-way market is one in which the bid
The financial markets of developing economies.
Employee stock fund
A firm-sponsored program that enables employees to purchase shares of the firm's
Employee stock ownership plan (ESOP)
A company contributes to a trust fund that buys stock on behalf of
Equilibrium market price of risk
The slope of the capital market line (CML). Since the CML represents the
The money market for borrowing and lending currencies that are held in the form of
Securities sold in the Euromarket. That is, securities initially sold to investors
Excess return on the market portfolio
The difference between the return on the market portfolio and the
The marketplace in which shares, options and futures on stocks, bonds, commodities and indices
A nickname for the New york stock exchange. Also known as the Big Board. More than
Governmental restrictions on the purchase of foreign currencies by domestic citizens or
Exchange of assets
Acquisition of another company by purchase of its assets in exchange for cash or stock.
Exchange of stock
Acquisition of another company by purchase of its stock in exchange for cash or shares.
An offer by the firm to give one security, such as a bond or preferred stock, in exchange for
The price of one country's currency expressed in another country's currency.
Exchange Rate Mechanism (ERM)
The methodology by which members of the EMS maintain their
Exchange rate risk
Also called currency risk, the risk of an investment's value changing because of currency
The variability of a firm's value that results from unexpected exchange rate changes or the
Security that grants the security holder the right to exchange the security for the
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
Federal funds market
The market where banks can borrow or lend reserves, allowing banks temporarily
An organized institutional structure or mechanism for creating and exchanging financial assets.
A country's decision to tie the value of its currency to another country's currency, gold
The market for trading bonds and preferred stock.
Floating exchange rate
A country's decision to allow its currency value to freely change. The currency is not
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 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.
Forward exchange rate
exchange rate fixed today for exchanging currency at some future date.
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.
A market in which contracts for future delivery of a commodity or a security are bought or sold.
Gold exchange standard
A system of fixing exchange rates adopted in the Bretton Woods agreement. It
Purchases and sales of eurobonds that occur before the issue price is finally set.
Common stock of a company that has an opportunity to invest money and earn more than the
Historical exchange rate
An accounting term that refers to the exchange rate in effect when an asset or
Common stock with a high dividend yield and few profitable investment opportunities.
Index and Option Market (IOM)
A division of the CME established in 1982 for trading stock index
spread The spread between the interest rate offered in two sectors of the bond market for
Intermarket spread swaps
An exchange of one bond for another based on the manager's projection of a
The mechanisms for issuing and trading securities within a nation, including its domestic
Internally efficient market
Operationally efficient market.
Related: See external market.
International Monetary Market (IMM)
A division of the CME established in 1972 for trading financial
Intramarket sector spread
The spread between two issues of the same maturity within a market sector. For
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