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Financial Terms | |
Policyowner |
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Definition of PolicyownerPolicyownerThe person who owns and holds all rights under the policy, including the power to name and change beneficiaries, make a policy loan, assign the policy to a financial institution as collateral for a loan, withdraw funds or surrender the policy.
Related Terms:12b-1 fundsMutual funds that do not charge an upfront or back-end commission, but instead take out up to Accomodating PolicyA monetary policy of matching wage and price increases with money supply increases so that the real money supply does not fall and push the economy into recession. Accounting changeAn alteration in the accounting methodology or estimates used in acid test ratio (also called the quick ratio)The sum of cash, accounts receivable, and short-term marketable All equity rateThe discount rate that reflects only the business risks of a project and abstracts from the All-in costTotal costs, explicit and implicit. All or noneRequirement that none of an order be executed unless all of it can be executed at the specified price. ![]() All-or-none underwritingAn arrangement whereby a security issue is canceled if the underwriter is unable allocateassign based on the use of a cost driver, a cost predictor, allocationthe systematic assignment of an amount to a recipient AllocationThe process of storing costs in one account and shifting them to other Allocation base A measure of activity or volume such as labourhours, machine hours or volume of production Allowance for bad debtsAn offset to the accounts receivable balance, against which Allowance for doubtful accountsA contra account related to accounts receivable that represents the amounts that the company expects will not be collected. Allowance for Doubtful AccountsAn estimate of the uncollectible portion of accounts receivable Allowance methodA method of adjusting accounts receivable to the amount that is expected to be collected based on company experience. ![]() American Stock Exchange (AMEX)The second-largest stock exchange in the United States. It trades Appraisal rightsA right of shareholders in a merger to demand the payment of a fair price for their shares, as approximated net realizable value at split-off allocationa method of allocating joint cost to joint products using a Asset allocation decisionThe decision regarding how an institution's funds should be distributed among the AssignmentThe receipt of an exercise notice by an options writer that requires the writer to sell (in the case AssignmentThis is the legal transfer on one person's interest in an insurance policy to another person or entity, such as to a bank to qualify for a loan Back-to-back loanA loan in which two companies in separate countries borrow each other's currency for a Balloon maturityAny large principal payment due at maturity for a bond or loan with or without a a sinking Basic Earnings Power RatioPercentage of earnings relative to total assets; indication of how Beggar-My-Neighbor PolicyA policy designed to increase an economy's prosperity at the expense of another country's prosperity. Beta equation (Mutual Funds)The beta of a fund is determined as follows: ![]() Beta (Mutual Funds)The measure of a fund's or stocks risk in relation to the market. A beta of 0.7 means Bill of exchangeGeneral term for a document demanding payment. Borrower falloutIn the mortgage pipeline, the risk that prospective borrowers of loans committed to be Bridge LoanA short term loan to cover the immediate cash requirements until permanent financing is received. Broker loan rateRelated: Call money rate. Builder buydown loanA mortgage loan on newly developed property that the builder subsidizes during the Bullet loanA bank term loan that calls for no amortization. BuydownsMortgages in which monthly payments consist of principal and interest, with portions of these CallAn option that gives the right to buy the underlying futures contract. Call a. An option to buy a certain quantity of a stock or commodity for a Call an optionTo exercise a call option. Call dateA date before maturity, specified at issuance, when the issuer of a bond may retire part of the bond Call money rateAlso called the broker loan rate , the interest rate that banks charge brokers to finance Call optionAn option contract that gives its holder the right (but not the obligation) to purchase a specified Call OptionA contract that gives the holder the right to buy an asset for a call optionRight to buy an asset at a specified exercise price on or before the exercise date. Call priceThe price, specified at issuance, at which the issuer of a bond may retire part of the bond at a Call priceThe price for which a bond can be repaid before maturity under a call provision. Call protectionA feature of some callable bonds that establishes an initial period when the bonds may not be Call provisionAn embedded option granting a bond issuer the right to buy back all or part of the issue prior Call riskThe combination of cash flow uncertainty and reinvestment risk introduced by a call provision. Call swaptionA swaption in which the buyer has the right to enter into a swap as a fixed-rate payer. The CallableA financial security such as a bond with a call option attached to it, i.e., the issuer has the right to Callable bondA bond that allows the issuer to buy back the bond at a callable bondBond that may be repurchased by the issuer before maturity at specified call price. Capital allocationdecision allocation of invested funds between risk-free assets versus the risky portfolio. Capital Consumption AllowanceSee depreciation. Capital Cost Allowance (CCA)The annual depreciation expense allowed by the Canadian Income Tax Act. Cash-surrender valueAn amount the insurance company will pay if the policyholder ends a whole life Cash Surrender ValueThis is the amount available to the owner of a life insurance policy upon voluntary termination of the policy before it becomes payable by the death of the life insured. This does not apply to term insurance but only to those policies which have reduced paid up values and cash surrender values. A cash surrender in lieu of death benefit usually has tax implications. Cash Surrender ValueBenefit that entitles a policy owner to an amount of money upon cancellation of a policy. Change in Accounting EstimateA change in accounting that occurs as the result of new information Change in Accounting EstimateA change in the implementation of an existing accounting Change in Accounting PrincipleA change from one generally accepted accounting principle to another generally accepted accounting principle—for example, a change from capitalizing expenditures Change in Reporting EntityA change in the scope of the entities included in a set of, typically, consolidated financial statements. Changes in Financial PositionSources of funds internally provided from operations that alter a company's Chicago Mercantile Exchange (CME)A not-for-profit corporation owned by its members. Its primary chief financial officer (CFO)Officer who oversees the treasurer and controller and sets overall financial strategy. Chinese wallCommunication barrier between financiers (investment bankers) and traders. This barrier is Cold-Turkey PolicyDecreasing inflation by immediately decreasing the money growth rate to a new, low rate. Contrast with gradualism. CollateralAssets than can be repossessed if a borrower defaults. CollateralAssets that are used to secure a loan. collateralA pledge of property or other assets by a customer who is borrowing from a financial institution. financial institutions require collateral as security in the event that the customer defaults on his/her loan. Collateral trust bondsA bond in which the issuer (often a holding company) grants investors a lien on Collateralized mortgage obligation (CMO)A security backed by a pool of pass-throughs , structured so that Collection policyProcedures followed by a firm in attempting to collect accounts receivables. collection policyProcedures to collect and monitor receivables. Commercial Business Loan (Credit Insurance)An agreement between a creditor and a borrower, where the creditor has loaned an amount to the borrower for business purposes. Commodities Exchange Center (CEC)The location of five New York futures exchanges: Commodity Completion undertakingAn undertaking either (1) to complete a project such that it meets certain specified Convertible exchangeable preferred stockConvertible preferred stock that may be exchanged, at the Corporate financial managementThe application of financial principals within a corporation to create and Corporate financial planningfinancial planning conducted by a firm that encompasses preparation of both cost allocationthe assignment, using some reasonable basis, Cost of fundsInterest rate associated with borrowing money. costs of financial distressCosts arising from bankruptcy or distorted business decisions before bankruptcy. Country financial riskThe ability of the national economy to generate enough foreign exchange to meet Covered callA short call option position in which the writer owns the number of shares of the underlying Covered call writing strategyA strategy that involves writing a call option on securities that the investor credit policyStandards set to determine the amount and nature of credit to extend to customers. Cum rightsWith rights. Cumulative Effect of a Change in Accounting PrincipleThe change in earnings of previous years Cumulative Effect of Accounting ChangeThe change in earnings of previous years assuming Dealer loanOvernight, collateralized loan made to a dealer financing his position by borrowing from a Deferred callA provision that prohibits the company from calling the bond before a certain date. During this Delivery policyA company’s stated goal for how soon a customer order will be Demand LoanA loan which must be repaid in full on demand. Demand Management PolicyFiscal or monetary policy designed to influence aggregate demand for goods and services. Depreciation AllowancesTax deductions that businesses can claim when they spend money on investment goods. Discretionary PolicyA policy that is a conscious, considered response to each situation as it arises. Contrast with policy rule. Dividend policyAn established guide for the firm to determine the amount of money it will pay as dividends. Dividend PolicyThis policy governs Canada Life's actions regarding distribution of dividends to policyholders. It's goal is to achieve a dividend distribution that is equitable and timely, and which gives full recognition of the need to ensure the ongoing solidity of the company. It also specifies that distribution to individual policyholders must be equitable between dividend classes and policyholder generations, and among policyholders within any class. Dividend rightsA shareholders' rights to receive per-share dividends identical to those other shareholders receive. Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |