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Definition of Policyowner
The 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.
Mutual funds that do not charge an upfront or back-end commission, but instead take out up to
A 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.
An alteration in the accounting methodology or estimates used in
The sum of cash, accounts receivable, and short-term marketable
The discount rate that reflects only the business risks of a project and abstracts from the
Total costs, explicit and implicit.
Requirement that none of an order be executed unless all of it can be executed at the specified price.
An arrangement whereby a security issue is canceled if the underwriter is unable
assign based on the use of a cost driver, a cost predictor,
the systematic assignment of an amount to a recipient
The process of storing costs in one account and shifting them to other
hours, machine hours or volume of production
An offset to the accounts receivable balance, against which
A contra account related to accounts receivable that represents the amounts that the company expects will not be collected.
An estimate of the uncollectible portion of accounts receivable
A 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
A 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 allocation
a method of allocating joint cost to joint products using a
Asset allocation decision
The decision regarding how an institution's funds should be distributed among the
The receipt of an exercise notice by an options writer that requires the writer to sell (in the case
This 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
A loan in which two companies in separate countries borrow each other's currency for a
Any large principal payment due at maturity for a bond or loan with or without a a sinking
Basic Earnings Power Ratio
Percentage of earnings relative to total assets; indication of how
A 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 exchange
General term for a document demanding payment.
In the mortgage pipeline, the risk that prospective borrowers of loans committed to be
A short term loan to cover the immediate cash requirements until permanent financing is received.
Broker loan rate
Related: Call money rate.
Builder buydown loan
A mortgage loan on newly developed property that the builder subsidizes during the
A bank term loan that calls for no amortization.
Mortgages in which monthly payments consist of principal and interest, with portions of these
An option that gives the right to buy the underlying futures contract.
a. An option to buy a certain quantity of a stock or commodity for a
Call an option
To exercise a call option.
A date before maturity, specified at issuance, when the issuer of a bond may retire part of the bond
Call money rate
Also called the broker loan rate , the interest rate that banks charge brokers to finance
An option contract that gives its holder the right (but not the obligation) to purchase a specified
A contract that gives the holder the right to buy an asset for a
Right to buy an asset at a specified exercise price on or before the exercise date.
The price, specified at issuance, at which the issuer of a bond may retire part of the bond at a
The price for which a bond can be repaid before maturity under a call provision.
A feature of some callable bonds that establishes an initial period when the bonds may not be
An embedded option granting a bond issuer the right to buy back all or part of the issue prior
The combination of cash flow uncertainty and reinvestment risk introduced by a call provision.
A swaption in which the buyer has the right to enter into a swap as a fixed-rate payer. The
A financial security such as a bond with a call option attached to it, i.e., the issuer has the right to
A bond that allows the issuer to buy back the bond at a
Bond that may be repurchased by the issuer before maturity at specified call price.
decision allocation of invested funds between risk-free assets versus the risky portfolio.
Capital Consumption Allowance
Capital Cost Allowance (CCA)
The annual depreciation expense allowed by the Canadian Income Tax Act.
An amount the insurance company will pay if the policyholder ends a whole life
Cash Surrender Value
This 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 Value
Benefit that entitles a policy owner to an amount of money upon cancellation of a policy.
Change in Accounting Estimate
A change in accounting that occurs as the result of new information
Change in Accounting Estimate
A change in the implementation of an existing accounting
Change in Accounting Principle
A change from one generally accepted accounting principle to another generally accepted accounting principle—for example, a change from capitalizing expenditures
Change in Reporting Entity
A change in the scope of the entities included in a set of, typically, consolidated financial statements.
Changes in Financial Position
Sources 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.
Communication barrier between financiers (investment bankers) and traders. This barrier is
Decreasing inflation by immediately decreasing the money growth rate to a new, low rate. Contrast with gradualism.
Assets than can be repossessed if a borrower defaults.
Assets that are used to secure a loan.
A 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 bonds
A 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
Procedures followed by a firm in attempting to collect accounts receivables.
Procedures 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
An undertaking either (1) to complete a project such that it meets certain specified
Convertible exchangeable preferred stock
Convertible preferred stock that may be exchanged, at the
Corporate financial management
The application of financial principals within a corporation to create and
Corporate financial planning
financial planning conducted by a firm that encompasses preparation of both
the assignment, using some reasonable basis,
Cost of funds
Interest rate associated with borrowing money.
costs of financial distress
Costs arising from bankruptcy or distorted business decisions before bankruptcy.
Country financial risk
The ability of the national economy to generate enough foreign exchange to meet
A short call option position in which the writer owns the number of shares of the underlying
Covered call writing strategy
A strategy that involves writing a call option on securities that the investor
Standards set to determine the amount and nature of credit to extend to customers.
Cumulative Effect of a Change in Accounting Principle
The change in earnings of previous years
Cumulative Effect of Accounting Change
The change in earnings of previous years assuming
Overnight, collateralized loan made to a dealer financing his position by borrowing from a
A provision that prohibits the company from calling the bond before a certain date. During this
A company’s stated goal for how soon a customer order will be
A loan which must be repaid in full on demand.
Demand Management Policy
Fiscal or monetary policy designed to influence aggregate demand for goods and services.
Tax deductions that businesses can claim when they spend money on investment goods.
A policy that is a conscious, considered response to each situation as it arises. Contrast with policy rule.
An established guide for the firm to determine the amount of money it will pay as dividends.
This 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.
A shareholders' rights to receive per-share dividends identical to those other shareholders receive.
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