|Principal only (PO)|
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Definition of Principal only (PO)
Principal only (PO)
A mortgage-backed security in which the holder receives only principal cash flows on
Belief that an effort to keep unemployment below its natural rate results in an accelerating inflation.
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.
The change in the value of a firm's foreign currency denominated accounts due to a
The principles, bases, conventions, rules and procedures adopted by management in preparing and presenting financial statements.
A strategy that uses available information and forecasting techniques to seek a
Capitalizing and reporting as assets significant portions of
Certificates issued by a U.S. depositary bank, representing foreign
Yearly record of a publicly held company's financial condition. It includes a description of the
The report required by the Stock Exchange for all listed companies, containing the company’s financial statements.
A report issued to a company’s shareholders, creditors, and regulatory
Legal document establishing a corporation and its structure and purpose.
A section of an annual report containing the auditor's opinion about the veracity of the
Percentage of earnings relative to total assets; indication of how
In the bond market, the smallest measure used for quoting yields is a basis point. Each percentage
One one-hundredth of one percent
One hundredth of one percentage point, or 0.0001.
One one-hundredth of a percentage point, used to express variations in yields. For example, the difference between 5.36 percent and 5.38 percent is 2 basis points.
A policy designed to increase an economy's prosperity at the expense of another country's prosperity.
Blue Ribbon Committee on Improving the Effectiveness of Corporate Audit Committees
A committee formed in response to SEC chairman Arthur Levitt's initiative to improve the financial
A conventional unit of measure for bond prices set at $10 and equivalent to 1% of the $100 face
break-even point (BEP)
the level of activity, in units or dollars, at which total revenues equal total costs
The point at which total costs equal total revenue, i.e. where there is neither a profit nor a loss.
The annual sales volume level at which total contribution
The sales level at which a company, division, or product line makes a
Canadian Deposit Insurance Corporation
Better known as CDIC, this is an organization which insures qualifying deposits and GICs at savings institutions, mainly banks and trust companys, which belong to the CDIC for amounts up to $60,000 and for terms of up to five years. Many types of deposits are not insured, such as mortgage-backed deposits, annuities of duration of more than five years, and mutual funds.
Capitalized Cost An expenditure or accrual that is reported as an asset to be amortized against
Cash-flow break-even point
The point below which the firm will need either to obtain additional financing
Certificate of deposit (CD)
Also called a time deposit, this is a certificate issued by a bank or thrift that
Certificate of Deposit (CD)
A bank deposit that cannot be withdrawn for a specified period of time. See also term deposit.
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
Clear a position
To eliminate a long or short position, leaving no ownership or obligation.
Decreasing inflation by immediately decreasing the money growth rate to a new, low rate. Contrast with gradualism.
Procedures followed by a firm in attempting to collect accounts receivables.
Procedures to collect and monitor receivables.
policies which enhance each other.
The entire portfolio, including risky and risk-free assets.
Raw materials or subassemblies used to make either finished goods
Voluntary arrangement to restructure a firm's debt, under which payment is reduced.
Interest paid on previously earned interest as well as on the principal.
Interest paid on principal and on interest earned in previous
a method of determining interest in which interest that was earned in prior periods is added to the original investment so that, in each successive period, interest is earned on both principal and interest
Interest earned on interest.
Interest earned on an investment at periodic intervals and added to principal and previous interest earned. Each time new interest earned is calculated it is on a combined total of principal and previous interest earned. Essentially, interest is paid on top of interest.
Option on an option.
The process of accumulating the time value of money forward in time. For example, interest
When an asset generates earnings that are then reinvested and generate their own earnings.
The number of compounding periods in a year. For example, quarterly
The length of the time period (for example, a quarter in the case of quarterly
the time between each interest computation
The process of accumulating the time value of money forward in time on a
The process of continuously adding interest to a principal plus
Controlled foreign corporation (CFC)
A foreign corporation whose voting stock is more than 50% owned
The acquisition of one firm by anther firm.
Debt obligations issued by corporations.
A legal document creating a corporation.
One of the three areas of the discipline of finance. It deals with the operation of the firm
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
Corporate processing float
The time that elapses between receipt of payment from a customer and the
Corporate tax view
The argument that double (corporate and individual) taxation of equity returns makes
Corporate taxable equivalent
Rate of return required on a par bond to produce the same after-tax yield to
A legal "person" that is separate and distinct from its owners. A corporation is allowed to own
A legal entity, organized under state laws, whose investors purchase
Business owned by stockholders who are not personally
cost of production report
a process costing document that
The costs of (cross-functional) business processes, irrespective of the organizational structure of the business.
a collection of monetary amounts incurred either
A cluster of cost items.
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.
Standards set to determine the amount and nature of credit to extend to customers.
A bond selling at or close to par, that is, a bond with a coupon close to the yields currently
Related: Benchmark issues
Debtor in possession
A firm that is continuing to operate under Chapter 11 bankruptcy process.
New debt obtained by a firm during the Chapter 11 bankruptcy process.
Dedicating a portfolio
Related: cash flow matching.
Under certain circumstances, taxation rules assume that a transfer of property has occurred, even though there has not been an actual purchase or sale. This could happen upon death or transfer of ownership.
Those points designated by futures exchanges at which the financial instrument or
A company’s stated goal for how soon a customer order will be
A bank deposit that can be withdrawn on demand, such as a deposit in a checking account.
Checking accounts that pay no interest and can be withdrawn upon demand.
Demand Management Policy
Fiscal or monetary policy designed to influence aggregate demand for goods and services.
The process whereby the banking system transforms a dollar of reserves into several dollars of money supply.
Central bank switching of government deposits between the central bank and commercial banks.
Depository transfer check (DTC)
Check made out directly by a local bank to a particular firm or person.
Depository Trust Company (DTC)
DTC is a user-owned securities depository which accepts deposits of
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