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Financial Terms | |
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
Related Terms:Accelerationist HypothesisBelief that an effort to keep unemployment below its natural rate results in an accelerating inflation. 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 exposureThe change in the value of a firm's foreign currency denominated accounts due to a Accounting PoliciesThe principles, bases, conventions, rules and procedures adopted by management in preparing and presenting financial statements. Active portfolio strategyA strategy that uses available information and forecasting techniques to seek a Aggressive Capitalization PoliciesCapitalizing and reporting as assets significant portions of American Depositary Receipts (ADRs)Certificates issued by a U.S. depositary bank, representing foreign ![]() Annual reportYearly record of a publicly held company's financial condition. It includes a description of the Annual ReportThe report required by the Stock Exchange for all listed companies, containing the company’s financial statements. Annual reportA report issued to a company’s shareholders, creditors, and regulatory Articles of incorporationLegal document establishing a corporation and its structure and purpose. Auditor's reportA section of an annual report containing the auditor's opinion about the veracity of the Balance sheet exposureSee:accounting exposure. Basic Earnings Power RatioPercentage of earnings relative to total assets; indication of how Basis pointIn the bond market, the smallest measure used for quoting yields is a basis point. Each percentage Basis PointOne one-hundredth of one percent Basis pointOne hundredth of one percentage point, or 0.0001. Basis PointOne 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. Beggar-My-Neighbor PolicyA 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 CommitteesA committee formed in response to SEC chairman Arthur Levitt's initiative to improve the financial Bond pointsA 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 Breakeven pointThe point at which total costs equal total revenue, i.e. where there is neither a profit nor a loss. breakeven pointThe annual sales volume level at which total contribution Breakeven pointThe sales level at which a company, division, or product line makes a Canadian Deposit Insurance CorporationBetter 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 againstfuture-period revenue. Cash-flow break-even pointThe 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 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 Clear a positionTo eliminate a long or short position, leaving no ownership or obligation. Cold-Turkey PolicyDecreasing inflation by immediately decreasing the money growth rate to a new, low rate. Contrast with gradualism. Collection policyProcedures followed by a firm in attempting to collect accounts receivables. collection policyProcedures to collect and monitor receivables. Complementary Policiespolicies which enhance each other. Complete portfolioThe entire portfolio, including risky and risk-free assets. ComponentRaw materials or subassemblies used to make either finished goods CompositionVoluntary arrangement to restructure a firm's debt, under which payment is reduced. Compound interestInterest paid on previously earned interest as well as on the principal. Compound InterestInterest paid on principal and on interest earned in previous compound interesta 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 compound interestInterest earned on interest. Compound InterestInterest 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. Compound optionOption on an option. CompoundingThe process of accumulating the time value of money forward in time. For example, interest compoundingWhen an asset generates earnings that are then reinvested and generate their own earnings. Compounding frequencyThe number of compounding periods in a year. For example, quarterly Compounding periodThe length of the time period (for example, a quarter in the case of quarterly compounding periodthe time between each interest computation Continuous compoundingThe process of accumulating the time value of money forward in time on a Continuous CompoundingThe process of continuously adding interest to a principal plus Controlled foreign corporation (CFC)A foreign corporation whose voting stock is more than 50% owned Corporate acquisitionThe acquisition of one firm by anther firm. Corporate bondsDebt obligations issued by corporations. Corporate charterA legal document creating a corporation. Corporate financeOne of the three areas of the discipline of finance. It deals with the operation of the firm 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 Corporate processing floatThe time that elapses between receipt of payment from a customer and the Corporate tax viewThe argument that double (corporate and individual) taxation of equity returns makes Corporate taxable equivalentRate of return required on a par bond to produce the same after-tax yield to CorporationA legal "person" that is separate and distinct from its owners. A corporation is allowed to own CorporationA legal entity, organized under state laws, whose investors purchase corporationBusiness owned by stockholders who are not personally cost of production reporta process costing document that Cost poolThe costs of (cross-functional) business processes, irrespective of the organizational structure of the business. cost poola collection of monetary amounts incurred either Cost poolA cluster of cost items. CouponThe periodic interest payment made to the bondholders during the life of the bond. CouponDetachable certificate attached to a bond that shows the amount of couponThe interest payments paid to the bondholder. CouponThe annual interest payment associated with a bond. Coupon BondAny bond with a coupon. Contrast with discount bond. Coupon / CouponsThe periodic interest payment(s) made by the issuer of a bond Coupon datesThe dates when the coupons are paid. Typically a bond pays Coupon equivalent yieldTrue interest cost expressed on the basis of a 365-day year. Coupon paymentsA bond's interest payments. Coupon rateIn bonds, notes or other fixed income securities, the stated percentage rate of interest, usually Coupon RateThe rate of interest paid on a debt security. Generally stated on an Coupon rateThe nominal interest rate that the issuer promises to pay the coupon rateAnnual interest payment as a percentage of face value. credit policyStandards set to determine the amount and nature of credit to extend to customers. Current couponA bond selling at or close to par, that is, a bond with a coupon close to the yields currently Current-coupon issuesRelated: Benchmark issues Debtor in possessionA firm that is continuing to operate under Chapter 11 bankruptcy process. Debtor-in-possession financingNew debt obtained by a firm during the Chapter 11 bankruptcy process. Dedicating a portfolioRelated: cash flow matching. Deemed DispositionUnder 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. Delivery pointsThose points designated by futures exchanges at which the financial instrument or Delivery policyA company’s stated goal for how soon a customer order will be Demand DepositA bank deposit that can be withdrawn on demand, such as a deposit in a checking account. Demand depositsChecking accounts that pay no interest and can be withdrawn upon demand. Demand Management PolicyFiscal or monetary policy designed to influence aggregate demand for goods and services. Deposit CreationThe process whereby the banking system transforms a dollar of reserves into several dollars of money supply. Deposit SwitchingCentral 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 Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |