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Definition of Pyramid scheme
An illegal, fraudulent scheme in which a con artist contrives victims to invest by promising
Mutual funds that do not charge an upfront or back-end commission, but instead take out up to
Part of the return that is not due to systematic influences (market wide influences). In
Goods may be returned to the seller by the purchaser without restrictions.
A method of investment appraisal that measures
the rate of earnings obtained on the average capital investment over the life of a capital project; computed as average annual profits divided by average investment; not based on cash flow
Money owed to suppliers.
Amounts a company owes to creditors.
Amounts owed by the company for goods and services that have been received, but have not yet been paid for. Usually Accounts payable involves the receipt of an invoice from the company providing the services or goods.
Short-term, non-interest-bearing liabilities of a business
Acurrent liability on the balance sheet, representing short-term obligations
Amounts due to vendors for purchases on open account, that is, not evidenced
The number of days it would take to pay the ending balance
Expenses that have to be recorded in order for the financial statements to be accurate. Accrued expenses usually do not involve the receipt of an invoice from the company providing the goods or services.
The account that records the short-term, noninterest-
Cash flow provided by operating
Adjusted Income from Continuing
Operations Reported income from continuing operations
After-tax real rate of return
Money after-tax rate of return minus the inflation rate.
The fund return, for any 12-month period, including changes in unit value and the reinvestment of distributions, but not taking into account sales, redemption, distribution or other optional charges or income taxes payable by any unitholder that would reduce returns.
Annualized holding period return
The annual rate of return that when compounded t times, would have
Arithmetic average (mean) rate of return
Arithmetic mean return.
Arithmetic mean return
An average of the subperiod returns, calculated by summing the subperiod returns
Automatic Benefits Payment
Automatic payment of moneys derived from a benefit.
Average accounting return
The average project earnings after taxes and depreciation divided by the average
Average Propensity to Consume
Ratio of consumption to disposable income. See also marginal propensity to consume.
Average rate of return (ARR)
The ratio of the average cash inflow to the amount invested.
Balance of payments
A statistical compilation formulated by a sovereign nation of all economic transactions
Balance of Payments
The difference between the demand for and supply of a country's currency on the foreign exchange market.
Balance of Payments Accounts
A statement of a country's transactions with other countries.
The process of taking the balances from the bank statement and the general ledger and making adjustments so that they agree.
A comparison between the cash position recorded on a company’s
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
Large and creditworthy company.
Amounts owed by the company that have been formalized by a legal document called a bond.
book rate of return
Accounting income divided by book value.
Book yield is the investment income earned in a year on a portfolio of assets purchased over a number of years and at different interest rates, divided by the book value of those assets.
Break-even lease payment
The lease payment at which a party to a prospective lease is indifferent between
Break-even payment rate
The prepayment rate of a MBS coupon that will produce the same CFY as that of
The process of ensuring that actual financial results are in line with targets – see variance
A guaranteed investment contract purchased with a single (one-shot) premium. Related:
Business Expansion Investment
The use of capital to create more money through the addition of fixed assets or through income producing vehicles.
Related: Fixed-income equivalent.
Capital Consumption Allowance
capital investment analysis
Refers to various techniques and procedures
Money used to purchase fixed assets for a business, such as land, buildings, or machinery. Also, money invested in a business on the understanding that it will be used to purchase permanent assets rather than to cover day-to-day operating expenses.
CARs (cumulative abnormal returns)
a measure used in academic finance articles to measure the excess returns an investor would have received over a particular time period if he or she were invested in a particular stock.
Cash conversion cycle
The length of time between a firm's purchase of inventory and the receipt of cash
cash conversion cycle
Period between firm’s payment for materials
Cash Flow Provided or Used from Investing Activities
Cash receipts and payments involving
CASH FLOWS FROM INVESTING ACTIVITIES
A section on the cashflow statement that shows how much cash came in and went out because of various investing activities like purchasing machinery.
Cash settlement contracts
Futures contracts, such as stock index futures, that settle for cash, not involving
Related: technical analysts.
The school of macroeconomic thought prior to the rise of Keynesianism.
Clearing House Automated Payments System (CHAPS)
A computerized clearing system for sterling funds
Clearing House Interbank Payments System (CHIPS)
An international wire transfer system for high-value
An economy in which imports and exports are very small relative to GDP and so are ignored in macroeconomic analysis. contrast with open economy.
Assets acquired to create money. May include plant, machinery and equipment, shares of another company etc.
company cost of capital
Expected rate of return demanded by investors in a company, determined by the average risk of the company’s assets and operations.
Related: Unsystematic risk
See asset-specific risk
A contract accounting method that recognizes contract revenue
Comprehensive due diligence investigation
The investigation of a firm's business in conjunction with a
A single centralized account into which funds collected at regional locations
System whereby customers make payments to a regional collection center which transfers funds to
Movement of cash from different lockbox locations into a single concentration
An understanding between a company and the host government that specifies the
see simultaneous engineering
One of two parties to a conditional sale agreement, the other being the conditional seller.
A type of agreement to sell whereby a seller retains title to goods sold and delivered to a purchaser until full payment has been made.
Conditional Sale Agreement
An agreement entered into between a conditional buyer and a conditional seller setting out the terms under which goods change hands.
Conditional sales contracts
Similar to equipment trust certificates except that the lender is either the
One of two parties to a conditional sale agreement, the other being the conditional buyer.
A measure of investors' faith in the economy and the securities market. A low or
The degree of assurance that a specified failure rate is not exceeded.
A legal document whereby the one party, usually the prospective investor, pledges to keep strictly confidential, and return on request, any and all information provided by the entrepreneur seeking funding.
A review of all engineering documentation used as the basis
Verifying that a delivered product matches authorizing
he written statement that follows any "trade" in the securities markets. confirmation is issued
Conflict between bondholders and stockholders
These two groups may have interests in a corporation that
an organizational strategy in which company management decides to confront, rather than avoid, competition; an organizational strategy in which company management still attempts to differentiate company
A firm engaged in two or more unrelated businesses.
A merger involving two or more firms that are in unrelated businesses.
The mean of all financial analysts' forecasts for a company.
Inventories owned by a company, but located on the premises
A shipment of goods to a party who agrees to try to sell them to third parties. A
A party shipping goods to a consignee. The consignee then makes an effort to sell
A type of bond that has an infinite life but is not issued in the U.S. capital markets.
Consolidated Omnibus Budget Reconciliation Act (COBRA)
A federal Act
The combining of two or more firms to form an entirely new entity.
A summarization of the financial statements of a parent company and
A merchant banking subsidiary set up by several banks that may or may not be of the
Constant dollar accounting
A method for restating financial statements by reducing or
See real dollars.
constant-growth dividend discount model
Version of the dividend discount model in which dividends grow at a constant rate.
Also called the Gordon-Shapiro model, an application of the dividend discount
a restriction inhibiting the achievement of an objective
Credit granted by a firm to consumers for the purchase of goods or services. Also called
Consumer Credit Protection Act
A federal Act specifying the proportion of
Consumer Price Index (CPI)
The CPI, as it is called, measures the prices of consumer goods and services and is a
Consumer Price Index (CPI)
An index calculated by tracking the cost of a typical bundle of consumer goods and services over time. It is commonly used to measure inflation.
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