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real options |
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Definition of real optionsreal optionsoptions embedded in real assets.
Related Terms:After-tax real rate of returnMoney after-tax rate of return minus the inflation rate. Barrier optionsContracts with trigger points that, when crossed, automatically generate buying or selling of Basket optionsPackages that involve the exchange of more than two currencies against a base currency at Dealer optionsOver-the-counter options, such as those offered by government and mortgage-backed Delivery optionsThe options available to the seller of an interest rate futures contract, including the quality Equity optionsSecurities that give the holder the right to buy or sell a specified number of shares of stock, at Margin requirement (Options)The amount of cash an uncovered (naked) option writer is required to Options contractA contract that, in exchange for the option price, gives the option buyer the right, but not Options contract multipleA constant, set at $100, which when multiplied by the cash index value gives the Options on physicalsInterest rate options written on fixed-income securities, as opposed to those written on Real assetsIdentifiable assets, such as buildings, equipment, patents, and trademarks, as distinguished from a Real capitalWealth that can be represented in financial terms, such as savings account balances, financial Real cash flowA cash flow is expressed in real terms if the current, or date 0, purchasing power of the cash Real exchange ratesExchange rates that have been adjusted for the inflation differential between two countries. Real interest rateThe rate of interest excluding the effect of inflation; that is, the rate that is earned in terms Real marketThe bid and offer prices at which a dealer could do "size." Quotes in the brokers market may Real timeA real time stock or bond quote is one that states a security's most recent offer to sell or bid (buy). Realized compound yieldYield assuming that coupon payments are invested at the going market interest Realized returnThe return that is actually earned over a given time period. REIT (real estate investment trust)real estate investment trust, which is similar to a closed-end mutual REMIC (real estate mortgage investment conduit)A pass-through tax entity that can hold mortgages Real Interest RateThe rate of interest paid on an investment adjusted for inflation approximated net realizable value at split-off allocationa method of allocating joint cost to joint products using a cafeteria plan a “menu” of fringe benefit options that includecash or nontaxable benefits net realizable value approacha method of accounting for by-products or scrap that requires that the net realizable value of these products be treated as a reduction in the cost of the primary products; primary product cost may be reduced by decreasing either net realizable value at split-off allocationa method of allocating joint cost to joint products that uses, as the proration base, sales value at split-off minus all costs necessary real microprofit centera center whose output has a market value realized value approacha method of accounting for byproducts or scrap that does not recognize any value for these products until they are sold; the value recognized Net realizeable valueThe expected revenue to be gained from the sale of an item or real assetsAssets used to produce goods and services. real interest rateRate at which the purchasing power of an investment increases. real value of $1Purchasing power–adjusted value of a dollar. Exchange Rate, RealThe nominal exchange rate corrected for price level differences. Interest Rate, RealNominal interest rate less expected inflation. RealMeasured in base year, or constant, dollars. Contrast with nominal. Real Business Cycle TheoryBelief that business cycles arise from real shocks to the economy, such as technology advances and natural resource discoveries, and have little to do with monetary policy. Real Exchange RateExchange rate adjusted for relative price levels. Real GDPGDP expressed in base-year dollars, calculated by dividing nominal GDP by a price index. Real IncomeIncome expressed in base-year dollars, calculated by dividing nominal income by a price index. Real Money SupplyMoney supply expressed in base-year dollars, calculated by dividing the money supply by a price index. Real Rate of InterestSee interest rate, real. Real WageWage expressed in base-year dollars, calculated by dividing the money wage by a price index. Real Actions (Earnings) ManagementInvolves operational steps and not simply acceleration Realized Gains and LossesIncreases or decreases in the fair value of an asset or a liability that Realizable Revenue A revenue transaction where assets received in exchange for goods andservices are readily convertible into known amounts of cash or claims to cash. Realized RevenueA revenue transaction where goods and services are exchanged for cash or Exit OptionsA variety of options available to an investor to recover their invested capital and the return on their investment. Net Realizable ValueSelling price of an asset less expenses of bringing the asset into a saleable state and expenses of the sale.
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