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Definition of Red herring
A preliminary prospectus containing information required by the SEC. It excludes the offering
Provides additional financial security should an insured person be dismembered or lose the use of a limb as the result of an accident.
Publicly traded issues that may be collateralized by mortgages and MBSs.
Refers to the reduction of debt by regular payments of interest and principal in order to pay off a loan by maturity.
Floating rate preferred stock, the dividend on which is adjusted every
The person or party designated to receive proceeds entitled by a benefit. Payment of a benefit is triggered by an event. In the case of credit insurance, the beneficiary will always be the creditor.
The requirement that a claim holder voting against a plan of reorganization
A consumer who borrows money from a lender.
A market where an intermediary offers search services to buyers and sellers.
An agreement between a creditor and a borrower, where the creditor has loaned an amount to the borrower for business purposes.
A method of analysis in which a firm is compared to others that have a desired
Credit granted by a firm to consumers for the purchase of goods or services. Also called
A federal Act specifying the proportion of
The formal name for the load of a back-end load fund.
Convertible preferred stock that may be exchanged, at the
Preferred stock that can be converted into common stock at the option of the holder.
cost of goods manufactured (CGM)
the total cost of the
Cost of Preferred Stock
The rate of return required by the investors in the preferred stock of
the practice of lowering current costs, especially
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
Covered interest arbitrage
A portfolio manager invests dollars in an instrument denominated in a foreign
Covered or hedge option strategies
Strategies that involve a position in an option as well as a position in the
A put option position in which the option writer also is short the corresponding stock or has
A signal that provides accurate information; a signal that can be distinguish among senders.
Buying or selling goods or services now with the intention of payment following at some time in
One side of a journal entry, usually depicted as the right side.
A rating of a company's credit (ability to payback debt), usually by a third party credit agency.
On your bank statement, 'credit' represents funds that you have deposited into your account. The opposite of a credit is a debit.
The process of analyzing information on companies and bond issues in order to estimate the
Procedure to determine the likelihood a customer will pay its bills.
An organization that provides financial institutions with credit information concerning existing or potential customers who are looking to obtain credit services.
A revolving source of credit with a pre-established limit. You have to pay interest on a credit card if you have an outstanding balance.
A decline in the ability or willingness of banks to lend.
Purchase of the financial guarantee of a large insurance company to raise funds.
A loan receivable that has proven uncollectible and is written off.
A record of the funds which have been credited to your account.
The length of time for which the customer is granted credit.
Standards set to determine the amount and nature of credit to extend to customers.
Restriction of loans by lenders so that not all borrowers willing to pay the current interest rate are able to obtain loans.
The risk that an issuer of debt securities or a borrower may default on his obligations, or that the
Financial and moral risk that an obligation will not be paid and a loss will result.
A statistical technique wherein several financial characteristics are combined to form a single
Conditions under which credit is extended by a lender to a borrower.
Credit unions are community based financial co-operatives and most offer a full range of services. All are owned and controlled by members who are also shareholders. Credit unions are regulated provincially and insured by a stabilization fund, deposit insurance or guarantee corporation.
The interest rate offered on an investment type insurance policy.
Lender of money.
Person or business that is owed money.
Creditor (Credit Insurance)
A lender or lending institution that offers financing and loans to a borrower, for the purpose of acquiring a commodity.
Creditor Proof Protection
The creditor proof status of such things as life insurance, non-registered life insurance investments, life insurance RRSPs and life insurance RRIFs make these attractive products for high net worth individuals, professionals and business owners who may have creditor concerns. Under most circumstances the creditor proof rules of the different provincial insurance acts take priority over the federal bankruptcy rules.
Purchases of goods or services from suppliers on credit to whom the debt is not yet paid. Or a
Critical Illness Insurance (Credit Insurance)
Coverage that provides a lump-sum payment should you become seriously ill with a specified illness. The payment is made to your creditors to pay off your debt owing.
Cumulative preferred stock
Preferred stock whose dividends accrue, should the issuer not make timely
Debt (Credit Insurance)
Money, goods or services that someone is obligated to pay someone else in accordance with an expressed or implied agreement. Debt may or may not be secured.
Tax-advantaged life insurance product. Deferred annuities offer deferral of taxes with the
An annuity providing for income payments to commence at a specified future time.
A provision that prohibits the company from calling the bond before a certain date. During this
pay related to current performance
A common term for convertible bonds because of their equity component and the
The most distant months of a futures contract. A bond that sells at a discount and does not
Deferred Income Tax Expense
That portion of the total income tax provision that is the result
Deferred nominal life annuity
A monthly fixed-dollar payment beginning at retirement age. It is nominal
Deferred Tax Asset
Future tax benefit that results from (1) the origination of a temporary difference
Deferred Tax Liability
Future tax obligation that results from the origination of a temporary
A non-cash expense that provides a source of free cash flow. Amount allocated during the
Demand line of credit
A bank line of credit that enables a customer to borrow on a daily or on-demand basis.
Disability Insurance (Credit Insurance)
Group Insurance designed to cover monthly obligations due to a borrower being unable to work due to sickness or injury.
EBDDT - Earnings before depreciation and deferred taxes
This measure is used principally by
a cost that has been found to bear an observable
Intermediate-term loans of Eurocurrencies made by banking syndicates to corporate and
Revolving credit without maturity.
an expense or a loss
Export Credit Insurance
The granting of insurance to cover the commercial and political risks of selling in foreign markets.
Federal credit agencies
Agencies of the federal government set up to supply credit to various classes of
Five Cs of credit
Five characteristics that are used to form a judgement about a customer's creditworthiness:
Preferred stock paying dividends that vary with short-term interest rates.
Foreign tax credit
Home country credit against domestic income tax for foreign taxes paid on foreign
Formalized Line of Credit
A contractual commitment to make loans to a particular borrower up to a specified maximum during a specified period, usually one year.
Freddie Mac (Federal Home Loan Mortgage Corporation)
A Congressionally chartered corporation that
Full Credit Period
The period of trade credit given by a supplier to its customer.
Full faith-and-credit obligations
The security pledges for larger municipal bond issuers, such as states and
Government sponsored enterprises
Privately owned, publicly chartered entities, such as the Student Loan
See money base.
in the red
Making a loss.
Insurance Policy (Credit Insurance)
A policy under which the insurance company promises to pay a benefit of the person who is insured.
This is the person covered by the life insurance policy. Upon this person's death, a tax free benefit will be paid to that person's estate or a named beneficiary.
Person whose life is protected under a specific policy.
A municipal bond backed both by the credit of the municipal issuer and by commercial
An insured mortgage protects only the mortgage lender in case you do not make your mortgage payments. This coverage is provided by CMHC [Canada Mortgage and Housing Corporation] and is required if a person has a high-ratio mortgage. [A mortgage is high-ratio if the amount borrowed is more than 75% of the purchase price or appraised value, whichever is less.]
Defined benefit pension plans that are guaranteed by life insurance products. Related: noninsured plans
Insured Retirement Plan
This is a recently coined phrase describing the concept of using Universal Life Insurance to tax shelter earnings which can be used to generate tax-free income in retirement. The concept has been described by some as "the most effective tax-neutralization strategy that exists in Canada today."
Investment tax credit
Proportion of new capital investment that can be used to reduce a company's tax bill
Investment Tax Credit
A reduction in taxes offered to firms to induce them to increase investment spending.
Job Loss Insurance (Credit Insurance)
Coverage that can pay down your debt should you become involuntarily unemployed. The payment is made to your creditors to reduce your debt owing.
Labour-Sponsored Venture Funds
Venture capital corporations established by labour unions. They function as other venture capital corporations but are subject to government regulation.
Lease (Credit Insurance)
Contract granting use of real estate, equipment or other fixed assets for a specified period of time in exchange for payment. The owner or a leased property is the lessor and the user the lessee.
Lender (Credit Insurance)
Individual or firm that extends money to a borrower with the expectation of being repaid, usually with interest. Lenders create debt in the form of loans. Lenders include financial institutions, leasing companies government lending agencies and automobile dealers.
Letter of credit (L/C)
A form of guarantee of payment issued by a bank used to guarantee the payment of
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