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Definition of Regulation M
Fed regulation currently requiring member banks to hold reserves against their net borrowings
Fed regulation currently that required member banks to hold reserves against their net
Same as PV, but usually includes a subtraction for an initial cash outlay.
a generalization formula invented by Abrams that is the present value of Regular but noncontiguous cash flows that have constant growth to perpetuity.
Schedule of depreciation rates allowed for tax purposes.
The ratio of net credit sales to average accounts receivable, a measure of how
Process in corporate financial planning whereby the smaller investment proposals of each of the
The annual rate of return that when compounded t times, would have
A bond indenture restriction that permits additional borrowing on if the ratio of assets to
The ratio of net sales to total assets.
Using past data to predict future data.
The ratio of accounts receivables to sales, or the total
An estimation of price that uses the average or representative price of a
Gives the lessee the option to purchase the asset at a price below fair market
Bond yield calculated on an annual percentage rate method. Differs from annual
The method used for computing the bond-equivalent yield.
The annualized yield to maturity computed by doubling the semiannual yield.
A passive investment strategy with no active buying and selling of stocks from the
Cash and equivalents
The value of assets that can be converted into cash immediately, as reported by a
A short-term security that is sufficiently liquid that it may be considered the financial
Cash flow coverage ratio
The number of times that financial obligations (for interest, principal payments,
Temporary investments of currently excess cash in short-term, high-quality
An amount that would be accepted in lieu of a chance at a possible higher, but
A member firm of a clearing house. Each clearing member must also be a member of the
A transaction in which the purchaser's intention is to reduce or eliminate a short position in
Common stock/other equity
Value of outstanding common shares at par, plus accumulated retained
Common stock equivalent
A convertible security that is traded like an equity issue because the optioned
The length of the time period (for example, a quarter in the case of quarterly
Conflict between bondholders and stockholders
These two groups may have interests in a corporation that
A merchant banking subsidiary set up by several banks that may or may not be of the
Controlled foreign corporation (CFC)
A foreign corporation whose voting stock is more than 50% owned
Corporate taxable equivalent
Rate of return required on a par bond to produce the same after-tax yield to
Coupon equivalent yield
True interest cost expressed on the basis of a 365-day year.
The purchase of a contract to offset a previously established short position.
Ratios used to test the adequacy of cash flows generated through earnings for purposes of
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
The length of time for which the customer is granted credit.
One corporation holds shares in another firm.
The return at which two alternative projects have the same net present value.
An order to buy or sell stock that automatically expires if it can't be executed on the day it is entered.
Refers to establishing and liquidating the same position or positions within one day's trading.
Days in receivables
Average collection period.
Days' sales in inventory ratio
The average number of days' worth of sales that is held in inventory.
Days' sales outstanding
Average collection period.
Debt-service coverage ratio
Earnings before interest and income taxes plus one-third rental charges, divided
Direct stock-purchase programs
The purchase by investors of securities directly from the issuer.
The period during which a customer can deduct the discount from the net amount of the bill
Discounted payback period rule
An investment decision rule in which the cash flows are discounted at an
Doctrine of sovereign immunity
Doctrine that says a nation may not be tried in the courts of another country
Domestic International Sales Corporation (DISC)
A U.S. corporation that receives a tax incentive for
Part of a nation's internal market representing the mechanisms for issuing and trading
Specialized banking institutions, authorized and chartered by the Federal Reserve Board
Those holding shares of the firm's equity.
Equivalent annual annuity
The equivalent amount per year for some number of years that has a present
Equivalent annual benefit
The equivalent annual annuity for the net present value of an investment project.
Equivalent annual cash flow
Annuity with the same net present value as the company's proposed investment.
Equivalent annual cost
The equivalent cost per year of owning an asset over its entire life.
Equivalent bond yield
Annual yield on a short-term, non-interest bearing security calculated so as to be
Given the after-tax stream associated with a lease, the maximum amount of conventional
Equivalent taxable yield
The yield that must be offered on a taxable bond issue to give the same after-tax
European Monetary System (EMS)
An exchange arrangement formed in 1979 that involves the currencies
The time interval over which a money manager's performance is evaluated.
Any excess of actual reserves above required reserves.
Offsetting exposures in one currency with exposures in the same or another currency,
Federal agency securities
Securities issued by corporations and agencies created by the U.S. government,
Federal credit agencies
Agencies of the Federal government set up to supply credit to various classes of
Federal Deposit Insurance Corporation (FDIC)
A Federal institution that insures bank deposits.
Federal Financing Bank
A Federal institution that lends to a wide array of Federal credit agencies funds it
Non-interest bearing deposits held in reserve for depository institutions at their district Federal
Federal funds market
The market where banks can borrow or lend reserves, allowing banks temporarily
Federal funds rate
This is the interest rate that banks with excess reserves at a Federal Reserve district bank
Federal Home Loan Banks
The institutions that Regulate and lend to savings and loan associations. The
Federal Reserve System
The central bank of the U.S., established in 1913, and governed by the Federal
Federally related institutions
Arms of the Federal government that are exempt from SEC Registration and
A wire transfer system for high-value payments operated by the Federal Reserve System.
Firm's net value of debt
Total firm value minus total firm debt.
First notice day
The first day, varying by contracts and exchanges, on which notices of intent to deliver
A time series Regression to estimate the betas of securities portfolios.
Fixed asset turnover ratio
The ratio of sales to fixed assets.
Fixed-charge coverage ratio
A measure of a firm's ability to meet its fixed-charge obligations: the ratio of
also called a busted convertible, a convertible security that is trading like a straight
Flat price (also clean price)
The quoted newspaper price of a bond that does not include accrued interest.
Foreign banking market
That portion of domestic bank loans supplied to foreigners for use abroad.
A bond issued on the domestic capital market of anther company.
Foreign bond market
That portion of the domestic bond market that represents issues floated by foreign
Foreign currency option
An option that conveys the right to buy or sell a specified amount of foreign
Foreign currency translation
The process of restating foreign currency accounts of subsidiaries into the
Foreign direct investment (FDI)
The acquisition abroad of physical assets such as plant and equipment, with
Foreign equity market
That portion of the domestic equity market that represents issues floated by foreign companies.
Currency from another country.
Foreign exchange controls
Various forms of controls imposed by a government on the purchase/sale of
Foreign exchange dealer
A firm or individual that buys foreign exchange from one party and then sells it to
Foreign exchange risk
The risk that a long or short position in a foreign currency might have to be closed out
Foreign exchange swap
An agreement to exchange stipulated amounts of one currency for another currency
Part of a nation's internal market, representing the mechanisms for issuing and trading
Foreign market beta
A measure of foreign market risk that is derived from the capital asset pricing model.
Foreign Sales Corporation (FSC)
A special type of corporation created by the Tax Reform Act of 1984 that
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