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Definition of Reinstatement
This is the restoration of a lapsed life insurance policy. The life insurance company will require evidence of continuing good health and the payment of all past due premiums plus interest.
Provides additional financial security should an insured person be dismembered or lose the use of a limb as the result of an accident.
A 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.
The accumulated coupon interest earned but not yet paid to the seller of a bond by the
The amount of interest accumulated on a debt security between
The amount of interest owing but not paid.
The sum of cash, accounts receivable, and short-term marketable
Cash flow provided by operating
Operations Reported income from continuing operations
The discount rate that reflects only the business risks of a project and abstracts from the
Total costs, explicit and implicit.
requirement that none of an order be executed unless all of it can be executed at the specified price.
An arrangement whereby a security issue is canceled if the underwriter is unable
assign based on the use of a cost driver, a cost predictor,
the systematic assignment of an amount to a recipient
The process of storing costs in one account and shifting them to other
Allocation base A measure of activity or volume such as labour
hours, machine hours or volume of production
Allowance for bad debts
An offset to the accounts receivable balance, against which
Allowance for doubtful accounts
A contra account related to accounts receivable that represents the amounts that the company expects will not be collected.
Allowance for Doubtful Accounts
An estimate of the uncollectible portion of accounts receivable
A method of adjusting accounts receivable to the amount that is expected to be collected based on company experience.
Amortization (Credit Insurance)
Refers to the reduction of debt by regular payments of interest and principal in order to pay off a loan by maturity.
Amortizing interest rate swap
Swap in which the principal or national amount rises (falls) as interest rates
An annuity with n payments, wherein the first payment is made at time t = 0 and the last
Annuity where the payments are to be made at the beginning of
a series of equal cash flows being received or paid at the beginning of a period
Level stream of cash flows starting immediately.
approximated net realizable value at split-off allocation
a method of allocating joint cost to joint products using a
Asset allocation decision
The decision regarding how an institution's funds should be distributed among the
A common element of a financial plan that describes projected capital spending and the
Automatic Benefits Payment
Automatic payment of moneys derived from a benefit.
Also referred to as the weighted-average life (WAL). The average number of years that each
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.
Any large principal payment due at maturity for a bond or loan with or without a a sinking
Base interest rate
Related: Benchmark interest rate.
A policy designed to increase an economy's prosperity at the expense of another country's prosperity.
Benchmark interest rate
Also called the base interest rate, it is the minimum interest rate investors will
Beneficiary (Credit Insurance)
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
Large and creditworthy company.
Borrower (Credit Insurance)
A consumer who borrows money from a lender.
In the mortgage pipeline, the risk that prospective borrowers of loans committed to be
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
An option that gives the right to buy the underlying futures contract.
a. An option to buy a certain quantity of a stock or commodity for a
Call an option
To exercise a call option.
A date before maturity, specified at issuance, when the issuer of a bond may retire part of the bond
Call money rate
Also called the broker loan rate , the interest rate that banks charge brokers to finance
An option contract that gives its holder the right (but not the obligation) to purchase a specified
A contract that gives the holder the right to buy an asset for a
Right to buy an asset at a specified exercise price on or before the exercise date.
The price, specified at issuance, at which the issuer of a bond may retire part of the bond at a
The price for which a bond can be repaid before maturity under a call provision.
A feature of some callable bonds that establishes an initial period when the bonds may not be
An embedded option granting a bond issuer the right to buy back all or part of the issue prior
The combination of cash flow uncertainty and reinvestment risk introduced by a call provision.
A swaption in which the buyer has the right to enter into a swap as a fixed-rate payer. The
A financial security such as a bond with a call option attached to it, i.e., the issuer has the right to
A bond that allows the issuer to buy back the bond at a
Bond that may be repurchased by the issuer before maturity at specified call price.
Canadian Deposit Insurance Corporation
Better 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.
Canadian Life and Health Insurance Association (CLHIA)
An association of most of the life and health insurance companies in Canada that conducts research and compiles information about the life and health insurance industry in Canada.
decision allocation of invested funds between risk-free assets versus the risky portfolio.
Capital Consumption Allowance
Capital Cost Allowance (CCA)
The annual depreciation expense allowed by the Canadian Income Tax Act.
Amounts of directly contributed equity capital in excess of the par value.
interest that is not immediately expensed, but rather is considered as an asset and is then
interest incurred during the construction period on monies invested in
Cash flow after interest and taxes
Net income plus depreciation.
Child Insurance Rider (CIR)
insurance or insurability provided on current or future children of insured.
Communication barrier between financiers (investment bankers) and traders. This barrier is
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
In medical insurance, the insured person and the insurer sometimes share the cost of services under a policy in a specified ratio, for example 80% by the insurer and 20% by the insured. By This means, the cost of coverage to the insured is reduced.
Refers to the fact that the merger of two firms decreases the probability of default on
Decreasing inflation by immediately decreasing the money growth rate to a new, low rate. Contrast with gradualism.
Procedures followed by a firm in attempting to collect accounts receivables.
Procedures to collect and monitor receivables.
Commercial Business Loan (Credit Insurance)
An agreement between a creditor and a borrower, where the creditor has loaned an amount to the borrower for business purposes.
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
interest paid on previously earned interest as well as on the principal.
interest paid on principal and on interest earned in previous
a 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
interest earned on interest.
interest 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.
Comprehensive due diligence investigation
The investigation of a firm's business in conjunction with a
the assignment, using some reasonable basis,
Cost company arrangement
Arrangement whereby the shareholders of a project receive output free of
cost of goods manufactured (CGM)
the total cost of the
Cost of goods sold
The cost of merchandise that a company sold This year. For manufacturing companies, the cost of raw
Cost of goods sold
See cost of sales.
Cost of goods sold
The cost of the items that were sold during the current period.
Cost of goods sold
The accumulated total of all costs used to create a product or service,
Cost of goods sold
The charge to expense of the direct materials, direct labor, and
Cost of Insurance
The cost of insuring a particular individual under the policy. It is based on the amount of coverage, as well as the underwriting class, age, sex and tobacco consumption of that individual.
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