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Definition of Seigniorage
Funding available to the government through printing money.
Mortgage pass-through securities whose principal and interest payments are
An option is at-the-money if the strike price of the option is equal to the market price of the
Also called the broker loan rate , the interest rate that banks charge brokers to finance
Also called private-label pass-throughs, any mortgage pass-through security not
An account for the investment credit to show all income statement benefits of the credit
The practice of reporting to shareholders using straight-line depreciation and
Agency pass-throughs that guarantee the timely payment of both interest and
The ratio of a pension plan's assets to its liabilities.
Related: interest rate risk
See: government securities.
A wholly owned U.S. government corporation
Privately owned, publicly chartered entities, such as the Student Loan
Negotiable U.S. Treasury securities.
ReFunding of a high-coupon bond with a new, lower coupon bond.
money that moves across country borders in response to interest rate differences and that moves
A put option that has a strike price higher than the underlying futures price, or a call option
Liability funding strategies
Investment strategies that select assets so that cash flows will equal or exceed
Low-coupon bond refunding
ReFunding of a low coupon bond with a new, higher coupon bond.
Agency pass-throughs that guarantee (1) timely interest payments and (2) principal
Composed of currency and coins outside the banking system plus liabilities to the deposit money banks.
Money center banks
Banks that raise most of their funds from the domestic and international money markets, relying less on depositors for funds.
Related: Investment management.
Related: Investment manager.
money markets are for borrowing and lending money for three years or less. The securities in
Money market demand account
An account that pays interest based on short-term interest rates.
Money market fund
A mutual fund that invests only in short term securities, such as bankers' acceptances,
Money market hedge
The use of borrowing and lending transactions in foreign currencies to lock in the
Money market notes
Publicly traded issues that may be collateralized by mortgages and MBSs.
Money purchase plan
A defined benefit contribution plan in which the participant contributes some part and
Money rate of return
Annual money return as a percentage of asset value.
M1-A: Currency plus demand deposits
Mortgage pass-through security
Also called a passthrough, a security created when one or more mortgage
Net advantage of refunding
The net present value of the savings from a reFunding.
In a Treasury auction, the amount by which the par value of the securities offered exceeds that of
A call option is out-of-the-money if the strike price is greater than the market price
The net interest rate passed through to investors after deducting servicing, management,
A pool of fixed-income securities backed by a package of assets (i.e. mortgages)
Pass-through coupon rate
The interest rate paid on a securitized pool of assets, which is less than the rate
Payable through drafts
A method of making payment that is used to maintain control over payments made
Precautionary demand (for money)
The need to meet unexpected or extraordinary contingencies with a
Private Export Funding Corporation (PEFCO)
Company that mobilizes private capital for financing the
Related: Conventional pass-throughs.
The redemption of a bond with proceeds received from issuing lower-cost debt obligations
Speculative demand (for money)
The need for cash to take advantage of investment opportunities that may arise.
Stopping curve refunding rate
A reFunding rate that falls on the stopping curve.
An agreement to put a specified amount of product per period through a particular
Time value of money
The idea that a dollar today is worth more than a dollar in the future, because the dollar
Transaction demand (for money)
The need to accommodate a firm's expected cash transactions.
Sales revenue less the cost of materials.
A market that specializes in trading short-term, low-risk, very liquid
the total completed and sold output of a plant during a period
Market for short-term financial assets.
See money base.
Any item that serves as a medium of exchange, a store of value, and a unit of account. See medium of exchange.
Cash plus deposits of the commercial banks with the central bank.
A financial market in which short-term (maturity of less than a year) debt instruments such as bonds are traded.
Change in the money supply per change in the money base.
Money Rate of Interest
See interest rate, nominal.
Neutrality of Money
The doctrine that the money supply affects only the price level, with no long-run impact on real variables.
Sale of bonds by the government to the central bank.
Quantity Theory of Money
Theory that velocity is constant, and so a change in money supply will change nominal income by the same percentage. Formalized by the equation Mv = PQ.
Real Money Supply
money supply expressed in base-year dollars, calculated by dividing the money supply by a price index.
A debt or equity security not classified as a held-to-maturity security or a trading security. Can be classified as a current or noncurrent investment depending on the intended holding period.
Projected available balance
The future planned balance of an inventory item,
Fiat money is paper currency made legal tender by law or fiat. It is not backed by gold or silver and is not necessarily redeemable in coin. This practice has had widespread use for about the last 70 years. If governments produce too much of it, there is a loss of confidence. Even so, governments print it routinely when they need it. The value of fiat money is dependent upon the performance of the economy of the country which issued it. Canada's currency falls into this category.
This is the process by which "dirty money" generated by criminal activities is converted through legitimate businesses into assets that cannot be easily traced back to their illegal origins.
The price of obtaining capital, either borrowed or equity, with intent to carry on business operations.
Financial market in which funds are borrowed or lent for short periods. (The money market is distinguished from the capital market, which is the market for long term funds.)
money market fund
A type of mutual fund that invests primarily in short-term debt securities maturing in one year or less. These include treasury bills, bankersâ€™ acceptances, commercial paper, discount notes and guaranteed investment certficates.
A guaranteed form of payment in amounts up to and including $5,000. You might request a money order in order to pay for tuition fees at a university or a college, or for a magazine subscription.
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