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Definition of Sterilization
Central bank action offsetting money supply changes automatically generated by a balance of payments surplus or deficit under a fixed exchange rate system.
A bank machine, sometimes referred to as an automated teller machine (ATM).
Schedule of depreciation rates allowed for tax purposes.
Any depreciation method that produces larger deductions for depreciation in the
(1) The estimated useful life of the fixed asset being depreciated is
Any of several methods that recognize an increased amount
A method of investment appraisal that measures
the rate of earnings obtained on the average capital investment over the life of a capital project; computed as average annual profits divided by average investment; not based on cash flow
A set of accounts that summarize the transactions of a business that have been recorded on source documents.
A strategy that uses available information and forecasting techniques to seek a
a valuation method that uses actual direct
Publicly traded issues that may be collateralized by mortgages and MBSs.
money after-tax rate of return minus the inflation rate.
A form of organization commonly used by foreign banks to enter the U.S. market. An agency
Total quantity of goods and services supplied.
Combinations of price level and income for which the labor market is in equilibrium. The short-run aggregate supply curve incorporates information and price/wage inflexibilities in the labor market, whereas the long-run aggregate supply curve does not.
All equity rate
The discount rate that reflects only the business risks of a project and abstracts from the
An arrangement whereby a security issue is canceled if the underwriter is unable
American Stock Exchange (AMEX)
The second-largest stock exchange in the United States. It trades
Amortizing interest rate swap
Swap in which the principal or national amount rises (falls) as interest rates
Annual percentage rate (APR)
The periodic rate times the number of periods in a year. For example, a 5%
annual percentage rate (APR)
Interest rate that is annualized using simple interest.
Arithmetic average (mean) rate of return
Arithmetic mean return.
An option is at-the-money if the strike price of the option is equal to the market price of the
Auction rate preferred stock (ARPS)
Floating rate preferred stock, the dividend on which is adjusted every
Automated storage/retrieval system
A racking system using automated systems
Average rate of return (ARR)
The ratio of the average cash inflow to the amount invested.
Average tax rate
Taxes as a fraction of income; total taxes divided by total taxable income.
average tax rate
Total taxes owed divided by total income.
Balance of Merchandise Trade
The difference between exports and imports of goods.
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.
Balance of trade
Net flow of goods (exports minus imports) between countries.
Balance of Trade
See balance of merchandise trade.
Also called the statement of financial condition, it is a summary of the assets, liabilities, and
A “snapshot” statement that freezes a company on a particular day, like the last day of the year, and shows the balances in its asset, liability, and stockholders’ equity accounts. It’s governed by the formula:
A financial statement showing the financial position of a business – its assets, liabilities and
One of the basic financial statements; it lists the assets, liabilities, and equity accounts of the company. The balance Sheet is prepared using the balances at the end of a specific day.
A term often used instead of the more formal and correct
A report that summarizes all assets, liabilities, and equity for a company
Financial statement that shows the value of the
A financial report showing the status of a company's assets, liabilities, and owners' equity on a given date.
Balance sheet exposure
Balance sheet identity
Total Assets = Total Liabilities + Total Stockholders' Equity
The multiplier associated with a change in government spending financed by an equal change in taxes.
An investment company that invests in stocks and bonds. The same as a balanced mutual fund.
Balanced mutual fund
This is a fund that buys common stock, preferred stock and bonds. The same as a
A system of non-financial performance measurement that links innovation, customer and process measures to financial performance.
balanced scorecard (BSC)
an approach to performance
BAN (Bank anticipation notes)
Notes issued by states and municipalities to obtain interim financing for
money in a bank cheque account, the difference between receipts and payments.
Bank collection float
The time that elapses between when a check is deposited into a bank account and when the funds are available to the depositor, during which period the bank is collecting payment from the payer's bank.
Bank discount basis
A convention used for quoting bids and offers for treasury bills in terms of annualized
A draft addressed to a bank.
A guaranteed form of payment which is issued in amounts over $5,000.
Bank for International Settlements (BIS)
An international bank headquartered in Basel, Switzerland, which
Line of credit granted by a bank to a customer.
money owed to the bank in a cheque account where payments exceed receipts.
The process of taking the balances from the bank statement and the general ledger and making adjustments so that they agree.
A comparison between the cash position recorded on a company’s
A computer message system linking major banks. It is used not for effecting payments, but as a
A short-term credit investment created by a non-financial firm and guaranteed by a
A bill of exchange, or draft, drawn by the borrower for payment on a specified date, and accepted by a chartered bank. Upon acceptance, the bill becomes, in effect, a postdated certified cheque.
State of being unable to pay debts. Thus, the ownership of the firm's assets is transferred from
The reorganization or liquidation of a firm that cannot pay its debts.
Bankruptcy cost view
The argument that expected indirect and direct bankruptcy costs offset the other
The risk that a firm will be unable to meet its debt obligations. Also referred to as default or insolvency risk.
The argument that expected bankruptcy costs preclude firms from being financed entirely
A strategy in which the maturities of the securities included in the portfolio are concentrated
Base interest rate
Related: Benchmark interest rate.
In a balance of payments, the basic balance is the net balance of the combination of the current
Basic business strategies
Key strategies a firm intends to pursue in carrying out its business plan.
Benchmark interest rate
Also called the base interest rate, it is the minimum interest rate investors will
Bill of exchange
General term for a document demanding payment.
Blue Ribbon Committee on Improving the Effectiveness of Corporate Audit Committees
A committee formed in response to SEC chairman Arthur Levitt's initiative to improve the financial
book rate of return
Accounting income divided by book value.
Break-even payment rate
The prepayment rate of a MBS coupon that will produce the same CFY as that of
Break-even tax rate
The tax rate at which a party to a prospective transaction is indifferent between entering
Broker loan rate
Related: Call money rate.
The amount by which government spending exceeds government revenues.
The excess of government spending over tax receipts.
A strategy in which a portfolio is constructed so that the maturities of its securities are highly
business intelligence (BI) system
a formal process for gathering and analyzing information and producing intelligence to meet decision making needs; requires information about
A passive investment strategy with no active buying and selling of stocks from the
Call money rate
Also called the broker loan rate , the interest rate that banks charge brokers to finance
Amounts of directly contributed equity capital in excess of the par value.
A discount rate used to find the present value of a series of future cash receipts. Sometimes called discount rate.
cash burn rate
A relatively recent term that refers to how fast a business
A transaction where exchange is immediate, as contrasted to a forward contract, which
A public agency responsible for regulating and controlling an economy's monetary and financial institutions. It is the sole money-issuing authority.
a management style that exists when top management
Changes in Financial Position
Sources of funds internally provided from operations that alter a company's
a system using transfer prices; see transfer
Chicago Mercantile Exchange (CME)
A not-for-profit corporation owned by its members. Its primary
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
The percentage of a given month's sales collected during the month of sale and each
A strategy in which a put and with the same strike price and expiration are either both
A privately owned, profit-seeking firm that accepts deposits and makes loans.
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