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Definition of Swap buy-back
The sale of an interest rate swap by one counterparty to the other, effectively ending the swap.
swap in which the principal or national amount rises (falls) as interest rates
A security that is collateralized by loans, leases, receivables, or installment contracts
Creditors exchange the debt of one defaulting borrower for the debt of another
An interest rate swap used to alter the cash flow characteristics of an institution's assets so as to
The fee paid on the extension date if the buyer wishes to continue the option.
Brokerage house clerical operations that support, but do not include, the trading of stocks and
An intercompany loan channeled through a bank.
A loan in which two companies in separate countries borrow each other's currency for a
1) When bond yields and prices fall, the market is said to back-up.
A market condition in which futures prices are lower in the distant delivery months than in
A mortgage loan on newly developed property that the builder subsidizes during the
To purchase an asset; taking a long position.
To cover, offset or close out a short position. Related: evening up, liquidation.
A conditional trading order that indicates a security may be purchased only at the designated
To buy at the end of the trading session at a price within the closing range.
Buy on margin
A transaction in which an investor borrows to buy additional shares, using the shares
Buy on opening
To buy at the beginning of a trading session at a price within the opening range.
A passive investment strategy with no active buying and selling of stocks from the
Mortgages in which monthly payments consist of principal and interest, with portions of these
Buying the index
Purchasing the stocks in the S&P 500 in the same proportion as the index to achieve the
Purchase of a controlling interest (or percent of shares) of a company's stock. A leveraged buy-out is
Another term for a repo.
A financial analyst employed by a non-brokerage firm, typically one of the larger money
A swaption in which the buyer has the right to enter into a swap as a fixed-rate payer. The
A fixed rate currency swap against floating U.S. dollar LIBOR payments.
An agreement to swap a series of specified payment obligations denominated in one currency
A set of transactions (also called a debt-equity swap) in which a firm buys a country's dollar bank
swap between two LIBO rates of interest, e.g. yen LIBOR for dollar LIBOR. Payments are
Discounted payback period rule
An investment decision rule in which the cash flows are discounted at an
With respect to a project financing, an arrangement under which the sponsors of a project
A swap in which the cash flows that are exchanged are based on the total return on some stock
Extending maturity through a swap, e.g. selling a 2-year note and buying one with a slightly
Foreign exchange swap
An agreement to exchange stipulated amounts of one currency for another currency
Interest rate swap
A binding agreement between counterparties to exchange periodic interest payments on
Intermarket spread swaps
An exchange of one bond for another based on the manager's projection of a
Leveraged buyout (LBO)
A transaction used for taking a public corporation private financed through the use
An interest rate swap used to alter the cash flow characteristics of an institution's liabilities so
Limitation on sale-and-leaseback
A bond covenant that restricts in some way a firm's ability to enter into
An option that allows the buyer to choose as the option strike price any price of the
Management buyout (MBO)
Leveraged buyout whereby the acquiring group is led by the firm's management.
Mortgage-Backed Securities Clearing Corporation
A wholly owned subsidiary of the Midwest Stock
Securities backed by a pool of mortgage loans.
Normal backwardation theory
Holds that the futures price will be bid down to a level below the expected
The length of time it takes to recover the initial cost of a project, without regard to the time value of money.
Related: retention rate.
Protective put buying strategy
A strategy that involves buying a put option on the underlying security that is
Pure yield pickup swap
Moving to higher yield bonds.
A financial tool in which the buyer has the right, or option, to enter into a swap as a floatingrate
See: differential swap.
Rate anticipation swaps
An exchange of bonds in a portfolio for new bonds that will achieve the target
Sale and lease-back
Sale of an existing asset to a financial institution that then leases it back to the user.
Stripped mortgage-backed securities (SMBSs)
Securities that redistribute the cash flows from the
A swap in which a money manager exchanges one bond for another bond that is similar in
An arrangement whereby two companies lend to each other on different terms, e.g. in different
Related: swap sale.
The difference between spot and forward rates expressed in points, e.g., $0.0001 per pound sterling.
An interest rate swap designed to end a counterparty's role in another interest rate swap,
Also called a swap assignment, a transaction that ends one counterparty's role in an interest rate
Options on interest rate swaps. The buyer of a swaption has the right to enter into an interest rate
Tax clawback agreement
An agreement to contribute as equity to a project the value of all previously
swapping two similar bonds to receive a tax benefit.
The retrospective process of measuring performance, comparing it with plan and taking corrective action.
A method of investment appraisal that calculates the number of years taken for the cash flows from an investment to cover the initial capital outlay.
The number of years necessary for the net cash flows of an
An exchange of cash flows between two counterparties. The
a streamlined cost accounting method that speeds up, simplifies, and reduces accounting effort in an environment that minimizes inventory balances, requires
a system using transfer prices; see transfer
a decision that compares the cost of
the time it takes an investor to recoup an
A contract between two parties to exchange cash flows in the future
A swap option; an option on an interest-rate swap. The option gives
The purchase of one business entity by another, largely using borrowed
The offsetting of a current year loss against the reported taxable
A capital budgeting analysis method that calculates the amount of
leveraged buyout (LBO)
Acquisition of the firm by a private group using substantial borrowed funds.
management buyout (MBO)
Acquisition of the firm by its own management in a leveraged buyout.
Time until cash flows recover the initial investment of the project.
Fraction of earnings retained by the firm.
Arrangement by two counterparties to exchange one stream of cash flows for another.
The subsequent subtraction from inventory records of those parts used
The purchase of items exceeding the quantity levels indicated
A procedure for making the effective date of a policy earlier than the application date. backdating is often used to make the age of the consumer at policy issue lower than it actually was in order to get a lower premium.
Back To Back Annuity
This term refers to the simultaneous issue of a life annuity with a non-guaranteed period and a guaranteed life insurance policy [usually whole life or term to 100]. The face value of the life insurance would be the same amount that was used to purchase the annuity. This combination of life annuity providing the highest payout of all types of annuities, along with a guaranteed life insurance policy allowed an uninsurable person to convert his/her RRSP into the best choice of annuity and guarantee that upon his/her death, the full value of the annuity would be paid tax free through the life insurance policy to his family members. However, in the early 1990's, the Federal tax authorities put a stop to the issuing of standard life rates to rated or uninsurable applicants. Insuring a life annuity in this manner is still an excellent way to provide guaranteed tax free funds to family members but the application for the annuity and the application for the life insurance are separate transactions and today, most likely conducted through two different insurance companies so that there is no suspicion of preferential treatment given to the life insurance application.
This is an agreement entered into by the owners of a business to define the conditions under which the interests of each shareholder will be bought and sold. The agreement sets the value of each shareholders interest and stipulates what happens when one of the owners wishes to dispose of his/her interest during his/her lifetime as well as disposal of interest upon death or disability. Life insurance, critical illness coverage and disability insurance are major considerations to help fund this type of agreement.
Bond or note secured by assets of company.
One of two parties to a conditional sale agreement, the other being the conditional seller.
Refers to the investors percentage ownership of a company that can be re-acquired by the company, usually at a pre-determined amount.
The length of time required for the net revenues of an investment for the net revenues of an investment to return the cost of the investment.
Sale and Leaseback
An agreement in which the owner of a property sells that property to a person or institution and then leases it back again for an agreed period and rental.
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