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Financial Terms | |
Tenor |
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Definition of TenorTenorMaturity of a loan.
Related Terms:LIBORThe London Interbank Offered Rate; the rate of interest that major international banks in London Circus swapA fixed rate currency swap against floating U.S. dollar libor payments. Differential swapSwap between two LIBO rates of interest, e.g. yen libor for dollar libor. Payments are Reference rateA benchmark 'interest rate (such as libor), used to specify conditions of an interest rate Variable rate loanLoan made at an interest rate that fluctuates based on a base interest rate such as the Accelerated cost recovery system (ACRS)Schedule of depreciation rates allowed for tax purposes. Accelerated depreciationAny depreciation method that produces larger deductions for depreciation in the ![]() accelerated depreciation(1) The estimated useful life of the fixed asset being depreciated is Accelerated depreciationAny of several methods that recognize an increased amount Accounting rate of return (ARR)A method of investment appraisal that measures accounting rate of return (ARR)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 Accrued interestThe accumulated coupon interest earned but not yet paid to the seller of a bond by the Accrued InterestThe amount of interest accumulated on a debt security between Accrued InterestThe amount of interest owing but not paid. Accumulated Other Comprehensive IncomeCumulative gains or losses reported in shareholders' Active portfolio strategyA strategy that uses available information and forecasting techniques to seek a ![]() Activity-based budgetingA method of budgeting that develops budgets based on expected activities and cost drivers – see also activity-based costing. activity-based budgeting (ABB)planning approach applying activity drivers to estimate the levels and costs of activities necessary to provide the budgeted quantity and Activity-based costingA method of costing that uses cost pools to accumulate the cost of significant business activities and then assigns the costs from the cost pools to products or services based on cost drivers. activity based costing (ABC)A relatively new method advocated for the activity-based costing (ABC)a process using multiple cost drivers to predict and allocate costs to products and services; Activity-based costing (ABC)A cost allocation system that compiles costs and assigns activity-based management (ABM)a discipline that focuses on the activities incurred during the production/performance process as the way to improve the value received Adjustable rate preferred stock (ARPS)Publicly traded issues that may be collateralized by mortgages and MBSs. After-tax real rate of returnMoney after-tax rate of return minus the inflation rate. All equity rateThe discount rate that reflects only the business risks of a project and abstracts from the Amortizing interest rate swapSwap 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 returnArithmetic mean return. Asset-based financingMethods of financing in which lenders and equity investors look principally to the Asset-Based Financingloans granted usually by a financial institution where the asset being financed constitutes the sole security given to the lender. attribute-based costing (ABC II)an extension of activitybased costing using cost-benefit analysis (based on increased customer utility) to choose the product attribute Auction rate preferred stock (ARPS)Floating rate preferred stock, the dividend on which is adjusted every Average maturityThe average time to Maturity of securities held by a mutual fund. Changes in interest rates Average rate of return (ARR)The ratio of the average cash inflow to the amount invested. Average tax rateTaxes as a fraction of income; total taxes divided by total taxable income. average tax rateTotal taxes owed divided by total income. Back-to-back loanA loan in which two companies in separate countries borrow each other's currency for a Balloon maturityAny large principal payment due at Maturity for a bond or loan with or without a a sinking Bank for International Settlements (BIS)An international bank headquartered in Basel, Switzerland, which Barbell strategyA strategy in which the maturities of the securities included in the portfolio are concentrated Base interest rateRelated: Benchmark interest rate. Basic business strategiesKey strategies a firm intends to pursue in carrying out its business plan. Benchmark interest rateAlso called the base interest rate, it is the minimum interest rate investors will Best-interests-of-creditors testThe requirement that a claim holder voting against a plan of reorganization Blue Ribbon Committee on Improving the Effectiveness of Corporate Audit CommitteesA committee formed in response to SEC chairman Arthur Levitt's initiative to improve the financial book rate of returnAccounting income divided by book value. Break-even payment rateThe prepayment rate of a MBS coupon that will produce the same CFY as that of Break-even tax rateThe tax rate at which a party to a prospective transaction is indifferent between entering Bridge LoanA short term loan to cover the immediate cash requirements until permanent financing is received. Broker loan rateRelated: Call money rate. Builder buydown loanA mortgage loan on newly developed property that the builder subsidizes during the Bullet loanA bank term loan that calls for no amortization. Bullet strategyA strategy in which a portfolio is constructed so that the maturities of its securities are highly Buy-and-hold strategyA passive investment strategy with no active buying and selling of stocks from the Call money rateAlso called the broker loan rate , the interest rate that banks charge brokers to finance Capitalization RateA discount rate used to find the present value of a series of future cash receipts. Sometimes called discount rate. Capitalized interestinterest that is not immediately expensed, but rather is considered as an asset and is then Capitalized Interestinterest incurred during the construction period on monies invested in cash burn rateA relatively recent term that refers to how fast a business Cash flow after interest and taxesNet income plus depreciation. charge-back systema system using transfer prices; see transfer Clearing House Interbank Payments System (CHIPS)An international wire transfer system for high-value Combination strategyA strategy in which a put and with the same strike price and expiration are either both 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. Common stock/other equityValue of outstanding common shares at par, plus accumulated retained compensation strategya foundation for the compensation plan that addresses the role compensation should play in the organization Compound interestinterest paid on previously earned interest as well as on the principal. Compound Interestinterest paid on principal and on interest earned in previous compound interesta 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 compound interestinterest earned on interest. Compound Interestinterest 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. computer integrated manufacturing (CIM)the integration of two or more flexible manufacturing systems through the use of a host computer and an information networking system confrontation strategyan organizational strategy in which company management decides to confront, rather than avoid, competition; an organizational strategy in which company management still attempts to differentiate company ConglomerateA firm engaged in two or more unrelated businesses. Conglomerate mergerA merger involving two or more firms that are in unrelated businesses. Consortium banksA merchant banking subsidiary set up by several banks that may or may not be of the Contingent deferred sales charge (CDSC)The formal name for the load of a back-end load fund. Continuous random variableA random value that can take any fractional value within specified ranges, as Contribution RateThe percentage tax charged by a state to an employer to Corporate acquisitionThe acquisition of one firm by anther firm. Corporate bondsDebt obligations issued by corporations. Corporate charterA legal document creating a corporation. Corporate financeOne of the three areas of the discipline of finance. It deals with the operation of the firm Corporate financial managementThe application of financial principals within a corporation to create and Corporate financial planningFinancial planning conducted by a firm that encompasses preparation of both Corporate processing floatThe time that elapses between receipt of payment from a customer and the Corporate tax viewThe argument that double (corporate and individual) taxation of equity returns makes Corporate taxable equivalentrate of return required on a par bond to produce the same after-tax yield to cost leadership strategya plan to achieve the position in a Coupon rateIn bonds, notes or other fixed income securities, the stated percentage rate of interest, usually Coupon RateThe rate of interest paid on a debt security. Generally stated on an Coupon rateThe nominal interest rate that the issuer promises to pay the coupon rateAnnual interest payment as a percentage of face value. Covered call writing strategyA strategy that involves writing a call option on securities that the investor Covered interest arbitrageA portfolio manager invests dollars in an instrument denominated in a foreign Covered or hedge option strategiesStrategies that involve a position in an option as well as a position in the Crediting rateThe interest rate Offered on an investment type insurance policy. Cross ratesThe exchange rate between two currencies expressed as the ratio of two foreign exchange rates Crossover rateThe return at which two alternative projects have the same net present value. Current maturityCurrent time to Maturity on an outstanding debt instrument. Current rate methodUnder this currency translation method, all foreign currency balance-sheet and income Daily Interest AccumulationAccount in which interest is accrued daily and credited to the account at the end of a specified time. Dealer loanOvernight, collateralized loan made to a dealer financing his position by borrowing from a Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |