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Definition of Tenor
Maturity of a loan.
The London Interbank Offered Rate; the rate of interest that major international banks in London
A fixed rate currency swap against floating U.S. dollar libor payments.
Swap between two LIBO rates of interest, e.g. yen libor for dollar libor. Payments are
A benchmark 'interest rate (such as libor), used to specify conditions of an interest rate
Loan made at an interest rate that fluctuates based on a base interest rate such as the
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
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.
Cumulative gains or losses reported in shareholders'
Active portfolio strategy
A strategy that uses available information and forecasting techniques to seek a
A 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
A 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 return
Money after-tax rate of return minus the inflation rate.
All equity rate
The discount rate that reflects only the business risks of a project and abstracts from the
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.
Methods of financing in which lenders and equity investors look principally to the
loans 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
The 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 rate
Taxes as a fraction of income; total taxes divided by total taxable income.
average tax rate
Total taxes owed divided by total income.
A loan in which two companies in separate countries borrow each other's currency for a
Any 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
A strategy in which the maturities of the securities included in the portfolio are concentrated
Base interest rate
Related: Benchmark interest rate.
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
The requirement that a claim holder voting against a plan of reorganization
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
A short term loan to cover the immediate cash requirements until permanent financing is received.
Broker loan rate
Related: Call money rate.
Builder buydown loan
A mortgage loan on newly developed property that the builder subsidizes during the
A bank term loan that calls for no amortization.
A strategy in which a portfolio is constructed so that the maturities of its securities are highly
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
A discount rate used to find the present value of a series of future cash receipts. Sometimes called discount rate.
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 burn rate
A relatively recent term that refers to how fast a business
Cash flow after interest and taxes
Net income plus depreciation.
a system using transfer prices; see transfer
Clearing House Interbank Payments System (CHIPS)
An international wire transfer system for high-value
A 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 equity
Value of outstanding common shares at par, plus accumulated retained
a foundation for the compensation plan that addresses the role compensation should play in the organization
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.
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
an 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
A firm engaged in two or more unrelated businesses.
A merger involving two or more firms that are in unrelated businesses.
A 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 variable
A random value that can take any fractional value within specified ranges, as
The percentage tax charged by a state to an employer to
The acquisition of one firm by anther firm.
Debt obligations issued by corporations.
A legal document creating a corporation.
One of the three areas of the discipline of finance. It deals with the operation of the firm
Corporate financial management
The application of financial principals within a corporation to create and
Corporate financial planning
Financial planning conducted by a firm that encompasses preparation of both
Corporate processing float
The time that elapses between receipt of payment from a customer and the
Corporate tax view
The argument that double (corporate and individual) taxation of equity returns makes
Corporate taxable equivalent
rate of return required on a par bond to produce the same after-tax yield to
cost leadership strategy
a plan to achieve the position in a
In bonds, notes or other fixed income securities, the stated percentage rate of interest, usually
The rate of interest paid on a debt security. Generally stated on an
The nominal interest rate that the issuer promises to pay the
Annual interest payment as a percentage of face value.
Covered call writing strategy
A strategy that involves writing a call option on securities that the investor
Covered interest arbitrage
A portfolio manager invests dollars in an instrument denominated in a foreign
Covered or hedge option strategies
Strategies that involve a position in an option as well as a position in the
The interest rate Offered on an investment type insurance policy.
The exchange rate between two currencies expressed as the ratio of two foreign exchange rates
The return at which two alternative projects have the same net present value.
Current time to Maturity on an outstanding debt instrument.
Current rate method
Under this currency translation method, all foreign currency balance-sheet and income
Daily Interest Accumulation
Account in which interest is accrued daily and credited to the account at the end of a specified time.
Overnight, collateralized loan made to a dealer financing his position by borrowing from a
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