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Definition of Term structure
The relationship between the yields on fixed-interest
A biased expectations theory that asserts that the implied forward
Relationship among interest rates on bonds with different terms to maturity.
Theories of the term structure of interest rates which include the pure
The fact that future inflation rates are not known. It is a possible contributing factor to
A biased expectations theory that believes the term structure reflects the
A theory that asserts that the forward rates exclusively represent the expected
A repurchase agreement with a term of more than one day.
A curve derived from theoretical considerations as applied to the yields of
The graphical depiction of the relationship between the yield on bonds of the same credit quality
Graph of yields (vertical axis) of a particular type of security
The makeup of the liabilities and stockholders' equity side of the balance sheet, especially
The combination of debt, preferred stock, and common stock used
Firm’s mix of long-term financing.
The mix of the various types of debt and equity capital maintained by a firm. The more debt capital a firm has in its capital structure, the more highly leveraged the firm is considered to be.
terms that refer to the combination of
Coefficient of determination
A measure of the goodness of fit of the relationship between the dependent and
coefficient of determination
a measure of dispersion that
the relative composition of an organization’s
Conditions under which credit is extended by a lender to a borrower.
Liability-matching models that assume that the liability payments and the asset cash
Withdrawal of funds from a financial institution in order to invest them directly.
Euro-medium term note (Euro-MTN)
A non-underwritten Euronote issued directly to the market. Euro-
Institutions that provide the market function of matching borrowers and lenders or
Firm that raises money from many small investors and provides financing to businesses or other
Any institution, such as a bank, that takes deposits from savers and loans them to borrowers.
The process whereby financial intermediaries channel funds from lender/savers to borrower/spenders.
Optional periods of time which the conditions of a contract will be carried out.
Basic facilities, such as transportation, communication, and legal systems, on which economic activity depends.
spread The spread between the interest rate offered in two sectors of the bond market for
Intermarket spread swaps
An exchange of one bond for another based on the manager's projection of a
An independent third party that may act as a mediator during negotiations.
A good used in producing another good.
Typically 1-10 years.
Investment through a financial institution. Related: disintermediation.
In accounting information, one year or greater.
Value of property, equipment and other capital assets minus the depreciation. This is an
An obligation having a maturity of more than one year from the date it was issued. Also
A debt for which payments will be required for a period of more than
Long Term Debt
Liability due in a year or more.
Indicator of financial leverage. Shows long-term debt as a proportion of the
Long-term debt ratio
The ratio of long-term debt to total capitalization.
Long-term debt to equity ratio
A capitalization ratio comparing long-term debt to shareholders' equity.
Long-term financial plan
Financial plan covering two or more years of future operations.
Amount owed for leases, bond repayment and other items due after 1 year.
Bills that are payable in more than one year, such as a mortgage or bonds.
Amounts owing after more than one year.
Longer-Term Fixed Assets
Assets having a useful life greater than one year but the duration of the 'long term' will vary with the context in which the term is applied.
an organizational structure in which functional
A corporate debt instrument that is continuously offered to investors over a period of
the manner in which authority and
Other long term liabilities
Value of leases, future employee benefits, deferred taxes and other obligations
Pecking-order view (of capital structure)
The argument that external financing transaction costs, especially
Perfect market view (of capital structure)
Analysis of a firm's capital structure decision, which shows the
Personal tax view (of capital structure)
The argument that the difference in personal tax rates between
Pie model of capital structure
A model of the debt/equity ratio of the firms, graphically depicted in slices of
predetermined overhead rate
an estimated constant charge per unit of activity used to assign overhead cost to production or services of the period; it is calculated by dividing total budgeted annual overhead at a selected level of volume or activity by that selected measure of volume or activity; it is also the standard overhead application rate
Pro forma capital structure analysis
A method of analyzing the impact of alternative capital structure
The length of time given a borrower by a lender to repay a debt and the frequency of principal payments which the borrower has to meet.
Short-term financial plan
A financial plan that covers the coming fiscal year.
Short-term investment services
Services that assist firms in making short-term investments.
Short-term solvency ratios
Ratios used to judge the adequacy of liquid assets for meeting short-term
Short-term tax exempts
Short-term securities issued by states, municipalities, local housing agencies, and
Static theory of capital structure
Theory that the firm's capital structure is determined by a trade-off of the
Structured arbitrage transaction
A self-funding, self-hedged series of transactions that usually utilize
Debt that has been customized for the buyer, often by incorporating unusual options.
Structured portfolio strategy
A strategy in which a portfolio is designed to achieve the performance of some
An agreement in settlement of a lawsuit involving specific payments made over a
Historically, damages paid out during settlement of personal physical injury cases were distributed in the form of a lump-sum cash payment to the plaintiff. This windfall was intended to provide for a lifetime of medical and income needs. The claimant or his/her family was then forced into the position of becoming the manager of a large sum of money.
See term to maturity.
This is usually the duration of a loan.
The period of time during which a financial contract – such as a GIC or a loan – is in force.
The time period during which a policy is in force, or the time it takes for a policy to reach maturity.
Often referred to as bullet-maturity bonds or simply bullet bonds, bonds whose principal is
An interest-earning bank deposit that cannot be withdrawn without penalty until a specific time.
Term Fed Funds
Fed Funds sold for a period of time longer than overnight.
Provides a death benefit only, no build-up of cash value.
A product that provides life coverage for a specified duration typically not beyond the age of 75.
Term life insurance
A contract that provides a death benefit but no cash build-up or investment component.
Term Life Insurance
A plan of insurance which covers the insured for only a certain period of time and not necessarily for his or her entire life. The policy pays a death benefit only if the insured dies during the term.
A bank loan, typically with a floating interest rate, for a specified amount that matures in between
A secured loan made to business concerns for a specific period (normally three to ten years). It is repaid with interest, usually with periodical payments.
Excess of the yields to maturity on long-term bonds over those of short-term bonds.
A list of the major points of the proposed financing being offered by an investor.
Term to maturity
The time remaining on a bond's life, or the date on which the debt will cease to exist and
Term to Maturity
Period of time from the present to the redemption date of a bond.
A closed-end fund that has a fixed termination or maturity date.
Terminal Illness Insurance (Credit Insurance)
Coverage that provides a lump-sum payment should you become terminally ill. The payment is made to your creditors to pay off your debt owing.
The value of a bond at maturity, typically its par value, or the value of an asset (or an entire
Cease all legal obligations under a contract.
Additional pay due to an employee whose employment is
Terms of sale
Conditions on which a firm proposes to sell its goods services for cash or credit.
terms of sale
Credit, discount, and payment terms offered on a sale.
Terms of trade
The weighted average of a nation's export prices relative to its import prices.
Terms of Trade
The quantity of imports that can be obtained for a unit of exports, measured by the ratio of an export price index to an import price index.
Yearly Renewable Term Insurance
Sometimes, simply called YRT, this is a form of term life insurance that may be renewed annually without evidence of insurability to a stated age.
The future interest rate of a bond inferred from the term
Approach to the determination of the optimal capital structure asserting that insiders in a
The International Bank for Reconstruction and Development, an international organization that provides long-term loans to developing countries to improve their infrastructure.
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