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Definition of Tontine
A type of life insurance or annuity first introduced by Lorenzo Tonti, a Neopolitan banker, in France in the 17th century. It consisted of a fund to which a group of persons contribute, the benefits ultimately accruing to the last survivor or to those surviving after a specified time, in equal shares. The only insurance plans available today which we are aware of that display characteristics of a tontine are some children's Registered Educational Savings Plans (RESP's). These plans generally stipulate that if the child who is covered under the plan does not use the accumulated savings to attend an accredited university, then only the principal invested is returned. All growth in the plan is held to be distributed to other plan holders who do go on to attend university.
Mutual funds that do not charge an upfront or back-end commission, but instead take out up to
A retirement plan set up by an employer, into which employees can
A retirement plan similar to a 401k plan, except that it is designed
The option of terminating an investment earlier than originAlly planned.
Clause causing repayment of a debt, if specified events occur or are not met.
Provides additional financial security should an insured person be dismembered or lose the use of a limb as the result of an accident.
An approximate measure of the liability of a plan in the event of a
A contra-fixed asset account representing the portion of the cost of a fixed asset that has been previously charged to expense. Each fixed asset account will have its own associated accumulated depreciation account.
A contra, or offset, account that is coupled
The sum total of All deprecation expense recognized to date
Cumulative gains or losses reported in shareholders'
An amount of money invested plus the interest earned on that money.
The sum of cash, accounts receivable, and short-term marketable
This doctrine says that a nation is sovereign within its own borders and its domestic
the present value of a finite stream of cash flows for every beginning $1 of cash flow.
After-tax profit margin
The ratio of net income to net sales.
After-tax real rate of return
Money after-tax rate of return minus the inflation rate.
A budgeting process using summary-level information to
a logical step-by-step problem-solving technique
All equity rate
The discount rate that reflects only the business risks of a project and abstracts from the
Total costs, explicit and implicit.
All or none
Requirement that none of an order be executed unless All of it can be executed at the specified price.
An arrangement whereby a security issue is canceled if the underwriter is unable
assign based on the use of a cost driver, a cost predictor,
the systematic assignment of an amount to a recipient
The process of storing costs in one account and shifting them to other
Allocation base A measure of activity or volume such as labour
hours, machine hours or volume of production
Allowance for bad debts
An offset to the accounts receivable balance, against which
Allowance for doubtful accounts
A contra account related to accounts receivable that represents the amounts that the company expects will not be collected.
Allowance for Doubtful Accounts
An estimate of the uncollectible portion of accounts receivable
A method of adjusting accounts receivable to the amount that is expected to be collected based on company experience.
Securities certificates issued in the U.S. by a transfer agent acting on behalf of the foreign
Amortization (Credit Insurance)
Refers to the reduction of debt by regular payments of interest and principal in order to pay off a loan by maturity.
Annual fund operating expenses
For investment companies, the management fee and "other expenses,"
A regular periodic payment made by an insurance company to a policyholder for a specified period
A series of payments or deposits of equal size spaced evenly over
A series of payments over a period of time. The payments are usuAlly
equally spaced level stream of cash flows.
A contract which provides an income for a specified period of time, such as a certain number of years or for life. An annuity is like a life insurance policy in reverse. The purchaser gives the life insurance company a lump sum of money and the life insurance company pays the purchaser a regular income, usuAlly monthly.
Periodic payments made to an individual under the terms of the policy.
An annuity with n payments, wherein the first payment is made at time t = 0 and the last
annuity where the payments are to be made at the beginning of
a series of equal cash flows being received or paid at the beginning of a period
Level stream of cash flows starting immediately.
Present value of $1 paid for each of t periods.
Present value of an annuity of $1 per period.
Annuity in arrears
An annuity with a first payment on full period hence, rather than immediately.
The time between each payment under an annuity.
approximated net realizable value at split-off allocation
a method of Allocating joint cost to joint products using a
Asset allocation decision
The decision regarding how an institution's funds should be distributed among the
Number of shares authorized for issuance by a firm's corporate charter.
The number of shares of stock that the company is legAlly authorized to sell.
Automated Clearing House (ACH)
A collection of 32 regional electronic interbank networks used to
Automated Clearing House (ACH)
A banking clearinghouse that processes direct
Automatic Benefits Payment
Automatic payment of moneys derived from a benefit.
A debt or equity security not classified as a held-to-maturity security or a trading security. Can be classified as a current or noncurrent investment depending on the intended holding period.
Also referred to as the weighted-average life (WAL). The average number of years that each
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.
A plan by U.S. Treasury Secretary James Baker under which 15 principal middle-income debtor
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
Any large principal payment due at maturity for a bond or loan with or without a a sinking
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.
Basic Earnings Power Ratio
Percentage of earnings relative to total assets; indication of how
A signAlling device.
Beneficiary (Credit Insurance)
The person or party designated to receive proceeds entitled by a benefit. Payment of a benefit is triggered by an event. In the case of credit insurance, the beneficiary will always be the creditor.
a listing of service departments in an order that begins with the one providing the most service
Beta equation (Mutual Funds)
The beta of a fund is determined as follows:
Beta (Mutual Funds)
The measure of a fund's or stocks risk in relation to the market. A beta of 0.7 means
Brokerage firms that help to find potential buyers or sellers of large block trades.
Borrower (Credit Insurance)
A consumer who borrows money from a lender.
In the mortgage pipeline, the risk that prospective borrowers of loans committed to be
Related: Premium payback period.
Builder buydown loan
A mortgage loan on newly developed property that the builder subsidizes during the
Foreign bond issue made in London.
The foreign market in the United Kingdom.
Mortgages in which monthly payments consist of principal and interest, with portions of These
A flexible benefits plan authorized under the Internal Revenue
cafeteria plan a “menu” of fringe benefit options that include
cash or nontaxable benefits
An option that gives the right to buy the underlying futures contract.
a. An option to buy a certain quantity of a stock or commodity for a
Call an option
To exercise a cAll option.
A date before maturity, specified at issuance, when the issuer of a bond may retire part of the bond
Call money rate
Also cAlled the broker loan rate , the interest rate that banks charge brokers to finance
An option contract that gives its holder the right (but not the obligation) to purchase a specified
A contract that gives the holder the right to buy an asset for a
Right to buy an asset at a specified exercise price on or before the exercise date.
The price, specified at issuance, at which the issuer of a bond may retire part of the bond at a
The price for which a bond can be repaid before maturity under a cAll provision.
A feature of some cAllable bonds that establishes an initial period when the bonds may not be
An embedded option granting a bond issuer the right to buy back All or part of the issue prior
The combination of cash flow uncertainty and reinvestment risk introduced by a cAll provision.
A swaption in which the buyer has the right to enter into a swap as a fixed-rate payer. The
A financial security such as a bond with a cAll option attached to it, i.e., the issuer has the right to
A bond that Allows the issuer to buy back the bond at a
Bond that may be repurchased by the issuer before maturity at specified cAll price.
Canada Pension Plan (CPP)
A plan that provides retirement and long term disability income benefits to residents of Canadian provinces (excluding Quebec).
Canada Savings Bonds
A bond issued each year by the federal government. These bonds can be cashed in at any time for their full face value.
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