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Financial Terms | |
Underlying Results |
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Definition of Underlying ResultsUnderlying ResultsEarnings after removing the effects of nonrecurring or nonoperating items.
Related Terms:results benchmarkingbenchmarking in which an end product or service is examined; the focus is on product/service specifications and performance results Rho - The rate of change in a derivative’s price relative to the underlyingsecurity’s risk-free interest rate. Underlying assetThe asset that an option gives the option holder the right to buy or to sell. Underlying securityOptions: the security subject to being purchased or sold upon exercise of an option 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 changeAn alteration in the accounting methodology or estimates used in 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 Active portfolio strategyA strategy that uses available information and forecasting techniques to seek a 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 American Stock Exchange (AMEX)The second-largest stock exchange in the United States. It trades ![]() 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. Arm's length priceThe price at which a willing buyer and a willing unrelated seller would freely agree to Ask priceA dealer's price to sell a security; also called the offer price. Auction rate preferred stock (ARPS)Floating rate preferred stock, the dividend on which is adjusted every 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. Barbell strategyA strategy in which the maturities of the securities included in the portfolio are concentrated ![]() Bargain-purchase-price optionGives the lessee the option to purchase the asset at a price below fair market Base interest rateRelated: Benchmark interest rate. Basic business strategiesKey strategies a firm intends to pursue in carrying out its business plan. Basis priceprice expressed in terms of yield to maturity or annual rate of return. Benchmark interest rateAlso called the base interest rate, it is the minimum interest rate investors will benchmarkingthe process of investigating how others do something better so that the investigating company can imitate, Bid priceThis is the quoted bid, or the highest price an investor is willing to pay to buy a security. Practically Bill of exchangeGeneral term for a document demanding payment. 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 Broker loan rateRelated: Call money rate. 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 Call priceThe price, specified at issuance, at which the issuer of a bond may retire part of the bond at a Call priceThe price for which a bond can be repaid before maturity under a call provision. Capitalization RateA discount rate used to find the present value of a series of future cash receipts. Sometimes called discount rate. cash burn rateA relatively recent term that refers to how fast a business Change in Accounting EstimateA change in accounting that occurs as the result of new information Change in Accounting EstimateA change in the implementation of an existing accounting Change in Accounting PrincipleA change from one generally accepted accounting principle to another generally accepted accounting principle—for example, a change from capitalizing expenditures Change in Reporting EntityA change in the scope of the entities included in a set of, typically, consolidated financial statements. Changes in Financial PositionSources of funds internally provided from operations that alter a company's Chicago Mercantile Exchange (CME)A not-for-profit corporation owned by its members. Its primary Clean priceBond price excluding accrued interest. Combination strategyA strategy in which a put and with the same strike price and expiration are either both Commodities Exchange Center (CEC)The location of five New York futures exchanges: Commodity compensation strategya foundation for the compensation plan that addresses the role compensation should play in the organization 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. Consumer Price Index (CPI)The CPI, as it is called, measures the prices of consumer goods and services and is a Consumer Price Index (CPI)An index calculated by tracking the cost of a typical bundle of consumer goods and services over time. It is commonly used to measure inflation. Contribution RateThe percentage tax charged by a state to an employer to Conversion parity priceRelated:Market conversion price Convertible exchangeable preferred stockConvertible preferred stock that may be exchanged, at the Convertible priceThe contractually specified price per share at which a convertible security can be 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 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. Cumulative Effect of a Change in Accounting PrincipleThe change in earnings of previous years Cumulative Effect of Accounting ChangeThe change in earnings of previous years assuming Current rate methodUnder this currency translation method, all foreign currency balance-sheet and income Dedication strategyRefers to multi-period cash flow matching. Delivery priceThe price fixed by the Clearing house at which deliveries on futures are in invoiced; also the DerivativeA financial instrument that is based on some underlying asset. Derivative instrumentsContracts such as options and futures whose price is derived from the price of the Derivative marketsMarkets for derivative instruments. Derivative securityA financial security, such as an option, or future, whose value is derived in part from the Devaluation A decrease in the spot price of the currency
differentiation strategya technique for avoiding competition by distinguishing a product or service from that of competitors through adding sufficient value (including quality and/or features) that customers are willing to pay Dirty priceBond price including accrued interest, i.e., the price paid by the bond buyer. discount ratethe rate of return on investment that would be required by a prudent investor to invest in an asset with a specific level risk. Also, a rate of return used to convert a monetary sum, payable or receivable in the future, into present value. Discount rateThe interest rate that the Federal Reserve charges a bank to borrow funds when a bank is Discount RateThe rate of interest used to calculate the present value of a stream discount ratethe rate of return used to discount future cash discount rateInterest rate used to compute present values of future cash flows. Discount RateThe interest rate at which the Fed is prepared to loan reserves to commercial banks. Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |