Financial term of the day, Friday 4th of September 2015:

Dow

The dow (of the dow Jones) Industrial Index is a stock index named after its founders. It is the "price" of a collection of 30 blue chip industrials on the New York stock Exchange calculated throughout the trading day. It provides a measure of how the "blue chip" stock market is performing. (see also "Index")

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Dow Jones Industrial Average
The Dow Jones Industrial Average (DJIA) is based on a portfolio consisting of 30 blue-chipi stocks in the United States. The weights given to the stocks are proportional to their prices.

Downgrade Trigger
A clause in a contract that states that the contract will be terminated with a cash settlement if the credit rating of one side falls below a certain level.

Dow theory
A theory contending that a primary market trend - one that will last for a year or more - will follow the movements in at least two of the three Dow Jones Averages (industrial, transportation and utilities). The theory is based on the belief that trends follow movements set by the indexes.

Write-down
Decreasing the book value of an asset if its book value is overstated compared to current market values.

Window contract
A guaranteed investment contract purchased with deposits over some future designated time period (the "window"), usually between 3 and 12 months. All deposits made are guaranteed the same credit rating.

Top-down equity management style
A management style that begins with an assessment of the overall economic environment and makes a general asset allocation decision regarding various sectors of the financial markets and various industries. The bottom-up manager, in contrast, selects the specific securities within the favored sectors.

Paydown
In a Treasury refunding, the amount by which the par value of the securities maturing exceeds that of those sold.

Cramdown
When investors get heavily diluted by a susbsequent round of investment especially when the investment is a down round. Also known as a Washout.

Dow
The Dow (of the Dow Jones) Industrial Index is a stock index named after its founders. It is the "price" of a collection of 30 blue chip industrials on the New York Stock Exchange calculated throughout the trading day. It provides a measure of how the "blue chip" stock market is performing. (see also "Index")

Builder buydown loan
A mortgage loan on newly developed property that the builder subsidizes during the early years of the development. The builder uses cash to buy down the mortgage rate to a lower level than the prevailing market loan rate for some period of time. The typical buydown is 3% of the interest-rate amount for the first year, 2% for the second year, and 1% for the third year (also referred to as a 3-2-1 buydown).

Buydowns
Mortgages in which monthly payments consist of principal and interest, with portions of these payments during the early period of the loan being provided by a third party to reduce the borrower's monthly payments.

Drawdown
The state in which the borrower obtains some of the project financing, usually progressively according to construction expenditures plus IDC.

Did you know?

Savings and Loan association

A US-type state-chartered institution that accepts savings deposits and invests the bulk of the funds thus received in mortgages.


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