ACT

Similar financial terms

De facto
Existing in actual fact although not by official recognition

Clayton Act
Federal antitrust law originally passed in 1914 and strengthened in 1950 by the Celler-Kefauver amendment. Section 7 gives the Federal Trade Commission (FTC) power to prohibit the acquisition of one company by another if adverse effects on competition would result, or if the FTC perceives a trend that ultimately might lead to decreased competition.

Bootstrap transaction
A highly leveraged transaction (HLT)

Transactions costs
The transactions costs are the expenses to the execution of a trade. It includes the commissions plus the difference between the price obtained and the midpoint of the bid-offer spread.

Spread transaction
A position in two or more options of the same type.

Act of state doctrine
This doctrine says that a nation is sovereign within its own borders and its domestic actions may not be questioned in the courts of another nation.

Active
A market in which there is much trading.

Active portfolio strategy
A strategy that uses available information and forecasting techniques to seek a better performance than a portfolio that is simply diversified broadly. Related: passive portfolio strategy.

Actuals
The physical commodity underlying a futures contract. Cash commodity, physical.

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.

Amortization factor


Two-factor model
Black's zero-beta version of the capital asset pricing model.

Turnkey construction contract
A type of construction contract under which the construction firm is obligated to complete a project according to prespecified criteria for a price that is fixed at the time the contract is signed.

Transactions motive
A desire to hold cash for the purpose of conducting cash based transactions.

Transaction demand (for money)
The need to accommodate a firm's expected cash transactions.

Transaction loan
A loan extended by a bank for a specific purpose. In contrast, lines of credit and revolving credit agreements involve loans that can be used for various purposes.

Transaction exposure
Risk to a firm with known future cash flows in a foreign currency that arises from possible changes in the exchange rate.

Taxable transaction
Any transaction that is not tax-free to the parties involved, such as a taxable acquisition.

Tax Reform Act of 1986
A 1986 law involving a major overhaul of the U.S. tax code.

Take-or-pay contract
A contract that obligates the purchaser to take any product that is offered to it (and pay the cash purchase price) or pay a specified amount if it refuses to take the product.

Tactical Asset Allocation
Tactical Asset Allocation (TAA) is an asset allocation strategy that allows active departures from the normal asset mix based upon rigorous objective measures of value. Often called active management. It involves forecasting asset returns, volatilities and correlations. The forecasted variables may be functions of fundamental variables, economic variables or even technical variables.

Structured arbitrage transaction
A self-funding, self-hedged series of transactions that usually utilize mortgage securities as the primary assets.

Single factor model
A model of security returns that acknowledges only one common factor.

Short-run operating activities
Events and decisions concerning the short-term finance of a firm, such as how much inventory to order and whether to offer cash terms or credit terms to customers.

Set of contracts perspective
View of corporation as a set of contracting relationships, among individuals who have conflicting objectives, such as shareholders or managers. The corporation is a legal contrivance that serves as the nexus for the contracting relationships.

Security characteristic line
A plot of the excess return on a security over the risk-free rate as a function of the excess return on the market.

Round-trip transactions costs
Costs of completing a transaction, including commissions, market impact costs, and taxes.

Reported factor
The pool factor as reported by the bond buyer for a given amortization period.

Receivables balance fractions
The percentage of a month's sales that remain uncollected (and part of accounts receivable) at the end of succeeding months.

Reaction
A decline in prices following an advance. Opposite of rally.

Present value factor
Factor used to calculate an estimate of the present value of an amount to be received in a future period.

Pool factor
The outstanding principal balance divided by the original principal balance with the result expressed as a decimal. Pool factors are published monthly by the Bond Buyer newspaper for Ginnie Mae, Fannie Mae, and Freddie Mac(Federal Home Loan Mortgage Corporation) MBSs.

Overreaction hypothesis
The supposition that investors overreact to unanticipated news, resulting in exaggerated movement in stock prices followed by corrections.

Options contract multiple
A constant, set at $100, which when multiplied by the cash index value gives the dollar value of the stock index underlying an option. That is, dollar value of the underlying stock index = cash index value x $100 (the options contract multiple).

Options contract
A contract that, in exchange for the option price, gives the option buyer the right, but not the obligation, to buy (or sell) a financial asset at the exercise price from (or to) the option seller within a specified time period, or on a specified date (expiration date).

Optimal contract
The contract that balances the three types of agency costs (contracting, monitoring, and misbehavior) against one another to minimize the total cost.

Open contracts
Contracts which have been bought or sold without the transaction having been completed by subsequent sale or purchase, or by making or taking actual delivery of the financial instrument or physical commodity.

One-factor APT
A special case of the arbitrage pricing theory that is derived from the one-factor model by using diversification and arbitrage. It shows the expected return on any risky asset is a linear function of a single factor.

Old-line factoring
Factoring arrangement that provides collection, insurance, and finance for accounts receivable.

Nexus (of contracts)
A set or collection of something.

Next futures contract
The contract settling immediately after the nearby futures contract.

Net benefit to leverage factor
A linear approximation of a factor, T*, that enables one to operationalize the total impact of leverage on firm value in the capital market imperfections view of capital structure.

Nearby futures contract
When several futures contracts are considered, the contract with the closest settlement date is called the nearby futures contract. The next futures contract is the one that settles just after the nearby futures contract. The contract farthest away in time from settlement is called the most distant futures contract.

Multifactor CAPM
A version of the capital asset pricing model derived by Merton that includes extramarket sources of risk referred to as factor.

Most distant futures contract
When several futures contracts are considered, the contract settling last.

Maturity factoring
Factoring arrangement that provides collection and insurance of accounts receivable.

Market impact costs
Also called price impact costs, the result of a bid/ask spread and a dealer's price concession.

Manufactured housing securities (MHSs)
Loans on manufactured homes - that is, factory-built or prefabricated housing, including mobile homes.

Coastal Barrier Resource Act (CBRA)
The Coastal Barrier Resources Act (CBRA) restricts Federal expenditures and financial assistance that encourage development of coastal barriers so that damage to the property, fish, wildlife, and other natural resources associated with the coastal barrier is minimized.

Computer-Intergrated Manufacturing (CIM)
The intergration of computer control and monitoring into a manufacturing process.

Actionable
Capable of being acted on or completed in the near future. "Which items on our list are actionable in the next quarter?" Note: "actionable" has a long-standing legal meaning differing from the above.

Sabanes Oxley Act
This is an Act passed in the USA to ensure that corporations meet prescribed accounting and reporting standards. It was legislated as a response to corporate misappropriations and malfeasance. It is supposed to better protect investors although it is doubtful that it will make dishonest people honest. It merely adds to the bureaucratic burden and cost of running a company.

Bullet contract
A guaranteed investment contract purchased with a single (one-shot) premium.

Cash settlement contracts
Futures contracts, such as stock index futures, that settle for cash, not involving the delivery of the underlying.

Cash transaction
A transaction where exchange is immediate, as contrasted to a forward contract, which calls for future delivery of an asset at an agreed-upon price.

Characteristic line
The market model applied to a single security. The slope of the line is a security's beta.

Collection fractions
The percentage of a given month's sales collected during the month of sale and each month following the month of sale.

Conditional sales contracts
Similar to equipment trust certificates except that the lender is either the equipment manufacturer or a bank or finance company to whom the manufacturer has sold the conditional sales contract.

Contract
A term of reference describing a unit of trading for a financial or commodity future. Also, the actual bilateral agreement between the buyer and seller of a transaction as defined by an exchange.

Contract month
The month in which futures contracts may be satisfied by making or accepting a delivery. Also called value managers, those who assemble portfolios with relatively lower betas, lower price-book and P/E ratios and higher dividend yields, seeing value where others do not.

Conversion factors
Rules set by the Chicago Board of Trade for determining the invoice price of each acceptable deliverable Treasury issue against the Treasury Bond futures contract.

Interactive marketing
Any marketing method that uses electronic communication between the marketer and customer. Web sites, and consumer electronic kiosks are examples of interactive marketing.

Federal Home Loan Bank Act of 1932
Law that created the Federal Home Loan Bank Board and a network of regional home loan banks.

Restrictive practice
A general term for anything done by a company, or companies, to inhibit fair competition. Generally against the law.

Fair Credit Reporting Act
A consumer protection law that regulates the disclosure of consumer credit reports by consumer/credit reporting agencies and establishes procedures for correcting mistakes on one's credit record.

Equal Credit Opportunity Act (ECOA)
A federal law that requires lenders and other creditors to make credit equally available without discrimination based on race, color, religion, national origin, age, sex, marital status, or receipt of income from public assistance programs.

Factor market
The place where inputs or resources are bought or sold. Factor markets usually refer to labor or capital.

Foreign Investor in Real Property Tax Act of 1980
Under FIRPTA (Foreign Investor in Real Property Tax Act of 1980), and the Economic Recovery Act of 1981, unless an exemption is granted by the IRS, upon the sale of real property owned by offshore (foreign) persons, the agency, attorney or escrow officer handling the transaction is required to withhold capital gains taxes at the closing of the sale transaction. Unless withheld and submitted to the IRS, the party handling the sale transaction is personally liable for the taxes.

Revenue Reconciliation Act of 1995
Proposed changes to the Internal Revenue Code affecting foreign trust reporting, among other changes.

Transaction
The entry or liquidation of a trade.

To-Arrive Contract
A transaction providing for subsequent delivery within a stipulated time limit of a specific grade of a commodity.

Contract Grades
Those grades of a commodity which have been officially approved by an exchange as deliverable in settlement of a futures contract.