Fixed interest securities

Similar financial terms

Fixed assets
Alternative name for noncurrent assets.

Fixed costs
Production expenses that are independent of the level of output. Fixed costs could include debt repayments, security costs and marketing and administration costs.

Fixed exchange rates
A fixed exchange rate system is one where the value of the currency against other currencies remains exactly the same. A fixed exchange rate doesn't stay fixed on its own. Governments have to hold large stocks of foreign exchange, so that they can actively intervene to hold the value of the currency stable. Monetary and fiscal policies will also have to be directed to keeping the rate constant.

Interest-rate risk on bonds
The price of a typical bond will change in the opposite direction from a change in interest rates. As interest rates rise, the price of a bond will fall; as interest rates fall, the price of a bond will rise. The actual degree of sensitivity of a bond’s price to changes in market interest rates depends on various characteristics of the issue maturity, coupon and special provisions.

Accrued interest
Interest earned but not yet due and payable. In the context of bond, it is the next coupon to be paid multiplied by the time elapsed since the last payment date and divided by the total coupon period.

Zero-coupon interest rate
The interest rate that would be earned on a bond that provides no coupons.

Term structure of interest rates
The relationship between interest rates and their maturities.

Amortizing interest rate swap
Swap in which the principal or national amount rises (falls) as interest rates rise (decline).

True interest cost
For a security such as commercial paper that is sold on a discount basis, the coupon rate required to provide an identical return assuming a coupon-bearing instrument of like maturity that pays interest in arrears.

Times-interest-earned ratio
Earnings before interest and tax, divided by interest payments.

Stated annual interest rate
The interest rate expressed as a per annum percentage, by which interest payment is determined.

Spot interest rate
Interest rate fixed today on a loan that is made today.

Simple interest
Interest calculated only on the initial investment.

Short interest
This is the total number of shares of a security that investors have borrowed, then sold in the hope that the security will fall in value. An investor then buys back the shares and pockets the difference as profit.

Real interest rate
The rate of interest excluding the effect of inflation; that is, the rate that is earned in terms of constant-purchasing-power dollars. Interest rate expressed in terms of real goods, i.e. nominal interest rate adjusted for inflation.

Rate of interest
The rate, as a proportion of the principal, at which interest is computed.

Pooling of interests
An accounting method for reporting acquisitions accomplished through the use of equity. The combined assets of the merged entity are consolidated using book value, as opposed to the purchase method, which uses market value. The merging entities' financial results are combined as though the two entities have always been a single entity.

Open interest
The total number of derivative contracts traded that not yet been liquidated either by an offsetting derivative transaction or by delivery.

Nominal interest rate
The interest rate unadjusted for inflation.

Minority interest
An outside ownership interest in a subsidiary that is consolidated with the parent for financial reporting purposes.

Benchmark interest rate
Also called the base interest rate, it is the minimum interest rate investors will demand for investing in a non-Treasury security. It is also tied to the yield to maturity offered on a comparable-maturity Treasury security that was most recently issued ("on-the-run").

Best-interests-of-creditors test
The requirement that a claim holder voting against a plan of reorganization must receive at least as much as he would have if the debtor were liquidated.

Capitalized interest
Interest that is not immediately expensed, but rather is considered as an asset and is then amortized through the income statement over time.

Cash flow after interest and taxes
Net income plus depreciation.

Compound interest
Interest paid on previously earned interest as well as on the principal.

Covered interest arbitrage
A portfolio manager invests dollars in an instrument denominated in a foreign currency and hedges his resulting foreign exchange risk by selling the proceeds of the investment forward for dollars.

Separate Trading of Registered Interest (STRIPS)
Separate Trading of Registered Interest and Principal Securities (STRIPS) are securities that have their periodic interest payments separated from the final maturity payment and the two cash flows are sold to different investors.

Net interest margin (NIM)
The difference between interest income and interest expense as a percentage of assets.

Nominal rate of interest
The annual return form lending money expressed as a percentage, without having taken account of the rate of inflation.

Amortizing securities
Securities that have an amortization schedule.

Non-amortizing securities
Securities that do not have an amortization schedule.

Convertible securities
Bond or preferred stock that can be converted to common stock if the investor so chooses.

Treasury securities
Securities issued by the U.S. Department of the Treasury.

Stripped mortgage-backed securities (SMBSs)
Securities that redistribute the cash flows from the underlying generic MBS collateral into the principal and interest components of the MBS to enhance their use in meeting special needs of investors.

Public Securities Administration (PSA)
The trade association for primary dealers in US government securities, including MBSs.

Project loan securities
Securities backed by a variety of FHA-insured loan types - primarily multi-family apartment buildings, hospitals, and nursing homes.

Pass-through securities
A pool of fixed-income securities backed by a package of assets (i.e. mortgages) where the holder receives the principal and interest payments.

Mortgage-backed securities (MBS)
Securities backed by a pool of mortgage loans.

Mortgage-Backed Securities Clearing Corporation
A wholly owned subsidiary of the Midwest Stock Exchange that operates a clearing service for the comparison, netting, and margining of agency-guaranteed MBSs transacted for forward delivery.

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

Book-entry securities
The Treasury and federal agencies are moving to a book-entry system in which securities are not represented by engraved pieces of paper but are maintained in computerized records at the Fed in the names of member banks, which in turn keep records of the securities they own as well as those they are holding for customers. In the case of other securities where a book-entry has developed, engraved securities do exist somewhere in quite a few cases. These securities do not move from holder to ho ...

Defensive securities
Low-risk stocks or bonds that will provide a predictable and safe return on an investor's money.

The Securities Industry Protection Corporation
Commonly named the SIPC. Provides up to $500,000 insurance protection for your U.S. stock brokerage account.

Johannesburg Securities Exchange (JSE)
Established in 1886, the Johannesburg Securities Exchange is the only stock exchange in South Africa. Gold and mining stocks form the majority of shares listed. The discovery of the Witwatersrand goldfields in 1886 and the subsequent formation of mining and financial companies, meant investors needed a facility through which to buy and sell shares. Benjamin Woollan provided that facility when he founded the JSE in November 1887. The JSE was admitted as a member of the Federation Internatio ...