Money purchase plan

Similar financial terms

In-the-money
An option that has a positive value if exercised immediately. For example, a call when the exercise price is below the current price of the underlying asset, or a put when the exercise price is above the current price of the underlying asset.

Out-of-the-money
An option that has a negative value if exercised immediately. For example, a call when the exercise price is above the current price of the underlying asset, or a put when the exercise price is below the current price of the underlying asset.

Out-of-the-money options are usually not exercised.

At-the-money
An option that has zero value if exercised immediately. For example, a call or put when the exercise price is equal to the current price of the underlying asset.

Near money
A domestic dollar deposit is money within the context of the US economy while tue euro-dollar deposit is near money held y a bank branch in an offshore money market, such as Luxembourg. So the eurodollar market is a place where banks outside the US accept (borrow from customers) and place (lend) dollar deposits.

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

Time value of money
The idea that a dollar today is worth more than a dollar in the future, because the dollar received today can earn interest up until the time the future dollar is received.

Speculative demand (for money)
The need for cash to take advantage of investment opportunities that may arise.

Precautionary demand (for money)
The need to meet unexpected or extraordinary contingencies with a buffer stock of cash.

Out-of-the-money option
A call option is out-of-the-money if the strike price is greater than the market price of the underlying security. A put option is out-of-the-money if the strike price is less than the market price of the underlying security.

New money
In a Treasury auction, the amount by which the par value of the securities offered exceeds that of those maturing.

Money supply
M1-A: Currency plus demand deposits
M1-B: M1-A plus other checkable deposits
M2: M1-B plus overnight repos, money market funds, savings, and small (less than $100M) time deposits.
M3: M-2 plus large time deposits and term repos.
L: M-3 plus other liquid assets.

Money rate of return
Annual money return as a percentage of asset value.

Money market notes
Publicly traded issues that may be collateralized by mortgages and MBSs.

Money market hedge
The use of borrowing and lending transactions in foreign currencies to lock in the home currency value of a foreign currency transaction.

Money market fund
A mutual fund that invests only in short term securities, such as bankers' acceptances, commercial paper, repurchase agreements and government bills. The net asset value per share is maintained at $1. 00. Such funds are not federally insured, although the portfolio may consist of guaranteed securities and/or the fund may have private insurance protection.

Money market demand account
An account that pays interest based on short-term interest rates.

Money market
Money markets are for borrowing and lending money for three years or less. The securities in a money market can be U.S.government bonds, treasury bills and commercial paper from banks and companies.

Money center banks
Banks that raise most of their funds from the domestic and international money markets , relying less on depositors for funds.

Money base
Composed of currency and coins outside the banking system plus liabilities to the deposit money banks.

Call money rate
Also called the broker loan rate , the interest rate that banks charge brokers to finance margin loans to investors. The broker charges the investor the call money rate plus a service charge.

Hush money
Bribe; payment to keep someone quiet

Tight money
When a restricted money supply makes credit difficult to secure. The antithesis of tight money is easy money.

Dear money
UK term for tight money.

Deep in the money
A call option with an exercise price substantially below the underlying stock's market price. Also put option with an exercise price substantially above the underlying stock's market price. Often substantially below is defined as more than one strike price below (for calls)/above (for puts) the current value of the underlying security.

Deep out of the money
A call option with an exercise pricesubstantially above the market price. Also put option with an exercise price substantially below the underlying stock's market price. Often substantially below is defined as more than one strike price below (for calls)/above (for puts) the current value of the underlying security.

Earnest money deposit
A deposit made by the potential home buyer to show that he or she is serious about buying the house.

Hire Purchase
The right to buy an asset by the user of the asset according to a pre-agreed method. The user may be the owner for tax purposes.

Targeted repurchase
The firm buys back its own stock from a potential bidder, usually at a substantial premium, to forestall a takeover attempt.

Stock repurchase
A firm's repurchase of outstanding shares of its common stock.

Share repurchase
Program by which a corporation buys back its own shares in the open market. It is usually done when shares are undervalued. Since it reduces the number of shares outstanding and thus increases earnings per share, it tends to elevate the market value of the remaining shares held by stockholders.

Repurchase of stock
Device to pay cash to firm's shareholders that provides more preferable tax treatment for shareholders than dividends. Treasury stock is the name given to previously issued stock that has been repurchased by the firm. A repurchase is achieved through either a dutch auction, open market, or tender offer.

Repurchase agreement
An agreement with a commitment by the seller (dealer) to buy a security back from the purchaser (customer) at a specified price at a designated future date. Also called a repo, it represents a collateralized short-term loan, where the collateral may be a Treasury security, money market instrument, federal agency security, or mortgage-backed security. From the purchaser (customer) perspective, the deal is reported as a reverse Repo.

Purchase method
Accounting for an acquisition using market value for the consolidation of the two entities' net assets on the balance sheet. Generally, depreciation/amortization will increase for this method compared with pooling and will result in lower net income.

Purchase fund
Resembles a sinking fund except that money is used only to purchase bonds if they are selling below their par value.

Purchase and sale
A method of securities distribution in which the securities firm purchases the securities from the issuer for its own account at a stated price and then resells them, as contrasted with a best-efforts sale.

Purchase agreement
As used in connection with project financing, an agreement to purchase a specific amount of project output per period.

Purchase accounting
Method of accounting for a merger in which the acquirer is treated as having purchased the assets and assumed liabilities of the acquiree, which are all written up or down to their respective fair market values, the difference between the purchase price and the net assets acquired being attributed to goodwill.

Purchase
To buy, to be long, to have an ownership position.

Opening purchase
A transaction in which the purchaser's intention is to create or increase a long position in a given series of options.

Open-market purchase operation
A systematic program of repurchasing shares of stock in market transactions at current market prices, in competition with other prospective investors.

Minimum purchases
For mutual funds, the amount required to open a new account (Minimum Initial Purchase) or to deposit into an existing account (Minimum Additional Purchase). These minimums may be lowered for buyers participating in an automatic purchase plan

Open market purchase
An order placed by an insider, after all appropriate documentation has been filed, to buy restricted securities openly on an exchange.

Bargain-purchase-price option
Gives the lessee the option to purchase the asset at a price below fair market value when the lease expires.

Closing purchase
A transaction in which the purchaser's intention is to reduce or eliminate a short position in a stock, or in a given series of options.

Withdrawal plan
The ability to establish automatic periodic mutual fund redemptions and have proceeds mailed directly to the investor.

Underfunded pension plan
A pension plan that has a negative surplus (i.e., liabilities larger than assets).

Tax-deferred retirement plans
Employer-sponsored and other plans that allow contributions and earnings to be made and accumulate tax-free until they are paid out as benefits.

Short-term financial plan
A financial plan that covers the coming fiscal year.

Security market plane
A plane that shows the equilibrium between expected return and the beta coefficient of more than one factor.

Planning horizon
The length of time a model projects into the future.

Planned financing program
Program of short-term and long-term financing as outlined in the corporate financial plan.

Planned capital expenditure program
Capital expenditure program as outlined in the corporate financial plan.

Planned amortization class CMO
(a) One class of CMO that carries the most stable cash flows and the lowest prepayement risk of any class of CMO. Because of that stable cash flow, it is considered the least risky CMO. (b) A CMO bond class that stipulates cash-flow contributions to a sinking fund. With the PAC, principal payments are directed to the sinking fund on a priority basis in accordance with a predetermined payment schedule, with prior claim to the cash flows before other CMO classes. Similarly, cash flows received ...

Plan sponsors
The entities that establish pension plans, including private business entities acting for their employees; state and local entities operating on behalf of their employees; unions acting on behalf of their members; and individuals representing themselves.

Plan for reorganization
A plan for reorganizing a firm during the Chapter 11 bankruptcy process.

Pension plan
A fund that is established for the payment of retirement benefits.

Overfunded pension plan
A pension plan that has a positive surplus (i.e., assets exceed liabilities).

Non-insured plans
Defined benefit pension plans that are not guaranteed by life insurance products.

Materials requirement planning
Computer-based systems that plan backward from the production schedule to make purchases in order to manage inventory levels.

Long-term financial plan
Financial plan covering two or more years of future operations.

Keogh plan
A pension account with deferred taxes. Only available to self-employed persons.

Baker Plan
A plan by U.S. Treasury Secretary James Baker under which 15 principal middle-income debtor countries (the Baker 15) would undertake growth-oriented structural reforms, to be supported by increased financing from the World Bank and continued lending from commercial banks.

Corporate financial planning
Financial planning conducted by a firm that encompasses preparation of both long- and short-term financial plans.

Planned Amortization Class
A security which is structured to have a reasonable life expectancy provided the prepayment speeds stay within the defined ranges. The scheduled interest and principal payments tend to be more stable for these tranches relative to the other parts of the deal.

Advance funded pension plan
Pension plan in which funds are set aside in advance of the date of retirement.