Similar financial termsSafety-net return
The minimum available return that will trigger an immunization strategy in a contingent immunization strategy.
Reducing fund transfers between affiliates to only a netted amount. Netting can be done on a bilateral basis (between pairs of affiliates), or on a multi-lateral basis (taking all affiliates together).
To get or bring in as a net; to clear as profit.
Reducing transfers of funds between subsidiaries or separate companies to a net amount.
Common stockholders' equity which consists of common stock, surplus, and retained earnings.
Net working capital
Current assets minus current liabilities. Often simply referred to as working capital.
Net salvage value
The after-tax net cash flow for terminating the project.
Net profit margin
Net income divided by sales; the amount of each sales dollar left over after all expenses have been paid.
Net present value rule
An investment is worth making if it has a positive NPV. Projects with negative NPVs should be rejected.
Net present value of future investments
The present value of the total sum of NPVs expected to result from all of the firm's future investments.
Net present value of growth opportunities
A model valuing a firm in which net present value of new investment opportunities is explicitly examined.
Net present value (NPV)
The present value of the expected future cash flows minus the cost.
The period of time between the end of the discount period and the date payment is due.
Net operating margin
The ratio of net operating income to net sales.
Net operating losses
Losses that a firm can take advantage of to reduce taxes.
A lease arrangement under which the lessee is responsible for all property taxes, maintenance expenses, insurance, and other costs associated with keeping the asset in good working condition.
Gross, or total, investment minus depreciation.
The company's total earnings, reflecting revenues adjusted for costs of doing business, depreciation, interest, taxes and other expenses.
Sum of disbursement float and collection float.
Net financing cost
Also called the cost of carry or, simply, carry, the difference between the cost of financing the purchase of an asset and the asset's cash yield. Positive carry means that the yield earned is greater than the financing cost; negative carry means that the financing cost exceeds the yield earned.
Net errors and omissions
In balance of payments accounting, net errors and omissions record the statistical discrepancies that arise in gathering balance of payments data.
Net cash balance
Beginning cash balance plus cash receipts minus cash disbursements.
Net book value
The current book value of an asset or liability; that is, its original book value net of any accounting adjustments such as depreciation.
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.
The difference between total assets on the one hand and current liabilities and noncapitalized longterm liabilities on the other hand.
Net asset value (NAV)
The value of a fund's investments. For a mutual fund, the net asset value per share usually represents the fund's market price, subject to a possible sales or redemption charge. For a closed end fund, the market price may vary significantly from the net asset value.
Net advantage to merging
The difference in total post- and pre-merger market value minus the cost of the merger.
Net advantage to leasing
The net present value of entering into a lease financing arrangement rather than borrowing the necessary funds and buying the asset.
Net advantage of refunding
The net present value of the savings from a refunding.
Net adjusted present value
The adjusted present value minus the initial cost of an investment.
Monetary / non-monetary method
Under this translation method, monetary items (e.g. cash, accounts payable and receivable, and long-term debt) are translated at the current rate while non-monetary items (e.g. inventory, fixed assets, and long-term investments) are translated at historical rates.
Actions taken by the Board of Governors of the Federal Reserve System to influence the money supply or interest rates.
Gold held by governmental authorities as a financial asset.
A stock or bond listed on a major exchange with low daily traded volume.
A proposition that in the long run, a percentage rise in the money supply is matched by the same percentage rise in the price level, leaving unchanged the real money supply and all other economic variables such as interest rates.
This theory, a core belief of classical economics, was first put forward in the 18th century by David Hume. He set out the classical dichotomy that economic variables come in two varieties, nominal and real, and that the things that influence nominal variables ...
Net interest margin (NIM)
The difference between interest income and interest expense as a percentage of assets.
Net national product
The technical term for national income, it is GNP minus capital consumption.
High Net Worth (HNW) Person
An individual with more than $1,000,000 in liquid assets to manage.
An issue giving the bondholder the right to exchange the issue for a specified number of common stock shares of a corporation different from the issuer of the bond.
Exchange-rate risk on bonds
A non-domestic-currency nominated bond has unknown domestic currency cash flows. The domestic currency cash flows are dependent on the exchange rate at the time the payments are received. For example, suppose that a German investor purchases a bond whose payments are in British pounds (GBP). If pounds depreciate relative to euros (EUR), fewer euros will be received and vice versa. This risk is also referred to currency risk.
Indirect exchange rate
The required amount of foreign currency required to purchase on unit of domestic currency.
Oslo Stock Exchange
In the early 1800s, Norway was a country of farmers and fishermen. Christiania, as the capital city was then called, had just 10,000 citizens. The Norwegian economy was weak, and money was scarce. This had a crushing effect on business and industry, and it was decided that the country needed a commercial exchange to encourage greater commercial activity.
The merchant Nicolay Andresen is generally recognised as the "father" of the Oslo stock exchange. He made the first proposal for a com ...
American Stock Exchange (AMEX)
The second-largest stock exchange in the United States. It trades mostly in small-to medium-sized companies.
In the US, a stock exchange is a formal organization, approved and regulated by the Securities and Exchange Commission (SEC). The SEC are made up of members that use the facilities to exchange certain common stocks. The two major US stock exchanges are the New York Stock Exchange (NYSE) and the American Stock Exchange (ASE or AMEX). Five regional stock exchanges include the Midwest, Pacific, Philadelphia, Boston, and Cincinnati. The Arizona stock exchange is an after hours electronic marketpla ...
Spot exchange rates
Exchange rate on currency for immediate delivery.
Real exchange rates
Exchange rates that have been adjusted for the inflation differential between two countries.
Philadelphia Stock Exchange (PHLX)
A securities exchange where American and European foreign currency options on spot exchange rates are traded.
A securities marketplace wherein purchasers and sellers regularly gather to trade securities according to the formal rules adopted by the exchange.
Nominal exchange rate
The actual foreign exchange quotation in contrast to the real exchange rate that has been adjusted for changes in purchasing power.
New York Stock Exchange (NYSE)
Also known as the Big Board or The Exhange. More than 2,000 common and preferred stocks are traded. The exchange is the older in the United States, founded in 1792, and the largest. It is lcoated on Wall Street in New York City
Membership or a seat on the exchange
A limited number of exchange positions that enable the holder to trade for the holder's own accounts and charge clients for the execution of trades for their accounts.
London International Financial Futures Exchange
London International Financial Futures Exchange (LIFFE) is a London exchange where Eurodollar futures as well as futures-style options are traded.
American Standard Code for Information Interchange
American Standard Code for Information Interchange (ASCII) is the most common format for text files in computers and on the internet.
Vancouver Stock Exchange (VSE)
The Vancouver Stock exchange (VSE) was one of Canada's junior company stock exchanges. On March 15, 1999, the VSE and the ASE (Alberta Stock Exchange) agreed to merge and form the CDNX - the Canadian Venture Exchange - which will also take on some junior Toronto and Montreal Exchange companies. The VSE got a bad reputation in the 80's due to many unscrupulous scam artists manipulating VSE listed companies. New regulatory controls and surveillance systems which had been implemented on the VSE wer ...
Junior Stock Exchange
A stock exchange which lists mainly small, emerging companies with low market capitalizations (e.g. under $100million or even under $10 million).
Canadian Venture Exchange (CDNX)
The Canadian Venture Exchange (CDNX) was formed in late 1999 through the merging of the junior exchanges in Canada, i.e. the Vancouver Stock Exchange, the Alberta Stock Exchange, and various "parts" of the other, more senior exchanges (the Toronto Stock Exchange and the Montreal Stock Exchange) as well as the CDN, Canadian Dealing Network (which really isn't a stock exchange but is more like the OTC-BB in the USA, i.e. a market for "unlisted" stocks). The vision for the CDNX was to be the exchan ...
Kuala Lumpur Stock Exchange (KLSE)
Incorporated in 1965 as Kuala Lumpur's stock exchange (although share-trading activity dated from the 1930s).
Bill of exchange
General term for a document demanding payment.
Chicago Board Options Exchange (CBOE)
A securities exchange created in the early 1970s for the public trading of standardized option contracts.
Changes in Financial Position
Sources of funds internally provided from operations that alter a company's cash flow position: depreciation, deferred taxes, other sources, and capital expenditures.
Chicago Mercantile Exchange (CME)
A not-for-profit corporation owned by its members. Its primary functions are to provide a location for trading futures and options, collect and disseminate market information, maintain a clearing mechanism and enforce trading rules.
Commodities Exchange Center (CEC)
The location of five New York futures exchanges: Commodity Exchange, Inc. (COMEX), the New York Mercantile exchange (NYMEX), the New York Cotton Exchange, the Coffee, Sugar and Cocoa exchange (CSC), and the New York futures exchange (NYFE).
Convertible exchangeable preferred stock
Convertible preferred stock that may be exchanged, at the issuer's option, into convertible bonds that have the same conversion features as the convertible preferred stock.
Exchange rate overshooting
A phenomenon whereby the exchange rate changes by more in the short run than it does in the long run when the money supply changes.
Unsterilized foreign exchange intervention
A unsterilized foreign exchange intervention is an intervention in which a central bank allows the purchase or sale of domestic currency to affect the monetary base.
Madrid Stock Exchange (Bolsa de Madrid)
The largest of Spain's four stock exchange.
Fisher equation of exchange
Fisher's equation of exchange states MV = PT. M is the money supply; V is the velocity of circulation; P is average prices and T is the number of transactions. This equation is in fact an identity as it will always be true. At its simplest level you could imagine an economy that has a money supply of £5. If this £5 is on average used 20 times in a year, it will have generated £100 of spending. In the Fisher equation above M would be equal to £5, V equal to 20 and PT would be £100. This £100 coul ...
Forward exchange rate
The forward exchange rate is a rate for buying foreign exchange at a fixed point in the future. Taking out a forward contract for foreign exchange means that you are agreeing to buy foreign exchange at an agreed rate in the future. The existence of the forward market leads to a considerable amount of speculation.
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.
Montreal Stock Exchange (MSE)
One of the four major stock exchanges in Canada.
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 ...