Security characteristic line

Similar financial terms

Variable price security
A security, such as stocks or bonds, that sells at a fluctuating, market-determined price.

Underlying security
For options it is the security subject to being purchased or sold upon exercise of an option contract. For example, Deutsche Bank stock is the underlying security to Deutsche Bank options.

For depository receipts it is the class, series and number of the foreign shares represented by the depository receipt.

Security selection decision
Choosing the particular securities to include in a portfolio.

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

Security market line
Line representing the relationship between expected return and market risk.

Security deposit (initial)
Synonymous with the term margin. A cash amount of funds that must be deposited with the broker for each contract as a guarantee of fulfillment of the futures contract. It is not considered as part payment or purchase.

Security
Piece of paper that proves ownership of stocks, bonds and other investments.

Primitive security
An instrument such as a stock or bond for which payments depend only on the financial status of the issuer.

Mortgage pass-through security
Also called a passthrough, a security created when one or more mortgage holders form a collection (pool) of mortgages sells shares or participation certificates in the pool. The cash flow from the collateral pool is "passed through" to the security holder as monthly payments of principal, interest, and prepayments. This is the predominant type of MBS traded in the secondary market.

Monthly income preferred security (MIP)
Preferred stock issued by a subsidiary located in a tax haven. The subsidiary relends the money to the parent.

Convertible security
A security that can be converted into common stock at the option of the security holder, including convertible bonds and convertible preferred stock.

Cabinet security
A stock or bond listed on a major exchange with low daily traded volume.

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

Bottom line
The net profit of a company

Swingline facility
Bank borrowing facility to provide finance while the firm replaces U.S. commercial paper with eurocommercial paper.

Straight line depreciation
An equal dollar amount of depreciation in each accounting period.

Simple linear trend model
An extrapolative statistical model that asserts that earnings have a base level and grow at a constant amount each period.

Simple linear regression
A regression analysis between only two variables, one dependent and the other explanatory.

Revolving line of credit
A bank line of credit on which the customer pays a commitment fee and can take down and repay funds according to his needs. Normally the line involves a firm commitment from the bank for a period of several years.

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

Mortgage-pipeline risk
The risk associated with taking applications from prospective mortgage borrowers who may opt to decline to accept a quoted mortgage rate within a certain grace period.

Mortgage pipeline
The period from the taking of applications from prospective mortgage borrowers to the marketing of the loans.

Log-linear least-squares method
A statistical technique for fitting a curve to a set of data points. One of the variables is transformed by taking its logarithm, and then a straight line is fitted to the transformed set of data points.

Linear regression
A statistical technique for fitting a straight line to a set of data points.

Linear programming
Technique for finding the maximum value of some equation subject to stated linear constraints.

Line of credit
An informal arrangement between a bank and a customer establishing a maximum loan balance that the bank will permit the borrower to maintain.

Multicolinearity
One variable is the expression of the other

Bank line
Line of credit granted by a bank to a customer.

Capital market line (CML)
The line defined by every combination of the risk-free asset and the market portfolio.

Cash flow time-line
Line depicting the operating activities and cash flows for a firm over a particular period.

Pipeline
A type of risk often associated with mortgages. It occurs from the time an application is accepted to the sale of the asset. Some analysts partition this process into two parts: production and inventory. Production starts at the time of the application and continues until the closing of the mortgage. Inventory risk starts at the closing and continues until the product is hedged or sold. Different hedging techniques are suggested for the two partitions.

Trendline
In charting, a line drawn across the bottom or top of a price chart indicating the direction or trend of price movement. If up, the trendline is called bullish; if down, it is called bearish.