Transaction demand (for money)
The need to accommodate a firm's expected cash transactions.
Similar financial termsBootstrap transaction
A highly leveraged transaction (HLT)
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.
A position in two or more options of the same type.
A desire to hold cash for the purpose of conducting cash based transactions.
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.
Risk to a firm with known future cash flows in a foreign currency that arises from possible changes in the exchange rate.
Any transaction that is not tax-free to the parties involved, such as a taxable acquisition.
Structured arbitrage transaction
A self-funding, self-hedged series of transactions that usually utilize mortgage securities as the primary assets.
Round-trip transactions costs
Costs of completing a transaction, including commissions, market impact costs, and taxes.
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.
The entry or liquidation of a trade.
Eurodollar demand deposit
Eurodollar demand deposit accounts are not often used or available, as the balances of such accounts would be volatile and the transaction costs incurred in such a service would reduce the overall efficiency and competitiveness of the eurodollar market. It is the latter factor that stimulates interest-rate-conscious corporate treasures and investment agencies to make eurodollar time deposits with banks in offshore centres.
Variable rated demand bond
Variable rated demand bond (VRDB) is a floating rate bond that can be sold back periodically to the issuer.
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.
Money market demand account
An account that pays interest based on short-term interest rates.
Demand, law of
Ceteris paribus, the lower the price of a good (or service), the greater the quantity of it that will be demanded by purchasers at any given time.
The deman curve is a graphic illustration depicting the relationship between quantity demanded and price when all other economic variables are held constant.