Financial Terms Main Page

This site contains comprehensive definitions for a wide range of terms that cover topics such as financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit...

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Bond indexing

Designing a portfolio so that its performance will match the performance of some bond index.

Circus swap

A fixed rate currency swap against floating U.S. dollar LIBOR payments.

Dual-currency issues

Eurobonds that pay coupon interest in one currency but pay the principal in a different
currency.

Offset

Elimination of a long or short position by making an opposite transaction. Related: liquidation.

Shopping

Seeking to obtain the best bid or offer available by calling a number of dealers and/or brokers.

SIMEX (Singapore International Monetary Exchange)

A leading futures and options exchange in Singapore.

Single-premium deferred annuity

An insurance policy bought by the sponsor of a pension plan for a single
premium. In return, the insurance company agrees to make lifelong payments to the employee (the
policyholder) when that employee retires.

Capital budgeting

The series of steps one follows when justifying the decision to purchase
an asset, usually including an analysis of costs and related benefits, which
should include a discounted cash flow analysis of the stream of all future cash flows
resulting from the purchase of the asset.

controller

Officer responsible for budgeting, accounting, and auditing.

Central Bank

A public agency responsible for regulating and controlling an economy's monetary and financial institutions. It is the sole money-issuing authority.

Ratio Scale

See logarithmic scale.

Term

See term to maturity.

Private Placement

Sale of stocks, bonds or other investments directly to an institutional investor or individuals. Prior registration with the regulatory authorities is not required if the securities are purchased for investment as opposed to resale.

collateral

A pledge of property or other assets by a customer who is borrowing from a financial institution. Financial institutions require collateral as security in the event that the customer defaults on his/her loan.

RRSP

Registered Retirement Savings Plan - A plan enabling Canadian citizens to establish tax-sheltered accounts to accumulate money towards retirement.