Professional Documents
Culture Documents
TERM
Aftermarket
Coefficient of determination
• A measure of the goodness of fit of the relationship between the dependent and
independent variables in a regression analysis; for instance, the percentage of
variation in the return of an asset explained by the market portfolio return.
• The after tax cost today of raising long-term funds through borrowing.
Credit terms
• The terms of sale for customers who have been extended credit by the firm.
Deterministic models
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• Liability-matching models that assume that the liability payments and the asset
cash flows are known with certainty. Related: Compare stochastic models
Disintermediation
Financial intermediaries
• Institutions that provide the market function of matching borrowers and lenders or
traders.
• The spread between the interest rate offered in two sectors of the bond market for
issues of the same maturity.
• Is the network which links the trading floors of several registered exchanges. It
encourages competition in issues listed on the American or New York Stock
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Exchanges with the other participating regional exchanges. The competitive edge
occurs if there is a better price out in the network than on a particular exchange. If
so, then a broker or market maker can execute at that better price.
• Are investment grade notes and bonds issued by corporations. The maturities
Intermediate term
Intermediation
• A biased expectations theory that asserts that the implied forward rates will not be
a pure estimate of the market's expectations of future interest rates because they
embody a liquidity premium.
Long term
• Value of property, equipment and other capital assets minus the depreciation. This
is an entry in the bookkeeping records of a company, usually on a cost basis and
thus does not necessarily reflect the market value of the assets.
• On the balance sheet, the value of a company's property, equipment and other
capital assets, minus depreciation. These are usually recorded at cost and so do not
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• A contractual liability between the two parties, the borrower (issuer) and the lender
(saver). Examples include bonds and debentures.
• Often companies need more funds to support their activities than their profits can
provide. Therefore they will borrow money and make interest payments regularly.
Long-term debt describes the debt amount due after one year or more.
• Amount owed for leases, bond repayment and other items due after 1 year.
• Liabilities that will remain as debt for longer than one year, such as long term
• A company's liabilities for leases, bond repayments, and other items due in more
than one year.
• Planned financial actions and the anticipated financial impact of those actions over
periods ranging from 2 to 10 years.
• Continuously offered notes, having any or all of the features of corporate bonds
and ranging in maturity from nine months out to 30 years. Bank deposit notes are a
form of MTN.
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• Value of leases, future employee benefits, deferred taxes and other obligations not
requiring interest payments that must be paid over a period of more than 1 year.
• A balance sheet item. Value of leases, future employee benefits, deferred taxes,
and other obligations not requiring interest payments that must be paid over a period
of more than one year.
• All debt due in the next 12 months. This figure is found on the Balance Sheet under
current liabilities. See also: Long-Term Debt.
• Planned short-term financial actions and the anticipated financial impact of those
actions.
• An unsecured short-term loan in which the use to which the borrowed money is put
provides the mechanism through which the loan is repaid.
• Ratios used to judge the adequacy of liquid assets for meeting short-term
obligations as they come due, including (1) the current ratio, (2) the acid-test ratio,
(3) the inventory turnover ratio, and (4) the accounts receivable turnover ratio.
Term bond
• Is a newly issued municipal bond with one stated maturity. This compares to Serial
Bonds.
Term insurance
• Life insurance that provides protection for a specific period of time and does not
accrue any cash value; term insurance is the least expensive and simplest form of
life insurance.
Term loan
• Loan extended by a bank for more than the normal 90day period. A term loan
might run five years or more.
• A bank loan, typically with a floating interest rate, for a specified amount that
matures in between one and ten years and requires a specified repayment schedule.
• A formal contract, ranging from a few to a few hundred pages, specifying the
Term premiums
• Excess of the yields to maturity on long-term bonds over those of short-term bonds.
Term repo
• Repo borrowings for a period longer than overnight; may be 7, 30, 60, or even 90
days.
• Are Repurchase Agreements which are negotiated or renegotiated (rolled over) for
more than 1 day periods. These periods can be for multiple days, weeks, or
sometimes, months. They are a form of borrowing/lending.
Term structure
• Term structure denotes the relation between interest rates and maturity. They are
also referred to as the yield curve.
• The relationship between the interest rate or rate of return (as measured by the
yield to maturity on a bond) and the time to maturity for similar risk debt securities.
• Refers to the variability of short-term rates relative to longer-term rates. It has been
Term to maturity
• The time remaining on a bond's life, or the date on which the debt will cease to
exist and the borrower will have completely paid off the amount borrowed. See:
Maturity
Term trust
• The after tax nonoperating cash flow occurring in the final year of a project, usually
attributable to liquidation of the project.
Terminal loss
• This is a positive balance remaining in a capital cost allowance (CCA) pool (asset
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class) following the disposal of the last physical asset in the class. A terminal loss is
a deductible non-cash expense that gives rise to a tax shield benefit for the firm
equal to the amount of the terminal loss multiplied by the corporate tax rate.
Terminal value
• The value of a bond at maturity, typically its par value, or the value of an asset (or
an entire firm) on some specified future valuation date.
Terms of sale
• Conditions on which a firm proposes to sell its goods services for cash or credit.
Terms of trade
• The weighted average of a nation's export prices relative to its import prices.