Copy of `New York Times - Business and Finance Glossary`

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New York Times - Business and Finance Glossary Category: Economy and Finance Date & country: 11/09/2007, USA Words: 2680

Negotiated certificate of deposit
A large-denomination CD, generally $1MM or more, that can be sold but cannot be cashed in before maturity.

Negotiated markets
Markets in which each transaction is separately negotiated between buyer and seller (i.e. an investor and a dealer).

Negotiated offering
An offering of securities for which the terms, including underwriters' compensation, have been negotiated between the issuer and the underwriters.

Negotiated sale
Situation in which the terms of an offering are determined by negotiation between the issuer and the underwriter rather than through competitive bidding by underwriting groups.

Net adjusted present value
The adjusted present value minus the initial cost of an investment.

Net advantage of refunding
The net present value of the savings from a refunding.

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 to merging
The difference in total post- and pre-merger market value minus the cost of the merger.

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 assets
The difference between total assets on the one hand and current liabilities and noncapitalized long-term liabilities on the other hand.

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.

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 cash balance
Beginning cash balance plus cash receipts minus cash disbursements.

Net change
This is the difference between a day's last trade and the previous day's last trade.

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 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 float
Sum of disbursement float and collection float.

Net income
The company's total earnings, reflecting revenues adjusted for costs of doing business, depreciation, interest, taxes and other expenses.

Net investment
Gross, or total, investment minus depreciation.

Net lease
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.

Net operating losses
Losses that a firm can take advantage of to reduce taxes.

Net operating margin
The ratio of net operating income to net sales.

Net period
The period of time between the end of the discount period and the date payment is due.

Net present value (NPV)
The present value of the expected future cash flows minus the cost.

Net present value rule
An investment is worth making if it has a positive NPV. Projects with negative NPVs should be rejected.

Net profit margin
Net income divided by sales; the amount of each sales dollar left over after all expenses have been paid.

Net salvage value
The after-tax net cash flow for terminating the project.

Net working capital
Current assets minus current liabilities. Often simply referred to as working capital.

Net worth
Common stockholders' equity which consists of common stock, surplus, and retained earnings.

Netting
Reducing transfers of funds between subsidiaries or separate companies to a net amount.

Netting out
To get or bring in as a net; to clear as profit.

Neutral period
In the Euromarket, a period over which Eurodollars are sold is said to be neutral if it does not start or end on either a Friday or the day before a holiday.

New money
In a Treasury auction, the amount by which the par value of the securities offered exceeds that of those maturing.

New York Stock Exchange (NYSE)
Also known as the Big Board or The Exhange. More than 2,00 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

New-issues market
The market in which a new issue of securities is first sold to investors.

Next futures contract
The contract settling immediately after the nearby futures contract.

Nexus (of contracts)
A set or collection of something.

NM
Abbreviation for Not Meaningful.

No load mutual fund
An open-end investment company, shares of which are sold without a sales charge. There can be other distribution charges, however, such as Article 12B-1 fees. A true 'no load' fund will have neither a sales charge nor a distribution fee.

No-load fund
A mutual fund that does not impose a sales commission. Related: load fund

Noise
Price and volume fluctuations that can confuse interpretation of market direction.

Nominal
In name only. Differences in compounding cause the nominal rate to differ from the effective interest rate. Inflation causes the purchasing power of money to differ from one time to another.

Nominal annual rate
An effective rate per period multiplied by the number of periods in a year.

Nominal cash flow
A cash flow expressed in nominal terms if the actual dollars to be received or paid out are given.

Nominal exchange rate
The actual foreign exchange quotation in contrast to the real exchange rate that has been adjusted for changes in purchasing power.

Nominal interest rate
The interest rate unadjusted for inflation.

Nominal price
Price quotations on futures for a period in which no actual trading took place.

Non-cumulative preferred stock
Preferred stock whose holders must forgo dividend payments when the company misses a dividend payment. Related: Cumulative preferred stock

Non-financial services
Include such things as freight, insurance, passenger services, and travel.

Non-insured plans
Defined benefit pension plans that are not guaranteed by life insurance products. Related: insured plans

Non-reproducible assets
A tangible asset with unique physical properties, like a parcel of land, a mine, or a work of art.

Non-tradables
Refer to goods and services produced and consumed domestically that are not close substitutes to import or export goods and services.

Noncash charge
A cost, such as depreciation, depletion, and amortization, that does not involve any cash outflow.

Noncompetitive bid
In a Treasury auction, bidding for a specific amount of securities at the price, whatever it may turn out to be, equal to the average price of the accepted competitive bids.

Nondiversifiable risk
Risk that cannot be eliminated by diversification.

Nonmarketed claims
Claims that cannot be easily bought and sold in the financial markets, such as those of the government and litigants in lawsuits.

Nonrecourse
Without recourse, as in a non-recourse lease.

Nonredeemable
Not permitted, under the terms of indenture, to be redeemed.

Nonrefundable
Not permitted, under the terms of indenture, to be refundable.

Nonsystematic risk
Nonmarket or firm-specific risk factors that can be eliminated by diversification. Also called unique risk or diversifiable risk. Systematic risk refers to risk factors common to the entire economy.

Normal annuity form
The manner in which retirement benefits are paid out.

Normal backwardation theory
Holds that the futures price will be bid down to a level below the expected spot price.

Normal deviate
Related: standardized value

Normal portfolio
A customized benchmark that includes all the securities from which a manager normally chooses, weighted as the manager would weight them in a portfolio.

Normal probability distribution
A probability distribution for a continuous random variable that is forms a symmetrical bell-shaped curve around the mean.

Normal random variable
A random variable that has a normal probability distribution.

Normalizing method
The practice of making a charge in the income account equivalent to the tax savings realized through the use of different depreciation methods for shareholder and income tax purposes, thus washing out the benefits of the tax savings reported as final net income to shareholders.

Note
Debt instruments with initial maturities greater than one year and less than 10 years.

Note agreement
A contract for privately placed debt.

Note issuance facility (NIF)
An agreement by which a syndicate of banks indicates a willingness to accept short-term notes from borrowers and resell these notes in the Eurocurrency markets.

Notes to the financial statements
A detailed set of notes immediately following the financial statements in an annual report that explain and expand on the information in the financial statements.

Notice day
A day on which notices of intent to deliver pertaining to a specified delivery month may be issued. Related: delivery notice.

Notification date
The day the option is either exercised or expires.

Notional principal amount
In an interest rate swap, the predetermined dollar principal on which the exchanged interest payments are based.

Novation
Defeasance whereby the firm's debt is canceled.

NPV
See: Net present value.

NPV profile
A graph of NPV as a function of the discount rate.

Objective (mutual funds)
The fund's investment strategy category as stated in the prospectus. There are more than 20 standardized categories.

Odd lot
A trading order for less than 100 shares of stock. Compare round lot.

Odd lot dealer
A broker who combines odd lots of securities from multiple buy or sell orders into round lots and executes transactions in those round lots.

Off-balance-sheet financing
Financing that is not shown as a liability in a company's balance sheet.

Offer
Indicates a willingness to sell at a given price. Related: bid

Offer price
See: offer.

Offering memorandum
A document that outlines the terms of securities to be offered in a private placement.

Official reserves
Holdings of gold and foreign currencies by official monetary institutions.

Official statement
A statement published by an issuer of a new municipal security describing itself and the issue

Official unrequited transfers
Include a variety of subsidies, military aid, voluntary cancellation of debt, contributions to international organizations, indemnities imposed under peace treaties, technical assistance, taxes, fines, etc.

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

Offshore finance subsidiary
A wholly owned affiliate incorporated overseas, usually in a tax haven country, whose function is to issue securities abroad for use in either the parent's domestic or its foreign business.

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

Omnibus account
An account carried by one futures commission merchant with another futures commission merchant in which the transactions of two or more persons are combined and carried in the name of the originating broker, rather than designated separately. Related: commission house.

On the run
The most recently issued (and, therefore, typically the most liquid) government bond in a particular maturity range.

One man picture
The picture quoted by a broker is said to be a one-man picture if both the bid and offered prices come from the same source.

One-factor APT
A special case of the arbitrage pricing theory that is derived from the one-factor model by using diversification and arbitrage. It shows the expected return on any risky asset is a linear function of a single factor.

One-way market
(1) A market in which only one side, the bid or asked, is quoted or firm. (2) A market that is moving strongly in one direction.

Open (good-til-cancelled) order
An individual investor can place an order to buy or sell a security. That open order stays active until it is completed or the investor cancels it.

Open account
Arrangement whereby sales are made with no formal debt contract. The buyer signs a receipt, and the seller records the sale in the sales ledger.

Open book
See: unmatched book.

Open contracts
Contracts which have been bought or sold without the transaction having been completed by subsequent sale or purchase, or by making or taking actual delivery of the financial instrument or physical commodity.

Open interest
The total number of derivative contracts traded that not yet been liquidated either by an offsetting derivative transaction or by delivery. Related: liquidation