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Superglossary - Finance Category: Economy and Finance > Finance Date & country: 16/12/2013, USA Words: 5410

Exercise Limit
To implement the right of the holder of an option to buy (in the case of a call) or sell (in the cas

Exercise Notice
Cap on the number of option contracts of any one class of contract. that can be exercised within a f

Exercise Price
A broker's notification a client want to exercise a right to buy or sell (depending on the type of c

Exercise Value
The price at which the security underlying a future or options contract may be bought or sold.

Exercising The Option
The amount of advantage over a current market transaction provided by an in-the-money option.

Exhaust Price
The act of buying or selling the underlying asset via the option contract.

Exogenous Variable
A municipal bond offered without a law firm's legal opinion. As the majority of bonds are issued wit

Exotic Option
A variable whose value is determined outside the model in which it is used. Related

Expectations Hypothesis Theories
Refers to options that are more complex than simple puts or call options. For example, a Caput is a

Expected Dividend Yield
A theory of foreign exchange rates that states that the expected future spot foreign exchange rate t

Expected Future Cash Flows
Total amount of dividends received during the life of a futures contract or total dividends received

Expected Future Return
Projected future cash flows associated with an asset.

Expected Return
The return that is expected to be earned on an asset in the future. Also called the expected return.

Expected Return On Investment
The expected return on a risky asset, given a probability distribution for the possible rates of ret

Expected Return-Beta Relationship
The return one can expect to earn on an investment. See

Expected Value
Implication of the CAPM that security risk premiums will be proportional to beta.

Expenditures
The expected value if the future uncertain outcomes could be known minus the expected value with no

Expense Ratio
All purchases made by a business, whether in cash or on credit; not equivalent to expenses. Also kno

Expensed
The percentage of the assets that are spent to run a mutual fund (as of the last annual statement).

Expenses
Charged to an expense account, fully reducing reported profit of that year, as is appropriate for ex

Experience Rating
Resources used to support the ongoing operations of a business for a specified time period; not equi

Expiration
A technique insurance companies use to determine the correct price of a policy premium.

Expiration Cycle
The time an option contract lapses.

Expiration Date
Dates on which options on a particular security expire. A given option will be placed in one of thre

Exploding Term Sheet
The purchase of commodities off the exchange's floor.

Export-Import Bank (Ex-Im Bank)
Venture capital jargon. Often a proposed term sheet, might explode or be null and void in a fixed pe

Exposure Netting
The U.S. federal government agency that extends trade credits to U.S. companies to facilitate the fi

Expropriation
Offsetting exposures in one currency with exposures in the same or another currency, when exchange r

Expunge
The official seizure by a government of private property. Any government has the right to seize such

Extendable Bond
The time period between the announcement of a stock dividend and its actual payment. The buyer of sh

Extendable Notes
Bond whose maturity can be extended at the option of the lender or issuer.

Extension
Note with maturity that can be extended by mutual agreement between the issuer and investors.

Extension Date
Voluntary arrangements to restructure a firm's debt, under which the payment date is postponed.

Extension Swap
The day on which the first option either expires or is extended.

External Efficiency
Extending maturity through a swap, e.g. selling a 2-year note and buying one with a slightly longer

External Finance
Related

External Funds
Funding that is not generated by a firm's operations

External Market
Funds originating from a source outside the corporation to increase cash flow and to aid in expansio

Extinguish
Also referred to as the international market, the offshore market, or, more popularly, the Euromarke

Extra Or Special Dividends
Retire or pay off debt.

Extraordinary Call
A dividend that is paid in addition to a firm's established or expected quarterly dividend.

Extraordinary Item
Early redemption of a revenue bond because the revenue source paying the interest on the bond has be

Extraordinary Positive Value
An unusual and unexpected one-time event that must be explained to shareholders in an annual or quar

Extrapolative Statistical Models
A positive net present value.

Face-Amount Certificate
Fifth letter of a Nasdaq stock symbol specifying that the issue is a foreign company.

Factor
A debt security issued by face amount. The holder makes payments periodicaly to the issues, and the

Factor Analysis
A financial institution that buys a firm's accounts receivable and collects the accounts.

Factor Model
A statistical procedure that seeks to explain a certain phenomenon, such as the return on a common s

Factor Portfolio
A way of decomposing the forces that influence a security's rate of return into common and firm-spec

Factoring
A well-diversified portfolio constructed to have a beta of 1.0 on one factor and a beta of zero on a

Fade
Sale of a firm's accounts receivable to a financial institution known as a factor.

Fail
Refers to over-the-counter trading. Fill another OTC dealer's bid for or offer of stock.

Fair Game
A deal is said to fail if on the settlement date either the seller does not deliver securities in pr

Fair Market Price
An investment prospect that has a zero risk premium.

Fair Price
Amount at which an asset would change hands between two parties, that both have knowledge of the rel

Fair Rate Of Return
The equilibrium price for futures contracts. Also called the theoretical futures price, which equals

Fair Value
The rate of return that state governments allow a public utility to earn on its investments and expe

Fair-And-Equitable Test
In the context of futures, the equilibrium price for futures contracts. Also called the theoretical

Fairness Opinion
A set of requirements for a plan of reorganization to be approved by the bankruptcy court.

Fall Down
An investment banker's professional opinion as to the price an acquiring firm is offering in a takeo

Fall Out Of Bed
In the context of general equities, may not be able to produce as indicated in one's advertised mark

Fallen Angels
A sudden drop in a stock's price resulting from failed or poor business deals gone bad or falling th

Fallout Risk
Bonds that at the time of issue were considered investment grade but that have dropped below that ra

Fama, Eugene F.
A type of mortgage pipeline risk that is generally created when the terms of the loan to be originat

Far Month
Finance professor at the University of Chicago. Developer of the Efficient Markets Hypothesis.

Farther Out; Farther In
Used in the context of option or futures to refer to the trading month of the contract that is farth

FASB No. 52
Used in the context of options to refer to the relative length of option contract maturities.

FASB No. 8
The U.S. accounting standard that replaced FASB No. 8. U.S. companies are required to translate fore

Fast Market
U.S. accounting standard that requires U.S. firms to translate their foreign affiliates' accounts by

Favorable Trade Balance
Excessively rapid trading in a specific security that causes a delay in the electronic updating of i

Feasible Portfolio
Condition that total exports of a nation exceed total imports, creating a net export.

Feasible Set Of Portfolios
A portfolio that an investor can construct, given the assets available.

Feasible Target Payout Ratios
The collection of all feasible portfolios.

FED Pass
Payout ratios that are consistent with the level of excess funds available to make cash dividend pay

Federal Agency Securities
A Federal Reserve action adding more reserves to the banking system, increasing the money available

Federal Credit Agencies
A federal agency chartered in 1988 to provide a secondary market for farm mortgage loans.

Federal Deficit (Surplus)
Agencies of the federal government set up to supply credit to various classes of institutions and in

Federal Farm Credit Bank
A federal institution that insures bank deposits.

Federal Farm Credit System
An institution created by the government with the purpose of uniting the financing activities of the

Federal Financing Bank
A system chartered in 1971 through the farm credit act providing farmers with credit services throug

Federal Funds
A federal institution that lends to a wide array of federal credit agencies funds it obtains by borr

Federal Funds Market
Noninterest-bearing deposits held in reserve for depository institutions at their district Federal R

Federal Funds Rate
The market in which banks can borrow or lend reserves, allowing banks temporarily short of their req

Federal Gift Tax
The interest rate that banks with excess reserves at a Federal Reserve district bank charge other ba

Federal Home Loan Banks
A federal tax imposed on assets conveyed as gifts to individuals.

Federal Intermediate Credit Bank
U.S. government agency chartered in 1989 to assume the responsibilities formerly held by the Federal

Federal Land Bank
A bank sponsored by the federal government to provide funds to institutions making loans to farmers.

Federal Reserve Bank
The body that is responsible for setting the interest rates and credit policies of the Federal Reser

Federal Reserve Board (FRB)
One of the 12 member banks constituting the Federal Reserve System that is responsible for overseein

Federal Reserve System
The seven-member governing body of the Federal Reserve System, which is responsible for setting rese

Federally Related Institutions
An institution chartered by the federal government whose primary function is to collect savings depo

Fedwire
Arms of the federal government exempt from SEC registration whose securities are backed by the full

FHA Prepayment Experience
A wire transfer system for high-value payments operated by the Federal Reserve System.

Fiat Money
The percentage of loans in a pool of mortgages outstanding at the origination anniversary, based on

Fictitious Credit
Nonconvertible paper money.

Field Warehouse
A margin account's credit balance. Fictitious credit exists after the proceeds from a short sale are

FIFO
Warehouse rented by a company on another firm's premises.

Figure
See first in, first out.

Figuring The Tail
Refers to details about price including the bid and ofter. See

Fill
Calculating the yield at which a future money market (one available some period hence) is purchased