A negotiable unsecured money market instrument issued by a bank evidencing a time (term) deposit with that bank, typically in book-entry form, usually at a fixed rate, with a matur…
What is a bond’s invoice price?
When buying a bond, all interest that has accrued since its last interest payment is added to the dealer’s ask price and received by the buyer at the next interest payment date. A…
What is a bond fund?
A bond is any capital market debt instrument. Bonds are generally categorized according to their issuer as government bonds, agencies (national government agencies and government-…
What is a banker’s acceptance (BA)?
A banker’s acceptance (BA) is a negotiable short-term high quality straight discount money market instrument in the form of a time draft authorized under a letter of credit drawn o…
What are warrants?
A warrant (WT) is a security granting its holder the right to buy (call) or sell (put) a specific amount of an underlying asset either of the instrument’s issuer or of a 3rd-party,…
What are voting rights?
Voting rights are the rights of shareholders to vote on corporate matters. While any class of equity entitling its holders to vote is voting stock, generally only common stock has…
What are US “Treasury zeros” (STRIPS)?
Zero-coupon notes and bonds are not issued by the US Treasury. Instead, “Treasury zeros” are created by financial institutions and government securities brokers and dealers throug…
What are US Treasuries?
A US Treasury security (Treasury) is a government debt security issued and backed by the full faith and credit of the US government, including Treasury bills, notes, bonds, floatin…
What are Treasury inflation-protected securities (TIPS)?
Treasury inflation-protected securities (TIPS) are US Treasury notes and bonds that pay a fixed rate of semiannual interest over their life on their principal value adjusted for ch…
What are the money market yields?
Bank discount yield (BDY) is the annualized discount rate expected from the face value of a money market instrument on a 360-day simple interest basis (i.e., without compounding) e…
What are the key share ratios?
The earnings per share (EPS) is net income for the year attributable to common shareholders of the company divided by the weighted average number of issue-adjusted common shares du…
What are the key dividend and earnings ratios?
Dividends per share is used in other financial formulas, including dividend yield and the dividend payout ratio. Dividends per share (DPS) is the ratio of the total annual dividen…
What are the investment yield and the tax-equivalent yield?
Investment yield is the bond equivalent yield (BEY) measure of return used by the US Treasury to compare the yield on T-bills with bonds maturing on the same date, calculated as a…
What are the costs of fund investing?
The price at which investment fund shares are sold to the public is its public offering price (POP). For mutual funds, it includes the front-end sales charge plus the net asset va…
What are tax depreciation and MACRS?
Tax laws generally grant depreciation rights only to the asset’s legal owner, who depreciates the cost of the asset over its economic life and claims any available investment tax c…
What are subscription rights?
A negotiable certificate entitling its holder to purchase a certain amount of a new issue of shares at a fixed price, usually below the current market price, is a subscription righ…
What are SNDA agreements and the privity of contract?
A subordination, non-disturbance and attornment agreement (SNDA agreement) is employed by a landlord, tenant and the lender to resolve how and when the rights of tenants will be su…
What are servicing agreements?
A servicing agreement is a contract between a servicer and a special purpose vehicle (SPV) or an assignee under which the servicer is responsible for administering a lease and acti…
What are secured bonds?
A bond that is backed by one or more assets of the issuer to secure the payment of interest and the repayment of the principal is a secured bond. Because government securities are…
What are repossession and foreclosure?
The act of taking possession of property by the owner of the asset or a creditor with a security interest in that asset upon termination of or debtor default on the agreement that…
What are preemptive rights?
When a corporation raises capital through the sale of capital stock or securities convertible into shares of stock, it may be required by law or its corporate charter to offer the…
What are participation certificates?
A participation certificate (PC) is usually a bearer instrument securitizing its holders the right to share in the distributable profits of the issuing company and in liquidation p…
What are operating expenses and other fund costs?
Operating expenses (Opex) are annual asset-based expenses paid out of fund assets by an investment fund as a percentage of the fund’s value, such as the investment advisory fee and…
What are open-end (mutual) and closed-end funds?
A mutual fund is an investment company that continually issues redeemable shares without limit (open end) upon investor demand, typically through a registered broker-dealer for the…
What are offerings?
The sale of shares or bonds by the issuing company to the general public for the first time, as distinct from a distribution by an existing shareholder, is a primary offering. New…