Archive for 'Financial Definitions' Category

Financial Definitions - Arrearage

1) Generally this means the amount owed between two parties from a prior financial agreement. 2) In the area of investments, this means the money owed in interest on dividends or bonds on cumlative preferred stock is over-due. In the case of cumulative preferred stock, common dividends cannot be paid by a com pany as […]

Financial Definitions - Arms’s Length Transaction

An arm’s length transaction is carried out as if the principals are not related in any way. This is a good way to stay away from any appearance of a conflict of interest. A good example of an arm’s length transaction is; the present law states that parents can rent real estate to their kids […]

Financial Definitions - Arithmetic Mean

An average created by dividing the sum of two or more financial items by the number of financial items.
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Financial Definitions - Arbitrageur

A firm, person, or financing company working in arbitrage. Arbitrageurs try to make a profit when the same security or commodity is trading at different prices in more than two markets. Firms, financial houses, and people working with risk arbitrage try to profit from buying stocks of announced or potential takeover opportunities.

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Financial Definitions - Aunt Millie

Aunt Millie is a tag, handle, or term, that is used in the financing industry to describe an investor that has very limited understanding of the financing industry. Many investment company staff will refer to an investment as an “Aunt Millie Investment”, which means that the details of the investment are simple and something a […]

Financial Definitions - Audit Trail

An audit trail is a detailed collection of data on paper, tape, or digital media that shows the true source of income and and expenses for a company or individual.
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Financial Definitions - Automatic Investment Program Example #3

3) Example #3 of an automatic investment program would can be a payroll savings plan (usually in the way of bonds). These automatic investment programs entail the investment in bonds by employees of a company. On the event of retirement the inactive employees can automatically withdraw monies on a monthly, biweekly, or weekly schedule. These […]

Financial Definitions - Automatic Investment Program Example #2

2) Example #2 of an automatic investment program would be for stock dividends. This means that winning shareholders who are enjoying profit in the way of dividends may have those money used to buy more shares in the company. This is especially used when a company is in a boom mode, and the share holders […]

Financial Definitions - Automatic Investment Program Example #1

1) Example #1 of an automatic investment program would be a mutual fund that automatically withdrawals money from a client’s bank account (checking or savings) that can be invested in the mutual fund. The mutual fund can also automatically re-invest capital gains from the clients account(s) in the said mutual fund.
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Financial Definitions - Automatic Investment Program

An automatic investment program is a program in which an investor can accumulate or withdraw funds automatically. Some of the most popular automatic investment programs will be mentioned in the next three following posts. Click the “next” link for those automatic investment program examples.
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Financial Definitions - Automatic Funds Transfer

Automatic funds transfer is the process of transferring funds from one financial company to another. A classic example would be the transfer of funds via digital methods overseas between a mutual fund broker and a money market management company. This is not done on the Internet by proxy. Telephone lines are still the norm for […]

Financial Definitions - The Autex System

The Autex System is used for letting brokers communicate with each other. The Autex alerting system now digital, but used various mediums of data transfer since it’s inception in the 1960’s. The Internet is now used as well in using the Autex system. Once a buyer of a security has found their seller, the actual […]

Financial Definitions - Automatic Distribution Service

An automatic distribution service is a system the banks use to manage data for external and internal customers. When you go to your bank and make a deposit or withdrawal using check(s) or cash, that information is then recorded, on paper, in digital via tap or database. The funds are then distributed accordingly. If you […]

Financial Definitions - Australian Options Market

Part of the Australian Stock Exchange (ASX) history is the founding of the AOM (the Australian Options Market). Securities in the form of call options began trading in 1976. Over 35 Australian companies were initially active in trading. The instrument of trading is via “open outcry” and is fueled by quote. One of the key […]

Financial Definitions - Automated Clearing House

An automated clearing house (aka ACH) is an automated data system that keeps information on banking clients and accounts for sharing between banks and finance companies. This data was kept on analogue tape and later digital tape. ACH data is now 100% digital in most banking institutions.
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Financial Definitions - Automated Bond System

The Automated Bond System (ABS) is simply a database used in the New York Stock Exchange (NYSE). It tracks offers and bids in traded bonds that are inactive - this is tracked until the stocks or bonds are cancelled. There are traders who buy, bid on, and sell stocks that are inactive, and these folks […]

Financial Definitions - Auto Insurance

Auto insurance is the protection a consumer or driver can buy from a legal insurance provider. If the operator of the vehicle in an accident in which they are hurt, others are hurt, they can be given a settlement amount from their auto insurance company to cover damages. Their auto insurance can also be used […]

Financial Definitions - Authorized Shares

The term “authorized shares” (or authorized stock) means how many shares a company can legally sell (or create) according to their company articles and official documentation. Just because a company is authorized to create a said amount of shares (or stocks), does not mean they will issue them all. Often companies will hold off on […]

Financial Definitions - Authorized Capital

Authorized capital, in the financing industry means the number of shares one company can sell. The amount of shares a company is allowed to sell depends on how much money the company needs and the percentage of stock dilution the shareholders agree to withstand. When these shares are sold off to the public at large, […]

Financial Definitions - Authenticity

In short, the term authenticity in the financial industry means the genuineness of precious metals. Reputable and legit dealers in the precious metals industry can and do appraise precious metals and can sign a document for the authenticity of a a precious metal. Silver and gold cannot be less than .999 pure to be accepted.
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Financial Definitions - Authentication

Authentication within the financing world usually means the identification (or ID) of a bond certificate. Basically, when a bond certificate is issued it has to be validated. An authorized public official (or personnel of a designated official) must legally verify the bond as a genuine document with an official stamp and/or seal.
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Financial Definitions - Average Available Balance

Banks will take a 30 day period and they calculate the available balances from each day. They use this number to see the average amount of money a client (whether it’s business or personal) has in their account on any given day of the 30 day period.

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Financial Definitions - Average

The average usually mean the sum of a group of major securities within a market divided the number of securities used in the equation. Basically, in the financial industry, it’s the average of the biggest, and key securities. For instance, the Dow Jones Industrial Average at the time of this writing was 11575.81. This was […]

Financial Definitions - Available Balance

Available balance can mean various things within the financing community, but the most common use of the term is used in the personal financing arena. In this case, available balance is the amount of money that can be withdrawn from a bank account at any given time, depending on the amount drawn, and the daily, […]

Financial Definitions - Automatic Withdrawal

An automatic withdrawal is usually a term used when regarding a mutual fund which allows mutual fund holders (usually referred to as shareholders) a fixed convenient payment each month or each quarter. All of these payments stem from dividends, including capital gains, and security wind-falls held by the fund.
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Financial Definitions - Automatic Premium Loan

First of all, an automatic premium loans, and all the interest incurred, can be paid back before the value is exhausted. An automatic premium loan also keeps the policy in play (or in force) when a premium is not paid until the cash amount is used up.
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Financial Definitions - Asset Financing

Asset financing is financing that tries to convert certain assets into working cash in return for a security interest in those assets. The asset financing is replacing the term “commercial financing”. Most all major banks team with commercial financing companies in tackling the financial requirements of companies that don’t fit the average “seasonal borrower profile”. […]

Financial Definitions - Asset Coverage Part #2

Asset coverage calculations can be communicated as a percentage as week. To do this we use the dollar amount of “of coverage per unit” and dividing that number by the units. Notes On Asset Coverage: 1)Asset coverage is critical so as to act as a buffer on losses if liquidation is to take place. 2) […]

Financial Definitions - Asset Coverage

Asset coverage usually refers to the net assets of a company ability to pay down (if need be) debts of any kind. These debts can also be market equity positions investments, or perhaps preferred stock items. There is a specific way asset coverage is calculated - as follows. Take the asset(s) at sell-out or […]

Financial Definitions - Asset Backed Securities

Asset backed securities are bonds and/or notes that are backed up by accounts receivable or “loan paper” delegated by credit card companies, banks, or other lenders of credit. What usually happens is the creator of the accounts receivable paper and/or loan sells it to a trust. The trust in turns sells it as a security […]

Financial Definitions - Asset Liability Management

Asset liability management the term used by banks and lending institutions when they are considering your loan and financing terms. They weight your personal and/or business debt with you assets. They do this to ensure that their risk on the loan is within their company policies and limits. This is why some banks will approve […]

Financial Definitions - Asset Allocation (Mutual Funds)

Asset allocations with mutual funds is asset allocation that changes between bonds, stocks, and money market securities to optimize shareholder returns while minimizing their risk. These mutual funds, have become the main stay these days because they avoid single share holders from having to watch, wait, and bait they’re investments in various markets. Mutual fund […]

Financial Definitions - Asset Allocation

Assets allocation is sometimes known as “apportioning of investment funds among categories of assets”. Examples could be cash equivalents, stocks, and fixed income investments. Also, your tangible assets come into play, including precious metals (diamonds, gold, etc.), real estate, and collectibles. This will of course apply to sub-category assets like government, municipal, and corporate bonds. […]

Financial Definitions - Asset

An asset is anything that has a monetary, commercial or exchange value - this could be in the form of deposits, securities, or property owned by an individual or a business. For personal loans and financing, the banks usually see your assets as being your home or your car. Assets are the items, stocks, bonds, […]

Financial Definitions - Assessed Valuation

The dollar value given to a property by the city, town, or municipality. This is for figuring out and assessing taxes. They base these valuations on the count of “mills per dollar” of assessed valuation. For instance, if a house is assessed at $300,000 with a tax rate of 150 mills - then the tax […]