Financial definitions for business owners E

• Definition Asset Earning Explain An asset that generates income, e.g., income from rental property
• Definition Power Earning Explain Earnings before interest and taxes (EBIT) divided by total assets
• Definition Earnings Explain Net income for the company during a period
• Definition Rights Ex Explain Shares of stock that are trading without rights attached
• Definition Date Rights Ex Explain The date on which a share of common stock begins trading ex-rights
• Definition Momentum Earnings Explain An increase in the earnings per share growth rate from one reporting period to the next
• Definition Equityholders Explain Stockholders; those holding shares of the firm's equity
• Definition Expected future cash flows Explain Projected future cash flows associated with an asset
• Definition Return Future Expected Explain The return that is expected to be earned on an asset in the future. Also called the expected return
• Definition Extinguish Explain Retire or pay off debt
• Definition Call Extraordinary Explain Early redemption of a revenue bond because the revenue source paying the interest on the bond has been eliminated or has disappeared
• Definition Item Extraordinary Explain event that must be explained to shareholders in an annual or quarterly report, e.g., employee fraud, a lawsuit, etc
• Definition Extra or special dividends Explain A dividend that is paid in addition to a firm's established or expected quarterly dividend
• Definition Value Positive Extraordinary Explain A positive net present value
• Definition Swap Equity Explain exchanged are based on the total return on some stock market index and an interest rate (either a fixed rate or floating rate). Related
• Definition Value Exercise Explain The amount of advantage over a current market transaction provided by an in-the-money option
• Definition Option The Exercising Explain The act of buying or selling the underlying asset via the option contract
• Definition Price Exhaust Explain liquidate a client's holding in a stock purchased in a margin account in order to meet a margin call when the client cannot meet the
• Definition Export-Import Bank (Ex-Im Bank) Explain The U.S. federal government agency that extends trade credits to U.S. companies to facilitate the financing of U.S. exports
• Definition Fee Exit Explain See: Back-end load
• Definition Variable Exogenous Explain A variable whose value is determined outside the model in which it is used. Related: Endogenous variable
• Definition Option Exotic Explain Refers to options that are more complex than simple puts or call options. For example, a Caput is a call option on a put option
• Definition Theories Hypothesis Expectations Explain interest rates, which include the pure expectations theory; the liquidity theory of the term structure, and the preferred habitat theory
• Definition Expectations theory of forward exchange rates Explain states that the expected future spot foreign exchange rate t periods from now equals the current t-period forward exchange rate
• Definition Return Expected Explain given a probability distribution for the possible rates of return. Expected return equals some risk-free rate (generally the prevailing U.S
• Definition Expected return-beta relationship Explain Implication of the CAPM that security risk premiums will be proportional to beta
• Definition Value Expected Explain The weighted average of a probability distribution. Also known as the mean value
• Definition Expected value of perfect information Explain The expected value if the future uncertain outcomes could be known minus the expected value with no additional information
• Definition Ratio Expense Explain spent to run a mutual fund (as of the last annual statement). This includes expenses such as management and advisory fees, overhead costs
• Definition Expensed Explain reducing reported profit of that year, as is appropriate for expenditures for items with useful lives under one year
• Definition Rating Experience Explain A technique insurance companies use to determine the correct price of a policy premium
• Definition Expiration Explain The time an option contract lapses
• Definition Cycle Expiration Explain security expire. A given option will be placed in one of three cycles; the January cycle, the February cycle, or the March cycle. At any
• Definition Sheet Term Exploding Explain Venture capital jargon. Often a proposed term sheet, might explode or be null and void in a fixed period set to negotiate the final contract
• Definition Dividends Stock Ex Explain announcement of a stock dividend and its actual payment. The buyer of shares during this time period does is not entitled to the dividend
• Definition Netting Exposure Explain with exposures in the same or another currency, when exchange rates are expected to move in such a way that losses or gains on the first
• Definition Expropriation Explain private property. Any government has the right to seize such property, according to international law, if prompt and adequate compensation
• Definition Bond Extendable Explain Bond whose maturity can be extended at the option of the lender or issuer
• Definition Notes Extendable Explain Note with maturity that can be extended by mutual agreement between the issuer and investors
• Definition Extension Explain Voluntary arrangements to restructure a firm's debt, under which the payment date is postponed
• Definition Date Extension Explain The day on which the first option either expires or is extended
• Definition Swap Extension Explain Extending maturity through a swap, e.g. selling a 2-year note and buying one with a slightly longer current maturity
• Definition Efficiency External Explain Related: Pricing efficiency
• Definition Finance External Explain Funding that is not generated by a firm's operations: new borrowing or a stock issue
• Definition Funds External Explain the corporation to increase cash flow and to aid in expansion efforts, e.g., bank loan or bond offering
• Definition Market External Explain market, the offshore market, or, more popularly, the Euromarket. A mechanism for trading securities that at issuance (1) are offered
• Definition Kurtosis Excess Explain tails of a distribution. Excess kurtosis means that distribution has fatter tails than a normal distribution. Fat tails means there is a
• Definition Margin Excess Explain account above the legal minimum required for a margin account or the maintenance requirement at a brokerage firm
• Definition Tax Profits Excess Explain Additional federal taxes placed on the earnings of a business, used only in time of national emergency such as war
• Definition Reserves Excess Explain Actual reserves that exceed required reserves
• Definition Excess return on the market portfolio Explain Difference between the return on the market portfolio and the riskless rate
• Definition Returns Excess Explain riskless rate. Sometimes confused with abnormal returns, returns in excess of those required by some asset pricing model
• Definition Exchange Explain and futures on stocks, bonds, commodities, and indexes are traded. Principal U.S. stock exchanges are: New York Stock Exchange (NYSE
• Definition The Exchange Explain Exchange. Also known as the Big Board, where more than 2000 common and preferred stocks are traded. The exchange is the oldest in the
• Definition Assets Of Exchange Explain Acquisition of another company by purchase of its assets in exchange for cash or stock
• Definition Controls Exchange Explain of foreign currencies by domestic citizens or on the purchase of the local domestic currency by foreigners
• Definition Distribution Exchange Explain block of stock in a single transaction. A broker bunches a large number of buy orders and sells the block all at once. The broker receives
• Definition Exchange fund (also known as swap fund) Explain that appeals to wealthy investors with large holdings in a single stock who want to diversify without paying capital gains taxes. These
• Definition Offer Exchange Explain An offer by a firm to give one security, such as a bond or preferred stock, in exchange for another security, such as shares of common stock
• Definition Privilege Exchange Explain A mutual fund shareholder's right to switch from one fund to another within one fund family, usually at no additional charge
• Definition Rate Exchange Explain The price of one country's currency expressed in another country's currency
• Definition Risk Exchange Explain that results from unexpected exchange rate changes, or the extent to which the present value of a firm is expected to change as a result of
• Definition Stock Of Exchange Explain Acquisition of another company by purchase of its stock in exchange for cash or shares
• Definition Exchangeable Explain securities. Means the issuer, if so stated, may substitute a convertible debenture for an existing convertible preferred with identical
• Definition Instrument Exchangeable Explain securities. Bond or preferred stock that may be exchangeable into the common stock of a different public corporation
• Definition Security Exchangeable Explain Investment instrument that grants its holder the right to exchange it for the common stock of a firm other than the issuer of the instrument
• Definition Tax Excise Explain Federal or state tax placed on the sale or manufacture of a commodity, typically a luxury item e.g., alcohol
• Definition Tender Self Exclusionary Explain A firm's offer to buy a given amount of its own stock while excluding targeted stockholders
• Definition Exclusive Explain In the context of general equities, having sole possession of the customer order/indication; not in competition with other dealers
• Definition Warrants Ex Explain Describes a stock sale in which the buyer is not entitled to the warrant accompanying the stock
• Definition Interest Exact Explain 365-day/year schedule by a bank or other financial institution as opposed to a 360-day basis (ordinary interest). Difference can be
• Definition Execution Explain buy or sell securities. Once a trade is executed, it is reported by a Confirmation Report; settlement (payment and transfer of ownership
• Definition Costs Execution Explain price of a security and the price that would have existed in the absence of a trade, which can be further divided into market impact costs
• Definition Securities Exempt Explain requirements of the Securities Act of 1933 or the margin requirements of the SEC Act of 1934. Such securities include government bonds
• Definition Exemption Explain Direct reductions from gross income allowed by the IRS
• Definition Exercise Explain To implement the right of the holder of an option to buy (in the case of a call) or sell (in the case of a put) the underlying security
• Definition Limit Exercise Explain of any one class of contract. that can be exercised within a five-day period contract. Stock option's exercise limit is typically 2000
• Definition Notice Exercise Explain want to exercise a right to buy or sell (depending on the type of contract) the underlying security of the option contract
• Definition Price Exercise Explain The price at which the security underlying a future or options contract may be bought or sold
• Definition Eurocurrency Explain but denominated in your currency. A Eurodollar is a Certificate of Deposit in U.S. dollars in some other country (though mainly traded in
• Definition Deposit Eurocurrency Explain A short-term fixed-rate time deposit denominated in a currency other than the local currency (i.e., U.S. dollars deposited in a London bank
• Definition Market Eurocurrency Explain lending currencies that are held in the form of deposits in banks located outside the countries where the currencies are issued as legal
• Definition Eurodollar Explain S. dollars in a bank that is not located in the U.S. Most of the Eurodollar deposits are in London banks, but Eurodeposits may be anywhere
• Definition Bonds Eurodollar Explain Eurobonds denominated in U.S.dollars
• Definition Eurodollar certificate of deposit Explain A certificate of deposit paying interest and principal in dollars, but issued by a bank outside the United States, usually in Europe
• Definition Issues Euroequity Explain is, securities initially sold to investors simultaneously in several national markets by an international syndicate. Related: External
• Definition Euro-medium term note (Euro-MTN) Explain directly to the market. Euro-MTNs are offered continuously rather than all at once as a bond issue is. Most Euro-MTN maturities are under
• Definition Reit Equity Explain assumes ownership status in the property it invests in enabling investors of the REIT to earn dividends on rental income from the property
• Definition Nm Euro Explain pan-European network of regulated markets dedicated to growth companies, regardless of their sector of activity or country of origin. Euro
• Definition Note Euro Explain Short- to medium-term debt instrument sold in the Eurocurrency market
• Definition Bonds Euroyen Explain Eurobonds denominated in Japanese yen
• Definition European Central Bank (ECB) Explain policy of the 11 countries that have converted to the Euro from their local currencies. The 11 countries are: Austria, Belgium, Finland
• Definition Option European Explain Option that may be exercised only at the expiration date. Related: American option
• Definition Exercise Style European Explain A method of exercising options contracts in which the buyer can exercise the contract on the last day before expiration
• Definition Option Style European Explain An option contract that can be exercised only on the expiration date
• Definition Period Evaluation Explain The time interval over which funds assess a money manager's performance
• Definition Up Evening Explain Buying or selling to offset an existing market position
• Definition Risk Event Explain to make interest and principal payments will change because of rare, discontinuous, and very large, unanticipated changes in the market
• Definition Default Of Events Explain Contractually specified events that allow lenders to demand immediate repayment of a debt
• Definition Credit Evergreen Explain Revolving credit without maturity
• Definition Funding Evergreen Explain A British term referring to the gradual injection of capital into a new or existing enterprise
• Definition All Ex Explain The sale of a security without the privileges associated with the security such as dividends, voting rights, or warrants
• Definition Return Ante Ex Explain The expected return or anticipated return of an asset or portfolio
• Definition Date Dividend Ex Explain seller, rather than the buyer, of a stock will be entitled to the most recently announced dividend payment. The date set by the NYSE (and
• Definition Legal Ex Explain A municipal bond offered without a law firm's legal opinion. As the majority of bonds are issued with legal opinions
• Definition Transaction Pit Ex Explain The purchase of commodities off the exchange's floor
• Definition Return Post Ex Explain Related: Holding-period return
• Definition Matching Exact Explain that involves finding the lowest cost portfolio generating cash inflows exactly equal to cash outflows that are being financed by
• Definition Opinion For Except Explain the fact that the auditor is unable to audit certain areas of the company's operations because of restrictions imposed by management
• Definition Cap Equity Explain up-front premium, agrees to pay the other at specific time periods if a designated stock market benchmark tops a predetermined level
• Definition Claim Equity Explain Also called a residual claim; a claim to a share of earnings after debt obligations have been satisfied
• Definition Collar Equity Explain The simultaneous purchase of an equity floor and sale of an equity cap
• Definition Agreement Contribution Equity Explain An agreement to contribute equity to a project under certain specified conditions
• Definition Floor Equity Explain to pay the other at specific time periods if a specific stock market benchmark falls below a predetermined level
• Definition Funding Equity Explain insurance policy and a mutual fund. The insurance policy is paid by the collateral value of fund shares, give the investor the advantages
• Definition Kicker Equity Explain Stock warrants issued attached to privately placed bonds
• Definition Policies Linked Equity Explain Related: Variable life
• Definition Market Equity Explain Related: stock market
• Definition Multiplier Equity Explain Total assets divided by total common stockholders' equity; the total assets per dollar of stockholders' equity
• Definition Options Equity Explain right (but not the obligation) to buy or sell a specified number of shares of stock, at a specified price for a certain (limited) time
• Definition Annuity Annual Equivalent Explain The amount per year for some number of years that has a present value equal to a given amount
• Definition Benefit Annual Equivalent Explain The annual annuity with the same value as the net present value of an investment project
• Definition Equivalent annual cash flow Explain Annuity with the same net present value as the company's proposed investment
• Definition Cost Annual Equivalent Explain The cost per year of owning an asset over its entire life
• Definition Yield Bond Equivalent Explain Annual yield on a short-term, noninterest-bearing security calculated for comparison to yields quoted on coupon securities
• Definition Loan Equivalent Explain with a lease, the maximum amount of conventional debt that the same period-by-period after-tax debt service stream is capable of supporting
• Definition Yield Taxable Equivalent Explain The yield that must be offered on a taxable bond issue to give the same after-tax yield as a tax-exempt issue
• Definition Erosion Explain A negative impact on one or more of a firm's existing assets
• Definition Clause Escalator Explain increases to be passed on. In an employment contract, for example an escalator clause may call for wage increases in line with inflation
• Definition Escrow Explain Property or money held by a third party until the agreed upon obligations of a contract are met
• Definition Receipt Escrow Explain options trading to guarantee that the underlying security is on deposit and available for potential delivery
• Definition Escrowed to Maturity (ETM) Explain Holding of the proceeds from a new bond issue to pay off an existing bond issue at its maturation date
• Definition Tax Estate Explain A federal or state tax imposed on an individual's assets inherited by heirs
• Definition Date Expiration Explain style) or the only day (in the case of European-style) on which an option may be exercised. For stock options, this date is the Saturday
• Definition Ethics Explain Standards of conduct or moral judgment
• Definition Euro Explain 039;s home country but in the home country currency. This terminology is confusing now since the new European currency unit, also called
• Definition Cds Euro Explain CDs issued by a U.S. bank branch or foreign bank located outside the U.S. Almost all Euro CDs are issued in London
• Definition Lines Euro Explain Lines of credit granted by banks (foreign or foreign branches of U.S. banks) for Eurocurrencies
• Definition Straight Euro Explain A fixed-rate coupon Eurobond
• Definition Eurobank Explain A bank that regularly accepts foreign currency-denominated deposits and makes foreign currency loans
• Definition Eurobond Explain international syndicate, (2) issued simultaneously to investors in a number of countries, and (3) issued outside the jurisdiction of any
• Definition Euroclear Explain in the Eurobond market. It began operations in 1968, is located in Brussels, and is managed by Morgan Guaranty Bank. Applies mainly to
• Definition Paper Commercial Euro Explain Short-term notes with maturities up to 360 days that are issued by companies in international money markets
• Definition Eurocredits Explain Intermediate-term loans of Eurocurrencies made by banking syndicates to corporate and government borrowers
• Definition Eligible bankers' acceptances Explain referred to as eligible because it is acceptable by the Fed as collateral at the discount window and/or because the accepting bank can sell
• Definition Theory Wave Elliott Explain predicts price movements on the basis of historical price wave patterns and their underlying psychological motives. Robert Prechter is a
• Definition Elves Explain on the PBS television show, Wall Street Week , who are technical analysts attempting to predict the direction of stock prices over the
• Definition Option Embedded Explain of a bond that gives either the bondholder or the issuer the right to take some action against the other party, as opposed to a bare
• Definition Fund Emergency Explain A reserve of cash kept available to meet the costs of any unexpected financial emergencies
• Definition Emergency Home Finance Act of 1970 Explain Federal Home Loan Mortgage Corporation, a partially government-run program initiated to stimulate the development of a secondary mortgage
• Definition Markets Emerging Explain The financial markets of developing economies
• Definition Emerging Markets Free index (EMF) Explain index created to track stock markets in selected emerging markets that are open to foreign investment like Argentina, Chile, Jordan
• Definition Employee Retirement Income Security Act (ERISA) Explain The law that regulates the operation of private pensions and benefit plans
• Definition Fund Stock Employee Explain A firm-sponsored program that enables employees to purchase shares of the firm's common stock on a preferential basis
• Definition Empty head and pure heart test Explain that allows only the bidder of a tender offer to trade in the stock while possessing inside information
• Definition Encumbered Explain a second party reserves the right to make a valid claim, e.g., a bank's holding of a home mortgage encumbers property
• Definition End-of-year convention Explain the end of a year as opposed to the date convention. Under the end-of-year convention, the present is time 0, the end of year 1 occurs one
• Definition Variable Endogenous Explain A value determined within the context of a model. Related: Exogenous variable
• Definition Endorse Explain Transfering asset ownership by signing the back of the asset's certificate
• Definition Endowment Explain Gift of money or property to a specified institution for a specified purpose
• Definition Funds Endowment Explain support of institutions such as colleges, private schools, museums, hospitals, and foundations. The investment income may be used for the
• Definition Fund Mutual Energy Explain Mutual fund investing in energy stocks only, e.g., oil and gas companies
• Definition Indexing Enhanced Explain strategy whose objective is to exceed or replicate the total return performance of some predetermined index
• Definition Enhancement Explain An innovation that has a positive impact on one or more of a firm's existing products
• Definition Enterprise Explain A business firm
• Definition Entrepreneur Explain takes on the risks associated with starting the enterprise, which may require venture capital to cover start-up costs
• Definition Fund Environmental Explain stocks of companies that are environmentally friendly and/or have the goal of environmental betterment. The investors are trying to support
• Definition Swap Shares Equal Explain securities. Selling the underlying common and reinvesting the proceeds in as much of the convertible as can be converted into the number of
• Definition Dividend Equalizing Explain Special dividends received by investors of a firm for income the investor lost because the firm altered the dividends payment schedule
• Definition Equilibrium market price of risk Explain CML). Since the C.M.L. represents the expected return offered to compensate for a perceived level of risk, each point on the line is a
• Definition Price Equilibrium Explain The price when the supply of goods matches demand
• Definition Equilibrium rate of interest Explain The interest rate that clears the market. Also called the trade-clearing interest rate
• Definition Partnership Leasing Equipment Explain income and tax benefits such as depreciation costs by purchasing equipment and leasing it to other parties
• Definition Certificates Trust Equipment Explain formed to purchase an asset and lease it to a lessee. When the last of the certificates has been repaid, title and ownership of the asset
• Definition Owner Equitable Explain The beneficiary of a property held in a trust
• Definition Equity Explain residual dollar value of a futures trading account, assuming its liquidation is at the going trade price. In real estate, dollar
• Definition Scope Of Economies Explain investment can support multiple profitable activities less expensively in combination than separately
• Definition Edgar Explain uses Electronic Data Gathering and Retrieval to transmit company documents such as 10-Ks, 10-Qs, quarterly reports, and other SEC filings
• Definition Corporations Edge Explain authorized and chartered by the Federal Reserve Board of Goverors in the U.S., that are allowed to engage in transactions of a foreign or
• Definition Ira Education Explain enabling the contribution of up to $500 per year for each child up to the age of 18 by the parents in the family
• Definition Effective annual interest rate Explain An annual measure of the time value of money that fully reflects the effects of compounding
• Definition Yield Annual Effective Explain Annualized interest rate on a security computed using compound interest techniques
• Definition Price Call Effective Explain The strike price in a market redemption provision plus the accrued interest to the redemption date
• Definition Convexity Effective Explain The convexity of a bond calculated using cash flows that change with yields
• Definition Date Effective Explain In an interest rate swap, the date the swap begins accruing interest
• Definition Debt Effective Explain The total debt owed by a firm to its creditors
• Definition Duration Effective Explain approximate duration formula for a bond with an embedded option, reflecting the expected change in the cash flow caused by the option
• Definition Worth Net Effective Explain Net worth plus subordinated debt
• Definition Rate Effective Explain A measure of the time value of money that fully reflects the effects of compounding
• Definition Sale Effective Explain lot price, which determines the price of the next odd lot. The difference created between the last round-lot price and the odd-lot price is
• Definition Spread Effective Explain The gross underwriting spread adjusted for the impact that a common stock offering's announcement has on the firm's share price
• Definition Rate Tax Effective Explain The net rate a taxpayer pays on income that includes all forms of taxes. It is calculated by dividing the total tax paid by taxable income
• Definition Efficiency Explain The degree and speed with which a market accurately incorporates information into prices
• Definition Market Capital Efficient Explain A market in which new information is very quickly reflected accurately in share prices
• Definition Diversification Efficient Explain portfolio theory, which maintains that any risk-averse investor will search for the highest expected return for any particular level of
• Definition Frontier Efficient Explain portfolios that maximize expected return for any level of expected risk, or that minimizes expected risk for any level of expected return
• Definition Hypothesis Market Efficient Explain fully and immediately reflected in a security's market price, thereby assuming that an investor will obtain an equilibrium rate of
• Definition Set Efficient Explain Graph representing a set of portfolios that maximize expected return at each level of portfolio risk
• Definition Ed Eighth Explain A specialist or another broker is bidding higher or offering lower than we are, often topping or undercutting us by an eighth
• Definition Facility Or Either Explain to borrow either domestic dollars from the bank's head office or Eurodollars from one of its foreign branches
• Definition Study Event Explain A statistical study that examines how the release of information affects prices at a particular time
• Definition Market Way Either Explain In the interbank Eurodollar deposit market, an either-way market is one in which the bid and offered rates are identical
• Definition Elasticity of demand and supply Explain responsiveness to price changes. Elasticity is measured as the percent change in quantity divided by the percent change in price. A large
• Definition Elasticity of an option Explain Percentage change in the value of an option given a 1% change in the value of the option's underlying stock
• Definition Elect Explain The conversion of a conditional order into a market order
• Definition Transfers Depository Electronic Explain The transfer of funds between bank accounts through the Automated Clearing House (ACH) system
• Definition Elephants Explain A term used to refer to large institutional investors
• Definition Index Bond Eleven Explain 11 municipal bonds that mature in 20 years and carry an average AA rating. The eleven bonds used to calculate the index are also found in
• Definition Exchange Rate Mechanism (ERM) Explain EMS maintain their currency exchange rates within an agreed-upon range with respect to other member countries
• Definition Employee stock ownership plan (ESOP) Explain A company contributes to a trust fund that buys stock on behalf of employees
• Definition Eu Union European Explain countries founded by the Treaty of Rome in 1957 as a common market for six nations. It was known as the European Community until January 1
• Definition Eurex Explain formed in 1998 by a merger of the Deutsche Terminbörse (DTB) and the Swiss Options and Financial Futures Exchange (SOFFEX
• Definition Way Each Explain A broker's commission from his or her involvement on both the purchase and the sale side of a security
• Definition Penalty Withdrawal Early Explain Penalty paid by the holder of a fixed-term investment penalizing an investor who withdraws money before the agreed-upon maturity date
• Definition Out Earn Explain merger or acquisition that is not part of the original acquisition cost, which is based on the acquired company's future earnings
• Definition Credit Income Earned Explain A tax credit for taxpayers with children
• Definition Risk Rate Exchange Explain Also called currency risk; the risk that an investment's value will change because of currency exchange rates
• Definition Money Earnest Explain Money given to a seller by a buyer to demonstrate the buyer's good faith. If the deal falls through, the deposit is usually forfeited
• Definition Earnings per share (EPS) Explain number of outstanding shares. If a company earning $2 million in one year had $2 million shares of stock outstanding, its EPS would be $1
• Definition Yield Earnings Explain allowing for tax and interest payments on fixed interest debt, to the current share price. The inverse of the price-earnings ratio. It is
• Definition Ratio Retention Earnings Explain Plowback rate
• Definition Surprises Earnings Explain the consensus forecast of earnings by institutions such as First Call or IBES Negative earnings surprises generally have a greater adverse
• Definition Dividend Ex Explain The buyer of shares when they are quoted ex-dividend is not entitled to receive a declared dividend. It is the interval between the record
• Definition Stock Eating Explain When an underwriter can't find buyers for a stock and therefore has to buy them for his own account
• Definition Emerging Company Marketplace (ECM) Explain Stock Exchange to help small growth companies fulfill special listing requirements. The service is no longer available
• Definition Assumptions Economic Explain General market environment a firm expects to operate in over the life of a financial plan
• Definition Portfolio Efficient Explain expected return for a given level of risk (i.e., standard deviation), or, equivalently, the lowest risk for a given expected return
• Definition Dependence Economic Explain When the costs and/or revenues of one project depend on those of another
• Definition Earnings Economic Explain The real flow of cash that a firm could pay out forever in the absence of any change in the firm's productive capacity
• Definition Exposure Economic Explain The extent to which the value of a firm will change because of an exchange rate change
• Definition Rate Growth Economic Explain The annual percentage rate of change in the Gross National Product
• Definition Income Economic Explain Cash flow plus change in present value
• Definition Indicators Economic Explain reveal the direction the economy is heading in; for example, the unemployment rate and the inflation rate
• Definition Rents Economic Explain Profits in excess of the competitive level
• Definition Risk Economic Explain project's output will not be salable at a price that will cover the project's operating and maintenance costs and its debt
• Definition Surplus Economic Explain For any entity, the difference between the market value of all its assets and the market value of its liabilities
• Definition Union Economic Explain countries that allows the free movement of capital, labor, and all goods and services, and involves the harmonization and unification of
• Definition Economics Explain The study of the economy. See also: Macroeconomics; microeconomics; Keynesian economics, monetarism, and supply-side economics
• Definition Scale Of Economies Explain The decrease in the marginal cost of production as a firm's extent of operations expands
• Definition E Explain specifying that an issue has not met the reporting date for the company's SEC regulatory filing requirements
• Definition Europea, Australia, and Far East index (EAFE index) Explain Stock index, computed by Morgan Stanley Capital International
• Definition European Association of Securities Dealers Automated Quotation (EASDAQ) Explain European equivalent of NASDAQS
• Definition Earnings before interest after taxes (EBIAT) Explain less cost of goods sold and selling, general, and administrative expenses. In other words, operating and nonoperating profit before the
• Definition Earnings before interest and, taxes (EBIT) Explain less cost of goods sold and selling, general, and administrative expenses. In other words, operating and nonoperating profit before the
• Definition Earnings before interest, taxes, and depreciation (EBITD) Explain less cost of goods sold and selling, general, and administrative expenses. In other words, operating and nonoperating profit before the
• Definition Earnings before interest, taxes, depreciation, and amortization (EBITDA) Explain less cost of goods sold and selling, general, and administrative expenses. In other words, operating and nonoperating profit before the
• Definition Earnings before taxes (EBT) Explain less cost of goods sold and selling, general, and administrative expenses. In other words, operating and nonoperating profit before the
• Definition European Currency Unit (ECU) Explain An index of foreign exchange consisting of European currencies, originally devised in 1979. See also: Euro
• Definition Electronic data interchange (EDI) Explain The direct exchange of information electronically, from one firm's computer to another firm's computer in a structured format
• Definition Em Margin Effective Explain amount equal to the net earned spread, or margin of income, on assets in excess of financing costs for a given interest rate and
• Definition European Monetary System (EMS) Explain An exchange arrangement formed in 1979 that governs the currencies of European Union member countries
• Definition European Options Exchange (EOE) Explain Now AEX-Optiebeurs. See: Amsterdam Exchanges (AEX
• Definition Economic order quantity (EOQ) Explain The order quantity that minimizes total inventory costs

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Economic Order Quantity (Eoq), European Options Exchange (Eoe), European Monetary System (Ems), Effective Margin (Em), Electronic Data Interchange (Edi

Economic Order Quantity (Eoq), European Options Exchange