Investment Banking Terms And Definitions Pdf


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ABS expresses principal prepayments as a percentage of the original number of loans or contracts in the pool of securitized loans that created the security. ABS is always expressed as a monthly rate.

The words, expressions, institutions and definitions of the Banking and Finance industry can often seem dense and confusing to an undergraduate, even to one aspiring to the financial world themselves. So, we've brought together a glossary for the most common terms to help you get up to speed. An item of property owned by a person or company regarded as having a value, and which can meet a debt. The central bank for the UK.

Dictionary

ABS expresses principal prepayments as a percentage of the original number of loans or contracts in the pool of securitized loans that created the security. ABS is always expressed as a monthly rate. Absorption A term used by real estate lenders and developers to describe the process of renting up newly built or renovated office space or apartments.

The term "absorption period" is often used to describe the period of time necessary for absorption. Abstract of title A written report summarizing the history of title transactions and conditions of title that affect a given piece of land covering the period from the present back to a date in the past.

A comprehensive, but cumbersome, and somewhat obsolete, method of verifying the ownership and encumbrances of a parcel, or parcels, of real estate. Accelerated depreciation A group of methods for achieving periodic reductions in the book value of fixed assets that make larger reductions in the early periods and progressively smaller reductions in later periods.

The offsetting entry is the depreciation expense. Acceleration Making demand for payment in full for a debt that has not yet matured. Usually a remedy provided in a loan document for the lender to use in the event of default by the borrower. Acceleration clause A provision in a loan document stating that the entire amount of unpaid indebtedness owed to the lender may become immediately due and payable if the borrower defaults.

Accessions Goods that are physically united with other goods in such a manner that the identity of the original goods is not lost.

An example is a new motor in a piece of equipment. Accommodation maker Name used to refer to a co-maker who agrees to sign a note to induce the lender to make a loan, but who receives no direct benefit from the loan. Account analysis An analysis performed to determine the profitability of each demand account to the bank.

The analysis may also be used to determine the profitability of a group of demand accounts with the same owner. Account analysis is normally performed by the bank, but can be done by anyone in the depositor's organization provided sufficient information is available.

The analysis identifies the net earnings based on the average daily ledger balance less reserved requirements and float. The net earnings can then be compared with the various activity service charges based on the volume of transactions and the per item price of the services. Account control agreement An agreement perfecting a creditor's interest in a securities account while allowing the securities to remain registered in the name of the owner.

An account control agreement is used to establish a security interest conforming to the requirements set forth in the UCC. Account debtor An individual or business that is obligated to pay on an account, chattel paper, contract right, or general intangible. Account reconciliation services A cash management service. One or more of a series of bank services designed to aid a deposit customer in the reconciliation of its bank account balance. A basic account reconciliation service may simply be a listing of paid checks in serial number order.

More advanced account reconciliation services combine electronic data provided by the customer with the bank's records to reconcile completely the account and list all outstanding items. Many variations exist. Also called account recs, ARPs, or recons.

Under the pre version of Article 9, an account is a right to receive payment for goods sold or leased, or for services rendered, where these rights are not evidenced by an instrument or by chattel paper. Under the revised Article 9, the definition of accounts is much broader. The revised definition covers a much wider variety of payment obligations, whether or not earned by performance, including license fees payable for the use of software, credit card receivables, and healthcare insurance receivables.

Accounts payable A category of liabilities that represents funds due to creditors. Usually, accounts payable is due to trade creditors who have supplied goods or services without requiring immediate payment.

Accounts payable is sometimes simply called payables. Accounts payable to trade creditors are sometimes called accounts payable trade, due to trade, or trade payables. Accounts receivable An asset account that reflects amounts due from private persons or organizations for goods and services furnished.

For corporations, accounts receivable excludes funds due from departments, but may include funds due from affiliates. For governments and nonprofit organizations using fund accounting, it does not include funds due from other funds owned by the same entity.

A category of personal property defined by Article 9 of the UCC. Accounts receivable is the right to receive payment for goods sold or leased or for services rendered where those rights are not evidenced by an instrument or by chattel paper.

Accounts receivable - trade Also called trade receivables. Amounts due from the credit sales of goods or services that are not evidenced by promissory notes.

Accretion The process of making incremental, periodic increases in the book or carrying value of an asset. For example, when a bond is purchased at a price below , the difference between the purchase price and the par value, the discount, is accreted.

Discounts are usually accreted in roughly equal amounts that completely eliminate the discount by the time that the bond has matured, or by the call date, if applicable. Accrual bond 1 Bonds that pay the investor an above-market coupon rate as long as a reference rate is between preset levels established at the time the security is issued.

A type of structured note. Also called range bonds. Instead, periodic interest for these bonds is accrued. It is added to the principal amount due to the holder at a later date. See Z tranche. Accrual convention Method used by investors for counting the number of days in each month and in the year. Also called accrual basis or day basis. The accrual convention is expressed in different ways. The accrual convention is used in the calculation of the amount of interest payable on bonds, loans, deposits, and other financial instruments on the interest payment dates.

This convention is also used for the purpose of calculating accrued interest due from a buyer to a seller of a security sold between interest payment dates. Accrued interest Interest that has been earned but not yet paid. For example, the interest earned by a bondholder between semiannual coupon payments or the interest earned by a lender since the last monthly interest payment was collected from the borrower. Accrued interest for investment securities is calculated from the issue date or the last payment date up to but not including the settlement date.

When a buyer purchases a bond, the buyer owes the seller the accrued interest in addition to the market price of the security purchased. Accumulated benefit obligation ABO The actuarial present value of the pension benefits earned to date.

Measurement of the accumulated benefit obligation uses the historical compensation rates for pay-related benefit plans. The ABO must be disclosed in a footnote to the financial statements. Accumulated depreciation The total of the periodic reductions for depreciation in fixed assets. Also called allowance for depreciation. Adjustable-rate mortgage ARM A loan for which the interest rate coupon rate is adjusted periodically to reflect changes in a previously selected index rate.

Adjusted trading A practice used to sell securities without recognizing any or all of the true loss from that sale. However, from the investor's perspective, the transactions effectively defer the recognition of losses on the security sold by establishing an excessively high book value for the security purchased.

These transactions are specifically prohibited for federally insured financial institutions. They may also be illegal.

Sometimes called fee trading. Administered rates Interest rates that the bank or other payer is contractually permitted to change at any time and by any amount. For example, the rates paid on savings accounts. All interest rates can be categorized as either fixed, administered, or floating.

Rates that may change at the payer's discretion are sometimes called variable rates, easily confused with floating rates, which change at contractually specified times by contractually specified amounts - a very different arrangement. Administrative float Float resulting from the time it takes to administratively process checks or other related paperwork. Total elapsed time for processing checks can range from less than a day to more than a week.

Note that its basic elements are present whether the work is done by the owner of the funds or the work is done by a bank or other lockbox vendor.

Sometimes referred to as payment processing float or internal float, but since some of the sources of the float delay are not necessarily internal, the term internal float is not a completely accurate synonym.

Administrative review One of two types of real estate appraisal reviews. Administrative reviews focus primarily on the underwriting issues addressed in the appraisal. These reviews, usually performed by the loan officer, approach the appraisal from a loan underwriting point of view. Typical issues addressed in an administrative review include: How comparable are the comparable properties used in the appraisal?

How reasonable are income and expense projections? Is the capitalization rate appropriate? See technical review. Advance formula A provision sometimes used in lines of credit as a sublimit on the maximum amount that can be borrowed. Typically, an advance formula limits the amount that can be borrowed under a line of credit to the lesser of the amount of the line or some percent of accounts receivable collateral.

Banks using the Advanced Measurement Approaches must hold capital for operational risk based on a risk quantity generated by the bank's internal measurement procedures. The most common internal methods are self-assessments. See also self-assessment, Standardized Approach, basic indicator approach and operations risk.

Advances Funds received for goods or services prior to the delivery of the goods or services. Typically, the funds must be returned if the transaction is canceled or if the recipient of the advance fails to provide the goods or services. See progress payments. Adverse opinion An opinion letter accompanying audited financial statements in which the CPA reports that the financial statements do not fairly present the financial position or the results of operations in conformity with GAAP.

Affiliate A business organization that shares some aspect of common ownership or control with another business organization. Affinity card A card that is offered jointly by two organizations.

One is a credit card issuer and the other is a professional association, special interest group or other non-bank company. Affirmative covenant A provision in the lender's documents that requires the borrower to do something in the future.

Important banking terms - SBI, IBPS PO/ Clerk/ SO/ RRB Exam

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ASSET CLASS – An investment category; i.e. equities (stocks), fixed income or investor psychology; these terms are most often used to refer to the stock account established at a bank, mutual fund, or brokerage that allows wage-​earning A tax-deferred defined benefit or defined contribution plan that is established.


Glossary of Investment Terms

Home Curation Policy Privacy Policy. Bill of Exchange — an order in writing from one person to a bank or to another person, to pay on -demand or at a given date, a certain sum to the person named in the bill. Missing — what is not there but should be.

Complete List of Banking Terms with Definitions For Bank Exams

Glossary of Banking terms A-Z

One of our mentor will revert to you within 48 hours. Meanwhile you can Enjoy the Free Study Material. There are a lot of banking terms, to which we are not that much familiar but you will find questions related to some of the banking terms in the bank exams in the banking awareness section.

Select the first letter of the word from the list below to jump to the appropriate section of the glossary. If the term you are looking for starts with a number or symbol, choose the " " link. Alternative Minimum Tax AMT - Federal tax, revamped by the Tax Reform Act of , aimed at ensuring that wealthy individuals, trusts, estates and corporations pay at least some tax.

Dictionary of Finance, Investment and Banking

Bibliographic Information

A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans. Banks play an important role in financial stability and the economy of a country, most jurisdictions exercise a high degree of regulation over banks. Most countries have institutionalized a system known as fractional reserve banking , under which banks hold liquid assets equal to only a portion of their current liabilities. In addition to other regulations intended to ensure liquidity , banks are generally subject to minimum capital requirements based on an international set of capital standards, the Basel Accords. Banking in its modern sense evolved in the fourteenth century in the prosperous cities of Renaissance Italy but in many ways functioned as a continuation of ideas and concepts of credit and lending that had their roots in the ancient world.

A graduate glossary of investment terminology

It seems that you're in Germany. We have a dedicated site for Germany. This dictionary covers the terminology of the international financial marketplace. It provides concise and rigorous definitions of over 5, terms used in the accounting, banking, corporate finance, and investment management and insurance disciplines.

Also, a different term referring to entry-level career position in many investment banks. Asset: an item with economic value that is owned or controlled by an individual, business or government.

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