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  • Bond, cushioned (cushion bond) on by , [] Hatena Bookmark

    A bond with an above-market yield and low price volatility. In this case, the terms and conditions of the bond usually include the right of early termination. The issuer will exercise this right if the market interest rate falls below the coupon for a longer period (a callable bond with coupons that are above predominant […]

  • Bond, index-linked (inflation-indexed bond; bond bearing interest and paid off in accordance with an index; index-linked bond, de-leveraged bond) on by , [] Hatena Bookmark

    Bonds that pay investors according to a formula that is based on a fraction of the increase or decrease in a specified index. – In Germany, such bonds were prohibited by law until the start of monetary union on January 1, 1999; in the U.S.A., too, they have only been permitted since 1977. – In […]

  • Bond, callable (hard-call protected bond) on by , [] Hatena Bookmark

    A bond which, according to the terms and conditions of the bond, cannot be called by the issuer within fixed time limits. This creates planning security for the bondholder (there is a period of time when the bond cannot be called, no matter what the interest rate is). – See bond, callable, bond, non-callable, redemption […]

  • Financial Services Action Plan (also on by , [] Hatena Bookmark

    Action Programme Financial Services): Catalog of measures introduced by the EU Commission in May 1999 with the aim of achieving uniform legislation and organization in the Community’s financial services markets. In 2002, the EU Parliament adopted relevant provisions to accelerate the corresponding legislative process. – See financial market integration, European, gold plating, Lamfalussy process, legal […]

  • At the money on by , [] Hatena Bookmark

    An option (call option or put option) is „at the money“ if the strike price is exactly equal to the price of the underlying asset on the spot market (an option is at the money when the price of the underlying asset is equal to the strike price). In this case, the exercise of the […]

  • Amortization, negative (negative amortization) on by , [] Hatena Bookmark

    In the case of real estate loans, the fact that the monthly payments made by the borrowers themselves do not cover the interest due. In the case of construction loans to financially weak borrowers („house builders“, home-builders), the increasing debt burden each month thus easily leads to ruin and foreclosure. (compulsory auction). – See deferment […]

  • Initiation costs on by , [] Hatena Bookmark

    Expenses (of a bank) incurred prior to the conclusion of a contract, in particular in the course of an elaborate creditworthiness check (credit assessment) of the potential customer. In some cases, the borrower must agree to pay an amount required for this in advance, which is then credited back to him when the contract is […]

  • Investment ambiguity (ambiguity = doubtfulness) on by , [] Hatena Bookmark

    An investor feels uncertain about the closer or further consequences of an investment in the various sectors of the global financial market. He therefore decides to invest where his subjective uncertainty is lowest. – See Animal Spirits, Investment Risk, Home Bias. Attention: The financial encyclopedia is protected by copyright and may only be used for […]

  • Central bank arrogation on by , [] Hatena Bookmark

    The central bank’s unauthorized actions, i.e. actions that are not covered at all or at most only marginally by its statutes. – In the slipstream of the turmoil surrounding subprime crisis and leading into a global financial crisis in the summer of 2007, central banks were the only institution that could act quickly and save […]

  • Amenity value on by , [] Hatena Bookmark

    In the case of a company and thus also its issued shares, a special appreciation due to special advantages not attributed (to this extent) to other companies (all features that makes a company and by this its shares more attractive or valuable to investors). The plus points in detail depend on – the respective industry […]