ENG
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Investment opportunity costs
on
2023/07/21 by
alex1, []
Waiting to make an investment decision generates indirect costs. If one is not present in the market, the opportunity to generate a return is lost. – The risk of running into a crash while fully invested can be mitigated by staggering. – See attentism, liquidity preference, opportunity cost, Roosa effect. – Cf. Monthly Report of […]
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Fixed assets, permanent assets, non-current assets; in the case of a company, all tangible assets that are intended to serve business operations on a permanent basis. – In the national accounts, basically all produced and thus reproducible goods that are used repeatedly or permanently in production for more than one year
on
2023/07/21 by
alex1, []
the capital stock; in detail, a number of statistical definitions and delimitations have to be taken into account. – Cf. capital assets fixed assets, balance sheet rule, golden, facility management, trade capital, investment, capital goods, physical capital, tangible assets, assets, asset value, current value. – On physical capital formation, see the annex „Euro area statistics,“ […]
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Bond, secured (secured bond)
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2023/07/21 by
alex1, []
A debt security that is protected by some means against default and/or delinquency by the issuer. – See bond, asset-backed, bond, unsecured, monetary expansion, monetary union-internal, pledge, collateral, collateralization, real collateral. Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent! University Professor Dr. Gerhard Merk, […]
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Bond, cushioned (cushion bond)
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2023/07/21 by
alex1, []
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 […]
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Bond, index-linked (inflation-indexed bond; bond bearing interest and paid off in accordance with an index; index-linked bond, de-leveraged bond)
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2023/07/21 by
alex1, []
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 […]
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Bond, callable (hard-call protected bond)
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2023/07/21 by
alex1, []
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 […]
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Financial Services Action Plan (also
on
2023/07/21 by
alex1, []
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 […]
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At the money
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2023/07/21 by
alex1, []
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 […]
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Amortization, negative (negative amortization)
on
2023/07/21 by
alex1, []
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 […]
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Initiation costs
on
2023/07/21 by
alex1, []
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 […]
