- Industry: Financial services
- Number of terms: 73910
- Number of blossaries: 1
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Theories of the term structure of interest rates, which include the pure expectations theory; the liquidity theory of the term structure, and the preferred habitat theory. These theories hold that each forward rate equals the expected future interest rate for the relevant period. These three theories differ, however, on whether other factors also affect forward rates, and how.
Industry:Financial services
The time period over which an asset's NPV is maximized. Economic life can be less than absolute physical life for reasons of technological obsolescence, physical deterioration, or product life cycle.
Industry:Financial services
A theory of foreign exchange rates that states that the expected future spot foreign exchange rate t periods from now equals the current t-period forward exchange rate.
Industry:Financial services
Total amount of dividends received during the life of a futures contract or total dividends received for holding a particular stock one year. See: Current yield.
Industry:Financial services
In project financing, the risk that the project's output will not be salable at a price that will cover the project's operating and maintenance costs and its debt service requirements.
Industry:Financial services
The return that is expected to be earned on an asset in the future. Also called the expected return.
Industry:Financial services
Events that impact the economy, come from outside it, and are unexpected and upredictable (e.g., Hurricane Andrew in 1991, the rise in oil prices by OPEC).
Industry:Financial services
The expected return on a risky asset, given a probability distribution for the possible rates of return. Expected return equals some risk-free rate (generally the prevailing U.S. Treasury note or bond rate) plus a risk premium (the difference between the historic market return, based upon a well diversified index such as the S&P 500 and the historic US Treasury bond) multiplied by the assets beta. The conditional expected return varies through time as a function of current market information.
Industry:Financial services
Gæld begrænsning, forbyder udstedelse af supplerende langfristet gæld, hvis udstederens interesse dækning vil, som følge af spørgsmålet, falder under nogle angivne minimum.
Industry:Financial services
