Thursday, August 30, 2007

FINANCIAL TERMS V

Yield
it’s the annual percentage rate of return earned on a security. Yield is a function of a security's purchase price and coupon interest rate.

Yield curve
it shows the relationship between the yields to maturity of securities and their maturities. It is also called as the term structure of interest rates.

Yield to call
a yield on a security calculated by assuming that interest payments will be paid until the call date, when the security will be redeemed at the call price.

Yield to maturity
A yield based on the assumption that the security remains outstanding to maturity. It represents the total of coupon payments until maturity, plus interest on interest, and whatever gain or loss is realized from the security at maturity.

Institutionalization
The shifting of the financial markets from dominance by retail investors to institutional investors.

Contingent Liabilities
Liabilities that may or may not be incurred by a company and which depend on the outcome of say forthcoming events such as a court case. These are recorded in a company’s account as contingent liabilities.

PECULIAR WORD

Asset Play

An investment strategy which seeks to identify companies whose net assets per share are worth significantly more than the current share price – essentially a type of value investing.

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