Saturday, 20 October 2012
Corporate Bond [CB]
Corporate Bond; A bond issued by a corporation, rather than by a government. The credit risk for a corporate bond is based on the repayment ability of the company that issued the bond. Credit Risk The risk that a bond issuer will default, meaning not repay principal or interest to the investor as promised. Credit risk is also known as"default risk." Current Yield The current rate of return of an investment calculated by dividing its expected incomepayments by its current market price. Custodian A person or entity (e.g., bank, trust company, or other organization) responsible for holding financial assets.
[FRS] Federal Reserve System
Federal Reserve System
The central bank for the United States banking system and the institution that holds the primary responsibility for the making and execution of American monetary policies. Its bank notes circulate today as the United States' everydaypaper currency. (Metal coins, however, are issued by the United States Treasury Department, not by theFederal Reserve.)
The Federal Reserve System represents an almost unique hybrid or blending of elements of governmental power with elements of private ownership and control. Because the authors of the 1913 legislation that set up the Federal Reserve System felt that it was vital to insulate monetary policy from"undue" pressure and influence by partisan politicians obsessed with their own short-range re-election prospects, the Federal Reserve was set up along the lines of an independent regulatorycommission -- not as just one more agency of the Executive Branch that would be under the direction of the President and supervised closely by Congress. The private banking community was also given a major role in the running of the Federal Reserve System that continues to give banking interests privileged access to the process by which the US government's monetary policy is made.
The Federal Reserve System's highest decision-making body is its Board of Governors , which consists of seven members. Members of the Fed's Board of Governors are nominated for their positions by the President of the United States and then must be confirmed by a majority vote of the Senate before taking office. The members ofthe Federal Reserve's Board of Governors serve very long terms (fourteen years), and, once appointed and confirmed, they may not be removed from office by either President or Congress (except through a cumbersome process ofimpeachment by Congress for serious violations of the criminal law). People selected for appointment to the Board of Governors have nearly always been professional bankers, executives of Wall Street brokerage houses, or, occasionally,professional economists.
The central bank for the United States banking system and the institution that holds the primary responsibility for the making and execution of American monetary policies. Its bank notes circulate today as the United States' everydaypaper currency. (Metal coins, however, are issued by the United States Treasury Department, not by theFederal Reserve.)
The Federal Reserve System represents an almost unique hybrid or blending of elements of governmental power with elements of private ownership and control. Because the authors of the 1913 legislation that set up the Federal Reserve System felt that it was vital to insulate monetary policy from"undue" pressure and influence by partisan politicians obsessed with their own short-range re-election prospects, the Federal Reserve was set up along the lines of an independent regulatorycommission -- not as just one more agency of the Executive Branch that would be under the direction of the President and supervised closely by Congress. The private banking community was also given a major role in the running of the Federal Reserve System that continues to give banking interests privileged access to the process by which the US government's monetary policy is made.
The Federal Reserve System's highest decision-making body is its Board of Governors , which consists of seven members. Members of the Fed's Board of Governors are nominated for their positions by the President of the United States and then must be confirmed by a majority vote of the Senate before taking office. The members ofthe Federal Reserve's Board of Governors serve very long terms (fourteen years), and, once appointed and confirmed, they may not be removed from office by either President or Congress (except through a cumbersome process ofimpeachment by Congress for serious violations of the criminal law). People selected for appointment to the Board of Governors have nearly always been professional bankers, executives of Wall Street brokerage houses, or, occasionally,professional economists.
Growth theory
Growth theory
The part of economic theory that seeks to explain (and hopes to predict) the rate at which a country's economy will grow over time. Economic growth is usually measured as the annualpercentage rate of growth in one or another of the country's major national income accounting aggregates,such as Gross National Product or Gross Domestic Product (almost always with appropriate statistical adjustments to discountthe potentially misleading effects of price inflation). Just about any country's economy will show sizable year-to-year and quarter-to-quarter fluctuations in its economic growth rate, but economic growth theorists tend to concentrate their efforts on analyzing and explaining the smaller variations in thelonger-term trend or average rate of economic growth over periods of a decade or more. They leave explanation of the shorter-term fluctuations around thelonger-term trend to specialists in business cycle theory because investigation has shownthat the predominant influences on short-term growth rates seemto differ in important ways from the determinants of an economy's long term average growth performance. It might also be added that the political effects of variations in long rangeeconomic growth ratestend to be substantiallydifferent from the political effects of the booms and busts of thebusiness cycle.
The short term ups anddowns of the business cycle have dramatic effects on popular perceptions of the country's economic well-being. In a recession, hundreds of thousands or even millions of people maybecome unemployed and suffer dramatic declines in their incomes for the duration of the crisis -- usually for a period of somewhere between sixmonths and one-and-a-half years before more normal economic conditions return again. Yet over the long haul, even rather small increases or decreases in the trend rate of economicgrowth will have muchmore profound and enduring effects on economic production and hence on the material living standards of the population.
The part of economic theory that seeks to explain (and hopes to predict) the rate at which a country's economy will grow over time. Economic growth is usually measured as the annualpercentage rate of growth in one or another of the country's major national income accounting aggregates,such as Gross National Product or Gross Domestic Product (almost always with appropriate statistical adjustments to discountthe potentially misleading effects of price inflation). Just about any country's economy will show sizable year-to-year and quarter-to-quarter fluctuations in its economic growth rate, but economic growth theorists tend to concentrate their efforts on analyzing and explaining the smaller variations in thelonger-term trend or average rate of economic growth over periods of a decade or more. They leave explanation of the shorter-term fluctuations around thelonger-term trend to specialists in business cycle theory because investigation has shownthat the predominant influences on short-term growth rates seemto differ in important ways from the determinants of an economy's long term average growth performance. It might also be added that the political effects of variations in long rangeeconomic growth ratestend to be substantiallydifferent from the political effects of the booms and busts of thebusiness cycle.
The short term ups anddowns of the business cycle have dramatic effects on popular perceptions of the country's economic well-being. In a recession, hundreds of thousands or even millions of people maybecome unemployed and suffer dramatic declines in their incomes for the duration of the crisis -- usually for a period of somewhere between sixmonths and one-and-a-half years before more normal economic conditions return again. Yet over the long haul, even rather small increases or decreases in the trend rate of economicgrowth will have muchmore profound and enduring effects on economic production and hence on the material living standards of the population.
Capitalism
Capitalism ..
A form of economic order characterized by private ownership of the means of production and the freedom of private owners to use, buy andsell their property or services on the market at voluntarily agreed prices and terms, with only minimal interference with such transactions by the state or other authoritative third parties.
A form of economic order characterized by private ownership of the means of production and the freedom of private owners to use, buy andsell their property or services on the market at voluntarily agreed prices and terms, with only minimal interference with such transactions by the state or other authoritative third parties.
Budget deficit
The amount by which total government spending is more than government income during a specified period; the amount of money which the government has to raise by borrowing or currency emission in order to make up for the shortfall in tax revenues.
(ATM) Automated Teller Machine .
A machine, activated by a magnetically encoded card or othermedium, that can process a variety of banking transactions. These include accepting deposits and loan payments, providing withdrawals,and transferring funds between accounts.
Bank Statement:
Bank Statement:
Periodically the bank provides a statement of a customer's deposit account. It shows all deposits made, all checks paid, and other debits posted during the period (usually one month), as well as the current balance.
Periodically the bank provides a statement of a customer's deposit account. It shows all deposits made, all checks paid, and other debits posted during the period (usually one month), as well as the current balance.
Bankruptcy:
Bankruptcy:
The legal proceedingsby which the affairs ofa bankrupt person are turned over to a trustee or receiver for administration under the bankruptcy laws. There are two types ofbankruptcy:
*. Involuntary bankruptcy-one or more creditors of an insolvent debtor file a petition having thedebtor declared bankrupt.
*. Voluntary bankruptcy-the debtor files a petitionclaiming inability to meet financial obligations and willingness to be declared bankrupt.
The legal proceedingsby which the affairs ofa bankrupt person are turned over to a trustee or receiver for administration under the bankruptcy laws. There are two types ofbankruptcy:
*. Involuntary bankruptcy-one or more creditors of an insolvent debtor file a petition having thedebtor declared bankrupt.
*. Voluntary bankruptcy-the debtor files a petitionclaiming inability to meet financial obligations and willingness to be declared bankrupt.
return on capital employed (ROCE)
A fundamental financial performance measure. A percentage figure representing profit before interest against the money thatis invested in the business. (profit before interest and tax, divided by capital employed, x 100 to produce percentage figure.)
return on investment
Another fundamental financial and business performance measure. This term means different things to different people (often depending on perspective and what isactually being judged) so it's important to clarify understanding ifinterpretation has serious implications. Many business managers and owners use the term in a general sense as a means of assessing the merit of an investment or business decision. 'Return' generally means profit before tax,but clarify this with theperson using the term -profit depends on various circumstances, not least the accounting conventions used in the business. In this sense most CEO's and business owners regard ROI as the ultimate measure of any business or any businessproposition, after all it'swhat most business is aimed at producing - maximum return on investment, otherise you might as well put your money in a bank savings account. Strictly speaking ReturnOn Investment is defined as:
Profits derived as a proportion of and directly attributable to cost or 'book value' of an asset, liability or activity, net of depreciation.
Profits derived as a proportion of and directly attributable to cost or 'book value' of an asset, liability or activity, net of depreciation.
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