Glossary Economics & Finance

is an accounting system for recording all payments of all the real and financial transactions of a country with the rest of the world.

is a statement at a specific time which shows the financial position of a firm/organization indicating its total assets which must be equal with the sum of its liabilities plus its capital.

this term characterizes a progressively growing economy where key macroeconomic indicators remain unchanged (i.e. the ratio of capital-output).

is named the range (corridor) within which the market value of a national currency is permitted to fluctuate due to international agreements or by autonomous decision by the central bank.

is named an estimation method which is used to estimate the interest rate on a fixed-income asset by using the principal of the asset as the asset's cost.

is called the situation in which a bank cannot fulfill its obligations to its lenders and depositors equally and thereby bankrupt.

are companies that own one or more banks.

is called the simultaneous failure of many banks.

are named the obligations of the Central Bank which are either cash or central bank deposits which the commercial banks are obliged to keep aside with aim to meet the demands of depositors and/or the requirements of the regulatory authorities.

are connotations of banks that accomplish and regulate lending on international markets to sovereign debtors.

is a type of money market instrument. It concerns a promissory note issued by a debtor entrepreneur with a declared expiry date resulting from a business transaction. A bank, accepting the note, undertakes the obligation. If this obligation becomes the subject of a commercial transaction, it is referred to as the Banker's acceptance.

are named all the financial institutions accepting deposits and lending loans.

is the difference between the spot price of an asset and the forward price of the same asset.

1/100 of 1%.

is named the risk of the basis which widening or narrowing according to the expectations of the market.

is named the bond that issued with coupons and gives the right to its holder to receive periodically interest payments. The procedure of interest coupon payments take place with the submission of the coupon payment on the specified date. The ownership of the bond is transferred through the sale procedure.

are named all type of applied policies like charges, exchange rate policies, duties, tariffs which have aim to make the domestic demand to turn away from the consumption of foreign goods and services and targeting to the domestically produced goods and services.

is called that portfolio whose performance-risk is used as representative to compare the corresponding performance-risk of the investor's portfolio. Depending on the performance of the investor's portfolio in relation to the performance of this representative portfolio, are also characterized the investor's investment capacities.

is called the situation in which an investment banking group undertakes the task to underwrite a security with the agreement to get the best possible price that the market will pay for the security.

(in econometric theory)-it derives from a regression equation in which the variables have been standardized first. It is also named as coefficient estimate and another use of it as a measure of the relative strength of regressors in affecting the dependent variable. Its estimation takes place by multiplying the typical coefficient estimate by the standard error of its regressor and dividing by the standard error of the reggressand. It is understood as the number of standard error changes in the dependent variable resulting from a standard error change in the independent variable. (In portfolio theory)-it is an index of sensitivity of an asset's return to changes in the value of the market portfolio. The beta coefficient also measures the asset's marginal contribution to the total risk of the market portfolio. It is estimated by the asset's covariance with the market portfolio divided by the variance of the market portfolio. A beta of 1,5 means that a stock's or stock portfolio's excess return is expected to move 1,5 times the market excess returns i.e. if the market excess return is 10%, then we expect, on average, the stock return to be 15%.

is named the curve that relates the unemployment rate to the vacancy rate. It has a downward sloping curve shape and a point on this curve measures the efficiency of the job-matching process.

is named the price at which a trader or a market-maker purchases a specified number of a particular security.

is named the difference between the price to pay (Bid) and sell (Ask) on the same security. This difference usually is quoted as a percentage between the two prices.

is named the firm that makes a takeover offer to the targeting firm.

is called the situation when a country uses both the gold and the silver as a commodity money standard.

is called a brokerage firm which has both the trading expertise and financial capacity in order to be involved in block trades.

is named a big in size order to buy or sell a particular security. Usually, a block trade order concern more than 1000 stocks.

the composition of this board includes seven governors. The Chairman of the Board has a crucial decision-making role in the Federal Reserve System.

is called a security which promises to make payments periodically for a specified period.

is an index of the creditworthiness of specific bond issues.

is categorized as an active bond management technique. It is used by the portfolio manager with aim to replace a specific category of bonds with other bonds in order to increase the bond portfolio yield-to-maturity.

is estimated by dividing the under-consideration corporation's book value of the equity with the number of its common stocks remaining.

is defined as the summation between the cumulative retained earnings and other balance sheet entries like common stock, and capital contributed in excess par value. These balance sheet entries are classified under the title of stockholders' equity.

is named a restriction which imposed on borrowing activity. This usually takes place when there is uncertainty about the size of future disposable incomes. The consequence of this type of restriction is to prevent the smooth economic activity since agents are not able to gain from their intertemporal allocation of resources.

is a security analysis technique. It starts by making forecasts first for the economic units of an industry i.e. for individual companies of the industry under consideration, then continues with forecasts about that industry and ends by making forecasts for the whole economy. All the forecasts that take place based on the previous level forecasts.

are called each bank office which is in every local area and conduct all the banking procedures.

is named the summit held in 1944 and be there officials from 45 nations with aim to shape a new international money order after the end of the World War II.

is the international monetary system which was established in Bretton Woods from the US and their allies in 1944 and hold since 1945 until 1971. According to this system the exchange rates were fixed but the US dollar was associated with the gold. In other words, the foreign governments and central banks were free to convert US dollar into gold.

is called an agent with job duties to buy and sell securities on behalf of his clients (investors).

are named these firms which in their activities are included all type of brokering, dealing and investment banking tasks equally and participate in every type of security market.

is the tool-method which enable depositors to avoid the $ limit of the federal deposit insurance. The depositors have the choice to break up a large deposit into smaller size deposits of less than the $ limit at each bank so to achieve a full insurance to the total deposited amount.

are named the persistent small or big deviations of asset prices from their fundamental values.

is called the excess of the government's spending over the tax revenues for specific time period.

is a technique which is used to analyze the problem of multicollinearity.

is a series of periods of rapid growth and recession in which the output alters by moving forward around its long-run trend.

a scheme by which a sovereign debtor extinguishes its debt by purchasing it at discounted value on the secondary market.