Financial Terms Excerpts
Bond Market
A bond market is a financial market where investors buy and sell bonds. In practice this is mostly handled electronically over computers nowadays. There are two principal types of bond markets. These are primary markets where companies are able to sell new debt and secondary markets where investors are able to purchase and resell these debt securities. Companies generally issues [...]
Bonds
Bonds are also known as debt instruments, fixed income securities, and credit securities. A bond is actually an IOU contract where the terms of the bond, interest rate, and date of repayment are all particularly defined in a legal document. If you buy a bond at original issue, then you are literally loaning the issuer money that will be repaid [...]
Book Value
The book value refers to the tangible asset value of any company. Tangible value here is used to refer to any assets that can be felt, seen, or touched, such as inventory, plants, equipment, cash, offices, or properties. Because of this tangible factor to book value, it is often referred to as Net Tangible Assets. Finding a company’s book value [...]
Bookkeeper
A bookkeeper is an individual who maintains a business’ important financial records. These are typically kept in journals or ledgers format. This is where the word books derives from, which is used in the title of bookkeeper. Although bookkeepers typically engage in basic levels of accounting tasks, they are still not labeled as fully qualified accountants. This is because bookkeepers [...]
Boom
A boom is an economic expansion that happens when the economy of a country is growing at a rapid economic pace. Booms are more precisely commonly defined as periods in which the Gross Domestic Product expands at a faster rate pace than the long term economic growth trend rate. Total demand of goods and merchandise proves to be high in [...]
Bretton Woods Agreement
The Bretton Woods agreement represents the outcomes of a three week conference that the United Nations held to set up a new monetary system at the end of World War II. The U.N. organized this meeting called the United Nations Monetary and Financial Conference for July 1 to July 22 of 1944. They held it at Bretton Woods in New [...]
Bretton Woods Committee
The Bretton Woods agreement failed in 1973 with President Richard Nixon unilaterally abandoning the gold standard. Other countries soon followed suit, first with Switzerland and other European nations and eventually the rest of the world. The death of the Bretton Woods agreement did not end dreams of restoring a semblance of order and low volatility to the since-then troubled currency [...]
Brexit
Brexit refers to the Jun 23, 2016 referendum on the future of Britain in the European Union. The term comes from the Grexit reference to the potential for Greece to leave the Eurozone shared currency area in past years. In this historic referendum, British voters have to answer the question “Should the UK remain a member of the EU or [...]
Bridge Loan
A bridge loan is a temporary short term loan whose purpose is to help a home owner to afford to buy a new house before they are able to sell their present house. They might do this to avoid having to move into a rental in between houses. The home buyer’s existing house secure these loans.  The money that comes [...]
British Bankers Association (BBA)
The British Bankers Association turns out to be the members’ representative for the biggest international banking cluster in the world. This main trade association for the British banking sector boasts over 200 member banks headquartered in both the U.K. and more than 50 other countries that run operations in over 180 jurisdictions around the globe. As such fully 80% of [...]
British World Economic Order
The British World Economic Order has also been called the Pax Britannica, or “world peace of Britain.” What is often overlooked amidst the grandeur, splendor, and sheer military power of the Empire was that it was essentially an approximately 150 year lasting economic order that held sway over most of the planet in one form or another from 1763 at [...]
Brokers
Brokers are professional intermediaries that work on behalf of both a seller and a buyer. When brokers function as agents on behalf of only a buyer or seller, they become representatives and principal parties in any deal. Brokers should not be confused with agents, who instead work on the behalf of a single principal. In the financial world, there are [...]
Bubble
In economic terms, a bubble is high volume levels of trade at prices that are significantly out of line with actual intrinsic values. A simpler definition is the trading of assets that have over inflated values. Bubbles are also called market bubbles, speculative bubbles, balloons, financial bubbles, and speculation mania. Prices within bubbles can vary wildly. At times, they are [...]
Budget Deficit
Budget deficits are accounting positions in which revenues are not sufficient to cover expenditures. As such they involve spending more than the entity takes in from receipts. This term is most often utilized to address government accounting and spending instead of individual or business spending. This concept can also be applied to a number of government deficits that have been [...]
Bull Market
A bull market is one in which an entire financial market or a select grouping of securities sees rising prices over an extended period of time. It is also used to describe a scenario in which prices are expected to rise. While the phrase bull market is most frequently utilized to address the stock markets, it can similarly reference any [...]
Bullion
Bullion refers to gold, silver, platinum, or palladium that is officially government-recognized and -approved for its purity of minimally 99.5 percent by expert assayers. It generally comes in the form of either ingots or bars instead of collectible coins. Bullion is created by mining companies unearthing the precious metals then extracting them from rock either through extreme heat separation or [...]
Bundesbank
The central bank of Germany is the Deutsche Bundesbank. The Federal Republic of Germany established it as the German central bank in 1957. The bank headquarters reside in Frankfurt in the state of Main. The bank maintains regional offices throughout nine cities in the country. These regional offices have a total of 35 different branches. This bank is different from [...]
Bureau of Economic Analysis (BEA)
The Bureau of Economic Analysis is also known by its acronym the BEA. It is a bureau within the United States Department of Commerce. This BEA develops and publishes statistics for economic accounts that help a variety of groups to make decisions and to understand the economic performance of the U.S. Among the parties that follow their publications and statistics [...]
Bureau of Engraving and Printing (BEP)
The Bureau of Engraving and Printing is the Treasury Department entity that actually makes the United States’ currency. Their mission centers on creating and producing American currency notes which are trusted around the world. They have a vision to be considered the world standard for securities printing. This is so that they can deliver the public and their customers with [...]
Business Cycle
Business Cycle refers to changes in economic activity which economies around the globe undergo in a certain time-frame. Such cycles are generally framed under the concepts of recession or expansion. When an economy is expanding, it is growing in true terms, which means faster than inflation. This is demonstrated with economic indicators such as industrial production, personal income levels, employment [...]
C Corporation
C Corporations refers to the primary subchapter under which American businesses decide to incorporate themselves in order to restrict the total financial and legal liabilities of the owners. Such C Corporations prove to be the principle alternatives to S Corporations, whose profits are able to pass directly through to the owners and so only become taxable on the individual level. [...]
Call Option
A call option is a contract that grants a person the right, and yet not the requirement, to purchase a given security at a certain price by a certain cut off time. The securities that have call options associated with them are generally stocks, commodities, bonds, and certain other instruments. Call options are commonly abbreviated as simply calls. In practice, [...]
Cap Rate
Cap rate refers to the real estate property and its rate of return. Investors figure this out by utilizing the income which they anticipate the property will generate. The cap rate is also referred to as the capitalization rate. Realtors utilize it to gauge how much return investors will realize on their investments. The way people determine this cap rate [...]
Capital Account
Capital Account demonstrates the net changes in the financial asset ownership for any country. When added in with the national current account, this makes up the given country’s balance of payments. This capital account will always include such things as portfolio investment and FDI foreign direct investment as well as any changes in the reserve account. It is also possible [...]
Capital Adequacy Ratio
The Capital Adequacy Ratio refers to a metric for sizing up the capital of a given bank. It is usually written out in terms of a percentage of the risk weighted credit exposures of a bank. This formula is also referred to as CRAR or capital to risk weighted assets ratio. It is commonly employed to help ensure that the [...]
Capital Appreciation
Capital appreciation refers to the increase in an asset’s value. This gain is based on the increase in the market price of the asset. It primarily happens as the asset which an investor backed goes for a greater market price than the investor first paid for the asset in question. The part of the asset which is considered to be [...]
Capital Controls
Capital Controls refer to government intervention measures that a sovereign national government undertakes either directly, through the central bank, or another regulatory agency. They institute these in an effort to reduce the outflow of foreign capital (and sometimes the inflow as well) from the domestic national economy. There are a wide range of such controls. Among these are tariffs, taxes, [...]
Capital Expenditures
Capital expenditure refers to money that a firm employs to purchase physical assets. This can also be used to upgrade existing assets. These can include items such as equipment, industrial buildings, and property. It is also known as CapEx. Companies often use this CapEx to make new investments or to begin a new project. Other corporations utilize capital expenditures to [...]
Capital Flight
Capital flight refers to the major scale departure of money and financial assets out of a country. This usually occurs because of geopolitical events including economic volatility or political instability, capital controls, or deliberate currency devaluation. There are times when such a flight of capital is legal. An example of this is when investors choose to repatriate their foreign-based capital [...]
Capital Flows
Capital Flows relate to the general movements of money and investments so that they can be invested in securities, business, or trade production. This also takes into consideration flows of such capital that occur naturally within a multinational corporation. This might result from capital spending in other divisions, investment capital allocation, acquisitions of rival companies, or R&D research and development [...]