Search results for: “cash flow”
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Market Capitalization Rate
Expected return on a security. The market-consensus estimate of the appropriate discount rate for a firm’s cash flows….
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Macaulay Duration
The weighted-average term to maturity of the cash flows from the bond, where the weights are the present value of the cash flow divided by the price….
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Liability Funding Strategies
Investment strategies that select assets so that cash flows will equal or exceed the client’s obligations….
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Liability Swap
An interest rate swap used to alter the cash flow characteristics of an institution’s liabilities so as to provide a better match with its assets….
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Intrinsic Value Of A Firm
The present value of a firm’s expected future net cash flows discounted by the required rate of return….
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Internal Growth Rate
Maximum rate a firm can expand without outside source of funding. Growth generated by cash flows retained by company….
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Funds From Operations (Ffo)
Used by real estate and other investment trusts to define the cash flow from trust operations. It is earnings with depreciation and amortization added back. A similar term increasingly used is Funds Available for Distribution (FAD), which is FFO less capital investments in trust property and […]
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Forward Cover
Purchase or sale of forward foreign currency in order to offset a known future cash flow….
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First-Call
With CMOs, the start of the cash flow cycle for the cash flow window….
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Equity Swap
A swap in which the cash flows that are exchanged are based on the total return on some stock market index and an interest rate (either a fixed rate or a floating rate). Related: interest rate swap….
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End-Of-Year Convention
Treating cash flows as if they occur at the end of a year as opposed to the date convention. Under the end-of-year convention, the present is time 0, the end of year 1 occurs one year hence, etc….
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Effective Convexity
The convexity of a bond calculated with cash flows that change with yields….
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Effective Duration
The duration calculated using the approximate duration formula for a bond with an embedded option, reflecting the expected change in the cash flow caused by the option. Measures the responsiveness of a bond’s price taking into account the expected cash flows will change as interest rates […]
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Economic Income
Cash flow plus change in present value….
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Dollar-Weighted Rate Of Return
Also called the internal rate of return, the interest rate that will make the present value of the cash flows from all the subperiods in the evaluation period plus the terminal market value of the portfolio equal to the initial market value of the portfolio….