A type of exotic equity option belonging to a class known as mountain range options. The value of an Everest option is based on a basket of underlying securities, as opposed to the typical listed option which has just one underlying asset. Everest options are in effect for very long time periods – up to 10 years or more – and the payoff of the option is based on the aggregate performance of the worst-performing stock over the full time period. Taobiz explains Everest Option Everest options are created by - and for - large institutional investors, like hedge funds and investment banks. These very intricate options may contain between 15 and 25 stocks, which can make them difficult to fairly value. An investor could be devastated by one bad stock among a group of otherwise great performers over the life of an Everest option. If 14 out of 15 stocks were to quadruple in value but the remaining stock dropped 10% over the full period, the option would only recognize the performance of the latter in its payout!
The rate of interest that is added to the principal of a financial instrument between cash payments of that interest. For example, a six-month bond with interest payable semiannually will accrue daily interest during the six-month term until it is paid in full on the date it becomes due. |||Accrual rates are also used in nonfinancial contexts, such as for vacation or pension accrual rates. As well, they are often used in accrual accounting, which is used by most businesses; cash-basis accounting is most commonly used by individuals.
Remaining net interest payments from the underlying assets of an asset-backed security, after all payables and expenses are covered. Taobiz explains Excess Spread The excess spread can be deposited into a reserve account in order to enhance the credit of the asset-backed security, or it can be paid out to investors.
A bond that does not pay periodic interest payments. Instead, interest is added to the principal balance of the bond and is either paid at maturity or, at some point, the bond begins to pay both principal and interest based on the accrued principal and interest to that point. |||When the bond begins to pay both principal and interest based on the accrued principal and interest at that point, this is known as a Z tranche and is common in collateralized mortgage obligations (CMOs). In a CMO that includes a Z tranche, the interest payments that otherwise would be paid to the Z-tranche holder are used to pay down the principal of another tranche. After that tranche is paid off, the Z tranche begins to pay down based on the original principal of the tranche plus the accrued interest. Similar to a zero-coupon bond, an accrual bond or Z tranche has limited or no reinvestment risk. However, accrual bonds, by definition, have a longer duration than bonds with the same maturity that make regular interest or principal and interest payments. As such, accrual bonds are subject to greater interest rate risk than bonds that make periodic payments over their entire terms.
Returns in excess of the risk-free rate or in excess of a market measure, such as an index fund. Taobiz explains Excess Returns In other words, when you have excess returns you are making more money than if you put your money into an index fund like the Dow Jones Industrial Average (DJIA).
Capital reserves held by a bank or financial institution in excess of what is required by regulators, creditors or internal controls. For commercial banks, excess reserves are measured against standard reserve requirement amounts set by central banking authorities. These required reserve ratios set the minimum liquid deposits (such as cash) that must be in reserve at a bank; more is considered excess. Taobiz explains Excess Reserves Financial firms that carry excess reserves have an extra measure of safety in the event of sudden loan losses or cash withdrawals by customers. This may increase the attractiveness of the company that holds excess reserves to investors, especially in times of economic uncertainty. Boosting the level of excess reserves can also improve an entity's credit rating, as measured by ratings agencies like Standard & Poor's. Reserves need to be in liquid forms of capital such as cash in a vault, which does not create income. Banks will therefore try to minimize their excess reserves by lending the maximun allowable amount to borrowers.
A term used to describe fixed-income securities that trade frequently on the floor of the NYSE. |||These are typically corporate debt instruments and convertible bonds issued by well established companies on the NYSE.
The trading of shares when a warrant has been declared but not distributed. Taobiz explains Ex-Warrant In this case, the distribution would still belong to the seller rather than someone looking to buy the shares.
登录
工商服务
危机公关
金融律师
app开发
财税服务
金融牌照
网站建设
知识产权
企业征信
审计评估