The 15-year pass-through securities offered under Freddie Mac's cash program. |||Investors sell their mortgages through Freddie Mac's cash program. The 15-year mortgages sold to Freddie Mac form the pool of mortgages that back the securities referred to as gnomes.
An economic term referring to the effect that a change in a firm's product price has on the quantity demanded of that product. Pricing power ties in with the "Price Elasticity of Demand." Taobiz explains Pricing Power Generally speaking, if a company doesn't have much pricing power then an increase in their prices would lessen the demand for their products.
A stock index in which each stock influences the index in proportion to its price per share. The value of the index is generated by adding the prices of each of the stocks in the index and dividing them by the total number of stocks. Stocks with a higher price will be given more weight and, therefore, will have a greater influence over the performance of the index. Taobiz explains Price-Weighted Index For example, assume that an index contains only two stocks, one priced at $1 and one priced at $10. The $10 stock is weighted nine times higher than the $1 stock. Overall, this means that this index is composed of 90% of the $10 stocks and 10% of $1 stock. In this case, a change in the value of the $1 stock will not affect the index's value by a large amount, because it makes up such a small percentage of the index. A popular price-weighted stock market index is the Dow Jones Industrial Average. It includes a price-weighted average of 30 actively traded blue chip stocks.
Bonds that can be offered within the euromarket and several other markets simultaneously. |||Unlike eurobonds, global bonds can be issued in the same currency as the country of issuance. For example, a global bond could be both issued in the United States and denominated in U.S. dollars. Global bonds are usually issued by entities that have high credit ratings.
The main owner of a publicly traded investment, also known as the majority shareholder. The principal shareholder is the entity that owns the greatest percentage of a company's shares and therefore has the largest stake in the company's success. Smaller investors often look to the behavior of the principal shareholder as an indication of the company's performance. If the principal shareholder makes a large additional investment in the company, for example, this is probably an indication that the company is performing well. Taobiz explains Principal Shareholder In some cases, the company's principal shareholder is also its CEO, president or founder. This is common due to the fact that often the individual or family which founded the company typically insists on maintaining majority control over the company's shares, allowing them, the primary shareholders to dictate to a large degree the direction of the business.
Risk-free bonds issued by the British government. They are the equivalent of U.S. Treasury securities. |||The name "gilt" comes from the original British government certifications that had gilded edges.
High-grade bonds that are issued by a government or firm. This type of security originally boasted gilded edges, thus the name. In the case of a firm, a gilt-edged security is a stock or bond issued by a company that has a strong record of consistent earnings and can be relied on to cover dividends and interest. |||Gilt-edged securities are a high-grade investment with very low risk. Typically, these are issued by blue chip companies that dependably meet dividend or interest payments because they are well-established and financially stable .
The first of issuance of stock for public sale from a private company. This is the means by which a private company can raise equity capital through the financial markets in order to expand its business operations. This can also include debt issuance. Also known as an "initial public offering" (IPO). Taobiz explains Primary Offering A primary offering is usually done to help a young, growing company expand its business operations, but can also be done by a mature company that still happens to be a private company. Primary offerings can be followed by secondary offerings, which serve as a way for a company that is already publicly traded to raise further equity capital for its business. After the offering and the receipt of the funds raised, the securities are traded on the secondary market, where the company does not receive any money from the purchase and sale of the securities they previously issued.