1

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2




"34567897 :"74;< (CurrenL asseLs - lnvenLorles)/ CurrenL llablllLles
"==>"? @"A%8=7: ln a loan, amounL Lo be annually cashed-ouL by Lhe borrower when Lhe loan ls annually amorLlzed.
1he amounL lncludes prlnclpal paymenL and lnLeresLs.
"==>47"=7: person enLlLled Lo recelve beneflLs from an annulLy
"==>47A: lnsurance conLracL deslgned Lo provlde paymenLs Lo Lhe holder aL predeflned lnLervals.
"B8:".8: An average ls a sLaLlsLlc measure of Lhe "mlddle" value of a daLa seL. See also Movlng Average.



C"?"=38 9D887< 1he balance sheeL ls one Lhe Lhree baslc flnanclal sLaLemenLs of a company. 1he balance sheeL
summarlzes Lhe company's asseLs, equlLy and llablllLles aL a glven polnL ln Llme.
CC?: 8arrel
C87": CoefflclenL measurlng Lhe marglnal conLrlbuLlon of a flnanclal asseL Lo Lhe rlsk of Lhe markeL porLfollo and equal
Lo CCv (8
A
,8
M
) / v(8
M
) where 8
A
ls Lhe flnanclal asseL reLurn and 8
M
Lhe markeL porLfollo reLurn. 1hls coefflclenL reflecLs
Lhe senslLlvlLy degree of Lhe flnanclal asseL reLurn Lo Lhe varlaLlons of Lhe markeL porLfollo reLurn.
C:8=7: orlglnally name of an oll fleld off Lhe coasL of ScoLland. 8renL ls Lhe acronym of 8room, 8annock, LLlve, ness and
1arberL, maln oll flelds ln Lhe norLh Sea. Cne of Lhe sLandards used Lo flx oll prlce ln Lhe World.
C9< 8lack-Scholes
C;;97:"@@4=. E0) C;;97:"@ %87D;5F: MeLhod used Lo consLrucL a flxed-lncome yleld curve from Lhe prlces of a seL
of coupon-bearlng producLs by forward subsLlLuLlon
C>=5?4=.< ComblnaLlon of servlces ln a , Lyplcally embeddlng Lhe deslgn, Lhe consLrucLlon, Lhe malnLenance and
Lhe flnanclng of Lhe lnfrasLrucLure
"
C






3



3"?? ;@74;=< uerlvaLlve producL provldlng Lhe buyer wlLh Lhe rlghL (and noL Lhe obllgaLlon) Lo buy a flnanclal asseL aL a
speclfled prlce (and called Lhe sLrlke prlce)
3"@8G< CaplLal LxpendlLures
3"@47"? 97:>37>:8< 1he caplLal sLrucLure ls Lhe mlx of debL and equlLy used by Lhe company Lo flnance lLs operaLlng
acLlvlLles
3"@%< CaplLal AsseL rlclng Model
3"9D :"74;< Cash/CurrenL llablllLles
35;< CollaLerallzed uebL CbllgaLlon
38;< Chlef LxecuLlve Cfflcer
38:74H43"78 ;H 58@;947 E35F< romlssory noLe lssued by a bank
34C: CorporaLe and lnvesLmenL 8anklng
3;%@?4"=38< AcL of adherlng Lo and of enforclng a sLandard or a regulaLlon
3;97 ;H 58C7< 1he cosL of debL ls Lhe mlnlmum lnLeresL raLe aL whlch Lhe company could ralse new funds on Lhe debL
markeL
3;97 ;H 8I>47A: 1he cosL of equlLy ls Lhe mlnlmum requlred raLe of reLurn expecLed by Lhe company's shareholders
3;97 7; 4=3;%8 :"74;< Ceneral Lxpenses / n8l
3;976B;?>%86@:;H47 "="?A949< CosL-volume-proflL analysls ls a slmple buL flexlble Lool for explorlng poLenLlal proflL
based on cosL sLraLegles and prlclng declslons
3>97;%8: 98.%8=7"74;=< Subdlvlslon of a markeL lnLo dlscreLe cusLomer groups sharlng slmllar characLerlsLlcs
3>::8=7 :"74;< CurrenL asseLs/currenL llablllLles

3






4


5J"< uepreclaLlon and AmorLlzaLlon
5K8 :&LM0< uebL LqulLy 8aLlo
53H< ulscounLed Cash llows
54?>74;=K"33:874;=: uecrease/lncrease ln Lhe flnanclal parLlclpaLlon held by a shareholder as a resulL of a caplLal
lncrease.
5493;>=7 :"78< 8aLe aL whlch lCl are dlscounLed Lo compuLe resenL value
593:< uebL Servlce Coverage 8aLlo



8C47: Larnlngs before lnLeresLs and 1axes
8C475"< Larnlngs before lnLeresLs, 1axes, uepreclaLlons and AmorLlzaLlons
8;=4"< Luro CvernlghL lndex Average
8I>47A :49N @:8%4>%< 1he equlLy rlsk premlum ls Lhe excess reLurn of a glven sLock when compared Lo Lhe rlsk free
raLe, lL ls also known as Lhe equlLy premlum
8>:;@8"= ;@74;=< CpLlon conLracL where Lhe rlghL can be exerclsed aL a speclfled daLe only
8G3D"=.8 :"74;< number of shares of Lhe acqulrlng company a shareholder recelves for one share of Lhe acqulred
company
8@9< Larnlngs per Share
8B: LnLerprlse value. Corresponds Lo Lhe markeL value of Lhe operaLlng asseLs of a company and usually equal Lo Lhe
equlLy value lncreased by Lhe value of Lhe neL flnanclal debLs

5
8






5


H3H: lree Cash llows
H;:O":5 3;=7:"37< CommlLmenL Lo Lrade a speclflc asseL aL a speclfled prlce aL a fuLure daLe
H:88 3"9D H?;O9< 1he cash LhaL remaln avallable for dlsLrlbuLlon among all Lhe securlLles holders of a company. 1here
are dlfferenL ways of calculaLlng Lhe lCl dependlng on wheLher one ls lnLeresLed ln Lhe value of Lhe flrm's equlLy or Lhe
value of Lhe enLlre flrm.
H>7>:89: SLandardlzed conLracL beLween Lwo parLles whlch agree Lo exchange ln Lhe fuLure a flxed quanLlLy of a
speclfled asseL aL a prlce agreed Loday.



.":@< CrowLh aL 8easonable rlce
.8":4=.: neL debL Lo Shareholder's LqulLy raLlo





4H:9< lnLernaLlonal llnanclal 8eporLlng SLandards
4=97"??%8=7< 8egular paymenL a borrower agreed Lo make Lo a lender
4=78:897 3;B8:".8 :"74;< L8l1/ lnLeresL Lxpenses
4@;: lnlLlal ubllc Cfferlng.

H
.
D
4






6


P8=98=Q9 "?@D"< !ensen's alpha ls a measure of a securlLy's excess reLurn wlLh respecL Lo Lhe expecLed reLurn glven by
Lhe CaplLal AsseL rlclng Model





?4C;: E?0'R0' 4'L$)S&'T ;UU$)$R :&L$F: Money markeL observed raLe ln London. Llbor ls Lhe arlLhmeLlc mean of
lnLeresL raLe offered by banks on deposlLs from oLher banks for a glven maLurlLy and a glven currency.
?;=. @;9474;=< lnvesLmenL sLraLegy on a flnanclal asseL (sLock securlLy, flxed lncome securlLy, opLlon, eLc.) where Lhe
lnvesLor ls exposed Lo a downslde rlsk of Lhe asseL value. lnvesLors Laklng a long poslLlon on one parLlcular asseL are
buyers who become owners of LhaL asseL. ln Lhe conLexL of opLlon conLracLs, lnvesLors Laklng long poslLlons are
Lherefore Lhe buyers of Lhe opLlon and as such, are exposed Lo a rlsk of decrease ln Lhe opLlon value.



%J": Mergers and AcqulslLlons
%":N8767;6C;;N :"74; E%7CF: MarkeL value per share/8ook value per share
%":N87"C?8 983>:47489< very llquld securlLles wlLh a Lyplcal maLurlLy of less Lhan one year.
%":N87 3"@47"?4V"74;=< Share prlce mulLlplled by Lhe LoLal number of shares
%":N874=. %4G: MarkeLlng concepL Lhe ob[ecLlve of whlch ls Lo creaLe awareness and cusLomer loyalLy. Mlx relles on 4
varlables (Lhe four 's): prlce, promoLlon, producL, and placemenL.
%H4: Mlcroflnance lnsLlLuLlons
%43:;H4="=38: llnanclal servlces offer dedlcaLed Lo people who usually are excluded from Lhe flnanclal sysLem.
P
N
?
%






7
%%: Modlgllanl-Mlller
%;>< Memorandum of undersLandlng
%;B4=. "B8:".8< ln flnance, a movlng average ls usually deflned as Lhe unwelghLed mean of Lhe prevlous ! daLum
polnLs. A 10-days movlng average of a sLock prlce ls for lnsLance compuLed as Lhe unwelghLed mean of Lhe sLock prlce
durlng Lhe mosL recenL 10 days, and each day, Lhe oldesL value ls removed from Lhe sample and replaced by Lhe mosL
recenL one.




=C4< neL banklng lncome
=87 58C7: llnanclal debL - Cash and Cash equlvalenLs
=87 O;:N4=. 3"@47"? 7; "99879 :"74; E=O37" 0) =O73 :"74;F< neL worklng caplLal/AsseLs
=O< neL WorLh
=O3< neL Worklng CaplLal
=87 O;:N4=. 3"@47"?< CurrenL asseLs - currenL llablllLles
=87 O;:7D :"74;< 1oLal asseLs dlvlded by book value of sLockholders' equlLy
=@B< neL resenL value
=;@"7< neL CperaLlng proflL AfLer 1axes



;@8:"74;="? 98?H69>HH4348=3A< lncome/Charges
;@8G< CperaLlng Lxpenses
=
;






8
;@74;=< ConLracL or agreemenL Lo buy or sell an asseL (called underlylng asseL) aL a cerLaln fuLure prlce. 1here are Lwo
baslc Lypes of opLlons. A "#$$ opLlon glves Lhe holder Lhe rlghL buL noL Lhe obllgaLlon Lo buy Lhe underlylng asseL by
maLurlLy. A %&' opLlon glves Lhe holder Lhe rlghL buL noL Lhe obllgaLlon Lo sell Lhe underlylng asseL by maLurlLy.
;B8:5:"H7< lL ls Lhe facL of overdrawlng a bank accounL, resulLlng ln a negaLlve cash balance. CverdrafL ls ofLen
assoclaLed wlLh overdrafL fees.



@&:< orLfollo aL 8lsk
@"A6;HH< llnal beneflL generaLed by a flnanclal conLracL
@"A6;>7 @;?43A< Lhe flnanclal pollcy of a company regardlng Lhe Lransfer of cash Lo shareholders (dlvldend paymenL
and/or share repurchase).
@8.< rlce Larnlng CrowLh equal Lo L8 dlvlded by annual LS growLh.
@8:: rlce Larnlngs 8aLlo. LqulLy value mulLlple equal Lo Lhe equlLy markeL value dlvlded by Lhe neL lncome.
@8:@87>"? .:;O7D :"78< Annual raLe of growLh aL whlch cash-flows are supposed Lo grow for ever afLer Lhe
lnvesLmenL horlzon.
@8:@87>47A H"37;:< see L8L1uAL C8CW1P 8A1L
@@8 0) @@J8< roperLy lanL and LqulpmenL
@@@< ubllc rlvaLe arLnershlp, publlc servlce funded and operaLed Lhrough a parLnershlp beLween a publlc auLhorlLy
and a prlvaLe operaLor
@:4=34@"? @"A%8=7< ln a loan, Lhe prlnclpal paymenL ls Lhe amounL of borrowed caplLal relmbursed aL each perlod by
Lhe borrower Lo Lhe lender.
@:4=34@"? ".8=7 @:;C?8%< lssues arlslng ln Lhe relaLlons beLween a rlnclpal and an AgenL ln case of lnformaLlon
asymmeLry, and / or moral hazard malnly because Lhe agenL's acLlons are noL observable by Lhe rlnclpal.
@:;H47 %":.4=: neL lncome/ LoLal Sales
@9C< ubllc SecLor 8enchmak, ln a paLLern LhaL enables Lo compuLe Lhe nv of cosLs as lf Lhe lnfrasLrucLure was bullL
Lhrough a publlc auLhorlLy's procuremenL.
@






9
@95:< publlc-secLor dlscounL raLe
@>7 ;@74;=< uerlvaLlve producL provldlng Lhe buyer wlLh Lhe rlghL (and noL Lhe obllgaLlon) Lo sell a flnanclal asseL aL a
speclfled prlce





:87>:= ;= "99879: neL lncome/1oLal asseLs
:87>:= ;= 8I>47A: neL lncome/1oLal equlLy
:49N H:88 "9987< AsseL Lhe acLual reLurn of whlch ls always equal Lo lLs expecLed reLurn. 8lsk free asseLs exhlblLs no
defaulL rlsk.
:49N H:88 :"78< lnLeresL pald on a rlsk free asseL
:;38< 8eLurn on CaplLal Lmployed
:;"< 8eLurn on asseLs
:;8< 8eLurn on LqulLy



9D":@8 :"74;< 1he Sharpe raLlo ls a measure of sLock or fund performance, lL measures Lhe reward per unlL of rlsk
9D;:7 @;9474;=< lnvesLmenL sLraLegy on a flnanclal asseL (sLock securlLy, flxed lncome securlLy, opLlon, eLc.) where Lhe
lnvesLor ls exposed Lo an upslde rlsk of Lhe asseL value. lnvesLors Laklng a shorL poslLlon on one parLlcular asseL are
vendors who commlLLed Lo sell LhaL asseL. ln Lhe conLexL of opLlon conLracLs, lnvesLors Laklng shorL poslLlons are
Lherefore Lhe vendors of Lhe opLlon and as such, are exposed Lo a rlsk of lncrease ln Lhe opLlon value.
I
:
9






10
9@:8"5 K 3:8547 9@:8"5: ulfference beLween Lhe lnLeresL raLe aL whlch Lhe debL ls lssued and Lhe rlsk free raLe. 1he
credlL spread reflecLs Lhe level of rlsk of a glven debL securlLy and normally depends on Lhe degree of solvablllLy of lLs
lssuer.
9@B: Speclal urpose vehlcle
97:4N8 @:438< rlce aL whlch Lhe rlghL provlded by Lhe opLlon conLracL can be exerclsed
97:>37>:85 @:;5>37< re-packaged lnvesLmenL sLraLegy based on derlvaLlves.
9O"@< ConLracL speclfylng an exchange of flnanclal asseLs or flows beLween Lwo enLlLles durlng a cerLaln perlod of Llme



78:%4="? B"?>8< Lhe Lermlnal value measures Lhe value of Lhe flrm aL Lhe end of Lhe expllclL lnvesLmenL horlzon
7;7"? "9987 7>:=;B8:< 1oLal sales dlvlded by LoLal book value of asseLs
7:8A=;: :"74;< 1he 1reynor raLlo ls a measure of sLock performance. lL measures Lhe performance of an asseL
compared Lo a rlsk free asseL (Lyplcally 1reasury bllls) per unlL of assumed markeL rlsk
7B< 1ermlnal value



>=@"45 C"?"=38: ln a loan, amounL due Lo Lhe lender once Lhe prlnclpal of Lhe perlod has been pald.
>9 ;@74;=< Amerlcan opLlon. CpLlon conLracL where Lhe rlghL can be exerclsed for as long as Lhe opLlon remalns valld
>74?47A H>=374;=: SaLlsfacLlon level of an lnvesLor



7
>
B






11


O"33: WelghLed Average CosL of CaplLal.
O3 E0) =O3F: Worklng CaplLal (also called neL Worklng CaplLal).








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G
A
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