632
INDEX
rate, increase, 175
sources, 173–174
supply, origination, 194
surplus, defined, 174
total amount, factors, 177–178
volume, 195
Savings and loan (S&L)
crisis, 56, 214
defined, 49
deposit
protection, 60
development, 49
managements, preparation (problem), 59
OTS regulation, 60
Savings Association Insurance Fund (SAIF),
60
Savings banks
appearance, 47
defined, 48–49
state chartering, 61
Savings deficit unit, 174
Savings-investment process
defined, 24
focus, 25
individual savers to business firms, 24
f
Savings surplus unit, 174
Scenario analysis, usage, 583
t
SDRs.
See
Special drawing rights
Seasonal
production
example, 466
t
level production, differences, 466–468
Seasonal sales, impact, 467
f
Seasonal variation, impact, 497
Seasoned equity offerings (SEOs), 310
Secondary markets, defined, 15, 299
Secondary mortgage markets, participants,
184
Secondary reserves, defined, 68
Secondary securities markets, 314–316
Second Bank of the United States, 55
Secured lending (asset-based lending), 508
Secured loan, defined, 64
Secured
obligations, 256
Securities, 64
analyst, career, 17
discussion questions, 341
ethical issues, 328–329
exchanges, 314–315
financial markets pricing efficiency, finance
principle, 8, 9
foreign investor purchases, 174
issuance, 300–302
listing, 316
management (
See
Marketable securities,
management)
offering announcement (tombstone),
example, 302
f
problems, 341
safekeeping/transfer, 95
sale, 306
trading, 314–316
transactions, 317–320
Securities Act of 1933, 312
Securities and Exchange Commission (SEC)
establishment, 312
foreign stocks, registration, 326
Rule 415, 306
Risk
business, 584, 593
categories, example, 548
t
considerations, 547–549
diversification,
finance principle, 8–9
examples, 364
t
expected measures, 350–353
management’s
attitude toward, 593
measure, standard deviation, 346–349
origin, 348–350
portfolio diversification, relationship, 363
f
return, difference (finance principle), 8
sources, 349
t
Risk-adjusted discount rate (RADR),
defined, 548
Risk averse investors, 212
Risk-free financial instrument, 197
Risk-free interest rate, defined, 197
Risk-free rate of interest, defined, 197
Risk-free return (RFR), 572–573
Risk-free securities, 198–203
Risk-weighted assets, usage, 70
Risky assets,
presence, 365
Rollover risk (reinvestment rate risk),
defined, 283
Rome, historical international price
movements, 207
Round lot, 266
defined, 319
Rule of 72, defined, 232
Rule 415 (SEC), 306
S
Sales
data, example, 464
f
forecasts, impact, 464
terms, 504
trend, impact, 497–498
Sales finance companies, installment loan
finance, 51
Salvage value, 555–556
Sarbanes-Oxley (SOX), impact, 409
Saving
credit union, impact, 58
investment, relationship, 169–170
tax structure, impact, 112
United States, 170
t
Savings
accumulation, 13
corporation,
life stages, 180–181
creation, 174
current income, relationship, 178
deficit, defined, 174
defined, 174
domestic supply, 174
economic cycles, 178
economic expectations, 178
factors, 177–181
foreign sources, 174
historical role, 173
individual saver, life stages, 179–180
interest rate, example, 220
lending/investing, 13
local currency, 33
maintenance, media (usage), 176
movement, 23–25
Receivables
factoring, 466
investment amount, calculation, 459
sales increase, impact, 462
t
Receivables turnover, 430
Recession, control/prediction (absence),
350
Record keeping, 319–320
Refunding, types (determination), 114
Registered bonds, defined, 256
Registered traders, defined, 315
Regulation FD, 328
Regulation Q, 58
Regulation Z, defined, 94
Reinvestment rate risk (rollover risk), 283
Relevant cash flows, 540–542
Remote capture, defined, 477
Representative full-bodied money, 132
defined, 30
Representative full-bodied paper currency,
example, 30
f
Repurchase agreement, defined, 35
Reputation
destruction, 10
importance, finance principle, 8, 10–11
Request for proposal (RFP), usage, 561
Required rate of return, 569–570
Required reserves
defined, 87, 121
ratio, defined, 87, 121
Research analyst, career, 17
Reserve requirements, 58, 87–89
change, 87, 88, 122–123
Residual dividend policy, defined, 272
Resolution Trust Corporation (RTC),
creation, 60
Restricted stocks, defined, 408
Retained earnings, 572–573
account, 396
Retained earnings, cost
constant dividend growth model, 573
security market line (SML) approach,
572–573
Retention rate (RR), 580
defined, 580
Retirement outlays,
primary expenditures, 171
Retractable bonds (putable bonds), defined,
264
Return on equity (ROE), calculation,
436–437, 440
Return on total assets, calculation, 436–437,
440
Returns
distribution, example, 348
t
expected measures, 350–353
Revenue expanding project, cash flow
estimation, 556–558
Reverse split, 273
Revolutionary War
expenditures, financing, 55
inflation, 208
Revolving credit agreement (revolver),
501–502
defined, 502
effective cost, computation, 502
Rights
offerings, 306–308
