Introduction to Finance

Certifi cates of deposit (CDs)
Time 
deposits 
with a stated maturity, which pay a fi xed rate of 
interest or are sold at a discount
Character
Ethical quality of the applicant 
on which one can base a judgment about his or 
her willingness to pay bills and is best judged 
by reviewing his past credit history for long 
overdue or unpaid obligations
Charter
Provides the corporate name, indi-
cates the intended business activities, provides 
names and addresses of directors, and indicates 
how a fi rm will be capitalized with stock
Chartists (technicians)
People who exam-
ine graphs of past price movements, number 
of shares bought and sold, and other fi gures to 
predict future price movements
Chief fi nancial offi
cer (CFO)
Responsible 
for 
the controller and the treasury functions of a fi rm
Clean draft
A draft that is not accompa-
nied by any special documents and is gener-
ally used when the exporter has confi dence in 
the importer’s ability to meet the draft when 
presented
Clearing fl oat
The delay in transferring 
funds between payer and payee because of the 
banking system check-clearing processes
Closed-end mortgage bond
Does not per-
mit future bond issues to be secured by any of 
the assets pledged as security under the closed-
end issue
Coeffi
cient of variation (CV)
A measure of 
risk per unit of return
Collateral
Refl ects whether assets are avail-
able to provide security for the potential credit
Combined leverage
Eff ect on earnings pro-
duced by the operating and fi nancial leverage
Commercial banks
Depository institutions 
that accept deposits, issue check-writing ac 
-
counts, and make loans to businesses and indi-
viduals