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Definitions and measurement
Definitions and measurement

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Using Risk Analysis to Classify Junk Bonds as Equity for Federal

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... other financial institutions, and money market investments with original maturities of 90 days or less. Cash and Securities Segregated for Regulatory Purposes — The Company is required by its primary regulators, SEC and CFTC, to segregate cash and securities to satisfy rules regarding the protection ...
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... shortly thereafter. This essentially reflects a short-term loan to the institution that initially sold the securities until the time when it buys the securities back. Third, SIs can borrow at the Federal Reserve, but this is not as common as the other alternatives. Capital The capital (or net worth) ...
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... or securities may have tranches that contain fewer or no restrictive covenants. The tranche of the covenant lite loan or debt security that has fewer restrictions typically does not include the legal clauses which allow an investor to monitor the performance of the borrower/issuer. The Fund may trea ...
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... and deposited in another of the firm’s bank accounts. An automated clearinghouse debit transfer is a preauthorized electronic withdrawal from the payer’s account and is generally known as an electronic depository transfer. A wire transfer is an electronic communication that removes funds from the pa ...
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... When we asked each respondent to identify drivers of change in the next ten years, their answers confirmed the growing impact of transparency and speed on the industry (see the left side of Figure 2). The right side of the figure shows their most pressing current concerns, a list that closely parall ...
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Present value

In economics, present value, also known as present discounted value, is the value of an expected income stream determined as of the date of valuation. The present value is always less than or equal to the future value because money has interest-earning potential, a characteristic referred to as the time value of money, except during times of negative interest rates, when the present value will be greater than the future value. Time value can be described with the simplified phrase, “A dollar today is worth more than a dollar tomorrow”. Here, 'worth more' means that its value is greater. A dollar today is worth more than a dollar tomorrow because the dollar can be invested and earn a day's worth of interest, making the total accumulate to a value more than a dollar by tomorrow. Interest can be compared to rent. Just as rent is paid to a landlord by a tenant, without the ownership of the asset being transferred, interest is paid to a lender by a borrower who gains access to the money for a time before paying it back. By letting the borrower have access to the money, the lender has sacrificed the exchange value of this money, and is compensated for it in the form of interest. The initial amount of the borrowed funds (the present value) is less than the total amount of money paid to the lender.Present value calculations, and similarly future value calculations, are used to value loans, mortgages, annuities, sinking funds, perpetuities, bonds, and more. These calculations are used to make comparisons between cash flows that don’t occur at simultaneous times. The idea is much like algebra, where variable units must be consistent in order to compare or carry out addition and subtraction; time dates must be consistent in order to make comparisons between values or carry out simple calculations. When deciding between projects in which to invest, the choice can be made by comparing respective present values of such projects by means of discounting the expected income streams at the corresponding project interest rate, or rate of return. The project with the highest present value, i.e. that is most valuable today, should be chosen.
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