Structured finance is a term used to describe the trading of debt between banks. Basically it is the transferring of risk from one bank to another bank.
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Structured Finance is…
Friday, August 21st, 2009A Money Market is…
Friday, August 21st, 2009A money market is a market for borrowing and lending money for three years or less. The securities in a money market can be U.S. government bonds, treasury bills and other short-term instruments.
Analysis is…
Thursday, August 20th, 2009Analysis is a detailed examination of the composition or structure of something (a stock portfolio, for example). In general, the better the analysis, the greater the confidence in the financial choices you make.
Discounting is…
Thursday, August 20th, 2009Discounting is the process of figuring out how much money you need to invest now to have a certain amount of money in the future. It’s the opposite of compounding, through which you figure out how much a certain amount invested now will be worth in the future. Let’s say you want to have $100 dollars in 5 years. Discounting would tell you how much money you’d need to invest now to reach that goal.
An Emerging Market is…
Thursday, August 20th, 2009An emerging market is a financial sector or economy that isn’t quite as developed as that of, say, the United States or Western Europe, but that is experiencing rapid growth. Some emerging markets, especially Brazil, Russia, India, and China (collectively known as BRIC), are quickly becoming major world economic players.
Wall Street is…
Thursday, August 20th, 2009Wall Street is literally a street in New York City where the New York Stock Exchange and many major financial institutions are located. The term “Wall Street” is often used to refer to the investment community in general.
Spot Price is…
Thursday, August 20th, 2009The spot price is the current market price of an actual physical commodity. Sometimes this is also called the cash price. The spot price is traded on the spot market, where goods are sold for cash and delivered immediately. So, if you buy a barrel of oil on the spot market for $60, then you will receive the actual barrel of oil as soon as possible.
A Subsidiary is…
Thursday, August 20th, 2009A subsidiary is a company controlled by another company, sometimes called a “holding” company. For example, NBC Universal is a subsidiary of General Electric.
Wholesale Trade is…
Thursday, August 20th, 2009Wholesale trade is the purchase of large quantities of a commodity or product followed by the sale of that commodity or product to retailers. Basically, wholesale trade isn’t selling commodities to the public, it’s selling them to other companies who sell them to the public. Another term for it is B2B – business to business.
A Proportional Tax is…
Thursday, August 20th, 2009A proportional tax is a system of taxation in which individuals are taxed at the same rate regardless of their income level. So whether you make $25,000 a year or $3,000,000, you’re still paying the same percentage of that amount in income taxes. The U.S. uses a progressive tax system for income tax purposes.