Who is Judgment Debtor?-What is Lame Duck? etc.

Who is Judgment Debtor?

A. Person against whom there is a legal judgment or order for repayment.

What is Kite Flying?

A. Raising funds by discounting accommodation bills.

What is Lame Duck?

A. Company which is in financial difficulties.

What is Long Bill?

A. The bill having maturity period of three months and more.

What is Limited Partnership?

A. Partnership in which one or more partners, but not all, have limited liability to creditors of the partnership.

What is Load –to- Load?

A. Arrangement whereby the customer pays for the last delivery when the next one is received.

What is Long Tap?

A. Financial instrument which will take fifteen years or more to maturity.

What is Monetary Policy?

A. Action/plan taken by the Central Bank to influence the money supply and interest rates in order to maximize the production and employment and establish price.

What is Market Risk?

A. Risk that can not be diversified away.

What is Mezzanine Finance?

A. Provision of finance for a company after the start-up finance has been provided.

What is Now Account?

A. Individual saving account on which cheques can be drawn.

What is Off-Balance-Sheet financing?

A. Financing that is not shown as liability in a company’s balance sheet.

What is Old-Line-Factoring?

A. Factoring arrangement that provides collection, insurance, and finance for accounts receivable.

What is Off-Balance-Sheet financing?

A. Financing that is not shown as a liability in a company’s balance sheet.

What is Plain Vanilla?

A. A term that refers to a relatively simple derivative financial instruments, usually a swap or other derivative that is issued with standard features.

What is Poison Pill?

A. Action taken by a company to make itself less attractive to potential takeover bid.

What is Purchasing Power Parity Theory?

A. A theory by which the exchange rate between any two currencies adjusts to reflects changes in the price levels within two countries.

What is Peer Review?

A. Process by which an accounting firm’s practice is evaluated for compliance with professional standards.

What is Qualified Opinion?

A. Audit opinion that states, except for the effect of a matter to which a qualification relates, the Financial Statements are fairly presented in accordance with Generally Accepted Accounting Principles(GAAP).

What is Qualifying Ratio?

A. A borrower’s total monthly debt as a percentage of gross monthly income.

What is Reflation?

A. To inject a sluggish economy with a fresh supply of money with the object of increasing consumer demand. Act of stimulating the sluggish economy by increasing the money supply or by reducing taxes.

What is Reinsurance?

A. Process by which an insurance company obtains insurance on its insurance claims with other insurance in order to spread the risk.

What is Red Clause in documentary Credit?

A. A clause typed in red letter inserted in a documentary letter of credit authorizing the advising bank to grant the pre-shipment credit facility to the exporter upto 100% of the credit amount to enable him to purchase the goods and subsequently bank can reimburse the amount by negotiating the shipping documents plus interest for the accrued period.

What is Return on Assets?

A. Indicator of profitability. Determined by dividing net income for the past 12 months by total average assets. Result is shown as percentage. ROA can be decomposed into return on sales(Net Income/Sales) multiplied by asset utilization(Sales/assets).

What is Return on Equity?

A. Indicator of Profitability. Determined by dividing net income for the past 12 months by common stockholder equity. Result is shown as a percentage. Investor use ROE as a measure of how a company is using its money. ROE may be decomposed into return of assets(ROA) multiplied by financial leverage(Total Assets/Total equity)

What is Return on Investment(ROI)?

A. It is the ratio of Net income to total assets. It is a measure of the profits achieved by affirm though its basic operation. An indicator of management’s general effectiveness and efficiency.

What is SANS RECOURSE?

A. Meaning that the signatory will not accept any liability on the bill.

What is Sandwich Lease?

A. It relates to sub-letting a lease-hold property to the Lessee who becomes Lessor by renting out a portion of the premises to a third party.

What is Serial Bond?

A. Corporate bonds arranged so that specified principal amounts become due for payment on specified dates.

What is Stand-Alone Principle?

A. Investment principle that states a firm should accept or reject a project by comparing it with securities in the same risk class.

What is Sweatshop?

A. Place of employment having unacceptable working conditions i.e poor working conditions and poor salary.

What is Swap?

A. In foreign exchange operation, swap means a spot sale against a forward purchase or a spot purchase against a forward sale.

What is Sunrise Industries?

A. High-tech electronic industries.

What is Sunset Industries?

A. Old-style industries which are being modified by new technology.

What is Subordinate Debt?

A. The debt that may have lower or junior claim than other debts. The subordinate debt claim is payable only after Senior Debts or prior debts with a higher claim are fully satisfied or liquidated.

What is supplier Credit?

A. A credit arrangement under which an exporter supplies goods to an overseas buyer on deferred payment basis. As per agreement certain amount of cash down payment is made and rest amount is paid on future date as per arrangement.

What is Sunk Cost?

A. Costs that have been incurred and cannot be reversed.

What is Sub-Mortgage?

A. Mortgage over a mortgage; Second Mortgage. Under sub-mortgage borrower takes loan from another bank obtaining no objection certificate from the original mortgage. Under this system original mortgage becomes Head Mortgage and Second Mortgage is sub-mortgage.

What is Stripped Bond?

A. Bond that can be sub-divided into a series of zero-coupon bonds.

What is Sinking fund?

A. The fund which is created at regular intervals and kept aside to invest outside the business of the concern for repayment of a particular liability at a future date.

What is Transaction Loan?

A. A loan extended by a bank for a specific purpose.

What is Tombstone?

A. Official announcement given in the newspaper showing that a loan or bond issue has been subscribed, giving details of the banks which have underwritten it.

What is Tight Ship?

A. It indicates that organization management procedures are tough and followed very closely under effective control.

What is Technical Insolvency?

A. Default on a legal obligation of the firm. For example , technical insolvency occurs when a firm doesn’t pay a bill.

What is Tandem Account?

A. A banking account on which customers has a pre-arranged loan limit with the bank to draw as and when he needs by paying interest at a commercial rate, but when the account is in credit, bank pays interest at a very lower rate on balance to this account holder.

What is Unmatched Book?

A. If the average maturity of bank’s liabilities is less than that of its assets, it is said to be running an unmatched book. The term is commonly used with Euromarket.

What is Unqualified Opinion?

A. Audit opinion not qualified for any material scope restrictions nor departures from Generally Accepted Accounting Principles(GAAP)

What is Ultra Vires?

A. Action of a concern which are not duly authorized by its memorandum or charter.

What is Virement?

A. Transfer of money from one account to another.

What is Vertical Merger?

A. A merger in which one firm acquires another firm that is in the same industry but at another stage in the production cycle.

What is Venture Capital?

A. Capital provided by a bank or any other financial institutions to a business enterprise to start a new business

What is Voyage Policy?

A. Insurance policy issued for a particular voyage only.

What is Windfall Gain?

A. An unexpected gain of funds from a financial deal.

What is Without Recourse?

A. Without the lender having any right to seek payment or seize assets in the event of nonpayment from anyone other than the party (such as special-purpose entity) specified in the debt contract.

Who is White Knight?

A. Person or company which rescues a firm in financial difficulties.

What is Write-Down?

A. Decreasing the book value of an asset if its book value is overstated compared to current market value.

What is Wrap-Around Mortgage?

A. Second Mortgage which conveniently expands the total amount of borrowing by the mortgagor without disbursing the original mortgage.

What is Yellow Dog Contract?

A. Employment contract which prohibits the named employee to join labour union.

What is Yankee Bond?

A. A dollar denominated bond issued in the Unites States by foreign Banks and corporations. These bonds pay semi-annual interest and registered with Securities and Exchange Commission.