AUCTION RATE BOND - ARB
A debt security which possess an adjustable interest rate and a fixed term of 20 up to 30 years. The interest rate of an auction rate bond is derived via a modified Dutch auction (in which the price starts high and gradually decreases until buyers are located) on a fixed schedule every 7,14,28, or 35 days. Municipalities and non-profit institutions employs ARBs as a way to decrease borrowing cost on long-term financing.
POPULAR TERMS
Position
It refers to the amount of security either owned or borrowed by a person or a dealer. It’s basically a trade that an investor currently holds ...
Centrally Planned Economy
Economic system in which the state or government make economic decisions. It aims to regulate what is produced and how resources are used and distr ...
Debtor Nation
A nation with a cumulative balance of payments deficit. A debtor nation has negative net investment after recording all of the financial transactio ...
Fool In The Shower
The notion that policies designed to change the economy’s course should be done slowly, instead of all at once. The phrase is attributed to N ...
Discounted Cash Flow - DCF
A valuation method used to estimate the attractiveness of an investment opportunity. Discounted cash flow (DCF) analysis uses future free cash flow ...
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