Your Free Online Legal Dictionary • Featuring Black’s Law Dictionary, 2nd Ed.

Category: Finance Dictionary

T TABLES

tables used to calculate finding for retirement benefits. Interest, as well as mortality rates, are factored in.

TENDER OFFER

A public offer to buy stock in a takeover effort. The offer is made at a premium to make the sale attractive. Refer to twotier bid, hostile takeover, friendly takeover, takeover, and

TIGHT MARKET

A liquid market with large volume, strong two way flows, and a small spread. Refer to thin market.

TRACKING ERROR

The difference between a portfolios actual performance and its target. Indexing is used to minimize error. AKA tracking risk.

TWININ BARRIER OPTION

An option created with a barrier is breached. Two additional barriers are added to make the option more expensive. Refer to Twin out barrier option and barrier option.

UNDERWRITING RISK

The risk incurred if securities dont sell. Any shortfall must be covered by the underwriter. Or the risk that loss will be greater than insurance can cover.

VALUE DATE

The date a transaction is complete. AKA settlement date.

WARRANT

A long term option issued as a private instrument with a bond. This lowers funding costs. Refer to exwarrant, covered warrant, and bond with warrant.

WINDOW DRESSING

Changing the appearance on financial statements to make a company look better. It is ethically questionable.

JOURNAL VOUCHER

Every financial transaction hat meets defined requirements has this prepared, written authorization.

JUNK FAX

Sending unsolicited stock ads by facsimile transmission (fax). Just like junk mail or spam, over the lines instead of by postal mail or electronic mail. A marketing strategy.

KAIZEN BUDGETING

A budgeting approach that includes product improvement costs. With the objective of reducing actual costs below standard costs, projected costs of improvement are already incorporated in the budget . Also refer to

KEY EMPLOYEE

Essential, main employee stakeholder in corporate operations. May be an officer with voting rights able to influence the company. Any employee owning company assets 5% or more of the total and/or receives

KEYNESIAN

Supporter of governmental economic intervention by public policies driving for full employment and price stability. A follower of John Maynard Keynes, a believer in his economic principles.

KINKED DEMAND CURVE

Standard demand curve with a bend depicting competitors decreasing prices to match another’s, yet not raising prices to match another’s. Concern is that raising prices lose customers, so that once a business

KNOWLEDGE CREATION

Defined by Ikujiro Nonaka, interactions between explicit and tacit knowledge form new ideas. Socialization (tacit to tacit), externalization (tacit to explicit), combination (explicit to explicit), and internalization (explicit to tacit) are the

LACONIC

To the point; using as few words as possible to form a point; straightforward.

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