Financial Dictionary

This dictionary contains:
24549
financial terms

Liquidity premium




Liquidity premium

Forward rate minus expected future short-term interest rate.

RELATED TERMS
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Minus
The symbol (-) that precedes the change figure in a stock table to indicate a closing sale lower than that of the previous day.

Future
Contracts covering the sale of financial instruments or physical commodities for future delivery on a commodity exchange.

Short-term
Any investments with a maturity of one year or less.

Interest
The amount of money a lender loans a borrower to pay for using the borrower's principal.



SIMILAR TERMS
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LIQUEFIED NATURAL Gas Limited
LIQUEFIED NATURAL Gas Limited is a large Australian company in the field of energy. Their Australian Stock Exchange (ASX) code is LNG.

Liquid
Easily traded or converted to cash.

Liquid asset
Cash or items which can readily be converted to cash.  

Liquid market
A market with many bid and ask offers. The market is characterized by high liquidity, low spreads, and low volatility.

Liquid yield option note (LYON)
A zero coupon bond that is callable (by issuer), putable (by investor), and convertible. LYONs are synthetic products that are financially engineered by Merrill Lynch.

Liquidate
To sell personal assets in order to pay creditors.

Liquidated damages
Present in certain legal contracts, this provision allows for the payment of a specified sum should one of the parties be in breach of contract.

Liquidating dividend
Payment by a firm to its owners from capital rather than from earnings.

Liquidation
1) When a business or firm is terminated or bankrupt, its assets are sold and the proceeds pay creditors. 2) Any transaction that offsets or closes out a long or short position.

Liquidation by assignment
Sale or realization of a debtor firm's assets voluntarily agreed to by its creditors who estimate that the firm's liquidation value exceeds its going-concern value.

Liquidation or receivership-winding up
The compulsory sale of the assets of a bankrupt company.

Liquidation rights
The rights of a firm's security holders in the event the firm liquidates.

Liquidation value
A balance sheet concept that represents the amount of money that could be realized by breaking up the company, selling its assets, repaying its debt, and distributing the remainder to its stockowners.

Liquidation World
Liquidation World is one of Canada's largest companies.

Liquidator
An official appointed to supervise the liquidation of a company.

Liquidator or administrator
Person appointed by a court who realizes (turns into cash) a company's assets in order to repay creditors.

Liquidity
The degree to which assets of a company or an investment can easily be sold or converted into cash.

Liquidity diversification
Investing in a variety of maturities to reduce the price risk to which holding long bonds exposes the investor.

Liquidity preference
The public's demand for money in cash or current bank accounts; money which is saved rather than spent or lent.

Liquidity preference hypothesis
The argument that greater liquidity is valuable, all else equal. Also, the theory that the forward rate exceeds expected future interest rates.

Liquidity ratios
Ratios that measure a firm's ability to meet its short-term financial obligations on time, such as the ratio of current assets to current liabilities.

Liquidity risk
In banking, risk that a depository institution will not have sufficient cash or liquid assets to meet borrower and depositor demand.

Liquidity theory of the term structure
A biased expectations theory that asserts that the implied forward rates will not be a pure estimate of the market's expectations of future interest rates because they embody a liquidity premium.

Liquor Stores Income Fund
Liquor Stores Income Fund is one of Canada's largest companies.



PREVIOUS AND NEXT TERMS
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Liquidator or administrator
Person appointed by a court who realizes (turns into cash) a company's assets in order to repay creditors.

Liquidity
The degree to which assets of a company or an investment can easily be sold or converted into cash.

Liquidity diversification
Investing in a variety of maturities to reduce the price risk to which holding long bonds exposes the investor.

Liquidity preference
The public's demand for money in cash or current bank accounts; money which is saved rather than spent or lent.

Liquidity preference hypothesis
The argument that greater liquidity is valuable, all else equal. Also, the theory that the forward rate exceeds expected future interest rates.

Liquidity premium

Liquidity ratios
Ratios that measure a firm's ability to meet its short-term financial obligations on time, such as the ratio of current assets to current liabilities.

Liquidity risk
In banking, risk that a depository institution will not have sufficient cash or liquid assets to meet borrower and depositor demand.

Liquidity theory of the term structure
A biased expectations theory that asserts that the implied forward rates will not be a pure estimate of the market's expectations of future interest rates because they embody a liquidity premium.

Lisbon Stock Exchange (LSE)
Stock exchange trading stocks, bonds, and unit trusts. The BVL general index is the exchange's official index.

List price
The manufacturer's or wholesaler's recommended price, before any discounts or special reductions are offered.

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This dictionary contains 24549 terms.







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