Mutual Fund
A mutual fund is made up of money that is pooled together by a large number of investors who give their
money to a fund manager to invest in a large portfolio of stocks and / or bonds.
An investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets. Mutual funds are operated by money managers, who invest the fund's capital and attempt to produce capital gains and income for the fund's investors. A mutual fund's portfolio is structured and maintained to match the investment objectives stated in its prospectus.
Floating Charge
When a charge created against stock in process, raw materials etc. is called a floating charge. Floating
charge relates to charge on constantly changing property.
Documents of Title to Goods
Any written instrument, such as a bill of lading, a warehouse receipt, or an order for the delivery of goods, that in the usual course of business or financing is considered sufficient proof that the person who possesses it is entitled to receive, hold, and dispose of the instrument and the goods that it covers.
A document of title is usually either issued or addressed by a bailee—an individual who has custody of the goods of another—to a bailor—the person who has entrusted the goods to him or her. Its terms must describe the goods covered by it so that they are identifiable as well as set forth the conditions of the contractual agreement. Possession of a document of title is symbolic of ownership of the goods that are described within it.
Documents of title are an integral part of the business world since they facilitate commercial transactions by serving as security for loans sought by their possessors and by promoting the free flow of goods without unduly burdening the channels of commerce.
A person who possesses a document of title can legally transfer ownership of the goods covered by it by delivering or endorsing it over to another without physically moving the goods. In such a situation, a document of title is a negotiable instrument because it transfers legal rights of ownership from one person to another merely by its delivery or endorsement. It is negotiable only if its terms state that the goods are to be delivered to the bearer, the holder of the document, to the order of the named party, or, where recognized in overseas trade, to a named person or his or her assigns. The Uniform Commercial Code and various federal and state regulatory laws define the legal rights and obligations of the parties to a document of title.
Lead Bank
Bank arranging a loan Syndication in which several banks buy participations. The lead bank collects a
management fee for assembling the syndicate and arranging the financing terms. In the Eurobond market, a bank that acts as agent for members of an underwriting syndicate.
Lead banks are banking institutions that are charged with the responsibility of overseeing the management of any project involving more than one lender. Depending on the structure of the project, the lead bank may function as an agent that is authorized to act on behalf of all the other lenders involved. At other times, the bank functions as the facilitator for any actions taken regarding the project, keeping all partners in the
project informed of current developments, then taking action once the group has reached a consensus on how to move forward. The designation of a lead bank is very common with syndicated loans where more than one institution is underwriting the cost of the loan
Liquidity Ratio
A class of financial metrics that is used to determine a company's ability to pay off its short-terms debts
obligations. Generally, the higher the value of the ratio, the larger the margin of safety that the company possesses to cover short-term debts.
A company's ability to turn short-term assets into cash to cover debts is of the utmost importance when creditors are seeking payment. Bankruptcy analysts and mortgage originators frequently use the liquidity ratios to determine whether a company will be able to continue as a going concern.
The formula is the following:
= cash & equivalents / creditors,short
Liquidity (solvency) ratios indicate the ability to meet future short-term financial obligations. Current Ratio,
quick ratio, cash ratio, inventory turn over ratio, receivables turnover ratio etc.
Prime Rate
The interest rate that commercial banks charge their most credit-worthy customers. Generally a bank's best
customers consist of large corporations. The prime interest rate, or prime lending rate, is largely determined by the federal funds rate, which is the overnight rate which banks lend to one another. The prime rate is also important for retail customers, as the prime rate directly affects the lending rates which are available for mortgage, small business and personal loans.
Default risk is the main determiner of the interest rate a bank will charge a borrower. Because a bank's best customers have little chance of defaulting, the bank can charge them a rate that is lower than the rate that would be charged to a customer who has a higher likelihood of defaulting on a loan.
Bill of Lading:
A bill of lading evidencing the carriage of goods by sea. A bill of lading issued by the shipping company or
its agent.
A clean bill of lading is one which either states that the goods are received in good condition or does not make any remark about the defective condition of the goods or packing.
Demated Securities
The move from physical certificates to electronic book keeping. Actual stock certificates are slowly being
removed and retired from circulation in exchange for electronic recording.
With the age of computers and the Depository Trust Company, securities no longer need to be in certificate form. They can be registered and transferred electronically.
SLR
Statutory liquidity ratio is the amount of liquid assets, such as cash, precious metals or other approved
securities, that a financial institution must maintain as reserves other than the cash with the Central Bank
Statutory Liquidity Ratio or SLR refers to the amount that all banks require maintaining in cash or in the form of Gold or approved securities. Here by approved securities we mean, bond and shares of different companies.
Statutory Liquidity Ratio is determined as percentage of total demand and percentage of time liabilities. Time Liabilities refer to the liabilities, which the commercial banks are liable to pay to the customers on there anytime demand. The liabilities that the banks are liable to pay within one month's time, due to completion of maturity period, are also considered as time liabilities.
Allonge
An allonge is generally an attachment to a legal document that can be used to insert language or signatures
when the original document does not have sufficient space for the inserted material. It may be, for example, a piece of paper attached to a negotiable instrument or promissory note, on which endorsements can be written because there isn't enough room on the instrument itself. The allonge must be firmly attached so as to become a part of the instrument
Micro-finance
Refers to small credit specially credit for the poor, agriculture, rural development and other types of credit
for poverty alleviation. NGOs in our country are engaged in financing micro-credit needs of the rural areas.
Microfinance is the provision of financial services to low-income clients or solidarity lending groups including consumers and the self-employed, who traditionally lack access to banking and related services.
More broadly, it is a movement whose object is "a world in which as many poor and near-poor households as possible have permanent access to an appropriate range of high quality financial services, including not just credit but also savings, insurance, and fund transfers."[1] Those who promote microfinance generally believe that such access will help poor people out of poverty.
Factoring
Factoring is a financial transaction whereby a business job sells its accounts receivable (i.e., invoices) to a
third party (called a factor) at a discount. In "advance" factoring, the factor provides financing to the seller of the accounts in the form of a cash "advance," often 70-85% of the purchase price of the accounts, with the balance of the purchase price being paid, net of the factor's discount fee (commission) and other charges, upon collection. In "maturity" factoring, the factor makes no advance on the purchased accounts; rather, the purchase price is paid on or about the average maturity date of the accounts being purchased in the batch. Factoring differs from a bank loan in several ways. The emphasis is on the value of the receivables (essentially a financial asset), whereas a bank focuses more on the value of the borrower's total assets, and often considers, in underwriting the loan, the value attributable to non-accounts collateral owned
by the borrower also, such as inventory, equipment, and real property,[1][2] i.e., matters beyond the credit worthiness of the firm's accounts receivables and of the account debtors (obligors) thereon. Secondly, factoring is not a loan – it is the purchase of a financial asset (the receivable). Third, a nonrecourse factor assumes the "credit risk", that a purchased account will not collect due solely to the financial inability of account debtor to pay. In the United States, if the factor does not assume credit risk on the purchased
accounts, in most cases a court will recharacterize the transaction as a secured loan.