Dedicating a Portfolio Refer: cash flow matching. Matching portfolio returns to future capital outlays. … [Read more...]
Deductive Reasoning
Deductive Reasoning Using general facts to glean accurate and pertinent information about a given specific circumstance. … [Read more...]
Deep-Discount Bond
Deep-Discount Bond Bonds that carry low or no coupon and sell well below their par value. A zero coupon bond is one which has no coupon. … [Read more...]
Default
Default Any disruption or failure in making principal and interest payment on time on a debt security. Else, refers to any other failure to comply with bond indenture provisions and stipulations. … [Read more...]
Default Premium
Default Premium Differential or variance in projected yield that makes up for inherent risks in corporate bonds where some default risk exists. … [Read more...]
Default Probability
Default Probability Probability that borrower cannot make necessary scheduled repayments on debt. Such a borrower is said to be in default of the debt. … [Read more...]
Default Risk
Default Risk Alternatively termed credit risk. Such risk is evaluated by commercial credit rating entities. Represents the risk that the bond issuer may fail to repay principal and fulfill interest payments on time. … [Read more...]
Defeasance
Defeasance The system of setting aside bonds or cash by borrower to fulfill his debt. From the balance sheet, both debt and offset are removed. … [Read more...]
Deferred Annuities
Deferred Annuities A life insurance offering that gives a tax benefit. For example, a deferred annuity that affords tax deferral along with a life annuity option by means of fund withdrawal. … [Read more...]
Deferred Call
Deferred Call A prohibition on a firm that restricts calling bonds prior to a stipulated time. A call protection is in force on the bond until this time. … [Read more...]
Deferred Equity
Deferred Equity Commonly used term referring to convertible bonds. Known as such because of the equity component and a future expectation of conversion into common stock shares. … [Read more...]
Deferred Futures
Deferred Futures Refer: step-up bond, payment-in-kind bond. Furthest months encompassed by a futures contract. Bonds selling at discount without any interest payment for the first 3 to 7 years. … [Read more...]
Deferred Nominal Life Annuity
Deferred Nominal Life Annuity Fixed payment in dollars made every month starting retirement age. Considered nominal as the dollar amount is fixed at any specific time until post retirement period begins. … [Read more...]
Deferred Revenue
Deferred Revenue Liability account wherein deposits and cash receipts are collected before the sale is completed. … [Read more...]
Deferred Taxes
Deferred Taxes Expense that is a source of free flow of cash but is not an actual cash expenditure. Allocation of funds to cover unpaid taxes. … [Read more...]
Deficit
Deficit The amount by which liabilities exceed assets, expenditure exceeds income and losses exceed profits. … [Read more...]
Defined Benefit Plan
Defined Benefit Plan Refer: defined contribution plan. Pension plans where the sponsors undertake to make predetermined dollar pay outs to employees who qualify. These payments are considered the employer’s debt obligations. … [Read more...]
Defined Contribution Plan
Defined Contribution Plan Refer: defined benefit plan. Pension plans wherein the sponsors are only required to make predetermined contributions for qualifying participants into the plan. … [Read more...]
Delayed Issuance Pool
Delayed Issuance Pool Represents Mortgage Backed Securities that are backed by seasoned loans as collateral. These loans were given earlier than the MBS pool issue. … [Read more...]
Deliverable Instrument
Deliverable Instrument Actual commodity or financial instrument that will change hands at a future date at a predetermined price under the terms of a futures contract. … [Read more...]