1. 1. Finance and Banking
Finance:The art of manipulating money.
Banking: The all activities of a bank.
2. Partnership.
A unincorporated business owned by two or more persons.
3. Corporation.
A legal entity created by a state & distinct from its owners.
4. Agency problem.
A potential conflict of interests between the agent (manager) and owners (stockholders,
creditors)
5. Performance share.
Share that is awarded to executives on the basis of company's performance.
6. Executive stock option.
An option to buy stock at a stated price within a specified period of time.
7. Common stockholders equity.
The capital supplied by common stockholders; common stock, paid in capital, and retained
earnings.
8. Retained earnings.
The portion of the firm's earning that has been saved rather than paid out as dividends.
9. Depreciation.
It is not a cash outline.
10. Tangible assets.
Physical assets such as plants and equipments.
11. Intangible assets.
Assets such as patents, copyrights, trademarks and goodwill.
12. Earning Before Tax (EBT)
Net income/(1-tax rate)
13. Expected rate of return.
The rate of return expected from an investment.
14. Risk premium.
Difference between expected rate of return on a given risky assets that on a less risky assets.
15. Market risk.
The part of a security's risk that can't be eliminated. e.g. inflation, recession etc.
16. Compounding.
Determining cash flow when compound interest is used.
17. Present value.
The value today of a future cash flow.
18. Discounting.
Finding the present value of a cash flow or series of cash flows.
19. Annuity.
A series of equal payments of an equal amount at fixed interval for a specified number of
periods.
20. Treasury bond.
A bond issued by the government.
21. Par value.
2. The stated face value of share.
22. Coupon payment.
The specific amount of interest that is paid in each period.
23. Coupon interest rate.
The stated annual rate of interest of a bond.
24. Zero coupon bond.
Bond that pays no annual interest.
25. Call provision.
The provision in a bond contract that gives the issuer the right to redeem the bond.
26. Discount bond.
Bond that sells below its par value.
27. Premium bond.
Bond that sells above its par value.
28. Yield To Maturity (YTM).
The rate of return earned from a bond if hold till the maturity.
29. Proxy.
Document giving one person the authority to act for another.
30. Takeover.
An action whereby a person or group succeeds in ousting a firm's management.
31. Initial Public Offering ( IPO)
The market for stocks of companies that is in process of going public.
32. Flotation cost.
Percentage cost of issuing new common stock.
33. Capital budgeting.
The process of planning expenditures on assets.
34. Payback period.
Length of time required an investment's net revenues to cover its cost.
35. Mutually exclusive projects.
Set of projects where only one can be accepted.
36. IRR method.
Internal Rate of Return (IRR), method of ranking investment proposals using the rate of return
on an investment.
37. Sunk/Historical/part cost.
Cash outlay that already has incurred.
38. Opportunity cost.
The return on the best alternative use of assets.
39. Sensitivity analysis.
A risk analysis technique.
40. Business risk.
Risk inherent in the firm's operation if it uses no debt.
41. Financial flexibility.
The ability to raise capital on reasonable terms under adverse conditions.
42. Operating leverage.
The extent to which fixed cost are used in firm's operation.
43. Financial leverage.
3. Extent to which fixed income securities (debt & preferred stock) are used in a firm's capital
structure.
44. Target payout ratio.
The percentage of net income paid out as cash dividend.
45. Stock-split.
It increases the number of shares outstanding.
46. Working capital.
A firm's short-term assets and liabilities.
47. Cash conversion cycle.
The average length of time a dollar is tied up in current assets.
48. Transaction balance.
A cash balance necessary for day to day operation.
49. Compensating balance.
A bank balance that a firm must maintain to have loan from a bank.
50. Precautionary balance.
A cash balance held in reserve for unforeseen fluctuation in cash flow.
51. Trade discount.
A reduction that supplier offer to customer for early payment of bill.
52. Operating lease.
Clients stop the usage and transfer the assets to the owner at the end.
53. Financial lease.
Client becomes owner at the end.
54. Merger.
The combination of two firms to form a single firm.
55. Horizontal merger.
A combination of two firms that produce the same types of goods or services.
56. Vertical merger.
A merger between a firm and one of its suppliers or customers.
57. Congeneric merger.
A merger of firms in the same general industry.
58. Conglomerate merger.
A merger of company in the totally different industries.
59. Financial market.
Financial market is a market in which financial assets such as stock and bond can be sold.
60. Money market.
The markets that facilitate the flow of short-term funds.
61. Capital market.
The financial market that facilitate the long-term funds.
62. Primary market.
Primary market that facilitate the issuance of new securities.
63. Secondary market.
Secondary market that facilitate the trading of existing securities.
64. Liquidity.
The degree of which securities can be easily sold without a less of value.
65. Credit risk/ default risk.
If credit risk high yield (return) will be high and vice-versa.
4. 66. Book value.
The value of an asset as recorded in the books of account of an organization.
67. Capital gain.
A profit from the sale of investment or property.
68. Capital goods.
Goods especially machinery, plant etc. Used in producing process.
69. Equities.
Stock and shares not bearing fixed interest.
70. Financial year.
A year reckoned for taxing or accounting.
71. Interest.
Money paid for the use of money lent.
72. Profit margin.
The profit remaining in a business after cost has been deducted.
73. Rally.
The increase of price of share after fall.
74. Risk capital.
Money put up for speculative business investment.
75. Sinking fund.
Money set aside for the gradual repayment of a debt.
76. Trade cycle.
Recurring period of boom and recession.
77. Asset-stripping.
The practice of taking over a company and selling off its assets to make a profit.
78. Prime cost.
The direct cost of a commodity in terms of materials.
79. Terminal/Horizon date.
The date when growth rate become constant.
80. Exchange rate.
The value of one currency in terms of another.
Prepared By,
Rakib Murad
Banking & Insurance
University of Chittagong
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VIVA TERMS:
(Suddenly, I have found the collection of following terms. Last year, I compiled these terms on
request of স োহেল আ োদ ভোই. I think it will help you)
1. Capital budgeting: The process in which a business determines whether projects such as
building a new plant or investing in a long-term venture are worth pursuing.
5. 2. Balance sheet: A financial statement that summarizes a company's assets, liabilities and
shareholders' equity at a specific point in time.
3. Oligopoly: A situation in which a particular market is controlled by a small group of firms. An
oligopoly is much like a monopoly.
4. Public goods: A product that one individual can consume without reducing its availability to
another individual and from which no one is excluded. Economists refer to public goods as "non-
rivalrous" and "non-excludable". National defense, sewer systems, public parks and basic
television and radio broadcasts could all be considered public goods.
5. Treasury bill: Treasury Bills issued by the government as an important tool of raising public
finance with a maturity of less than one year.
6. Bill of exchange: A non-interest-bearing written order used primarily in international trade
that binds one party to pay a fixed sum of money to another party at a predetermined future date.
7. Cartel: An organization created from a formal agreement between a group of producers of a
good or service, to regulate supply in an effort to regulate or manipulate prices.
8. Monetary policy: The actions of a central bank, currency board or other regulatory committee
that determine the size and rate of growth of the money supply, which in turn affects interest
rates. Monetary policy is maintained through actions such as increasing the interest rate, or
changing the amount of money banks need to keep in the vault (bank reserves).
9. Fiscal policy: In economics and political science, fiscal policy is the use of government
revenue collection (taxation) and expenditure (spending) to influence the economy. The two
main instruments of fiscal policy are changes in the level and composition of taxation and
government spending in various sectors. Through fiscal policy, regulators attempt to improve
unemployment rates, control inflation, stabilize business cycles and influence interest rates in an
effort to control the economy.
10. Gross domestic product (GDP) is the market value of all officially recognized final goods
and services produced within a country in a given period of time.
11. Gross national product (GNP) is the market value of all the products and services produced
in one year by labor and property supplied by the residents of a country. Unlike Gross Domestic
Product (GDP), which defines production based on the geographical location of production, GNP
allocates production based on ownership.
12. dear-money policy: A policy in which a government reduces the amount of money being
spent in an economy by raising interest rates, making it more expensive to borrow money.
13. Dear money: money which has to be borrowed at a high interest rate, and so restricts
expenditure by companies.
6. 14. A clearing house is a financial institution that provides clearing and settlement services for
financial and commodities derivatives and securities transactions.
15. Call Money: Money loaned by a bank that must be repaid on demand. Unlike a term loan,
which has a set maturity and payment schedule, call money does not have to follow a fixed
schedule.
16. Money laundering refers to a financial transaction scheme that aims to conceal the identity,
source, and destination of illicitly-obtained money.
17. Rate of return: The gain or loss on an investment over a specified period, expressed as a
percentage increase over the initial investment cost.
18. Mobile banking is a system that allows customers of a financial institution to conduct a
number of financial transactions through a mobile device such as a mobile phone or personal
digital assistant.
19. In economic theory, perfect competition (sometimes called pure competition) describes
markets such that no participants are large enough to have the market power to set the price of a
homogeneous product.
20. A perfect market structure in which the following five criteria are met: a) All firms sell an
identical product; b) All firms are price takers - they cannot control the market price of their
product; c) All firms have a relatively small market share; d) Buyers have complete information
about the product being sold and the prices charged by each firm; and e) The industry is
characterized by freedom of entry and exit. Perfect competition is sometimes referred to as "pure
competition".
21. Monopoly: A situation in which a single company or group owns all or nearly all of
themarket for a given type of product or service. By definition, monopoly is characterized by an
absence of competition, which often results in high prices and inferior products.
22. Monopsony: A market similar to a monopoly except that a large buyer not seller controls a
large proportion of the market and drives the prices down. Sometimes referred to as the buyer's
monopoly.
23. Multinational company: A corporation that has its facilities and other assets in at least one
country other than its home country. Such companies have offices and/or factories in different
countries and usually have a centralized head office where they co-ordinate global management.
24. Stagflation is a term used in economics to describe a situation where an inflation rate is high,
the economic growth rate slows down, and unemployment remains steadily high. It raises a
dilemma for economic policy since actions designed to lower inflation may exacerbate
unemployment, and vice versa.
7. 25. Stablization policy: A macroeconomic strategy enacted by governments and central banks to
keep economic growth stable, along with price levels and unemployment.
26. Special drawing rights (SDRs) are supplementary foreign exchange reserve assets defined
and maintained by the International Monetary Fund (IMF). Not a currency, SDRs instead
represent a claim to currency held by IMF member countries for which they may be exchanged.
27. Capital markets are financial markets for the buying and selling of long-term debt- or equity-
backed securities.
28. Soft currency: A currency with a value that fluctuates as a result of the country's political or
economic uncertainty. As a result of the of this currency's instability, foreign exchange dealers
tend to avoid it.
Also known as a "weak currency".
29. Hard currency: A currency, usually from a highly industrialized country, that is widely
accepted around the world as a form of payment for goods and services. A hard currency is
expected to remain relatively stable through a short period of time, and to be highly liquid in the
forex market.
30. Plastic money: debit cards, credit cards, used instead of cash.
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ব ব্োাংক ইন্টোরভভউহ়ে প্রোথভিক ব্োাংভকাং শর্তগুভল প্রো়েশই জিজ্ঞো ো করো ে়ে। এই পদগুভল
শুধুিোত্র আপনোর োক্ষোর্্কোহর ন়ে বরাং আপনোর োধোরণ জ্ঞোহনর িন্ও েো়েক। গুরুত্বপূণ ত
ব্োাংভকাং শর্তোবলী জ্ঞোন এবাং সবোঝোর চূডোন্ত ভনব তোচহন একটি অর্্ন্ত গুরুত্বপূণ তভূভিকো পোলন
কহর। ব্োাংভকাং উদ্দীপক, অথ তনীভর্ এবাং কিোহ তর ছোত্রহদর এিভবএ প্রোথীহদর িন্ এবাং অন্োন্
অনুরূপ স্তহরর পরীক্ষোর প্র ্র্ুভর্র িন্ও এই ব্োজকাং শর্তোবলী দরকোরী।
সিৌভলক ব্োাংভকাং শর্তোবলী িোনোর পোশোপোভশ আপভন সকবল অন্ প্রোথীর উপর ভনভতর কহরন,
আবোর চোকভরর িন্ আপনোর আগ্রহের িোত্রোও সদখোন।
Account Agreement: আপনোর ওহপন-এন্ড সেভিি অ্োকোউন্ট পভরচোলনোকোরী চু জি, যো এই
অ্োকোউহন্ট ঘিহর্ পোহর এিন পভরবর্তহনর র্থ্ রবরোে কহর।
Account History: একটি ভনভদতষ্ট িহ়ের িহধ্ একটি অ্োকোউহন্টর সপহিন্ট ইভর্েো , যোর িহধ্
অ্োকোউহন্টর াংখ্ো বো র্োভরখ ীিো অভর্েি কহর থোহক।
Account Holder: একটি অ্োকোউহন্টর পহক্ষ ব্ব ো পভরচোলনোর িন্ িহনোনীর্ এবাং অনুহিোভদর্
কল এবাং িস্ত ব্জি। প্রভর্টি অ্োকোউন্ট ধোরহকর স্বোক্ষরটি ব্োাংহকর োহথ ফোইহল থোকো
প্রহ়েোিন। স্বোক্ষর অনুহিোদন কহর সয ব্জি অ্োকোউহন্টর পহক্ষ ব্ব ো পভরচোলনো করহর্ পোহর।
Acquiring Bank: একটি িবো়ে ভে োহব, ব্োাংক সশোষণ কহর ব্োাংক সয অজিতর্