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- E
- E
- Fifth letter of a Nasdaq stock symbol specifying that an issue has not met the reporting date for the company's SEC regulatory filing requirements.
- EAFE index
- See: European Australian and Far East index
- EASD
- See: European Association of Securities Dealers
- EBIAT
- See: Earnings Before Interest after Taxes
- EBIT
- See: Earnings Before Interest and Taxes
- EBITD
- See: Earnings Before Interest, Taxes and Depreciation
- EBITDA
- See: Earnings Before Interest, Taxes, Depreciation, and Amortization
- EBT
- See: Earnings Before Taxes
- EC
- The two-character ISO 3166 country code for ECUADOR.
- ECN
- Electronic Communications Network. Defined under Rule 11Ac1- 1(a)(8) under the U.S. Securities Exchange Act of 1933.
- ECS
- The ISO 4217 currency code for the Ecuadorian Sucre.
- EEK
- The ISO 4217 currency code for the Estonian Kroon.
- EG
- The two-character ISO 3166 country code for EGYPT.
- EGP
- The ISO 4217 currency code for the Egyptian Pound.
- ECU
- See: European Currency Unit
- EDI
- See: Electronic Data Interchange
- EE
- The two-character ISO 3166 country code for ESTONIA.
- EH
- The two-character ISO 3166 country code for WESTERN SAHARA.
- EM
- See: Effective margin
- EMS
- See: European Monetary System
- EOE
- See: European Options Exchange
- EOQ
- See: Economic Order Quantity
- ER
- The two-character ISO 3166 country code for ERITREA.
- ERM
- See: Exchange Rate Mechanism
- ES
- The two-character ISO 3166 country code for SPAIN .
- ESOP
- See: Employee Stock Ownership Plan
- ESP
- The ISO 4217 currency code for the Spanish Peseta.
- ET
- The two-character ISO 3166 country code for ETHIOPIA.
- ETB
- The ISO 4217 currency code for the Ethiopian Birr.
- EU
- See: European Union
- EUR
- The ISO 4217 currency code for Euro.
- EUREX
- The European derivatives exchange formed in 1998 by a merger of the Deutsche Terminbörse (DTB) and the Swiss Options and Financial Futures Exchange (SOFFEX).
- Each way
- A broker's commission from his or her involvement on both the purchase and the sale side of a security.
- Early distribution
- See: Premature
distribution
- Early withdrawal
- See: Premature
distribution
- Early withdrawal penalty
- Penalty paid by the holder of a fixed-term investment penalizing an investor who withdraws money before the agreed-upon maturity date.
- Earn-out
- Refers to an additional payment in a merger or acquisition that is not part of the original acquisition cost, which is based on the acquired company's future earnings relative to a level determined by the merger agreement.
- Earned income
- Compensation earned from employment, which includes wages, salary, tips,
and compensation.
- Earned income credit
- A tax credit for taxpayers with children.
- Earned surplus
- See: Retained earnings
- Earnest money
- Money given to a seller by a buyer to demonstrate the buyer's good faith. If the deal falls through, the deposit is usually forfeited.
- Earning asset
- An asset that generates income, e.g., income from rental property.
- Earning power
- Earnings before interest and taxes (EBIT) divided by total assets.
- Earnings
- Net income for the company during a period.
- Earnings before interest after taxes (EBIAT)
- A financial measure defined as revenues less cost of goods sold and selling, general, and administrative expenses. In other words, operating and nonoperating profit before the deduction of interest plus cash income taxes. Equivalent to EBIT minus cash taxes.
- Earnings before interest and, taxes (EBIT)
- A financial measure defined as revenues less cost of goods sold and selling, general, and administrative expenses. In other words, operating and nonoperating profit before the deduction of interest and income taxes.
- Earnings before interest, taxes, and depreciation (EBITD)
- A financial measure defined as revenues less cost of goods sold and selling, general, and administrative expenses. In other words, operating and nonoperating profit before the deduction of interest and income taxes. Depreciation expenses are not included in the costs.
- Earnings before interest, taxes, depreciation, and amortization (EBITDA)
- A financial measure defined as revenues less cost of goods sold and selling, general, and administrative expenses. In other words, operating and nonoperating profit before the deduction of interest and income taxes. Depreciation and amortization expenses are not included in the costs.
- Earnings before taxes (EBT)
- A financial measure defined as revenues less cost of goods sold and selling, general, and administrative expenses. In other words, operating and nonoperating profit before the deduction of income taxes.
- Earnings momentum
- An increase in the earnings per share growth rate from one reporting period to the next.
- Earnings per share (EPS)
- A company's profit divided by its
number of outstanding shares. If a company earning $2 million in one year had $2 million shares of stock outstanding, its EPS would be $1 per share. In calculating EPS, the company often uses a weighted average of shares outstanding over the reporting term.
- Earnings-price ratio
- See: Earnings yield
- Earnings response
coefficient
- A measure of relation of stock returns to earnings surprises around the time of corporate
earnings announcements.
- Earnings retention ratio
- Plowback rate.
- Earnings surprises
- Positive or negative differences from the consensus forecast of earnings by institutions such as First Call or IBES Negative earnings surprises generally have a greater adverse effect on stock prices than a reciprocal positive earnings surprise.
- Earnings yield
- The ratio of earnings per share, after allowing for tax and interest payments on fixed interest debt, to the current share price. The inverse of the price-earnings ratio. It is the total twelve months, earnings divided by number of outstanding shares, divided by the recent price, multiplied by 100. The end result is shown in percentage terms. We often look at earnings yield because this avoids the problem of zero earnings in the denominator of the price-earning ratio.
- Easy money
- See: Tight money
- Eating stock
- When an underwriter can't find buyers for a stock and therefore has to buy them for his own account.
- ECN
- See: Emerging company marketplace
- Eclectic paradigm
- A theory that posits three types of advantages benefiting a multinational corporation:
ownership-specific, location-specific, and market internalization advantages.
- Econometrics
- The quantitative science of predicting the economy.
- Economic assumptions
- General market environment a firm expects to operate in over the life of a financial plan.
- Economic defeasance
- See: In-substance defeasance
- Economic dependence
- When the costs and/or revenues of one project depend on those of another.
- Economic earnings
- The real flow of cash that a firm could pay out forever in the absence of any change in the firm's productive capacity.
- Economic exposure
- The extent to which the value of a firm will change because of an exchange rate change.
- Economic growth rate
- The annual percentage rate of change in the Gross National Product.
- Economic income
- Cash flow plus change in present value.
- Economic indicators
- The key statistics of the economy that reveal the direction the economy is heading in; for example, the unemployment rate and the inflation rate.
- Economic Life
- The time period over which an asset's
NPV is maximized. Economic life
can be less than absolute physical life for reasons of technological obsolescence, physical
deterioration, or product life cycle.
- Economic order quantity (EOQ)
- The order quantity that minimizes total inventory costs.
- Economic rents
- Profits in excess of the competitive level.
- Economic risk
- In project financing, the risk that the project's output will not be salable at a price that will cover the project's operating and maintenance costs and its debt service requirements.
- Economic surplus
- For any entity, the difference between the market value of all its assets and the market value of its liabilities.
- Economic union
- An agreement between two or more countries that allows the free movement of capital, labor, and all goods and services, and involves the harmonization and unification of social, fiscal, and monetary policies.
- Economic value added (EVA)
- A method of performance evaluation that adjusts
accounting performance for investors' required
return on investment. Suppose a division produces a 12%
return on capital invested. Given the risk of the division's business line would have. If
investors would usually require 14% on capital invested, the division destroyed
shareholder value by the EVA metric. This description is trade marketed by
Stern-Stewart.
- Economics
- The study of the economy. See also: Macroeconomics; microeconomics; Keynesian economics, monetarism, and supply-side economics.
- Economies of scale
- Achievement of lower average cost per unit through increased
production.
- Economies of scale
- The decrease in the marginal cost of production as a firm's extent of operations expands.
- Economies of scope
- Scope economies exist whenever the same investment can support multiple profitable activities less expensively in combination than separately.
- Economies of vertical
integration
- Produced by achieving lower operating costs by owning all components of
production and sometimes sales outlets rather than contracting for companies in the
outside marketplace.
- EDGAR
- The Securities & Exchange Commission uses Electronic Data Gathering and Retrieval to transmit company documents such as 10-Ks, 10-Qs, quarterly reports, and other SEC filings, to investors.
- Edge corporations
- Specialized banking institutions, authorized and chartered by the Federal
Reserve Board of Governors in the U.S., that are allowed to engage in
transactions of a foreign or international character. They are not subject
to restrictions on interstate banking. Foreign banks operating in the US are
permitted to organize and own an edge corporation.
- Education IRA
- A type of individual retirement account enabling the contribution of up to $500 per year for each child up to the age of 18 by the parents in the family.
- Effective annual interest rate
- An annual measure of the time value of money that fully reflects the effects of compounding.
- Effective annual yield
- Annualized interest rate on a security computed using compound interest techniques.
- Effective call price
- The strike price in a market redemption provision plus the accrued interest to the redemption date.
- Effective convexity
- The convexity of a bond calculated using cash flows that change with yields.
- Effective date
- In an interest rate swap, the date the swap begins accruing interest.
- Effective debt
- The total debt owed by a firm to its creditors.
- Effective duration
- The duration calculated using the approximate duration formula for a bond with an embedded option, reflecting the expected change in the cash flow caused by the option. Measures the responsiveness of a bond's price-taking into account that expected cash flows will change as interest rates change due to the embedded option.
- Effective Interest Rate
- The annual rate at which an investment grows in value when interest is
credited more often than once a year.
- Effective margin (EM)
- Used with SAT performance measures, the amount equal to the net earned spread, or margin of income, on assets in excess of financing costs for a given interest rate and prepayment rate scenario.
- Effective net worth
- Net worth plus subordinated debt.
- Effective rate
- A measure of the time value of money that fully reflects the effects of compounding.
- Effective sale
- A sale based on the most recent round-lot price, which determines the price of the next odd lot. The difference created between the last round-lot price and the odd-lot price is referred to as the odd-lot differential.
- Effective spread
- The gross underwriting spread adjusted for the impact that a common stock offering's announcement has on the firm's share price.
- Effective tax rate
- The net rate a taxpayer pays on income that includes all forms of taxes. It is calculated by dividing the total tax paid by taxable income.
- Effective yield
- Yield or return on a short-term investment after adjustment for the change in exchange rates over the period of
concern.
- Efficiency
- The degree and speed with which a market accurately incorporates information into prices.
- Efficient capital market
- A market in which new information is very quickly reflected accurately in share prices.
- Efficient diversification
- The organizing principle of modern portfolio theory, which maintains that any risk-averse investor will search for the highest expected return for any particular level of portfolio risk.
- Efficient frontier
- The combinations of securities portfolios that maximize expected return for any level of expected risk, or that minimizes expected risk for any level of expected return. Pioneered by Harry Markowitz.
- Efficient market
- Economy in which prices correctly reflect all relevant information.
- Efficient Market Hypothesis
- States that all relevant information is fully and immediately reflected in a security's market price, thereby assuming that an investor will obtain an equilibrium rate of return. In other words, an investor should not expect to earn an abnormal return (above the market return) through either technical analysis or fundamental analysis. Three forms of efficient market hypothesis exist: weak form (stock prices reflect all information on past prices), semistrong form (stock prices reflect all publicly available information), and strong form (stock prices reflect all relevant information including insider information).
- Efficient markets theory
(EMT)
- Principle that all assets are correctly
priced by the market, and that there are no bargains.
- Efficient portfolio
- A portfolio that provides the greatest expected return for a given level of risk (i.e., standard deviation), or, equivalently, the lowest risk for a given expected return.
- Efficient set
- Graph representing a set of portfolios that maximize expected return at each level of portfolio risk.
- Efficient surface
- In mean variance skewness analysis, the set of portfolios that result from investors' preference for higher means, lower variance and higher (positive) skewness. The efficient surface is analogous (in three dimensions, mean, variance and skewness) to the effficient frontier (in two dimensions, mean and variance).
- Eighth[-ed]
- Used in the context of general equities. A specialist or another broker is bidding higher or offering lower than we are, often topping or undercutting us by an eighth.
- Either/or facility
- An agreement permitting a bank customer to borrow either domestic dollars from the bank's head office or Eurodollars from one of its foreign branches.
- Either-or order
- Used in the context of general equities. See: Alternative order.
- Either-way market
- In the interbank Eurodollar deposit market, an either-way market is one in which the bid and offered rates are identical.
- Elasticity of demand and supply
- The degree of buyers' responsiveness to price changes. Elasticity is measured as the percent change in quantity divided by the percent change in price. A large value (greater than 1) of elasticity indicates sensitivity of demand to price, e.g., luxury goods. Goods with a small value of elasticity (less than 1) have a demand that is insensitive to price, e.g., food.
- Elasticity of an option
- Percentage change in the value of an option given a 1% change in the value of the option's underlying stock.
- Elect
- The conversion of a conditional order into a market order.
- Electronic data interchange (EDI)
- The direct exchange of information electronically, from one firm's computer to another firm's computer in a structured format.
- Electronic depository transfers
- The transfer of funds between bank accounts through the Automated Clearing House (ACH) system.
- Elephants
- A term used to refer to large institutional investors.
- Eleven bond index
- An index based on the average yield of 11 municipal bonds that mature in 20 years and carry an average AA rating. The eleven bonds used to calculate the index are also found in the 20 bond index, which serves as a benchmark in tracking municipal bond yields.
- Eligible bankers' acceptances
- In the BA market, an acceptance may be referred to as eligible because it is acceptable by the Fed as collateral at the discount window and/or because the accepting bank can sell it without incurring a reserve requirement.
- Elliott Wave Theory
- Technical market timing strategy that predicts price movements on the basis of historical price wave patterns and their underlying psychological motives. Robert Prechter is a famous Elliott Wave theorist.
- Elves
- A term the host uses to refer to guests on the PBS television show, "Wall Street Week", who are technical analysts attempting to predict the direction of stock prices over the next six months.
- Embedded option
- An option that is part of the structure of a bond that gives either the bondholder or the issuer the right to take some action against the other party, as opposed to a bare option, which trades separately from any underlying security.
- Emergency fund
- A reserve of cash kept available to meet the costs of any unexpected financial emergencies.
- Emergency Home Finance Act of 1970
- The federal legislation creating the Federal Home Loan Mortgage Corporation, a partially government-run program initiated to stimulate the development of a secondary mortgage market and expand mortgages available to veterans and other groups.
- Emerging Company Marketplace (ECM)
- A service once offered by the American Stock Exchange to help small growth companies fulfill special listing requirements. The service is no longer available.
- Emerging markets
- The financial markets of developing economies.
- Emerging Markets Free index (EMF)
- A Morgan Stanley Capital International index created to track stock markets in selected emerging markets that are open to foreign investment like Argentina, Chile, Jordan, Malaysia, Mexico, Philippines, and Thailand.
- Emerging markets fund
- A mutual fund that invests
primarily in countries with developing economies (that is, those that are becoming
industrialized). Emerging markets funds tend to be more volatile than domestic stock
funds due to currency fluctuation and political instability. Consequently, fund prices can
fluctuate dramatically.
- Employee contribution
- An employee's own deposit to a company retirement plan.
- Employee Retirement Income Security Act (ERISA)
- The law that regulates the operation of private pensions and benefit plans.
- Employee stock fund
- A firm-sponsored program that enables employees to purchase shares of the firm's common stock on a preferential basis.
- Employee stock ownership plan (ESOP)
- A company contributes to a trust fund that buys stock on behalf of employees.
- Employer matching
contribution
- The amount, if any, a company contributes on an employee's behalf to the
employee's retirement account, usually tied to the employee's own contribution.
- Empty head and pure heart test
- Securities and Exchange Commission rule that allows only the bidder of a tender offer to trade in the stock while possessing inside information.
- Encumbered
- A property owned by one party on which a second party reserves the right to make a valid claim, e.g., a bank's holding of a home mortgage encumbers property.
- End-of-year convention
- Treating cash flows as if they occur at the end of a year as opposed to the date convention. Under the end-of-year convention, the present is time 0, the end of year 1 occurs one year hence; and so on.
- Endogenous uncertainty
- Describes factors within the control of the firm, such as a decision to reveal
information about price or input costs. Converse of exogenous.
- Endogenous variable
- A value determined within the context of a model. Related: Exogenous variable.
- Endorse
- Transferring asset ownership by signing
the back of the asset's certificate.
- Endowment
- Gift of money or property to a specified institution for a specified purpose.
- Endowment funds
- Investment funds established for the support of institutions such as colleges, private schools, museums, hospitals, and foundations. The investment income may be used for the operation of the institution and for capital expenditures.
- Energy mutual fund
- Mutual fund investing in energy stocks only, e.g., oil and gas companies.
- Enhanced indexing
- Also called indexing-plus, an indexing strategy whose objective is to exceed or replicate the total return performance of some predetermined index.
- Enhancement
- An innovation that has a positive impact on one or more of a firm's existing products.
- Enterprise
- A business firm.
- Enterprise Value
- The market capitalization of a firm's equity plus the market value of the firm's debt. Often the value of assets that are non-core are excluded the final calculation.
- Entrepreneur
- A person starting a new company who takes on the risks associated with starting the enterprise, which may require venture capital to cover start-up costs.
- Entropy
- The level of disorder in a system.
- Environmental fund
- A mutual fund that invests strictly in stocks of companies that are environmentally friendly and/or have the goal of environmental betterment. The investors are trying to support and profit from opportunities related to the environmental movement.
- EPS
- See: Earnings per share
- Equal dollar swap
- Selling common stock/convertibles in one company and reinvesting the proceeds in as many shares of (1) another type of security issued by the company, or (2) another security of the same type but of another company -- as can be bought with the proceeds of the sale. See: Equal shares swap.
- Equal percentage
contribution rule (EPCoR)
- Principle that each asset contributes
the same proportion to the equilibrium portfolio rate premium and risk.
- Equal shares swap
- Applies mainly to convertible securities. Selling the underlying common and reinvesting the proceeds in as much of the convertible as can be converted into the number of shares of common just sold. See equal dollar swap.
- Equalizing dividend
- Special dividends received by investors of a firm for income the investor lost because the firm altered the dividends payment schedule.
- Equilibrium
- The stable state of the system. See: Attractor.
- Equilibrium exchange
rate
- Exchange rate at which
demand for a currency is equal to the supply of the currency in the economy.
- Equilibrium market price of risk
- The slope of the capital market
line (CML). Since the CML
represents the expected return offered
to compensate for a perceived level of risk,
each point on the line is a balanced market
condition, or equilibrium. The slope of the line determines the additional
expected return needed to compensate
for a unit change in risk. The equation of
the CML is defined by the capital
asset pricing model.
- Equilibrium price
- The price when the supply of goods matches demand.
- Equilibrium rate of interest
- The interest rate that clears the market. Also called the trade-clearing interest rate.
- Equipment leasing partnership
- A limited partnership that receives income and tax benefits such as depreciation costs by purchasing equipment and leasing it to other parties.
- Equipment trust certificates
- Certificates issued by a trust that is formed to purchase an asset and lease it to a lessee. When the last of the certificates has been repaid, title and ownership of the asset transfers to the lessee.
- Equitable owner
- The beneficiary of a property held in a trust.
- Equity
- Ownership interest in a firm. Also, the residual dollar value of a futures trading account, assuming its liquidation is at the going trade price. In real estate, dollar difference between what a property could be sold for and debts claimed against it. In a brokerage account, equity equals the value of the account's securities minus any debit balance in a margin account. Equity is also shorthand for stock market investments.
- Equity cap
- An agreement in which one party, for an up-front premium, agrees to pay the other at specific time periods if a designated stock market benchmark tops a predetermined level.
- Equity claim
- Also called a residual claim; a claim to a share of earnings after debt obligations have been satisfied.
- Equity collar
- The simultaneous purchase of an equity floor and sale of an equity cap.
- Equity contribution agreement
- An agreement to contribute equity to a project under certain specified conditions.
- Equity floor
- An agreement in which one party agrees to pay the other at specific time periods if a specific stock market benchmark falls below a predetermined level.
- Equity funding
- An investment consisting of a life insurance policy and a mutual fund. The insurance policy is paid by the collateral value of fund shares, give the investor the advantages of insurance protection with the growth potential of a mutual fund.
- Equity kicker
- Stock warrants issued attached to privately placed bonds.
- Equity-linked Eurobonds
- A Eurobond including a convertibility option or warrant.
- Equity-linked policies
- Related: Variable life
- Equity market
- Related: stock market
- Equity multiplier
- Total assets divided by total common stockholders' equity; the total assets per dollar of stockholders' equity.
- Equity options
- Securities that give the holder the right (but not the obligation) to buy or sell a specified number of shares of stock, at a specified price for a certain (limited) time period. Typically one option equals 100 shares of stock.
- Equity REIT
- A Real Estate Investment Trust that assumes ownership status in the property it invests in enabling investors of the REIT to earn dividends on rental income from the property and appreciation in property resale. Antithesis of a Mortgage REIT.
- Equity swap
- A swap in which the cash flows exchanged are based on the total return on some stock market index and an interest rate (either a fixed rate or floating rate). Related: Interest rate swap.
- Equityholders
- Stockholders; those holding shares of the firm's equity.
- Equivalent annual annuity
- The amount per year for some number of years that has a present value equal to a given amount.
- Equivalent annual benefit
- The annual annuity with the same value as the net present value of an investment project.
- Equivalent annual cash flow
- Annuity with the same net present value as the company's proposed investment.
- Equivalent annual cost
- The cost per year of owning an asset over its entire life.
- Equivalent bond yield
- Annual yield on a short-term, noninterest-bearing security calculated for comparison to yields quoted on coupon securities.
- Equivalent loan
- Given the after-tax stream associated with a lease, the maximum amount of conventional debt that the same period-by-period after-tax debt service stream is capable of supporting.
- Equivalent taxable yield
- The yield that must be offered on a taxable bond issue to give the same after-tax yield as a tax-exempt issue.
- Erosion
- A negative impact on one or more of a firm's existing assets.
- Escalator clause
- Provision in a contract allowing cost increases to be passed on. In an employment contract, for example an escalator clause may call for wage increases in line with inflation.
- Escheatment
- The process of turning over unclaimed or abandoned property to a state
authority. Escheatment laws require mutual funds to turn over uncashed or returned check
dollars and/or client account fund shares if the owner cannot be located within a length of
time determined by each state.
- Escrow
- Property or money held by a third party until the agreed upon obligations of a contract are met.
- Escrow receipt
- A document provided by a bank in options trading to guarantee that the underlying security is on deposit and available for potential delivery.
- Escrowed to Maturity (ETM)
- Holding of the proceeds from a new bond issue to pay off an existing bond issue at its maturation date.
- Essential purpose (or function) bond
- See: Public purpose bond
- Estate planning
- The preparation of a plan to carry out an individual's wishes as to the
administration and disposition of his/her property before or after his/her death.
- Estate tax
- A federal or state tax imposed on an individual's assets inherited by heirs.
- Estimated tax
- Tax to be paid quarterly on income that is not subject to withholding tax, including self-employed
income, investment income,
alimony, rent, and capital gains.
- Ethical fund
- See: Social conscious mutual fund.
- Ethics
- Standards of conduct or moral judgment.
- Euclidean Geometry
- The Plane geometry we learn in high school, based upon a few ideal,
smooth, symmetric shapes.
- Euro
- Originally for a deposit outside one's home country but in the home country currency. This terminology is confusing now since the new European currency unit, also called the Euro, was introduced on January 1, 1999.
- Euro CDs
- CDs issued
by a US bank branch or foreign bank located outside the US Almost all Euro
CDs are issued in London.
- Eurodollar obligations
- Certificates of deposit
issued in US dollars by foreign banks and foreign branches of US banks.
- Euro lines
- Lines of credit granted by banks
(foreign or foreign branches of US banks) for Eurocurrencies.
- Euro straight
- A fixed-rate coupon Eurobond.
- Eurobank
- A bank that regularly accepts foreign currency-denominated deposits and makes foreign currency loans.
- Eurobond
- A bond that is (1) underwritten by an international syndicate, (2) issued simultaneously to investors in a number of countries, and (3) issued outside the jurisdiction of any single country.
- Euroclear
- One of two principal clearing systems in the Eurobond market. It began operations in 1968, is located in Brussels, and is managed by Morgan Guaranty Bank. Applies mainly to international equities. European clearing organization that functions much like the DTC
- Euro-commercial paper
- Short-term notes with maturities up to 360 days that are issued by companies in international money markets.
- Eurocredit market
- Comprises banks that accept deposits and provide loans in large
denominations and in a variety of currencies. The banks that constitute this market are the same banks that constitute the Eurocurrency market; the difference is that Eurocredit loans are longer-term than so-called
Eurocurrency loans.
- Eurocredits
- Intermediate-term loans of Eurocurrencies made by banking syndicates to corporate and government borrowers.
- Eurocurrency
- Instrument issued outside your country, but denominated in your currency.
A Eurodollar is a Certificate
of Deposit in US dollars in some other country (though mainly traded
in London). A Euroyen is a CD
in yen outside Japan.
- Eurocurrency deposit
- A short-term fixed-rate time deposit
denominated in a currency other than the
local currency (i.e., US dollars deposited in a London bank).
- Eurocurrency market
- The money market for borrowing and lending currencies that are held in the form of deposits in banks located outside the countries where the currencies are issued as legal tender.
- Eurodollar
- Refers to a certificate of
deposit in US dollars in a bank that is not located in the US Most of
the Eurodollar deposits are in London banks, but Eurodeposits may be anywhere
other than the US Similarly, a Euroyen or Euro DM deposit represents a CD
in yen or DM outside Japan and Germany,
respectively.
- Eurodollar bonds
- Eurobonds denominated in U.S.dollars.
- Eurodollar certificate of deposit
- A certificate of deposit paying interest and principal in dollars, but issued by a bank outside the United States, usually in Europe.
- Euroequity issues
- Securities sold in the Euromarket. That is, securities initially sold to investors simultaneously in several national markets by an international syndicate. Related: External market.
- Euro-medium term note (Euro-MTN)
- A nonunderwritten Euronote issued directly to the market. Euro-MTNs are offered continuously rather than all at once as a bond issue is. Most Euro-MTN maturities are under five years.
- Euro.NM
- Created on March 1, 1996, Euro.NM is a pan-European network of regulated markets dedicated to growth companies, regardless of their sector of activity or country of origin. Euro.NM member exchanges and their respective new markets consist of the Paris Stock Exchange (Le Nouveau Marché), the Deutsche Börse AG (Neuer Markt),
the Amsterdam Exchanges (NMAX), and the Brussels Stock Exchange (Euro.NM Belgium).
- Euro-note
- Short- to medium-term debt instrument sold in the Eurocurrency market.
- Euroyen bonds
- Eurobonds denominated in Japanese yen.
- European,
Australia, and Far East index (EAFE index)
- Stock index, computed by Morgan Stanley Capital International.
- European Association of Securities Dealers Automated Quotation (EASDAQ)
- European equivalent of Nasdaq.
- European Central Bank (ECB)
- Bank created to monitor the monetary policy of the 11 countries that have converted to the Euro from their local currencies. The 11 countries are: Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain.
- European Currency Unit (ECU)
- An index of foreign exchange consisting of European currencies, originally devised in 1979. See also: Euro.
- European exchange rate
mechanism (ERM)
- The system that countries in the European Union once used to pay exchange rates within bands around an ERM central value.
- European Monetary System (EMS)
- An exchange arrangement formed in 1979 that governs the currencies of European Union member countries.
- European option
- Option that may be exercised only at the expiration date. Related: American option.
- European Options Exchange (EOE)
- Now AEX-Optiebeurs. See: Amsterdam Exchanges (AEX).
- European-style exercise
- A method of exercising options contracts in which the buyer can exercise the contract on the last day before expiration.
- European-style option
- An option contract that can be exercised only on the expiration date.
- European terms
- A foreign exchange quotation that states the foreign currency price of one US dollar.
- European Union (EU)
- An economic association of European countries founded by the Treaty of Rome in 1957 as a common market for six nations. It was known as the European Community until January 1, 1994 and currently comprises 15 European countries. Its goals are a single market for goods and services without any economic barriers, and a common currency with one monetary authority.
- Evaluation period
- The time interval over which funds assess a money manager's performance.
- Even lot
- See: Round lot
- Evening up
- Buying or selling to offset an existing market position.
- Event anomalies
- Occurrences such as earnings surprises or stock splits that seem to present
opportunity to generate abnormal returns for those trading on the news.
- Event risk
- The risk that the ability of an issuer to make interest and principal payments will change because of rare, discontinuous, and very large, unanticipated changes in the market environment such as (1) a natural or industrial accident or some regulatory change or (2) a takeover, or corporate restructuring.
- Event study
- A statistical study that examines how the release of information affects prices at a particular time.
- Events of default
- Contractually specified events that allow lenders to demand immediate repayment of a debt.
- Evergreen credit
- Revolving credit without maturity.
- Evergreen funding
- A British term referring to the gradual injection of capital into a new or existing enterprise.
- Ex-all
- The sale of a security without the privileges associated with the security such as dividends, voting rights, or warrants.
- Ex ante return
- The expected return or anticipated return of an asset or portfolio.
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Financial Glossary