Business / Finance Glossary

Intraday: Term meaning 'within the day,' often to refer to the high and the low price of a stock.

Intramarket Sector Spread: The spread between two issues of the same maturity within a market sector. For instance, the difference in interest rates offered for five-year industrial corporate bonds and five-year utili . . . View Full Definition

Intrastate Offering: A securities offering limited to just one state in the United States.

Intrinsic Value Of A Firm: The present value of a firm's expected future net cash flows discounted by the required rate of return.

Intrinsic Value Of An Option: The amount by which an option is in the money. An option that is not in the money has no intrinsic value.

Inventory: Goods purchased or manufactured by a business and held for production or sale. Inventory is often subdivided into raw materials, work in progress, and finished goods. See also Inventory Targets.

Inventory Financing: Used in the context of factoring and general finance to refer to loans to consumer product producers that use inventory as collateral. See also: Inventory loan.

Inventory Loan: A secured short-term loan to purchase inventory. The three basic forms are a blanket inventory lien, a trust receipt, and field warehousing financing.

Inventory Targets: The numbers of months of inventory that the user requires to be in stock at a given point in time. For Raw Materials, this amount represents the number of months of future production. For Fi . . . View Full Definition

Inventory Turnover: The ratio of annual sales to average inventory, which measures the speed at which inventory is produced and sold. Low turnover is an unhealthy sign, indicating excess stocks and/or poor sales.

Inventory Turns: The ratio of annual cost of sales to inventory, commonly used as a rough measure of inventory management efficiency. Also known as inventory turnover ratio or simply turns.

Inverse Floater: A derivative instrument whose coupon rate is linked to the market rate of interest in an inverse relationship.

Inverse Floating-Rate Note: A variable-rate security whose coupon rate increases as a benchmark interest rate declines.

Inverted Market: A futures market in which the nearer months are selling at price premiums to the more-distant months. Related: Premium.

Inverted Scale: A serial bond offering whose bonds with earlier maturity dates have higher yields than bonds with later maturity dates.

Inverted Yield Curve: When short-term interest rates are higher than long-term rates. Antithesis of positive yield curve.

Investment: The expenditure of cash to create additional capital. Investment can be in income-producing vehicles such as stocks and bonds, or more risk-oriented ventures such as the purchase of another company.

Investment Advisers Act: Legislation passed in 1940 requiring financial advisers to register with the Securities and Exchange Commission. The measure was enacted to protect the public from fraud or misrepresentation . . . View Full Definition

Investment Advisory Service: A business that specializes in providing investment advice for a fee. All advisers of an advisory service must be registered with the Securities and Exchange Commission.

Investment Analysts: Related: Financial analysts

Investment Bank: Financial intermediaries who perform a variety of services, including aiding in the sale of securities, facilitating mergers and other corporate reorganizations, acting as brokers to both in . . . View Full Definition

Investment Certificate: A document that serves as proof that an individual has an investment in a savings and loan association.

Investment Climate: Factors such as economic, monetary, and other conditions that affect the performance of investments.

Investment Club: A group of people who combine their money into a larger pool, then invest collectively in stocks and bonds, making decisions as a group.

Investment Company: A firm that that invests the funds of investors in securities appropriate for their stated investment objectives in return for a management fee. See also: Mutual fund.

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