Business / Finance Glossary

Asked To Bid-Offer: Used in context of general equities. Usually a seller (buyer) looking to aggressively sell (buy) stock, usually asking for a capital commitment from an investment bank.

Aspirin: Australian Stock Price Riskless Indexed Notes. Zero-coupon four-year bonds repayable at face value plus the percentage increase by which the Australian stock index of all ordinaries (common . . . View Full Definition

Assay: Metal purity test to confirm that the metal meets the standards for trading on a commodities exchange (commodities exchange center).

Assessed Valuation: The value assigned to property by a municipality for the purpose of tax assessment. Such an assessed valuation is important to investors in municipal bonds that are backed by property taxes.

Asset: Anything that has future economic value. In addition to items such as cash and equipment, assets can include intangibles such as goodwill.

Asset Activity Ratios: Ratios that measure how effectively the firm is managing its assets.

Asset Allocation Decision: The decision regarding how an institution's funds should be distributed among the major classes of assets in which it may invest.

Asset Allocation Mutual Fund: A mutual fund that rotates amoung stocks, bonds, and money market securities to maximize return on investment and minimize risk.

Asset Classes: Categories of assets, such as stocks, bonds, real estate, and foreign securities.

Asset Depreciation Range System: A range of depreciable lives the IRS allows for particular classes of assets.

Asset For Asset Swap: Creditors exchange the debt of one defaulting borrower for the debt of another defaulting borrower.

Asset Management Account: Account at a brokerage house, bank, or savings institution that integrates banking services and brokerage features.

Asset Play: A company with assets that are not believed to be accurately reflected in its stock price, making it an attractive buy or play.

Asset Pricing Model: A model for determining the required or expected rate of return on an asset. Related: Capital asset pricing model and arbitrage pricing theory.

Asset Stripper: A corporate raider (company A) that takes over a target company (company B) in order to sell large assets of company B to repay debt. Company A calculates that the net selling of the assets . . . View Full Definition

Asset Substitution: Occurs when a firm invests in assets that are riskier than those that the debtholders expected.

Asset Substitution Problem: Arises when the stockholders substitute riskier assets for the firm's existing assets and expropriate value from the debtholders.

Asset Swap: An interest rate swap used to alter the cash flow characteristics of an institution's assets in order to provide a better match with its liabilities.

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