A bearer instrument is a financial instrument that is payable to the holder or bearer, regardless of that person's identity. As a bearer check or bill of exchange does not require endorsement, it is considered a high-risk form of transfer.
A bunny bond is a specialized financial instrument that gives bondholders the option to receive interest payments or additional bonds, commonly referred to as 'coupon bonds.' This flexible feature makes bunny bonds an appealing choice for investors seeking growth through compounding interest.
A Collateralized Bond Obligation (CBO) is an investment-grade bond backed by a pool of variously rated bonds, including junk bonds. CBOs represent different degrees of credit quality rather than different maturities.
The Committee on Uniform Securities Identification Procedures (CUSIP) assigns identifying numbers and codes for all securities. These CUSIP numbers and symbols are used when recording all buy and sell orders.
A compound instrument is a financial instrument that contains both an equity element and a debt element. These are complex financial instruments which require careful handling in financial reporting.
A demand note is a financial instrument that is payable immediately upon the lender's request or on a specified date of maturity, without the necessity of further demand for payment.
An Equipment Trust Certificate (ETC) is a debt instrument that allows transportation companies to finance the acquisition of equipment such as aircraft, ships, and railroad cars. These instruments are backed by the equipment itself, providing security for the lender and financing terms favorable to the borrower.
A financial asset is either cash, a contractual right to receive cash, the right to exchange a financial instrument with another entity under potentially favourable terms, or an equity instrument of another entity.
A contract involving a financial obligation that represents a monetary asset to one party and a financial liability or equity instrument to another party. Examples include stocks, bonds, loans, and derivatives.
In accounting and finance, an instrument refers to any document or financial asset that represents some form of value, usually a legal document that records a right to pay a sum of money or property. Common examples include promissory notes, checks, bonds, and other financial securities.
An irrevocable letter of credit, also known as ILOC, is a financial instrument issued by a bank guaranteeing a buyer's payment to a seller will be received on time and for the correct amount, providing the terms specified in the letter are met. It cannot be amended or canceled without the consent of the beneficiary.
A money order is a financial instrument that can be easily converted into cash by the payee named on the money order. It provides a secure way to transfer a specified amount of money.
A Note Receivable is a financial instrument representing a written promise from a debtor to pay a specified sum of money to the creditor at a future date or on demand.
A Participation Certificate is a financial instrument representing a share in a pool of funds or in other assets, such as mortgage pools. It provides investors with a means to invest in collective assets and receive proportional income from those assets.
Pass-through securities represent a financial instrument where income generated from a pool of underlying assets, such as loans or mortgages, is passed on to investors through intermediaries.
A share warrant is a financial instrument that gives the holder the right, but not the obligation, to purchase company stock at a specified price before a warrant expiration date.
A sight draft, also known as a documentary draft, is a type of financial instrument or bill of exchange that is payable upon presentation, typically used in international trade to facilitate the payment for goods and services.
A stock option is a financial instrument that gives the holder the right to buy or sell a company's stock at a predetermined price within a specified timeframe. It can be used both as an investment tool and as an employee incentive.
A financial mechanism that enables parties to exchange cash flows or financial instruments to meet specific funding or investment needs. Common types include currency swaps and interest-rate swaps.
A term certificate, more commonly known as a Certificate of Deposit (CD), is a widely used savings option with a fixed maturity date, often chosen for its reliable interest rates and diverse term lengths.
A U.S. Savings Bond is a government bond issued by the U.S. Department of the Treasury designed to provide savings and investment options for American citizens.
An undated security is a fixed-interest security that does not have a redemption date. These securities perpetually generate a set interest payment without a requirement for the principal to be returned at a specific future date.
An unpaid cheque is a cheque that has been submitted for clearing but is returned to the payee due to the inability to process the transfer of value. This typically occurs due to insufficient funds in the payer's account or other issues.
A phrase indicating that the holder of a bill of exchange cannot seek payment from the original payee if the bill is not honored.
