Saturday, 28 November 2015

List of Banking Terms for RBI Assistant Exam IBPS Po IBPS Clerk And RBI Exams SBI PO : Set-2

  1. Coupon: The feature on a bond that defines the amount of annual interest income.
  2. Coupon Frequency: The number of coupon payments per year.
  3. Coupon Rate: The annual rate of interest on the bond’s face value that a bond’s issuer promises to pay the bondholder. It is the bond’s interest payment per dollar of par value.
  4. Covered Warrants: Derivative call warrants on shares which have been separately deposited by the issuer so that they are available for delivery upon exercise.
  5. Credit Rating: An assessment of the likelihood of an individual or business being able to meet its financial obligations. Credit ratings are provided by credit agencies or rating agencies to verify the financial strength of the issuer for investors.
  6. Currency Board: A monetary system in which the monetary base is fully backed by foreign reserves. Any changes in the size of the monetary base has to be fully matched by corresponding changes in the foreign reserves.
  7. Current Yield: A return measure that indicates the amount of current income a bond provides relative to its market price. It is shown as: Coupon Rate divided by Price multiplied by 100%.
  8. Custody of Securities: Registration of securities in the name of the person to whom a bank is accountable, or in the name of the bank’s nominee; plus deposition of securities in a designated account with the bank’s bankers or with any other institution providing custodial services.
  9. Default Risk: The possibility that a bond issuer will default ie, fail to repay principal and interest in a timely manner.
  10. Derivative Call (Put) Warrants: Warrants issued by a third party which grant the holder the right to buy (sell) the shares of a listed company at a specified price.
  11. Derivative Instrument: Financial instrument whose value depends on the value of another asset.
  12. Discount Bond: A bond selling below par, as interest in-lieu to the bondholders.
  13. Diversification: The inclusion of a number of different investment vehicles in a portfolio in order to increase returns or be exposed to less risk.
  14. Duration: A measure of bond price volatility, it captures both price and reinvestment risks to indicate how a bond will react to different interest rate environments.
  15. Earnings: The total profits of a company after taxation and interest.
  16. Earnings per Share (EPS): The amount of annual earnings available to common stockholders as stated on a per share basis.
  17. Earnings Yield: The ratio of earnings to price (E/P). The reciprocal is price earnings ratio (P/E).
  18. Equity: Ownership of the company in the form of shares of common stock.
  19. Equity Call Warrants: Warrants issued by a company which give the holder the right to acquire new shares in that company at a specified price and for a specified period of time.
  20. Ex-dividend (XD): A security which no longer carries the right to the most recently declared dividend or the period of time between the announcement of the dividend and the payment (usually two days before the record date). For transactions during the ex-dividend period, the seller will receive the dividend, not the buyer. Ex-dividend status is usually indicated in newspapers with an (x) next to the stock’s or unit trust’s name.

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