Continuous compounding is the mathematical limit that compound interest can reach if it’s calculated and reinvested into an account’s balance over a theoretically infinite number of periods. While this is not possible in practice, the concept of continuously compounded interest is important in finance. It is an extreme case of compounding, as most interest is compounded on a monthly, quarterly, or semiannual basis.
Brand personality is a set of human characteristics that are attributed to a brand name. A brand personality is something to which the consumer can relate; an effective brand increases its brand equity by having a consistent set of traits that a specific consumer segment enjoys. This personality is a qualitative value-add that a brand gains in addition to its functional benefits.
A zero coupon swap is an exchange of cash flows in which the stream of floating interest-rate payments is made periodically, as it would be in a plain vanilla swap, but where the stream of fixed-rate payments is made as one lump-sum payment at the time when the swap reaches maturity, instead of periodically over the life of the swap.
The credit default swap index (CDX)—formerly the Dow Jones CDX—is a benchmark financial instrument made up of credit default swaps (CDS) that have been issued by North American or emerging markets companies. The CDX was the first CDS index, which was created in 2002 and was based on a basket of single issuer CDSs.
A ticker symbol is an arrangement of characters—usually letters—representing particular securities listed on an exchange or otherwise traded publicly. When a company issues securities to the public marketplace, it selects an available ticker symbol for its securities that investors and traders use to transact orders. Every listed security has a unique ticker symbol, facilitating the vast array of trade orders that flow through the financial markets every day.
The market approach is a method of determining the value of an asset based on the selling price of similar assets. It is one of three popular valuation methods, along with the cost approach and discounted cash-flow analysis (DCF).
A replacement rate is the percentage of a worker’s pre-retirement income that is paid out by a pension program upon retirement. In pension systems where workers get substantially different payouts due to their differing incomes, the replacement rate is a common measurement that can be used to determine the effectiveness of the pension system. In some cases, workers can use replacement rates to estimate their retirement income from the plan.
The 11th District Cost of Funds Index (COFI) is a monthly weighted average of the interest rates paid on checking and savings accounts offered by financial institutions operating in Arizona, California, and Nevada. It is one of many indices used by mortgage lenders to adjust the interest rate on adjustable rate mortgages (ARM) and was launched in 1981. With an ARM mortgage, the interest rate on a mortgage moves up and down along with some standard interest rate chosen by the lender, and COFI is one of the most popular indices in the western states.
Net asset value per share (NAVPS) is an expression for net asset value that represents the value per share of a mutual fund, an exchange-traded fund (ETF), or a closed-end fund. It is calculated by dividing the total net asset value of the fund or company by the number of shares outstanding and is also known as book value per share.
The Vienna Stock Exchange is also known as Wiener Borse AG, the name of the company that operates the exchange. It considers itself a customer and market-oriented company that plays a vital role in Austria’s capital market. The Vienna Stock Exchange runs the securities exchange and the Energy Exchange Austria (EXAA), a Central European energy exchange also headquartered in Vienna.