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11 Cards in this Set
- Front
- Back
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Accredited Investor
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To qualify as an accredited investor for a Regulation D Private Placement, an investor must be either: A. an affiliate of the issuer, B. a financial institiution, or C. an individual with $1 million in net worth, or $200,000 annual income. An investor not meeting one of these is considered Nonaccredited
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Accretion
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A method of adjusting a taxpayer's cost basis of a bond bought at an original issue discount. The annual accretion is treated as interest for tax purposes.
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Accrued Interest
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The interest due on a bond since the last interest payment was made. The buyer of the bond pays the market price plus accrued interest.
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Accumulation Account
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An account used by the sponsor of a Unit Investment Trust to acquire securities for the eventual placement withing the trust.
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Accumulation Period
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In a variable annuity, the time when the client is contributing money into the annuity and purchasing accumulation units.
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Accumulation Unit
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An accounting measure that represents a contract owner's proportionate unit of interest in a separate account during the accumulation period of a variable annuity.
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Acid Test Ratio
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A more stringent test of a corporation's liquidity than the current ratio. It is calculated by adding cash, cash equivalents, and accounts and notes receivable and dividing that sum by the total current liabilities. It is also known as the Quick Asset Ratio.
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ACRS
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Accelerated Cost Recovery System: The IRS approved method of calculating depreciation expense for tax purposes. Also know as Accelerated Depreciation.
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Additional Bonds Test
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A requirement that before additional bonds, which will be secured by assets or revenues already pledged to existing bonds, can be issued, that specific financial requirements must be met. Generally, the main requirement is that debt service coverage for the original and new bonds must be at a specific level.
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Additional Takedown
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A portion of the underwriting spread for a municipal issue defined as total takedown less concession.
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Adjustment Bond
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A corporate debt issue that pays interest only when, and if, the company has income. Also known as an Income Bond.
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