Abu Dhabi Investment Authority (ADIA)
What is 'Abu Dhabi Investment Authority - ADIA' A government-owned investment organization that manages the sovereign wealth fund for Abu Dhabi, United Arab Emirates. According to the Sovereign Wealth Fund Institute's rankings, the ADIA sovereign wealth fund ranked as the largest in the world in 2010. It is also one of the world's largest institutional investors. ...
Time Value of Money
DefinitionThe time value of money is the greater benefit of receiving money now rather than later. It is founded on time preference. Time Value of Money Time value of money is a concept according to which the value money present at the current time is worth more than how much the same amount of money will be worth in...
Offshore Mutual Fund
What is 'Offshore Mutual Fund' A mutual fund that is based in an offshore jurisdiction, which is generally considered to be outside the United States. The term is often used, perhaps incorrectly, to describe a fund that is not in a high-tax country. Explaining 'Offshore Mutual Fund' Always be careful when investing...
Offering
What is 'Offering' The issue or sale of a security by a company. It is often used in reference to an initial public offering (IPO) when a company's stock is made available for purchase by the public but it can also be used in the context of a bond issue. Explaining 'Offering' Usually, a...
Offering Price
DefinitionAsk price, also called offer price, offer, asking price, or simply ask, is the price a seller states they will accept. Offering Price What is an 'Offering Price' An offering price is the price at which publicly issued securities are made available for purchase by the investment bank underwriting the issue. A security's offering price includes the...
Imputed Interest
What is an 'Imputed Interest' Imputed interest is used by the Internal Revenue Service (IRS) as a means of collecting tax revenues on loans or securities that pay little or no interest. Imputed interest is important for discount bonds, such as zero-coupon bonds, and other securities that are sold below face value and mature at par. The...
Take or Pay
DefinitionA take-or-pay contract is a rule structuring negotiations between companies and their suppliers. With this kind of contract, the company either takes the product from the supplier or pays the supplier a. For any product the company takes, they agree to pay the supplier a certain price, say $50 a ton. Furthermore, up to an agreed-upon ceiling, the company...
Targeted Accrual Redemption Note (TARN)
What is a ‘Targeted Accrual Redemption Note – TARN' A targeted accrual redemption note (TARN) is an investment vehicle, calculated based on a variation of the LIBOR formula, which provides a guaranteed sum of coupons. Once the coupons you've received reaches the target cap, the note will be redeemed and you will be paid the par value of the note. Targeted...
Greater Fool Theory
Definition When it comes to pricing an item, the greater fool hypothesis asserts that the price is decided not by its inherent worth, but rather by the irrational beliefs and expectations of market players. In the event that a reasonable buyer believes that another party is prepared to pay an even greater price, he or she may justify the purchase...
Uncovered Interest Rate Parity (UIP)
What is the 'Uncovered Interest Rate Parity - UIP' The uncovered interest rate parity (UIP) is a parity condition stating that the difference in interest rates between two countries is equal to the expected change in exchange rates between the countries' currencies. If this parity does not exist, there is an opportunity to make a risk-free profit...