Super Finance Glossary

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Over 10,000 financial glossary terms...

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Browsing by the letter "B"

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Barron's Confidence Index
Definition: Index measuring the ratio of the average yield on 10 top-grade bonds to the average yield on 10 intermediate-grade bonds. The discrepancy between high-rated top-grade bonds and low-rated bond yields establishes a measure that is indicative of investor confidence.
Barter
Definition: The trading/exchange of goods or services without using currency.
Base
Definition: A technical analysis tool. A chart pattern depicting the period when the supply and demand of a certain stock are in relative equilibrium, resulting in a narrow trading range. The merging of the support level and resistance level.
Base Currency
Definition: Applies mainly to international equities. Currency in which gains or losses from operating an international portfolio are measured.
Base Interest Rate
Definition: Related: Benchmark interest rate.
Base Market Value
Definition: The average market price of a group of securities at a specific time. Used for the purpose of indexing.
Base Period
Definition: A particular period of time used for comparative purposes when measuring economic data.
Base Probability Of Loss
Definition: The probability of not achieving a portfolio expected return. Related: Value at risk.
Base Rate
Definition: British equivalent of the US prime rate.
Basel Accord
Definition: Agreement concluded among country representatives in 1988 in Switzerland to develop standardized risk-based capital requirements for banks across countries.
Basic Balance
Definition: In a balance of payments, the basic balance is the net balance of the combination of the current account and the capital account.
Basic Business Strategies
Definition: Key strategies a firm intends to pursue in carrying out its business plan.
Basic IRR Rule
Definition: Accept the project if IRR is higher than the discount rate; reject the project if it is lower than the discount rate. It is wise to also consider net present value for project evaluation.
Basis
Definition: The price an investor pays for a security plus any out-of-pocket expenses. It is used to determine capital gains or losses for tax purposes when the stock is sold. Also, for a futures contract, the difference between the cash price and the futures price observed in the market.
Basis Grade
Definition: The grade of a commodity used as the standard or par grade of a futures contract.
Basis Point
Definition: In the bond market, the smallest measure used for quoting yields is a basis point. Each percentage point of yield in bonds equals 100 basis points. Basis points also are used for interest rates. An interest rate of 5% is 50 basis points higher than an interest rate of 4.5%. Sometimes referred to as BPS, BIPS, and pronounced "Bips"
Basis Price
Definition: Price expressed in terms of yield to maturity or annual rate of return.
Basis Quote
Definition: Offer or sale of a cash commodity in terms of the difference above or below a futures price (e.g., 10 cents over December corn).
Basis Risk
Definition: Unexpected changes in the basis between the placing and the lifting of a hedge. Basis risk is in excess of convergence.
Basis Swap
Definition: An interest rate swap where both legs are floating, linked to different index tenors. Basis swaps can be on the same index at different tenors e.g. 3 month LIBOR versus 6 month LIBOR; on the same or different tenors on different indexes e.g. 3 month US dollar Libor against US Prime rate.
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