Real cash flow

Income expressed in current purchasing power terms.

Philosophy of Money and Finance. First published Fri Nov 2, 2018; substantive revision Wed Nov 14, 2018. Finance and philosophy may seem to be worlds apart. But they share at least one common ancestor: Thales of Miletus. Thales is typically regarded as the first philosopher, but he was also a financial innovator. Earnest money is a deposit made to a seller that represents a buyer's good faith to buy a home. The money gives the buyer extra time to get financing and conduct the title search, property.

Real Cash Flow

A company's cash flow for a certain period of time adjusted for inflation. For example, if a company wishes to compare its annual cash flows between 1995 and 2005, it may adjust all figures and reflect them in 2005 dollars. The real cash flow gives a company an idea of how it is really performing from one period of time to the next.

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Real Money Supply

money supply expressed in base-year dollars, calculated by dividing the money supply by a price index.

Accomodating Policy

A monetary policy of matching wage and price increases with money supply increases so that the real money supply does not fall and push the economy into recession.

After-tax real rate of return

money after-tax rate of return minus the inflation rate.

Aggregate Supply

Total quantity of goods and services supplied.

Aggregate Supply Curve

Combinations of price level and income for which the labor market is in equilibrium. The short-run aggregate supply curve incorporates information and price/wage inflexibilities in the labor market, whereas the long-run aggregate supply curve does not.

approximated net realizable value at split-off allocation

a method of allocating joint cost to joint products using a
simulated net realizable value at the split-off point; approximated
value is computed as final sales price minus
incremental separate costs

At-the-money

An option is at-the-money if the strike price of the option is equal to the market price of the
underlying security. For example, if xyz stock is trading at 54, then the xyz 54 option is at-the-money.

Call money rate

Also called the broker loan rate , the interest rate that banks charge brokers to finance
margin loans to investors. The broker charges the investor the call money rate plus a service charge.

Excess Supply

A situation in which supply exceeds demand.

Exchange Rate, Real

The nominal exchange rate corrected for price level differences.

Fiat Money

Fiat money is paper currency made legal tender by law or fiat. It is not backed by gold or silver and is not necessarily redeemable in coin. This practice has had widespread use for about the last 70 years. If governments produce too much of it, there is a loss of confidence. Even so, governments print it routinely when they need it. The value of fiat money is dependent upon the performance of the economy of the country which issued it. Canada's currency falls into this category.

Floating supply

The amount of securities believed to be available for immediate purchase, that is, in the
hands of dealers and investors wanting to sell.

High-Powered Money

See money base.

Hot money

money that moves across country borders in response to interest rate differences and that moves
away when the interest rate differential disappears.

In-the-money

A put option that has a strike price higher than the underlying futures price, or a call option
with a strike price lower than the underlying futures price. For example, if the March COMEX silver futures
contract is trading at $6 an ounce, a March call with a strike price of $5.50 would be considered in-the-money
by $0.50 an ounce.
Related: put.

Interest Rate, Real

Nominal interest rate less expected inflation.

Money

Any item that serves as a medium of exchange, a store of value, and a unit of account. See medium of exchange.

Money base

Composed of currency and coins outside the banking system plus liabilities to the deposit money banks.

Money Base

Cash plus deposits of the commercial banks with the central bank.

Money center banks

Banks that raise most of their funds from the domestic and international money markets, relying less on depositors for funds.

Money Laundering

This is the process by which 'dirty money' generated by criminal activities is converted through legitimate businesses into assets that cannot be easily traced back to their illegal origins.

Money management

Related: Investment management.

Money manager

Related: Investment manager.

Money market

money markets are for borrowing and lending money for three years or less. The securities in
a money market can be U.S.government bonds, treasury bills and commercial paper from banks and
companies.

Money Market

A market that specializes in trading short-term, low-risk, very liquid
debt securities

money market

Market for short-term financial assets.

Money Market

A financial market in which short-term (maturity of less than a year) debt instruments such as bonds are traded.

Money Market

Financial market in which funds are borrowed or lent for short periods. (The money market is distinguished from the capital market, which is the market for long term funds.)

Money market demand account

An account that pays interest based on short-term interest rates.

Money market fund

A mutual fund that invests only in short term securities, such as bankers' acceptances,
commercial paper, repurchase agreements and government bills. The net asset value per share is maintained at
$1. 00. Such funds are not federally insured, although the portfolio may consist of guaranteed securities
and/or the fund may have private insurance protection.

money market fund

A type of mutual fund that invests primarily in short-term debt securities maturing in one year or less. These include treasury bills, bankers’ acceptances, commercial paper, discount notes and guaranteed investment certficates.

Money market hedge

The use of borrowing and lending transactions in foreign currencies to lock in the
home currency value of a foreign currency transaction.

Money market notes

Publicly traded issues that may be collateralized by mortgages and MBSs.

Money Multiplier

Change in the money supply per change in the money base.

money order

A guaranteed form of payment in amounts up to and including $5,000. You might request a money order in order to pay for tuition fees at a university or a college, or for a magazine subscription.

Money purchase plan

A defined benefit contribution plan in which the participant contributes some part and
the firm contributes at the same or a different rate. Also called and individual account plan.

Money Rate of Interest

See interest rate, nominal.

Money rate of return

Annual money return as a percentage of asset value.

Money supply

M1-A: Currency plus demand deposits
M1-B: M1-A plus other checkable deposits.
M2: M1-B plus overnight repos, mon

Real Money Finance Definition