In finance, maturity or maturity date refers to the final
payment date of a loan or other financial instrument, at which point the
principal (and all remaining interest) is due to be paid. In other words, the
maturity is the date the borrower must pay back the money he or she
borrowed through the issue of a bond.
A repayment schedule for a bond issue where a
large number of the bonds come due at a one time (normally at the final
maturity date).When a balloon maturity occurs, a company must pay the principal back to borrowers on many bonds at once. If the company is short on cash then it may have trouble making all the payments.
In finance, the yield curve is the relation between the
interest rate (cost of borrowing) and the time to maturity of the debt for a
given borrower in a given currency.
In finance, trading out of a standard contract and
simultaneously into the contract with next longest maturity, so as to
maintain a constant maturity, is referred to as rolling a contract.
In business, economics or investment, market liquidity is
an asset's ability to be sold without causing a significant movement in the
price and with minimum loss of value. Money, or cash on hand, is the most
liquid asset. An act of exchange of a less liquid asset with a more liquid
asset is called liquidation. Liquidity also refers both to a business' ability to
meet its payment obligations, in terms of possessing sufficient liquid
assets, and to such assets themselves.
A futures contract is a standardized contract to buy
or sell a specified commodity of standardized quality at a certain date in
the future and at a market-determined price (the futures price). The
contracts are traded on a futures exchange. Futures contracts are not
"direct" securities like stocks, bonds, rights or warrants. They are still
securities, however, though they are a type of derivative contract.
Negative Verification: A system of confirming that a bank's records
agree with a customer's records. The bank contacts the customer to
provide specific information about the account. The customer is asked to
respond only if the information is incorrect; otherwise, it is assumed to be
Direct Tax vs. Indirect Tax:
a direct tax is one paid directly to the
government by the person on whom it is imposed (often accompanied by a
tax return filed by the taxpayer). Examples include some income taxes,
some corporate taxes, and transfer taxes such as estate (inheritance) tax
and gift tax. In this sense, a direct tax is contrasted with an indirect tax or
"collected" tax (such as sales tax or value added tax (VAT)); a "collected"
tax is one which is collected by intermediaries who turn over the proceeds
to the government and file the related tax return. Some commentators
have argued that "a direct tax is one that cannot be shifted by the
taxpayer to someone else, whereas an indirect tax can be."
Fuel, liquor and cigarette taxes are just a few examples of indirect taxes.
A state-sponsored tax that is added to products or services
that are seen as vices, such as alcohol, tobacco and gambling. These type
of taxes are levied by governments to discourage individuals from
partaking in such activities without making the use of the products illegal.
These taxes also provide a source of government revenue.