mmw finals

Simple Interest (I)

A fixed percentage of the principal paid to a depositor or an investor each year the principal is left on deposit or has been invested, or a fixed amount paid to a bank or lender each year the principal has been borrowed.

Principal (P)

The total amount of money invested, deposited, or borrowed.

Simple Interest Rate (r)

The annual percentage charge or yield used to calculate simple interest.

Time (T or t)

The duration or term of an investment, deposit, or loan, usually expressed in years or fractions of a year.

Maturity Value / Final Amount (F)

The total amount at the end of the term, solved using the formula F = P + I or F = P(1 + rt).

Derived Principal Formula (Simple Interest)

P = I / (rt), used to find the principal when interest, rate, and time are known.

Derived Rate Formula (Simple Interest)

r = I / (Pt), used to find the interest rate when interest, principal, and time are known.

Derived Time Formula (Simple Interest)

t = I / (Pr), used to find the length of time when interest, principal, and rate are known.

Simple Discount (D)

A deduction from the maturity amount (F) of an obligation allowed for paying it currently, calculated as D = Fdt.

Discount Rate (d)

The annual percentage rate used to compute a simple discount deduction.

Term of Discount (t)

The amount of time or duration over which a simple discount is calculated.

Present Value under Simple Discount (P)

The value of an obligation before maturity after the discount is subtracted; P = F - D or P = F(1 - dt).

Derived Discount Rate Formula

d = D / (Ft), used to find the discount rate.

Derived Discount Time Formula

t = D / (Fd), used to find the term of a discount.

Derived Maturity Value from Discount Formula

F = D / (dt), used to find the maturity amount from a known discount.

Actual Time

The exact, actual number of days counted between two specific dates.

Approximate Time

A time-counting method that assumes every month has exactly 30 days and one year has 360 days.

Exact Interest (Ie)

A type of simple interest computed based on 365 days, meaning the time for 1 day is 1/365 of a year.

Ordinary Interest (Io)

A type of simple interest computed based on 360 days, assuming each month has 30 days, meaning the time for 1 day is 1/360 of a year.

Compound Interest (Ic)

Interest computed on the sum of the original principal and any previously accumulated interest.

Frequency of Conversion (m)

The number of times that interest is computed and added to the principal within the span of one year.

Annually (Conversion Period)

An interest conversion frequency where interest is computed once a year (m = 1).

Semiannually (Conversion Period)

An interest conversion frequency where interest is computed every 6 months, or twice a year (m = 2).

Quarterly (Conversion Period)

An interest conversion frequency where interest is computed every 3 months, or 4 times a year (m = 4).

Monthly (Conversion Period)

An interest conversion frequency where interest is computed every month, or 12 times a year (m = 12).

Total Number of Conversion Periods (n)

The total number of times interest is compounded over the entire term, calculated as the product of years and frequency (n = t * m).

Nominal Rate (j)

The stated annual interest rate charge that may be converted or compounded several times per year.

Interest Rate per Period (i)

The actual rate applied at each conversion period, calculated by dividing the nominal rate by the frequency of conversion (i = j / m).

Compound Amount (F)

The accumulated value of the principal at the end of a compound interest term, calculated as F = P(1 + i)^n.

Compound Interest Formula (Ic)

The total interest earned over the entire term, found by taking the difference between the compound amount and the principal (Ic = F - P).

Present Value under Compound Interest (P)

The value of a future sum of money at the present time, calculated as P = F / (1 + i)^n or P = F(1 + i)^-n.

Stock

A type of security that signifies ownership in a corporation and represents a claim on part of the corporation's assets and earnings.

Common Stock

A class of corporate stock where the investor has voting rights and shares directly in the success or failure of the business.

Preferred Stock

A class of corporate stock in which the investor has preferential rights over common shareholders to receive dividends and company assets.

Philippines Stock Exchange (PSE) / Market Stock Exchange (MSE)

Regular marketplaces in the Philippines where investors buy or sell stocks through licensed brokers.

Stockbroker

A professional in stock market trading and investment who acts as an agent to handle the buying and selling of stocks and other securities.

Bond

A certificate or written contract in which a debtor promises to pay the holder a specified amount of money plus interest at a stated future date.

Bondholder

An investor who purchases a bond and is guaranteed to be repaid by the issuing company at a specified future date.

Par Value / Face Value (Bond)

The principal amount borrowed as explicitly stated on the bond certificate, usually representing the price paid when buying it from the issuing company.

Market Price (Bond)

The actual fluctuating amount an investor pays to buy a bond from another investor during its lifetime.

Sold at Par (Bond)

A condition where a bond is bought or sold at a price exactly equal to its stated face value.

Sold at Premium (Bond)

A condition where a bond is sold at a price higher than its face or par value.

Sold at Discount (Bond)

A condition where a bond is bought or sold for less than its face or par value.

Dividends

The distribution of a company's profits paid out to its shareholders.

Shareholders

Individuals or entities that own shares of stock within a corporation.

Par Value (Stock)

An arbitrary monetary figure specified in the corporate charter for each share of stock and printed on the stock certificate.

No-Par Value Stock

A stock that does not have an assigned arbitrary monetary figure, where the dividend is instead quoted as a specific peso amount per share.

Cumulative Preferred Stock

A type of preferred stock that must receive a dividend each year; if unpaid, dividends accumulate for future payment.

Dividend in Arrears

The accumulated amount of unpaid dividends owed to cumulative preferred shareholders from past years before common shareholders can receive any payouts.

Nonparticipating Stock

A category of preferred stock where shareholders receive only a fixed, predetermined dividend.

Participating Stock

A category of preferred stock where shareholders may receive additional dividends beyond the fixed amount if the company performs well.

Convertible Preferred Stock

A category of preferred stock that grants the holder the option to exchange it for a specified number of common shares in the future.

Dividend per Share (Common Stock)

The payout per share when no preferred stock exists, calculated as Total Dividend divided by the Number of Shares Outstanding.

Total Common Dividend (TC)

The profit remaining for common shareholders after subtracting the total preferred dividend from the total declared dividend (TC = Total Dividend - TP).

Dividend per Share (Par Value Preferred)

The payout per share calculated by multiplying the stock's Par Value by its stated Dividend Rate.

Stock Valuation

The process of calculating the total values of goods or materials owned by a company or available for sale in a store at a particular time.

Current Yield for a Stock (CY)

A percentage measure of stock earnings relative to its current price, calculated as Annual Dividend per Share divided by Current Price per Share.

Price-Earnings Ratio of Stock (P-e Ratio)

A ratio used by investors to determine if a stock is a good buy, calculated as Current Price per Share divided by Earnings per Share.

Proceeds

The net amount of money an investor receives after selling a stock, computed as the value of the shares minus the broker's commission.

Stockbroker's Commission

The transaction fee charged by a broker for assisting in the purchase or sale of stock shares, calculated as a percent of the transaction cost.

Round Lot

A standard stock transaction size consisting of a multiple of 100 shares, generally carrying a slightly lower commission rate.

Odd Lot

A stock transaction size consisting of less than 100 shares, generally carrying a higher commission rate than standard lots.

Gain or Loss (Stock)

The financial difference between the cost of purchasing a stock and the net proceeds received when selling it.

Bond Valuation

A mathematical technique used to determine the fair value of a particular bond.

Current Yield of a Bond

A valuation figure computed by dividing the bond's Annual Interest by its Purchase Price.

Redemption Value (V)

The price or value at which a bond will be paid off or redeemed at its maturity date.

Coupon / Regular Interest Payment (C)

The periodic interest payment paid to a bondholder, calculated as Face Value multiplied by the periodic coupon rate (C = F * b).

Bond Price General Method Formula (P)

The mathematical equation used to find a bond's purchase price to achieve a desired yield: P = V(1 + i)^-n + C * [(1 - (1 + i)^-n) / i].