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Glossary of Financial Terms: Part VII

by: sahil | last updated: March 22, 2010
Category: Personal Finance | Tags: glossary of terms, glossary, finance, financial, personal finance glossary

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Glossary of Financial Terms: Part VII

This is a continuation of the sixth part of the glossary of terms related to finance; personal finance in particular. This may help you in giving the upper hand while dealing and understanding finance in order to handle the household budget or for investing of any kind.

Growing Equity Mortgages: These types of mortgages are also known as GEM and the annual monthly payments are increased in order to reduce the outstanding principal and shorten the term of the loan.

Geographic risk: This is the type of risk that arises because when an issuer has policies concentrated in a particular geographical area. For example the areas those are prone to hurricanes or other natural disasters. The perfect example of such risk would be the one faced by insurance companies catering to the need of consumers in the state of Florida.

Ginnie Mae: Ginnie Mae is an acronym for government national Mortgage Association and is a completely owned United States government corporation within the Department of Housing & Urban Development.

Global Fund: A fund that can invest anywhere in the world including the United States.

Globalization: This is a tendency towards worldwide investment environment and seeks to integrate capital markets. Essentially this means open markets and a market driven global economy.

Gnomes: Freddie Mac’s fixed rate pass through securities of 15 years that are issued under its cash program.

Golden parachute: This is the compensation that is paid to top-level management by a target firm if a takeover takes place.

Gold exchange standard: This is a system of fixing exchange rates where the dollar is pegged to gold and other currencies are pegged to the Dollar (US).

Goodwill: This is an excess amount of purchase price over fair market value of the net amount of assets that are acquired under the purchase method of accounting.

Government securities: These are negotiable U.S Treasury securities.

Graduated payment mortgages: This is a type of mortgage in which the borrower’s payments are initially lower and increase over a period of time (3, 5, or 7 years. After this increase they stay at a level-pay schedule which will be high compared to the level-pay amortization of a level-pay mortgage originated at the same time. The difference between what the borrower truly shells out and the amount necessary to completely amortize the mortgage is added to the owing principal balance.

Gross Domestic Product: This is also referred to as GDP and is the market value of goods and services created over time comprising of the earnings of foreign corporations and foreign inhabitants working in the U.S., but not including the earnings of U.S. residents and corporations in a foreign country or countries.

Gross National Product: This is also called as GNP and an economy’s full amount of income. It is equal to G.D.P. in addition to the earnings overseas adding to domestic residents deducted by the earnings produced in domestic market accruing to those who are not residents.

Group of five: These are the five countries which are also called G 5 meet in order to achieve some co-operative effort on international economy. The countries in G5 include France, Germany, Japan, United Kingdom, and the U.S.

Growth opportunity: This can be loosely defined as the opportunity to invest in profitable projects.

Guaranteed insurance contract: This is a type of contract guaranteeing a stated nominal interest rate over some specific amount of time or period.

The Group of seven: These are the group of five or G7 to which two countries – Canada and Italy are added.