putative
(adjective)
Commonly believed or deemed to be the case; accepted by supposition rather than as a result of proof.
Examples of putative in the following topics:
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Options Contract
- Options contracts are defined as either call or put options.
- Put option is the opposite.
- A farmer buys five put options, insuring 50,000 tons of corn.
- Thus, the investors do not use the put option.
- Thus, investors exercise put option.
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Evaluating Financial Statements
- Ratio analysis is a tool for evaluating financial statements but also relies on the numbers in the reported financial statements being put into order to be used as ratios for comparison over time or across companies.
- Ratios put this financial statement information in context.
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Repurchasing Shares
- Repurchase Put Rights: Put rights are the right of the seller to purchase at a certain price, set ahead of time.
- If the company has put rights on its shares, it may use them to repurchase shares at that price.
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Other Features
- Some bonds give the holder the right to force the issuer to repay the bond before the maturity date on the put dates.
- Put dates are the dates on which putable bonds can be redeemed early.
- A death put is an optional redemption feature on a debt instrument allowing the beneficiary of the estate of a deceased bondholder to put (sell) the bond (back to the issuer) at face value in the event of the bondholder's death or legal incapacitation.
- Price of puttable bond = Price of straight bond + Price of put option
- Price of a puttable bond is always higher than the price of a straight bond because the put option adds value to an investor.
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Trends in Markets
- A market trend is a putative tendency of a financial market to move in a particular direction over time.
- A market trend is a putative tendency of a financial market to move in a particular direction over time.
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Classification
- Financial statements are generally insufficient to provide information to investors on their own; the numbers contained in those documents need to be put into context so that investors can better understand different aspects of the company's operations.
- Financial ratio analysis allows an observer to put the data provided by a company in context.
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Relationship Between Dividend Payments and the Growth Rate
- On the other hand, some companies can retain earnings and put that money back to work - i.e., invest in growth opportunities.
- Put succinctly, investors seeking high current income and limited capital growth prefer companies with a high dividend payout ratio.
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Chapter Questions
- A farmer bought 100 put options for corn.
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Approaches to Assessing Risk
- Sorting on this value puts the highest risks to the schedule first.
- The probable increase in cost associated with a risk (cost variance due to risk, Rc where Rc = P*C = P*Cost Accrual Ratio*S = P*S*CAR): sorting on this value puts the highest risks to the budget first, which can raise concerns about schedule variance.
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Impact of Diversification on Risk and Return: Unsystematic Risk
- Did your grandmother ever warn you not to put all your eggs in one basket?
- If you put all your eggs in one basket, and that basket breaks, you are stuck with nothing to fry up into an omelet.