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National Association of Insurance Commissioners
n Factorial
For a positive integer n, the product of the first n positive integers; 0 factorial equals 1 by definition. n factorial is written as n!.
Natural liquidity 
An extensive pool of investors who are aware of and have a potential interest in buying and/or selling a security.
Negative serial correlation
Serial correlation in which a positive error for one observation increases the chance of a negative error for another observation, and vice versa.
Net asset balance sheet exposure
When assets translated at the current exchange rate are greater in amount than liabilities translated at the current exchange rate. Assets exposed to translation gains or losses exceed the exposed liabilities.
Net book value
The remaining (undepreciated) balance of an asset’s purchase cost. For liabilities, the face value of a bond minus any unamortized discount, or plus any unamortized premium.
Net income
The difference between revenue and expenses; what remains after subtracting all expenses (including depreciation, interest, and taxes) from revenue. Synonyms: loss
Net interest margin
With respect to banks, net interest income (interest income minus interest expense) divided by average earning assets.
Net interest spread 
With respect to the operations of insurers, the difference between interest earned and interest credited to policyholders.
Net liability balance sheet exposure
When liabilities translated at the current exchange rate are greater than assets translated at the current exchange rate. Liabilities exposed to translation gains or losses exceed the exposed assets.
Net operating assets
The difference between operating assets (total assets less cash) and operating liabilities (total liabilities less total debt).
Negative convexity
A characteristic of CMOs and other callable or prepayable securities that causes investors to have their principal returned sooner than expected in a declining interest rate environment, and later than expected in a rising interest rate environment.
Negotiated underwriting
In a negotiated underwriting, the sale of bonds is by negotiation and agreement with an underwriter or underwriting syndicate selected by the issuer prior to the moment of sale. This is in contrast to a competitive or an advertised sale.
Net direct debt
Total direct debt of a municipality less all self-supporting debt, any sinking funds, and short-term debt such as tax anticipation notes and revenue anticipation notes.
Net interest cost
The traditional method of calculating bids for new issues of municipal securities. The total dollar amount of interest over the life of the bonds is adjusted by the amount of premium or discount bid, and then reduced to an average annual rate. The other method is known as the true interest cost (see also true interest).
Net operating cycle
An estimate of the average time that elapses between paying suppliers for materials and collecting cash from the subsequent sale of goods produced.
Net operating profit less adjusted taxes
A company’s operating profit with adjustments to normalize the effects of capital structure. Synonyms: NOPLAT
Net present value
The present value of an investment’s cash inflows (benefits) minus the present value of its cash outflows (costs). Synonyms: NPV
Net profit margin
An indicator of profitability, calculated as net income divided by revenue; indicates how much of each dollar of revenues is left after all costs and expenses. Synonyms: profit margin return on sales
Net realizable value 
Estimated selling price in the ordinary course of business less the estimated costs necessary to make the sale.
Net revenue
Revenue after adjustments (e.g., for estimated returns or for amounts unlikely to be collected).
Net worth 
The difference between the market value of assets and liabilities.
When parties agree to exchange only the net amount owed from one party to the other.
Each value on a binomial tree from which successive moves or outcomes branch.
No-growth company
A company without positive expected net present value projects.
Net order
Bond sold to investors at the price or yield shown in the reoffering scale. This is the price with no concessions.
Net price
Price paid to a dealer for bonds when the dealer acts as principal in a transaction, i.e., the dealer sells bonds that he owns, as opposed to an agency transaction (see agency transaction).
New-issue market
Market for new issues of bonds and notes
No-growth value per share
The value per share of a no-growth company, equal to the expected level amount of earnings divided by the stock’s required rate of return.
Nominal default-free bonds 
Conventional bonds that have no (or minimal) default risk.
Nominal gross domestic product
A money measure of the goods and services produced within a country’s borders. Synonyms: nominal GDP
Nominal rate
A rate of interest based on the security’s face value.
Nominal risk-free interest rate
The sum of the real risk-free interest rate and the inflation premium.
Nominal scale
A measurement scale that categorizes data but does not rank them.
Nominal spread
The spread of a bond or portfolio above the yield of a Treasury of equal maturity.
Nonconventional cash flow
In a nonconventional cash flow pattern, the initial outflow is not followed by inflows only, but the cash flows can flip from positive (inflows) to negative (outflows) again (or even change signs several times).
Not due to be consumed, converted into cash, or settled within one year after the balance sheet date.
Noncurrent assets
Assets that are expected to benefit the company over an extended period of time (usually more than one year).
Non-deliverable forwards
Cash-settled forward contracts, used predominately with respect to foreign exchange forwards. Synonyms: NDFs
Nonfinancial risk
Risks that arise from sources other than the external financial markets, such as changes in accounting rules, legal environment, or tax rates.
Nonlinear relation
An association or relationship between variables that cannot be graphed as a straight line.
Nonmonetary assets and liabilities
Assets and liabilities that are not monetary assets and liabilities. Nonmonetary assets include inventory, fixed assets, and intangibles; nonmonetary liabilities include deferred revenue.
Involving minimal probability distribution assumptions.
Nonparametric test
A test that is not concerned with a parameter, or that makes minimal assumptions about the population from which a sample comes.
With reference to a random variable, the property of having characteristics, such as mean and variance, which are not constant through time.
Normal backwardation
The condition in futures markets in which futures prices are lower than expected spot prices.
Normal contango
The condition in futures markets in which futures prices are higher than expected spot prices.
Normal distribution
A continuous, symmetric probability distribution that is completely described by its mean and its variance.
Normal portfolio
A portfolio with exposure to sources of systematic risk that are typical for a manager, using the manager’s past portfolios as a guide.
Normalized earnings per share
The earnings per share that a business could achieve currently under mid-cyclical conditions. Synonyms: normal earnings per share
Notes payable
Amounts owed by a business to creditors as a result of borrowings that are evidenced by (short-term) loan agreements.
Notional principal amount 
The amount specified in a swap that forms the basis for calculating payment streams.
n-Period moving average
The average of the current and immediately prior n – 1 values of a time series.
NPV rule
An investment decision rule that states that an investment should be undertaken if its NPV is positive but not undertaken if its NPV is negative.
Null hypothesis
The hypothesis to be tested.
Number of days of inventory
An activity ratio equal to the number of days in a period divided by the inventory ratio for the period; an indication of the number of days a company ties up funds in inventory.
Number of days of payables
An activity ratio equal to the number of days in a period divided by the payables turnover ratio for the period; an estimate of the average number of days it takes a company to pay its suppliers.
Number of days of receivables
Estimate of the average number of days it takes to collect on credit accounts.
Nominal value
The face value of a bond (as opposed to the amount an individual investor might have paid for the bond).
Non-callable bond
A bond that cannot be called for redemption by the issuer before its specified maturity date.
Non-investment grade
Bonds not considered suitable for preservation of invested capital; ordinarily, those rated Baa3 or below by Moody’s Investors Service, or BBB- or below by Standard & Poor’s Corporation. Bonds that are non-investment grade are also called high-yield bonds.
Short-term bonds to pay specified amounts of money, secured by specified sources of future revenues, such as taxes, federal and state aid payments, and bond proceeds.
Notice of sale
An official document disseminated by an issuer of municipal securities that gives pertinent information regarding an upcoming bond issue and invites bids from prospective underwriters.
Notional amount
A stated principal amount in an interest rate swap on which the swap is based.
Notice of Internet Availability of Proxy Materials 
In 2007, the Securities and Exchange Commission adopted the current “Notice and Access” regime for the distribution of proxy materials. In general, these rules permit issuers to post their proxy materials online so long as they provide shareholders with written notice of where they can find the materials. 
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