ACCOUNTING TERMS - ACCOUNTING DICTIONARY - ACCOUNTING GLOSSARY
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ADVANCE is an amount paid before it is earned, e.g. payment ahead of actual expenditures or phase completion of a construction project.
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STRIPS, in securities, is dividing a Treasury bond or mortgage-backed security into its principal and interest payments and selling the claims to these payments as new and separate securities. The principal portion is called a principal only (PO) security, and the interest portion is called an interest only (IO) security
PRIMARY DEALER is a designation given by the Federal Reserve System to commercial banks or broker/dealers who meet specific criteria, including capital requirements and participation in Treasury auctions. A primary dealer is entitled and obligated to purchase and sell government securities with the Federal Reserve directly. They serve as the conduits for Federal Reserve open market activities. There are approximately 30-40 such dealers.