E

1 EAC Method

Equivalent annual cost method is used to do capital decision for projects with unequal lives. It equals to the NPV of cost divided by an annuity factor that has the same life as the investment. However, this method assumes that two alternative projects have same revenue. [For a general case, see Equivalent annual NPV and Appendix D]

2 EAFE Index

The European, Australian, Far East index, computed by Morgan Stanley, is a widely used index of non-US stocks.

3 Early Exercise

Exercise prior to the maturity date.

4 Early Withdrawal Penalty

An interest penalty a depositor pays for withdrawing funds from a deposit account prior to maturity.

5 Earning Assets

Income-earning assets held by a bank; typically include interest-bearing balances, investment securities, and loans.

6 Earnings Credit (Earnings Credit Rate)

The assumed interest rate at which a bank applied to customer’s investable balances to earn interest income. Estimating investment income from balances involves four...