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Superglossary - Finance
Category: Economy and Finance > Finance
Date & country: 16/12/2013, US
Words: 5424


Abandonment
Controlling party giving up rights to property voluntarily.

Abandonment Option
The option of terminating an investment earlier than originally planned.

ABC Agreement
A contract between an employee and a brokerage firm outlining the rights of the firm purchasing an N

Ability To Pay
Refers to the borrower's ability to make interest and principal payments on debts. See

Abnormal Returns
The component of the return that is not due to systematic influences (market-wide influences). In ot

Absolute Priority
Rule in bankruptcy proceedings requiring senior creditors to be paid in full before junior creditors

Absorbed
Used in context of general equities. Securities are 'absorbed' as long as there are corresponding or

Abusive Tax Shelter
A limited partnership that the IRS judges to be claiming tax deductions illegally.

Accelerated Depreciation
Any depreciation method that produces larger deductions for depreciation in the early years of a ass

Acceleration Clause
A contract stating that the unpaid balance becomes due and payable if specific actions transpire, su

Acceptance
Contractual agreement instigated when the drawee of a time draft 'accepts' the draft by writing the

Accommodative Monetary Policy
Federal Reserve System policy to increase the amount of money available to banks for lending. See

Account
In the context of bookkeeping, refers to the ledger pages upon which various assets, liabilities, in

Account Balance
Credits minus debits at the end of a reporting period.

Account Executive
The brokerage firm employee who handles stock orders for clients. See

Account Reconciliation
The reviewing and adjusting of the balance in a personal checkbook to match your bank statement.

Account Statement
In the context of banking, refers to a summary of all balances. In the context of securities, a summ

Accountants Opinion
A signed statement from an independent public accountant after examination of a firm's records and a

Accounting Earnings
Earnings of a firm as reported on its income statement.

Accounting Exposure
The change in the value of a firm's foreign currency-denominated accounts due to a change in exchang

Accounting Insolvency
Total liabilities exceed total assets. A firm with a negative net worth is insolvent on the books.

Accounting Liquidity
The ease and quickness with which assets can be converted to cash.

Accounts Payable
Money owed to suppliers.

Accounts Payable
Amounts owed by the business for purchases made on credit. These amounts are paid by the business af

Accounts Receivable
Money owed by customers.

Accounts Receivable
Amounts due to the business from customers for merchandise or services purchased on credit. The busi

Accounts Receivable Financing
A short-term financing method in which accounts receivable are collateral for cash advances. See

Accounts Receivable Turnover
The ratio of net credit sales to average accounts receivable, which is a measure of how quickly cust

Accredited Investor
Refers to a wealthy investor (net worth $7 million or annual income >200,000) who does not count to

Accretion (Of A Discount)
In portfolio accounting, a straight-line accumulation of capital gains on a discount bond in anticip

Accrual Basis
In the context of accounting, practice in which expenses and income are accounted for as if they are

Accrual Bond
A bond on which interest accrues but is not paid to the investor during the time of accrual. The amo

Accrued Benefits
The pension benefits earned by an employee accourding to the years of the employee's service.

Accrued Expenses
Expenses that the business has incurred for which it has not received, or will not receive, an invoi

Accrued Interest
Applies mainly to convertible securities. Interest that has accumulated between the most recent paym

Accrued Market Discount
The rise in the market value of a discount bond as it approaches maturity (when it is redeemable at

Accumulate
Broker/analyst recommendation that could mean slightly different things depending on the broker/anal

Accumulated Depreciation
The total amount of depreciation expense recorded to date for the company's fixed assets. On the bal

Accumulated Dividend
A dividend that has reached its due date, but is not paid out. See

Accumulated Profits Tax
A tax on earnings kept in a firm to prevent the higher personal income tax rate that would obtain if

Accumulation
In the context of corporate finance, refers to profits that are added to the capital base of the com

Accumulation Area
A price range within which a buyer accumulates shares of a stock. See

Acid Test Ratio
Also called the quick ratio, the ratio of current assets minus inventories, accruals, and prepaid it

Acquired Surplus
The surplus acquired when a company is purchased in a pooling of interests combination, i.e. the net

Acquiree
A firm that is being acquired.

Acquirer
A firm or individual that is acquiring something.

Acquisition
When a firm buys another firm.

Acquisition Cost
The amount actually paid to purchase an asset. This includes all costs associated with the purchase,

Acquisition Cost
Refers to the price (including the closing costs) to purchase another company or property. In the co

Acquisition Of Assets
A merger or consolidation in which an acquirer purchases the selling firm's assets.

Acquisition Of Stock
A merger or consolidation in which an acquirer purchases the acquiree's stock.

Across The Board
Movement or trend in the stock market that affects almost all stocks in all sectors to move in the s

Act Of State Doctrine
This doctrine says that a nation is sovereign within its own borders, and its domestic actions may n

Acting In Concert
Investors working together and performing identical actions to attain the same investment goal.

Active
A market in which there is frequent trading.

Active Account
Refers to a brokerage account in which many transactions occur. Brokerage firms may levy a fee if an

Active Bond Crowd
Refers to members of the bond department of the NYSE who trade the most bonds. Antithesis of cabinet

Active Box
Securities that are held in safekeeping and are available as collateral for securing brokers' loans

Active Portfolio Strategy
A strategy that uses available information and forecasting techniques to seek better performance tha

Actual Market
Used in context of general equities. Firm market. Antithesis of Subject market.

Actuals
The physical commodities underlying a futures contract. Cash commodity, physical asset.

Actuals
Financial statements describing the actual operations of the business. Actuals often pertain to the

Additional Bonds Test
A test for ensuring that bond issuers can meet the debt service requirements of issuing any new addi

Additional Hedge
A protection against borrower fallout risk in the mortgage pipeline.

Additional Paid-In Capital
The amount paid by investors for stock over and above its par value. See also contributed capital.

Adequacy Of Coverage
A test that measures the extent to which the value of an asset is protected from potential loss eith

Adjustable Rate
Applies mainly to convertible securities. Refers to interest rate or dividend that is adjusted perio

Adjustable-Rate Mortgage (ARM)
A mortgage that features predetermined adjustments of the loan interest rate at regular intervals ba

Adjusted Balance Method
Method of calculating finance charges that uses the account balance remaining after adjusting for al

Adjusted Basis
Price from which to calculate and derive capital gains or losses upon sale of an asset. Account acti

Adjusted Debit Balance (ADB)
The account balance for a margin account that is calculated by combining the balance owed to a broke

Adjusted Exercise Price
Term used in options on Ginnie Mae (Government National Mortgage Association) contracts. The final e

Adjusted Gross Income (AGI)
Gross income less allowable adjustments, is the income on which an individual is taxed by the federa

Adjusted Present Value (APV)
The net present value analysis of an asset if financed solely by equity (present value of unlevered

Adjustment Bond
A bond issued in exchange for outstanding bonds when a corporation facing bankruptcy is recapitalize

Administrative Pricing Rules
IRS rules used to allocate income on export sales to a foreign sales corporation.

Advance
Increase in the market price of stocks, bonds, commodities, or other assets.

Advance Commitment
A promise to sell an asset before the seller has lined up purchase of the asset. This seller can off

Advance Funded Pension Plan
A pension plan in which funds are set aside in advance of the date of retirement.

Advance Refunding
In the context of municipal bonds, refers to the sale of new bonds (the refunding issue) before the

Adverse Opinion
An independent auditor's opinion expressing that a firm's financial statements do not reflect the co

Adverse Selection
Refers to a situation in which sellers have relevant information that buyers lack (or vice versa) ab

Advisory Letter
A newsletter offering financial advice to its readers.

Affiliate
Relationship between two companies when one company owns substantial interest, but less than a major

Affiliated Corporation
A corporation that is an affiliate to the parent company.

Affiliated Person
An individual who possesses enough influence and control in a corporation as to be able to alter the

Affirmative Covenant
A bond covenant that specifies certain actions the firm must take.

Affordability Index
An index that measures the financial ability of consumers to purchase a home.

After Acquired Clause
A contractual clause in a mortgage agreement stating that any additional mortgageable property attai

After Tax Income
Another term for net income.

After-Hours Dealing Or Trading
Securities trading after regular trading hours on organized exchanges.

After-Tax Basis
The comparison basis used to analyze the net after-tax returns on a corporate taxable bond and a mun

After-Tax Profit Margin
The ratio of net income to net sales.

After-Tax Real Rate Of Return
The after-tax rate of return minus the inflation rate.

Aged Fail
An account between two broker/dealers that remains intact after 30 days after the settlement date. T

Agency
In context of general equities, buying or selling for the account and risk of a customer. Generally,

Agency Bank
A form of organization commonly used by foreign banks to enter the U.S. market. An agency bank canno

Agency Basis
A means of compensating the broker of a program trade solely on the basis of commission established

Agency Cost View
The argument that specifies that the various agency costs create a complex environment in which tota

Agency Costs
The incremental costs of having an agent make decisions for a principal.