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Superglossary - Finance
Category: Economy and Finance > Finance
Date & country: 16/12/2013, US
Words: 3844


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

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 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.

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

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

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

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
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

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
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 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 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.

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.

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 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.

Agency Incentive Arrangement
A means of compensating the broker of a program trade using benchmark prices for issues to be traded

Agency Pass-Throughs
Mortgage pass-through securities whose principal and interest payments are guaranteed by government

Agency Securities
Securities issued by federally related institutions and U.S. government-sponsored entities. Such age

Agent
The decision-maker in a principal-agent relationship.

Aggregate Exercise Price
The exercise price multiplied by the number of shares in a put or call contract. The option premium

Aggregation
Process in corporate financial planning whereby the smaller investment proposals of each of the firm

Aggressive Growth Mutual Fund
A mutual fund designed for maximum capital appreciation that places its money in companies with high

Agreement Among Underwriters
A contract amoung participating members of a syndicate that defines the members' proportionate liabi

AIBD
Association of International Bond Dealers

Alien Corporation
A company incorporated under the laws of a foreign country regardless of where the company conducts

All In
Refers to an issuer's interest rate after accounting for commissions and various related expenses.

All Or None Order (AON)
Used in context of general equities. A limited price order that is to be executed in its entirety or

All Ordinaries Index
The major index of Australian stocks comprising 330 of the major companies listed on the Australian

All-Or-None Underwriting
An arrangement whereby a security issue is cancelled if the underwriter is unable to resell the enti

Alligator Spread
The term used to describe a spread in the options market that generates such a large commission that

Allotment
The number of securities assigned to each of the participants in an underwriting syndicate.

Alpha
Measure of risk-adjusted performance. An alpha is usually generated by regressing the security or mu

Alpha Equation
Regression usually run over 36-60 months of data

Alphabet Stock
Categories of common stock of a corporation associated with a particular subsidiary resulting from a

American Depository Receipt Ratio
The number of ordinary shares into which an ADR can be converted.