Financial definitions for business owners A

• Definition Angels Explain Individuals providing venture capital
• Definition Biter Ankle Explain Stock issued with a market capitalization of less than $500 million
• Definition Float Availability Explain Checks deposited by a company that have not yet been cleared
• Definition Autoregressive Explain Using past data or variable of interest to predict future values of the same variable
• Definition Angel Explain An investment-grade bond. Antithesis to fallen angel. In the context of venture capital, the first investor
• Definition Balance Daily Average Explain which the balance owed each day by a customer is divided by the number of days. See also: Adjusted balance method and previous balance
• Definition Down Average Explain the average cost of shares, in which the investor purchases more shares with a fixed amount of capital as the price of the shares decrease
• Definition Equity Average Explain A customer's average daily balance in a trading account at a brokerage firm
• Definition Life Average Explain average life (WAL). The average number of years that each dollar of unpaid principal due on the mortgage remains outstanding. Average life
• Definition Maturity Average Explain securities held by a mutual fund. Changes in interest rates have greater impact on funds with longer average maturity
• Definition Rate Tax Average Explain Taxes as a fraction of income; total taxes divided by total taxable income
• Definition Up Average Explain the overall cost of shares by buying as many shares with a given amount of capital in an increasing market. Buying $1000 worth of shares at
• Definition Away Explain A trade, quote, or market that does not originate with the dealer in question, e.g., the bid is 98-10 away from me
• Definition Asymmetry Explain A lack of equivalence between two things, such as the unequal tax treatment of interest expense and dividend payments
• Definition For At Explain Paramount terms used to differentiate an offering. Stock is offered at; stock is bid for. In an offering, the trading syntax followed is
• Definition Ase Explain See: Athens Stock Exchange
• Definition At the close order Explain none market order that is to be executed at the closing price of the security on the exchange. If the execution cannot be made under this
• Definition Figure The At Explain whole integer price (excluding the fraction) closest to the side of the market (bid/ask) being discussed. At the full
• Definition Full The At Explain Used in context of general equities. At the figure
• Definition Money The At Explain price of the option is equal to the market price of the underlying security. For example, if xyz stock is trading at 54, then the xyz 54
• Definition At the opening order Explain order or limited price order that is to be executed at the opening (and corresponding price) of the stock or not at all, and any such order
• Definition Bias Attribute Explain dividend discount model to share certain equity attributes such as low price-earnings ratios, high dividend yield, high book value ratio
• Definition Markets Auction Explain is determined through the free interaction of prospective buyers and sellers, as on the floor of the stock exchange
• Definition Trail Audit Explain Resolves the validity of an accounting entry by a step-by-step record by which accounting data can be traced to their source
• Definition Auditor's report Explain A section of an annual report that includes the auditor's opinion about the veracity of the financial statements
• Definition Millie Aunt Explain An unsophisticated investor
• Definition Authentication Explain In the context of bonds, refers to the validation of a bond certificate
• Definition Bond Authority Explain a corporation created to manage a revenue-producing public enterprise. The difference between an authority bond and a municipal bond is
• Definition Shares Authorized Explain Number of shares authorized for issuance by a firm's corporate charter
• Definition Autocorrelation Explain The correlation of a variable with itself over successive time intervals. Sometimes called serial correlation
• Definition Extension Automatic Explain An automatic extension of time granted to a taxpayer to file a tax return
• Definition Transfer Funds Automatic Explain A transfer of funds from one account or investment vehicle to another using electronic or telecommunications technology
• Definition Program Investment Automatic Explain invest or withdraw funds automatically. A mutual fund, for example, automatically withdraw a pre determined specified amount from the
• Definition Stay Automatic Explain from collection efforts related to collateral seizure. Automatically imposed when a firm files for bankruptcy under Chapter 11
• Definition Withdrawal Automatic Explain A mutual fund that gives shareholders the right to receive a fixed payment from dividends on a quarterly or monthly basis
• Definition Autoquote Explain generated for many of the financial options contracts traded at LIFFE using standard mathematical models as derived by Black and Scholes
• Definition Average Explain stocks intended to represent the behavior of the market or some component of it. One good example is the widely quoted Dow Jones Industrial
• Definition Return Accounting Average Explain The average project earnings after taxes and depreciation divided by the average book value of the investment during its life
• Definition Average (across-day) measures Explain An estimation of price that uses the average or representative price of a large number of trades
• Definition Average age of accounts receivable Explain The weighted-average age of all the firm's outstanding invoices
• Definition Average collection period, or days' receivables Explain The ratio of accounts receivables to sales, or the total amount of credit extended per dollar of daily sales (average AR/sales 365
• Definition Cost Average Explain In the context of investing, refers to the average cost of shares or stock bought at different prices over time
• Definition Average cost of capital Explain bondholders and stockholders expressed as a percentage of capital contributed to the firm. Average cost of capital is computed by dividing
• Definition Tops Ascending Explain peak in a security's price over a period of time is higher than the preceding peak. Antithesis of descending tops
• Definition Option Asian Explain Option based on the average price of the underlying assets during the life of the option
• Definition Ask Explain price an investor will accept to sell a stock. Practically speaking, this is the quoted offer at which an investor can buy shares of stock
• Definition Asked to bid/offer Explain Usually a seller (buyer) looking to aggressively sell (buy) stock, usually asking for a capital commitment from an investment bank
• Definition Aspirin Explain Notes. Zero-coupon four-year bonds repayable at face value plus the percentage increase by which the Australian stock index of all
• Definition Assay Explain Metal purity test to confirm that the metal meets the standards for trading on a commodities exchange (commodities exchange center
• Definition Valuation Assessed Explain municipality for the purpose of tax assessment. Such an assessed valuation is important to investors in municipal bonds that are backed by
• Definition Asset Explain Any possession that has value in an exchange
• Definition Ratios Activity Asset Explain Ratios that measure how effectively the firm is managing its assets
• Definition Decision Allocation Asset Explain The decision regarding how an institution's funds should be distributed among the major classes of assets in which it may invest
• Definition Asset allocation mutual fund Explain A mutual fund that rotates amoung stocks, bonds, and money market securities to maximize return on investment and minimize risk
• Definition Security Backed Asset Explain A security that is collateralized by loans, leases, receivables, or installment contracts on personal property, not real estate
• Definition Financing Based Asset Explain and equity investors look principally to the cash flow from a particular asset or set of assets for a return on, and the return of, their
• Definition Classes Asset Explain Categories of assets, such as stocks, bonds, real estate, and foreign securities
• Definition Test Coverage Asset Explain A bond indenture restriction that permits additional borrowing if the ratio of assets to debt does not fall below a specified minimum
• Definition Asset Depreciation Range System Explain A range of depreciable lives the IRS allows for particular classes of assets
• Definition Ratio Equity Asset Explain The ratio of total assets to stockholder equity
• Definition Asset for asset swap Explain Creditors exchange the debt of one defaulting borrower for the debt of another defaulting borrower
• Definition Management Liability Asset Explain financial institution to accomplish the two goals of a financial institution: (1) to earn an adequate return on funds invested and (2) to
• Definition Account Management Asset Explain Account at a brokerage house, bank, or savings institution that integrates banking services and brokerage features
• Definition Play Asset Explain A company with assets that are not believed to be accurately reflected in its stock price, making it an attractive buy or play
• Definition Interest And Explain An indication that the buyer will receive accrued interest in addition to the price quoted for a bond
• Definition Model Pricing Asset Explain expected rate of return on an asset. Related: Capital asset pricing model and arbitrage pricing theory
• Definition Stripper Asset Explain takes over a target company (company B) in order to sell large assets of company B to repay debt. Company A calculates that the net selling
• Definition Substitution Asset Explain Occurs when a firm invests in assets that are riskier than those that the debtholders expected
• Definition Problem Substitution Asset Explain Arises when the stockholders substitute riskier assets for the firm's existing assets and expropriate value from the debtholders
• Definition Swap Asset Explain cash flow characteristics of an institution's assets in order to provide a better match with its liabilities
• Definition Turnover Asset Explain The ratio of net sales to total assets
• Definition Itself Of Ahead Explain In context of general equities, refers to equities that are overbought or oversold on a fundamental basis
• Definition Value Asset Explain 039;s assets on a per-share basis, not the market value of the shares. A company is undervalued in the market when asset value exceeds
• Definition Assets Explain A firm's productive resources
• Definition Requirements Assets Explain A common element of a financial plan that describes projected capital spending and the proposed uses of net working capital
• Definition Assignment Explain options writer that requires the writer to sell (in the case of a call) or purchase (in the case of a put) the underlying security at the
• Definition Rate Interest Assumed Explain Rate of interest used by an insurance company to calculate the payout on an annuity contract
• Definition Assumption Explain Becoming responsible for the liabilities of another party
• Definition ASX Derivatives and Options Market (ASXD) Explain Options market trading options on more than 50 of Australia's and New Zealand's leading companies
• Definition Information Asymmetric Explain Information that is known to some people but not to other people
• Definition Taxes Asymmetric Explain When participants in a transaction have different net tax rates
• Definition Volatility Asymmetric Explain Phenomenon that volatility is higher in down markets than in up markets
• Definition Report Annual Explain company's financial condition. It includes a description of the firm's operations, as well as balance sheet, income statement
• Definition Gain Annualized Explain month, the annualized gain for that stock over a twelve month period is 121.5% = 18%. Compounded over the 12 month period, the gain is (1
• Definition Annualized holding-period return Explain compounded t times generates the same t-period holding return as actually occurred from period 1 to period t
• Definition Meeting Annual Explain Meeting of stockholder held once a year at which the managers of a company report to the stockholders on the year's results
• Definition Annuitant Explain An individual who receives benefits from an annuity
• Definition Annuitize Explain the capital that has accumulated in an annuity. The payments may be a fixed amount, for a fixed period of time, or for a lifetime
• Definition Annuity Explain A regular periodic payment made by an insurance company to a policyholder for a specified period of time
• Definition Certain Annuity Explain An annuity that pays a specific amount on a monthly basis for a set amount of time
• Definition Due Annuity Explain An annuity with n payments, where the first payment is made at time t = 0, and the last payment is made at time t = n - 1
• Definition Factor Annuity Explain Present value of $1 paid for each of t periods
• Definition Arrears In Annuity Explain An annuity with a first payment one full period hence, rather than immediately
• Definition Date Starting Annuity Explain The date when an annuitant starts receiving payments from an annuity
• Definition Period Holding Anticipated Explain The period of time an individual expects to hold an asset
• Definition Anticipation Explain Paying what is owed before it is due (usually to save interest charges
• Definition Effect Antidilutive Explain Result of a transaction that increases earnings per common share (e.g., by decreasing the number of shares outstanding
• Definition Laws Antitrust Explain Legislation established by the federal government to prevent the formation of monopolies and to regulate trade
• Definition Date Interest Any Explain A call provision in a municipal bond indenture that establishes the right of redemption for the issuer on any interest payment due date
• Definition Any-or-all bid Explain bid in which the acquirer offers to pay a set price for all outstanding shares of the target company, or any part thereof; contrasts with
• Definition Any-part-of order Explain In context of general equities, order to buy or sell a quantity of stock in pieces if necessary. Antithesis of an all-or-none order (AON
• Definition Ratio Appraisal Explain The signal-to-noise ratio of an analyst's forecasts. The ratio of alpha to residual standard deviation
• Definition Rights Appraisal Explain A right of shareholders in a merger to demand the payment of a fair price for their shares, as determined independently
• Definition Appreciation Explain Increase in the value of an asset
• Definition Request Appropriation Explain Formal request for funds for capital investment project
• Definition Accountant's opinion Explain public accountant after examination of a firm's records and accounts. The opinion may be unqualified or qualified. See: Qualified
• Definition Aps Explain Auction Preferred Stock. A type of Dutch Auction Preferred Stock (Goldman Sachs product
• Definition Amortizing interest rate swap Explain Swap in which the principal or notional amount rises (falls) as interest rates rise (decline
• Definition Amtel Explain Used in context of general equities. In-house message system entered and displayed through Quotron A page
• Definition Arbitrage Explain a security at two different prices in two different markets, resulting in profits without risk. Perfectly efficient markets present no
• Definition Bonds Arbitrage Explain intended to gain an interest rate advantage by refunding a higher-rate bond in ahead of their call date. Lower-rate refunding issue
• Definition Arbitrage-free option-pricing models Explain Yield curve option-pricing models
• Definition Date Announcement Explain concerning a given company is announced to the public. Used in event studies, which researchers use to evaluate the economic impact of
• Definition Away from the market Explain line with the inside market at this time, such as when a bid on a limit order is lower or the offer price is higher than the current market
• Definition Price Asked Explain In context of general equities, price at which a security or commodity is offered for sale on an exchange or in the OTC Market
• Definition Arithmetic average (mean) rate of return Explain Arithmetic mean return
• Definition Arm's length price Explain The price at which a willing buyer and a willing unrelated seller would freely agree to transact
• Definition Index Arms Explain total up volume)/(total down volume). An advance/decline market indicator. Less than 1.0 indicates bearish demand, while above 1.0 is
• Definition Us From Away Explain characterize role of a competing broker/dealer. Trading away from us signifies that stock is bought and/or sold with institutions using
• Definition Arrearage Explain In the context of investments, refers to the amount by which interest on bonds or dividends on cumulative preferred stock is due and unpaid
• Definition Incorporation Of Articles Explain Legal document establishing a corporation and its structure and purpose
• Definition Currency Artificial Explain A currency substitute, e.g., special drawing rights (SDRs
• Definition Corporation Alien Explain A company incorporated under the laws of a foreign country regardless of where the company conducts its operations
• Definition Rate Equity All Explain The discount rate that reflects only the business risks of a project, distinct from the effects of financing
• Definition In All Explain Refers to an issuer's interest rate after accounting for commissions and various related expenses
• Definition Index Ordinaries All Explain The major index of Australian stocks comprising 330 of the major companies listed on the Australian Stock Exchange
• Definition Aex Explain See: Amsterdam Exchange
• Definition Cost In All Explain Total costs, explicit and implicit
• Definition All-or-none underwriting Explain An arrangement whereby a security issue is cancelled if the underwriter is unable to resell the entire issue
• Definition Member Allied Explain A partner or stockholder of a firm that is a member of the NYSE, the partner or stockholder is not personally a member of the NYSE
• Definition Spread Alligator Explain the options market that generates such a large commission that the client is unlikely to make a profit even if the markets move as the
• Definition Allotment Explain The number of securities assigned to each of the participants in an underwriting syndicate
• Definition Alpha Explain An alpha is usually generated by regressing the security or mutual fund's excess return on the S;P 500 excess return. The beta adjusts
• Definition Equation Alpha Explain months of data: Return-Treasury bill= alpha + beta (S;P 500 - Treasury bill) + error. The alpha is the intercept. Note that the benchmark
• Definition Stock Alphabet Explain corporation associated with a particular subsidiary resulting from acquisitions and restructuring. The various alphabetical categories have
• Definition Alternative Minimum Tax (AMT) Explain wealthy individuals, estates, trusts, and corporations pay a minimal level income tax. For individuals, the AMT is calculated by adding
• Definition Instruments Mortgage Alternative Explain as adjustable-rate and variable-rate mortgages, graduated-payment mortgages, reverse-annuity mortgages, and several seldom-used variations
• Definition American Depository Receipt Fees Explain releasing of ADRs from ordinary shares, charged by the commercial banks with correspondent banks in the international sites
• Definition American Depository Receipt Ratio Explain The number of ordinary shares into which an ADR can be converted
• Definition Option American Explain An option that may be exercised at any time up to and including the expiration date. Related: European option
• Definition Shares American Explain S. by a transfer agent acting on behalf of the foreign issuer. The certificates represent claims to foreign equities
• Definition Option Style American Explain exercised at any time between the date of purchase and the expiration date. Most exchange-traded options are American style
• Definition Amortization Explain The repayment of a loan by installments
• Definition Factor Amortization Explain The pool factor implied by the scheduled amortization assuming no prepayments
• Definition Basis Annual Explain figure covering a period of less than one year and extrapolating it to cover a full one year period. The process is known as annualizing
• Definition Exclusion Annual Explain A tax rule allowing the deduction of certain income from taxation
• Definition Annual fund operating expenses Explain management fee and other expenses, including the expenses for maintaining shareholder records, providing shareholders with financial
• Definition Annual rate of return Explain annual rate of return. If the rate of return is calculated on a monthly basis, we sometimes multiply this by 12 to express an annual rate
• Definition Corporation Affiliated Explain A corporation that is an affiliate to the parent company
• Definition Person Affiliated Explain An individual who possesses enough influence and control in a corporation as to be able to alter the actions of the corporation
• Definition Covenant Affirmative Explain A bond covenant that specifies certain actions the firm must take
• Definition Index Affordability Explain An index that measures the financial ability of consumers to purchase a home
• Definition Clause Acquired After Explain agreement stating that any additional mortgageable property attained by the borrower after the mortgage is signed will be regarded as
• Definition After-hours dealing or trading Explain Securities trading after regular trading hours on organized exchanges
• Definition Basis Tax After Explain The comparison basis used to analyze the net after-tax returns on a corporate taxable bond and a municipal tax-free bond
• Definition After-tax profit margin Explain The ratio of net income to net sales
• Definition After-tax real rate of return Explain The after-tax rate of return minus the inflation rate
• Definition Fail Aged Explain that remains intact after 30 days after the settlement date. The receiving firm must adjust its capital as it can no longer treat this
• Definition Agency Explain or selling for the account and risk of a customer. Generally, an agent, or broker, acts as intermediary between buyer and seller, taking no
• Definition Bank Agency Explain foreign banks to enter the U.S. market. An agency bank cannot accept deposits or extend loans in its own name; it acts as agent for the
• Definition Basis Agency Explain program trade solely on the basis of commission established through bids submitted by various brokerage firms
• Definition View Cost Agency Explain various agency costs create a complex environment in which total agency costs are at a minimum with some, but less than 100%, debt
• Definition Costs Agency Explain The incremental costs of having an agent make decisions for a principal
• Definition Arrangement Incentive Agency Explain A means of compensating the broker of a program trade using benchmark prices for issues to be traded in determining commissions or fees
• Definition Throughs Pass Agency Explain principal and interest payments are guaranteed by government agencies, such as the Government National Mortgage Association (Ginnie Mae
• Definition Problem Agency Explain Conflicts of interest among stockholders, bondholders, and managers
• Definition Securities Agency Explain institutions and U.S. government-sponsored entities. Such agencies were created to reduce borrowing costs for certain sectors of the
• Definition Theory Agency Explain The analysis of principal-agent relationships, in which one person, an agent, acts on behalf of another person, a principal
• Definition Agent Explain The decision-maker in a principal-agent relationship
• Definition Price Exercise Aggregate Explain number of shares in a put or call contract. The option premium is excluded in the aggregate exercise price. In tje case of options traded
• Definition Aggregation Explain whereby the smaller investment proposals of each of the firm's operational units are aggregated and effectively treated as a whole
• Definition Aggressive growth mutual fund Explain A mutual fund designed for maximum capital appreciation that places its money in companies with high growth rates
• Definition Aggressively Explain For a customer it means working to buy or sell one's stock, with an emphasis on execution over price. For a trader it means acting in
• Definition Schedule Aging Explain down into age categories (such as 0-30 days, 30-60 days, and 60-90 days), which is used to determine if customer payments are keeping close
• Definition Underwriters Among Agreement Explain of a syndicate that defines the members' proportionate liability, which is usually limited to and based on the participants'
• Definition You Of Ahead Explain the same price but entered ahead of your order/interest, usually referring to the specialist's book. See: Behind, matched orders
• Definition Accelerated cost recovery system (ACRS) Explain Schedule of depreciation rates allowed for tax purposes
• Definition Asian Currency Units (ACU) Explain Dollar deposits held in Singapore or other Asian centers
• Definition AIMR Performance Presentation Standards Implementation Committee Explain Management and Research (AIMR) Performance Presentation Standards Implementation Committee is charged with the responsibility to interpret
• Definition Stock Pocket Air Explain A stock whose price drops precipitously, often on the unexpected news of poor results
• Definition Accumulate Explain could mean slightly different things depending on the broker/analyst. In general, it means to increase the number of shares of a particular
• Definition Ratio Test Acid Explain Also called the quick ratio, the ratio of current assets minus inventories, accruals, and prepaid items to current liabilities
• Definition Surplus Acquired Explain purchased in a pooling of interests combination, i.e. the net worth not considered to be capital stock
• Definition Acquiree Explain A firm that is being acquired
• Definition Acquirer Explain A firm or individual that is acquiring something
• Definition Acquisition Explain When a firm buys another firm
• Definition Assets Of Acquisition Explain A merger or consolidation in which an acquirer purchases the selling firm's assets
• Definition Stock Of Acquisition Explain A merger or consolidation in which an acquirer purchases the acquiree's stock
• Definition Board The Across Explain Movement or trend in the stock market that affects almost all stocks in all sectors to move in the same direction
• Definition Concert In Acting Explain Investors working together and performing identical actions to attain the same investment goal
• Definition Act of state doctrine Explain sovereign within its own borders, and its domestic actions may not be questioned in the courts of another nation
• Definition Active Explain A market in which there is frequent trading
• Definition Account Active Explain many transactions occur. Brokerage firms may levy a fee if an account generates an inadequate level of activity
• Definition Crowd Bond Active Explain Refers to members of the bond department of the NYSE who trade the most bonds. Antithesis of cabinet crowd
• Definition Box Active Explain Securities that are held in safekeeping and are available as collateral for securing brokers' loans or customers' margin positions
• Definition Strategy Portfolio Active Explain information and forecasting techniques to seek better performance than a buy and hold portfolio. Related: Passive portfolio strategy
• Definition Market Actual Explain Used in context of general equities. Firm market. Antithesis of Subject market
• Definition Actuals Explain The physical commodities underlying a futures contract. Cash commodity, physical asset
• Definition D A Explain number of issues trading above their previous closing prices less the number trading below their previous closing prices over a particular
• Definition Test Bonds Additional Explain A test for ensuring that bond issuers can meet the debt service requirements of issuing any new additional bonds
• Definition Hedge Additional Explain A protection against borrower fallout risk in the mortgage pipeline
• Definition Coverage Of Adequacy Explain A test that measures the extent to which the value of an asset is protected from potential loss either through insurance or hedging
• Definition Rate Adjustable Explain securities. Refers to interest rate or dividend that is adjusted periodically, usually according to a standard market rate outside the
• Definition Method Balance Adjusted Explain that uses the account balance remaining after adjusting for all transactions posted during the given billing period as its basis. Related
• Definition Basis Adjusted Explain derive capital gains or losses upon sale of an asset. Account actions such as any stock splits that have occurred since the initial
• Definition Price Exercise Adjusted Explain Government National Mortgage Association) contracts. The final exercise price of the option accounts for the coupon rates carried on Ginnie
• Definition Adjusted gross income (AGI) Explain Gross income less allowable adjustments, is the income on which an individual is taxed by the federal government
• Definition Bond Adjustment Explain A bond issued in exchange for outstanding bonds when a corporation facing bankruptcy is recapitalized
• Definition Rules Pricing Administrative Explain IRS rules used to allocate income on export sales to a foreign sales corporation
• Definition Advance Explain Increase in the market price of stocks, bonds, commodities, or other assets
• Definition Commitment Advance Explain seller has lined up purchase of the asset. This seller can offset risk by purchasing a futures contract to fix the sales price
• Definition Advance funded pension plan Explain A pension plan in which funds are set aside in advance of the date of retirement
• Definition Area Accumulation Explain A price range within which a buyer accumulates shares of a stock. See: On-balance volume and distribution area
• Definition Opinion Adverse Explain expressing that a firm's financial statements do not reflect the company's position accurately. See also: Qualified opinion
• Definition Selection Adverse Explain Refers to a situation in which sellers have relevant information that buyers lack (or vice versa) about some aspect of product quality
• Definition Letter Advisory Explain A newsletter offering financial advice to its readers
• Definition Australian Stock Exchange (ASX) Explain amalgamation of the six independent stock exchanges operating in the Australian state capitals. The ASX is the tenth-largest stock exchange
• Definition Arbitrage Trading Program (ATP) Explain See: Program trading
• Definition Abandonment Explain Controlling party giving up rights to property voluntarily
• Definition Option Abandonment Explain The option of terminating an investment earlier than originally planned
• Definition Agreement Abc Explain A contract between an employee and a brokerage firm outlining the rights of the firm purchasing an NYSE membership for that employee
• Definition Pay To Ability Explain to make interest and principal payments on debts. See: Fixed charge coverage ratio.In context of municipal bonds, refers to the issuer'
• Definition Returns Abnormal Explain due to systematic influences (market-wide influences). In other words, abnormal returns are above those predicted by the market movement
• Definition Absorbed Explain Securities are absorbed as long as there are corresponding orders to buy and sell. The market has reached the absorption point when further
• Definition Priority Absolute Explain Rule in bankruptcy proceedings requiring senior creditors to be paid in full before junior creditors receive any payment
• Definition Shelter Tax Abusive Explain A limited partnership that the IRS judges to be claiming tax deductions illegally
• Definition Clause Acceleration Explain balance becomes due and payable if specific actions transpire, such as failure to make interests payments on time
• Definition Depreciation Accelerated Explain larger deductions for depreciation in the early years of a asset's life. Accelerated cost recovery system (ACRS), which is a
• Definition Tax Profits Accumulated Explain prevent the higher personal income tax rate that would obtain if profits were paid out as dividends to the owners
• Definition Analyst Explain management house who studies companies and makes buy-and-sell recommendations on stocks of these companies. Most specialize in a specific
• Definition Executive Account Explain The brokerage firm employee who handles stock orders for clients. See: Broker
• Definition Balance Account Explain Credits minus debits at the end of a reporting period
• Definition Return Mean Arithmetic Explain An average of the subperiod returns, calculated by summing the subperiod returns and dividing by the number of subperiods
• Definition Reconciliation Account Explain The reviewing and adjusting of the balance in a personal checkbook to match your bank statement
• Definition Statement Account Explain summary of all balances.In the context of securities, a summary of all transactions and positions (long and short) between a broker/dealer
• Definition Adr Explain See: American Depository Receipt
• Definition Earnings Accounting Explain Earnings of a firm as reported on its income statement
• Definition Exposure Accounting Explain The change in the value of a firm's foreign currency-denominated accounts due to a change in exchange rates
• Definition Insolvency Accounting Explain Total liabilities exceed total assets. A firm with a negative net worth is insolvent on the books
• Definition Liquidity Accounting Explain The ease and quickness with which assets can be converted to cash
• Definition Payable Accounts Explain Money owed to suppliers
• Definition Receivable Accounts Explain Money owed by customers
• Definition Turnover Receivable Accounts Explain The ratio of net credit sales to average accounts receivable, which is a measure of how quickly customers pay their bills
• Definition Investor Accredited Explain $7 million or annual income >200,000) who does not count to the maximum of 35 people allowed to invest in a private limited partnership
• Definition Accretion (of a discount) Explain In portfolio accounting, a straight-line accumulation of capital gains on a discount bond in anticipation of receipt of par at maturity
• Definition Basis Accrual Explain in which expenses and income are accounted for as if they are earned or incurred, whether or not they have been received or paid
• Definition Bond Accrual Explain not paid to the investor during the time of accrual. The amount of accrued interest is added to the remaining principal of the bond and is
• Definition Benefits Accrued Explain The pension benefits earned by an employee accourding to the years of the employee's service
• Definition Interest Accrued Explain securities. Interest that has accumulated between the most recent payment and the sale of a bond or other fixed-income security. At the
• Definition Discount Market Accrued Explain discount bond as it approaches maturity (when it is redeemable at par) and not because of falling market interest rates
• Definition Advance Computerized Execution System (ACES) Explain Execution System, run by Nasdaq. ACES automates trades between order entry and market maker firms that have established trading
• Definition Automated Clearing House (ACH) Explain interbank networks used to process transactions electronically with a guaranteed one-day bank collection float
• Definition Adjusted debit balance (ADB) Explain account that is calculated by combining the balance owed to a broker with any outstanding balance in the special miscellaneous account, and
• Definition American Depository Receipt (ADR) Explain depository bank, representing foreign shares held by the bank, usually by a branch or correspondent in the country of issue. One ADR may
• Definition American Depository Share (ADS) Explain Foreign stock issued in the U.S. and registered in the ADR system
• Definition Aex Exchange Amsterdam Explain Effectenbeurs, the AEX-Optiebeurs (formerly the European Options Exchange or EOE) and the AEX-Agrarische Termijnmarkt. AEX-Data Services is
• Definition Amman Financial Market (AFM) Explain Established in 1976, the AFM is the only stock exchange in Jordan
• Definition Aibd Explain Association of International Bond Dealers
• Definition All or none order (AON) Explain limited price order that is to be executed in its entirety or not at all (no partial transaction), and thus is testing the
• Definition Automated Order System (AOS) Explain entry system that sends single order entries to DOT (Odd-Lot) or to investment banks, floor brokers on the exchange. See: Round lot, GTC
• Definition American Stock Exchange (AMEX) Explain volume of trading in the U.S. Located at 86 Trinity Place in downtown Manhattan. The bulk of trading on AMEX consists of index options
• Definition Auction Market Preferred Stock (AMPS) Explain A type of Dutch Auction Preferred Stock (A Merrill Lynch product
• Definition Annual percentage rate (APR) Explain The periodic rate times the number of periods in a year. For example, a 5% quarterly return has an A.P.R. of 20
• Definition Arbitrage Pricing Theory (APT) Explain asset pricing model developed by Stephen Ross and based purely on arbitrage arguments. The APT implies that there are multiple risk factors
• Definition Automated Pit Trading (APT) Explain screen-based trading system that replicates the open outcry method of trading on screen. A.P.T. is used to extend the trading day for the
• Definition Adjusted present value (APV) Explain asset if financed solely by equity (present value of unlevered cash flows), plus the present value of any financing decisions (levered cash
• Definition Annual percentage yield (APY) Explain return. The APY is the rate actually earned or paid in one year, taking into account the effect of compounding. The APY is calculated by
• Definition Adjustable-rate mortgage (ARM) Explain adjustments of the loan interest rate at regular intervals based on an established index. The interest rate is adjusted at each interval to
• Definition Adjustable-rate preferred stock (ARPS) Explain Publicly traded issues that may be collateralized by mortgages and MBS
• Definition Auction rate preferred stock (ARPS) Explain Floating-rate preferred stock, whose dividend is adjusted every seven weeks through a Dutch auction
• Definition Average rate of return (ARR) Explain The ratio of the average cash inflow to the amount invested
• Definition Athens Stock Exchange (ASE) Explain Greece's principal stock exchange
• Definition A Explain Fifth letter of a Nasdaq stock symbol specifying Class A shares
• Definition American Association of Individual Investors (AAII) Explain A not-for-profit organization to educate individual investors about stocks, bonds, mutual funds, and other financial instruments
• Definition Accumulated Benefit Obligation (ABO) Explain of a pension plan in the event of a termination at the date the calculation is performed. Related: Projected benefit obligation
• Definition Automated bond system (ABS) Explain The computerized system that records bids and offers for inactively traded bonds until they are cancelled or executed on the NYSE
• Definition Automated Customer Account Transfer (ACAT) Explain For transfers of securities from a non-equity trading account to your equity trading account with your broker

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Automated Customer Account Transfer (Acat), Automated Bond System (Abs), Accumulated Benefit Obligation (Abo), American Association Of Individual Investors

Automated Customer Account Transfer (Acat), Automated Bond