How are you making sex?

Similar financial terms

How does that play in Peoria?
What is reaction of average person at grass roots?

Dog-and-pony show
Simple, planned presentation, too often dog-and-pony shows insult the intelligence of their audience.

"However, after a dog-and-pony show purporting to consider new missions, Clinton and O'Leary have joined two factions in Congress--unreconstituted Cold Warriors and delegates seeking to preserve weapons spending in their districts--to endorse continuing the same costly, and ecologically disastrous mission despite the lack of a significant nuclear threat."
Positive Alternatives, ...

Adjusted R-Squared
A goodness-of-fit measure in multiple regression analysis that penalizes additional explanatory variables by using a degrees of freedom adjustment in estimating the error variance.

Share
Companies issue shares as a means of raising equity finance and determining ownership. Purchasers of shares pay money into the company's bank account in return for a Share Certificate signifying their ownership of the shares. The shareholders legally own the company and are therefore entitled to a share in its profits. Shares in public limited companies are traded on the Stock Market and as such the value of the shares will fluctuate depending on the demand.

Book value per share
The intrinsic value of a company's stock. BVPS is calculated by dividing tangible capital dollar value by the number of outstanding shares of common stock.

Diluted earnings per share
A calculation of earnings per share. Add conversion value or preferred stock and convertible bonds to net profit, then divide the result by the number of outstanding shares of common stock that would exist after full conversion; the result is expressed as a dollar value per share.

Earnings per share
The latest reported net earnings, divided by the number of outstanding shares of common stock; one of the most widely used forms for reporting earnings, also called basic earnings per share and distinguished from diluted earnings per share.

Growth in earnings per share
A ratio comparing current earnings per share to the same ratio in a base year; it is used to track rates of growth for the economy.

American shares
Securities certificates issued in the U.S. by a transfer agent acting on behalf of the foreign issuer. The certificates represent claims to foreign equities.

Warehousing
The interim holding period from the time of the closing of a loan to its subsequent marketing to capital market investors.

Shares
Certificates or book entries representing ownership in a corporation or similar entity.

Shareholders' letter
A section of an annual report where one can find jargon-free discussions by management of successful and failed strategies which provides guidance for the probing of the rest of the report.

Shareholders' equity
This is a company's total assets minus total liabilities. A company's net worth is the same thing. Also referred to as ownership interest in the UK.

Share repurchase
Program by which a corporation buys back its own shares in the open market. It is usually done when shares are undervalued. Since it reduces the number of shares outstanding and thus increases earnings per share, it tends to elevate the market value of the remaining shares held by stockholders.

R squared
The square of the correlation coefficient is the proportion of the variability in one series that can be explained by the variability of one or more other series.

Public warehouse
Warehouse operated by an independent warehouse company on its own premises.

Preferred shares
Preferred shares give investors a fixed dividend from the company's earnings. And more importantly: preferred shareholders get paid before common shareholders.

Performance shares
Shares of stock given to managers on the basis of performance as measured by earnings per share and similar criteria. A control device used by shareholders to tie management to the self-interest of shareholders.

Outstanding shares
Shares that are currently owned by investors.

Outstanding share capital
Issued share capital less the par value of shares that are held in the company's treasury.

Management/closely held shares
Percentage of shares held by persons closely related to a company, as defined by the Securities and exchange commission. Part of these percentages often is included in Institutional Holdings -- making the combined total of these percentages over 100. There is overlap as institutions sometimes acquire enough stock to be considered by the SEC to be closely allied to the company.

Log-linear least-squares method
A statistical technique for fitting a curve to a set of data points. One of the variables is transformed by taking its logarithm, and then a straight line is fitted to the transformed set of data points.

Goldbrick Shares
A stock with only the surface appearance of quality and worth, that is in fact worth very little.

European Economic Area (EEA)
The European Economic Area (EEA) came into being on 1 January 1, 1994 following an agreement between the European Free Trade Association (EFTA) and the European Union (EU). It was designed to allow EFTA countries to participate in the European Single Market without having to join the EU. In a referendum, Switzerland (ever keen on neutrality) chose not to participate in the EEA (although it is linked to the European Union by bilateral agreements similar in content to the EEA agreement), so the cu ...

Bearer bond
Bonds that are not registered on the books of the issuer. Such bonds are held in physical form by the owner, who receives interest payments by physically detaching coupons from the bond certificate and delivering them agent.to the paying

British clearers
The large clearing banks that dominate deposit taking and short-term lending in the domestic sterling market.

Cash flow per common share
Cash flow from operations minus preferred stock dividends, divided by the number of common shares outstanding.

Welfare state
A state whose government devotes a very large proportion of its activities and expenditures to the direct provision of personal benefits to be consumed by qualifying individuals or families (as contrasted with such more traditional and less individually divisible government activities as national defense, law enforcement, controlling the money supply, economic regulation, maintaining transportation and communications nets, administering the public lands, etc.).

Licensed Warehouse
A warehouse approved by exchange from which a commodity may be delivered on a futures contract.

Dividend payout ratio
A ratio showing the percentage of net profits paid out in dividends on common stock, after reducing net profits by the amount of dividends paid on preferred stock.

Target payout ratio
A firm's long-run dividend-to-earnings ratio. The firm's policy is to attempt to pay out a certain percentage of earnings, but it pays a stated dollar dividend and adjusts it to the target as base-line increases in earnings occur.

Payout ratio
Generally, the proportion of earnings paid out to the common stockholders as cash dividends. More specifically, the firm's cash dividend divided by the firm's earnings in the same reporting period.

Management buyout (MBO)
Leveraged buyout whereby the acquiring group is led by the firm's management.

Leveraged buyout (LBO)
A transaction used for taking a public corporation private financed through the use of debt funds: bank loans and bonds. Because of the large amount of debt relative to equity in the new corporation, the bonds are typically rated below investment grade, properly referred to as high-yield bonds or junk bonds. Investors can participate in an LBO through either the purchase of the debt (i.e., purchase of the bonds or participation in the bank loan) or the purchase of equity through an LBO fund ...

Buyout
Purchase of a controlling interest (or percent of shares) of a company's stock. A leveraged buy-out is done with borrowed money.

Customary payout ratios
A range of payout ratios that is typical based on an analysis of comparable firms.

PAYE (Pay-As-You-Earn)
PAYE is a scheme for the collection of income tax due from the earnings of an individual. In this scheme, tax is deducted by the employer before wages or salary is paid to the employee.

Making delivery
Refers to the seller's actually turning over to the buyer the asset agreed upon in a forward contract.

Treasury sector
Securities issued by the U.S. government. Includes Treasury bills, notes and bonds. The U.S. Treasury is the largest issuer of securities in the world. This sector plays a key role in the valuation of securities and the determination of interest rates throughout the world.

Agency sector
Securities issued by federally related institutions and government sponsored enterprises such as the Federal Home Loan Mortgage Corporation, Fannie Mae and Freddy Mac Foundation.

Corporate sector
Securities issued by U.S. corporations and non-U.S. corporations in the United States. Includes bonds, MTNs, structured notes and commercial paper. The corporate sector is divided into investment grade and non-investment grade sectors by rating agencies such as Moody’s and S&P.

Mortgage sector
Securities backed by mortgage loans. These are loans obtained by borrowers in order to purchase residential property or and entity to purchase commercial property.

Inverse floaters
Bonds whose coupon rate moves in the opposite direction from the change in interest rates.

Amortizing securities
Securities that have an amortization schedule.

Non-amortizing securities
Securities that do not have an amortization schedule.

Assets
Anything that the firm owns. In the balance sheet, assets are divided into intangible assets and tangible assets.

Exercise price
Price at which the holder of an option can buy (call option) or sell (put option) the underlying stock. Also referred to as strike price.

Bourse
The French term for a stock exchange

Börse
The German term for a stock exchange.

Short selling
Short selling, usually just referred to as "shorting", involves selling an asset that is not in posession. Suppose an investor instructs a broker to short 20,000 STL shares. The broker will carry out the instructions by borrowing the shares from another client and selling them in the market in the usual way. The investor can maintain the short position for as long as desired, provided there are always shares for the broker to borrow. At some stage, however, the investor will close out the positi ...

SEC
The Security and Exchange commission (SEC) was created by the Securities Exchange Act of 1934 to administer that act and the Securities Act of 1933. The statutes administered by the SEC are designed to promote full public disclosure and protect the investing public against fraudulent and manipulative practices in the securities markets. Generally, most issues of securities offered in interstate commerce or through the mails must be registered with the SEC.

Surprise
A company earnings report that deviates (either positively or negatively) from what analysts were expecting in their consensus forecasts. This often causes movement in the stock's price.

Exercise limit
The maximum number of option contracts that can be exercised within a five-day period.

Settlement price
The average of the prices that a futures contract trades for immediately before the bell signaling the close trading for a day. It is used in mark-to-market calculations.

Fixed interest securities
Fixed interest securities relates to bonds, bills, stocks and debentures which offer a fixed rate of interest per period. The purchaser buys the income stream and the seller receives loan.

Early exercise
The exercise or assignment of an option prior to expiry.

SEK
Swedish Krona from Sweden. The plural form is kronor and one krona is divided into 100 öre, singular and plural.

The introduction of the krona, which replaced the riksdaler as the country's legal tender, was a result of the Scandinavian Monetary Union, which came into effect in 1873 and lasted until the First World War. The parties to the union were the Scandinavian countries, where the name was krona in Sweden and krone in Denmark and Norway, which in English literally means crown. Aft ...

Current Assets
The value of assets held at the Balance Sheet date that are represented by cash, or can be expected to be converted into cash within the next 12 months.

Zero-base budgeting
The zero-base budgeting (ZBB) method disregards the previous year's budget in setting a new budget, since circumstances may have changed. Each and every expense must be justified in this system.

Hire Purchase
The right to buy an asset by the user of the asset according to a pre-agreed method. The user may be the owner for tax purposes.

Hang Seng
The major stock index in Hong Kong.

Japanese candlestick chart
A charting technique in technical analysis that, among other things, indicates the spread of a day's prices, the opening and closing prices and whether the market moved up or down during the trading session. Developed in the 1600s.

Base Currency
In terms of foreign exchange trading, currencies are quoted in terms of a currency pair. The first currency in the pair is the base currency. The base currency is the currency against which exchange rates are generally quoted in a given country. Examples: CHF/JPY, the Swiss franc is the base currency; EUR/USD, the EURO is the base currency.

Market Close
The term market close refers to the time of day that a market closes. In the 24h foreign exchange market, there is no official market close. 5:00 PM EST is often referred to and understood as the market close because value dates for spot transactions change to the next new value date at that time.

Convertible securities
Bond or preferred stock that can be converted to common stock if the investor so chooses.

Deferred assets
Payments that will be assigned as expenses in a later period, but that are paid in advance and temporarily set up as assets on the balance sheet.

Fixed assets
Alternative name for noncurrent assets.

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

Adjusted present value (APV)
The net present value analysis of an asset if financed solely by equity (present value of un-levered cash flows), plus the present value of any financing decisions (levered cash flows). In other words, the various tax shields provided by the deductibility of interest and the benefits of other investment tax credits are calculated separately. This analysis is often used for highly leveraged transactions such as a leverage buy-out.

Adverse selection
A situation in which market participation is a negative signal.

Without recourse
Without the lender having any right to seek payment or seize assets in the event of default from anyone other than the party (such as a special-purpose entity) specified in the debt contract.

Wire house
A firm operating a private wire to its own branch offices or to other firms, commission houses or brokerage houses.

Winners's curse
Problem faced by uninformed bidders. For example, in an initial public offering uninformed participants are likely to receive larger allotments of issues that informed participants know are overpriced.

Annual fund operating expenses
For investment companies, the management fee and "other expenses," including the expenses for maintaining shareholder records, providing shareholders with financial statements, and providing custodial and accounting services. For 12b-1 funds, selling and marketing costs are included.

Wasting asset
An asset which has a limited life and thus, decreases in value (depreciates) over time. Also applied to consumed assets, such as gas, and termed "depletion."

Variable price security
A security, such as stocks or bonds, that sells at a fluctuating, market-determined price.

Unsecured debt
Debt that does not identify specific assets that can be taken over by the debtholder in case of default.

Unseasoned issue
Issue of a security for which there is no existing market.

Underlying security
For options it is the security subject to being purchased or sold upon exercise of an option contract. For example, Deutsche Bank stock is the underlying security to Deutsche Bank options.

For depository receipts it is the class, series and number of the foreign shares represented by the depository receipt.

Unbiased predictor
A theory that spot prices at some future date will be equal to today's forward rates.

Two-fund separation theorem
The theoretical result that all investors will hold a combination of the risk-free asset and the market portfolio.

True lease
A contract that qualifies as a valid lease agreement under the Internal Revenue code.

Treasury securities
Securities issued by the U.S. Department of the Treasury.

Transition phase
A phase of development in which the company's earnings begin to mature and decelerate to the rate of growth of the economy as a whole.

Trade house
A firm which deals in actual commodities.

Total asset turnover
The ratio of net sales to total assets.

Thus, the total asset turnover ratio compares the turnover with the assets that the business has used to generate that turnover.

In other words, we are just saying that for every 1 of assets, the turnover is x.

Three-phase DDM
A version of the dividend discount model which applies a different expected dividend rate depending on a company's life-cycle phase, growth phase, transition phase, or maturity phase.

Tax-exempt sector
The municipal bond market where state and local governments raise funds. Bonds issued in this sector are exempt from federal income taxes.

Targeted repurchase
The firm buys back its own stock from a potential bidder, usually at a substantial premium, to forestall a takeover attempt.

Tangible asset
An asset whose value depends on particular physical properties. These i nclude reproducible assets such as buildings or machinery and non-reproducible assets such as land, a mine, or a work of art. Also referred to as real assets.

Tactical Asset Allocation
Tactical Asset Allocation (TAA) is an asset allocation strategy that allows active departures from the normal asset mix based upon rigorous objective measures of value. Often called active management. It involves forecasting asset returns, volatilities and correlations. The forecasted variables may be functions of fundamental variables, economic variables or even technical variables.

Subordination clause
A provision in a bond indenture that restricts the issuer's future borrowing by subordinating the new lender's claims on the firm to those of the existing bond holders.

Structured settlement
An agreement in settlement of a lawsuit involving specific payments made over a period of time. Property and casualty insurance companies often buy life insurance products to pay the costs of such settlements.

Stripped mortgage-backed securities (SMBSs)
Securities that redistribute the cash flows from the underlying generic MBS collateral into the principal and interest components of the MBS to enhance their use in meeting special needs of investors.

Stock selection
An active portfolio management technique that focuses on advantageous selection of particular stocks rather than on broad asset-allocation choices.

Stock repurchase
A firm's repurchase of outstanding shares of its common stock.

Skip-day settlement
The trade is settled one business day beyond what is normal.

Short-term investment services
Services that assist firms in making short-term investments.

Settlement rate
The rate suggested in Financial Accounting Standard Board (FASB) 87 for discounting the obligations of a pension plan. The rate at which the pension benefits could be effectively settled off the pension plan wished to terminate its pension obligation.

Settlement date
The date on which payment is made to settle a trade. For stocks traded on US exchanges, settlement is currently 3 business days after the trade. For mutual funds, settlement usually occurs in the U.S.the day following the trade. In some regional markets, foreign shares may require months to settle.

Settlement
When payment is made for a trade.

Set of contracts perspective
View of corporation as a set of contracting relationships, among individuals who have conflicting objectives, such as shareholders or managers. The corporation is a legal contrivance that serves as the nexus for the contracting relationships.

Series
Options: All option contracts of the same class that also have the same unit of trade, expiration date, and exercise price. Stock equity: shares which have common characteristics, such as rights to ownership and voting, dividends, par value, etc. In the case of many foreign shares, one series may be owned only by citizens of the country in which the stock is registered.

Series bond
Bond that may be issued in several series under the same indenture.

Serial covariance
The covariance between a variable and the lagged value of the variable. In econometrics referred to as autocovariance.

Serial bonds
Corporate bonds arranged so that specified principal amounts become due on specified dates.

Separation theorem
The value of an investment to an individual is not dependent on consumption preferences. All investors will want to accept or reject the same investment projects by using the NPV rule, regardless of personal preference.

Separation property
The property that portfolio choice can be separated into two independent tasks: (a) determination of the optimal risky portfolio, which is a purely technical problem, and (b) the personal choice of the best mix of the risky portfolio and the risk-free asset.

Sensitivity analysis
Analysis of the effect on a project's profitability due to changes in sales, cost, and so on.

Seniority
The order of repayment. In the event of bankruptcy, senior debt must be repaid before subordinated debt is repaid.

Senior debt
Debt that, in the event of bankruptcy, must be repaid before subordinated debt receives any payment.

Semi-strong form efficiency
A form of pricing efficiency where the price of the security fully reflects all public information (including, but not limited to, historical price and trading patterns). Compare weak form efficiency and strong form efficiency.

Sell-side analyst
Also called a Wall Street analyst, a financial analyst who works for a brokerage firm and whose recommendations are passed on to the brokerage firm's customers.

Selling short
If an investor thinks the price of a stock is going down, the investor could borrow the stock from a broker and sell it. Eventually, the investor must buy the stock back on the open market. For instance, you borrow 1000 shares of British Petroleum on July 1 and sell it for £8 per share. Then, on Aug 1, you purchase 1000 shares of BP at £7 per share. You've made £1000 (less commissions and other fees) by selling short.

Selling group
All banks involved in selling or marketing a new issue of stock or bonds.

Sell limit order
Conditional trading order that indicates that a security may be sold at the designated price or higher.

Self-selection
Consequence of a contract that induces only one group (e.g. low risk individuals) to participate.

Self-liquidating loan
Loan to finance current assets, The sale of the current assets provides the cash to repay the loan.

Security selection decision
Choosing the particular securities to include in a portfolio.

Security market plane
A plane that shows the equilibrium between expected return and the beta coefficient of more than one factor.

Security market line
Line representing the relationship between expected return and market risk.

Security deposit (initial)
Synonymous with the term margin. A cash amount of funds that must be deposited with the broker for each contract as a guarantee of fulfillment of the futures contract. It is not considered as part payment or purchase.

Security characteristic line
A plot of the excess return on a security over the risk-free rate as a function of the excess return on the market.

Security
Piece of paper that proves ownership of stocks, bonds and other investments.

Securitization
The process of creating a passthrough, such as the mortgage pass-through security, by which the pooled assets become standard securities backed by those assets. Also, refers to the replacement of nonmarketable loans and/or cash flows provided by financial intermediaries with negotiable securities issued in the public capital markets.

Secured debt
Debt that, in the event of default, has first claim on specified assets.

Section 482
United States Department of Treasury regulations governing transfer prices.

Sector
Refers to a group of securities that are similar with respect to maturity, type, rating, industry, and/or coupon.

Secondary market
The market where securities are traded after they are initially offered in the primary market. Most trading is done in the secondary market. The New York stock Exchange, as well as all other stock exchanges, the bond markets, etc., are secondary markets. Seasoned securities are traded in the secondary market.

Secondary issue
A secondary issue is both a (a) procedure for selling blocks of seasoned issues of stocks or (b) more generally, the sale of already issued stock.

Second pass regression
A cross-sectional regression of portfolio returns on betas. The estimated slope is the measurement of the reward for bearing systematic risk during the period analyzed.

Seasoned new issue
A new issue of stock after the company's securities have previously been issued. A seasoned new issue of common stock can be made by using a cash offer or a rights offer.

Seasoned issue
Issue of a security for which there is an existing market.

Seasoned datings
Extended credit for customers who order goods in periods other than peak seasons.

Search costs
Costs associated with locating a counterparty to a trade, including explicit costs (such as advertising) and implicit costs (such as the value of time).

Sales-type lease
An arrangement whereby a firm leases its own equipment, such as Acer leasing its own computers, thereby competing with an independent leasing company.

Sale and lease-back agreement
Sale of an existing asset to a financial institution that then leases it back to the user.

Safe harbor lease
A lease to transfer tax benefits of ownership (depreciation and debt tax shield) from the lessee, if the lessee could not use them, to a lessor that could use them.

Risk-free asset
An asset whose future return is known today with certainty.

Risky asset
An asset whose future return is uncertain.

Risk classes
Groups of projects that have approximately the same amount of risk.

Risk averse
A risk-averse investor is one who, when faced with two investments with the same expected return but two different risks, prefers the one with the lower risk.

Reverse stock split
A proportionate decrease in the number of shares, but not the value of shares of stock held by shareholders. Shareholders maintain the same percentage of equity as before the split. For example, a 1-for-3 split would result in stockholders owning 1 share for every 3 shares owned before the split. After the reverse split, the firm's stock price is, in this example, worth three times the pre-reverse split price. A firm generally institutes a reverse split to boost its stock's market price and ...

Reverse repo
In essence, refers to a repurchase agreement. From the customer's perspective, the customer provides a collateralized loan to the seller.

Reverse price risk
A type of mortgage-pipeline risk that occurs when a lender commits to sell loans to an investor at rates prevailing at application but sets the note rates when the borrowers close. The lender is thus exposed to the risk of falling rates.

Return on total assets
The ratio of earnings available to common stockholders to total assets.

Return on assets (ROA)
Indicator of profitability. Determined by dividing net income for the past 12 months by total average assets. Result is shown as a percentage. ROA can be decomposed into return on sales (net income/sales) multiplied by asset utilization (sales/assets).

Residual losses
Lost wealth of the shareholders due to divergent behavior of the managers.

Residual assets
Assets that remain after sufficient assets are dedicated to meet all senior debtholder's claims in full.

Reset frequency
The frequency with which the floating rate changes.

Reserve requirements
The percentage of different types of deposits that member banks are required to hold on deposit at the Fed.

Reserve ratios
Specified percentages of deposits, established by the Federal Reserve Board, that banks must keep in a non-interest-bearing account at one of the twelve Federal Reserve Banks.

Reserve currency
A foreign currency held by a central bank or monetary authority for the purposes of exchange intervention and the settlement of inter-governmental claims.

Reserve
An accounting entry that properly reflects the contingent liabilities.

Required reserves
The dollar amounts based on reserve ratios that banks are required to keep on deposit at a Federal Reserve Bank.

Repurchase of stock
Device to pay cash to firm's shareholders that provides more preferable tax treatment for shareholders than dividends. Treasury stock is the name given to previously issued stock that has been repurchased by the firm. A repurchase is achieved through either a dutch auction, open market, or tender offer.

Repurchase agreement
An agreement with a commitment by the seller (dealer) to buy a security back from the purchaser (customer) at a specified price at a designated future date. Also called a repo, it represents a collateralized short-term loan, where the collateral may be a Treasury security, money market instrument, federal agency security, or mortgage-backed security. From the purchaser (customer) perspective, the deal is reported as a reverse Repo.

Reproducible assets
A tangible asset with physical properties that can be reproduced, such as a building or machinery.

Remote disbursement
Technique that involves writing checks drawn on banks in remote locations so as to increase disbursement float.

Regular way settlement
In the money and bond markets, the regular basis on which some security trades are settled is that the delivery of the securities purchased is made against payment in Fed funds on the day following the transaction.

Registered representative
A person registered with the US CFTC who is employed by, and soliciting business for, a commission house or futures commission merchant.

Recourse
Term describing a type of loan. If a loan is with recourse, the lender has a general claim against the parent company if the collateral is insufficient to repay the debt.

Real assets
Identifiable assets, such as buildings, equipment, patents, and trademarks, as distinguished from a financial obligation.

RAMs (Reverse-annuity mortgages)
Mortgages in which the bank makes a loan for an amount equal to a percentage of the appraisal value of the home. The loan is then paid to the homeowner in the form of an annuity.

Quick assets
Current assets minus inventories.

Purchase method
Accounting for an acquisition using market value for the consolidation of the two entities' net assets on the balance sheet. Generally, depreciation/amortization will increase for this method compared with pooling and will result in lower net income.

Purchase fund
Resembles a sinking fund except that money is used only to purchase bonds if they are selling below their par value.

Purchase and sale
A method of securities distribution in which the securities firm purchases the securities from the issuer for its own account at a stated price and then resells them, as contrasted with a best-efforts sale.

Purchase agreement
As used in connection with project financing, an agreement to purchase a specific amount of project output per period.

Purchase accounting
Method of accounting for a merger in which the acquirer is treated as having purchased the assets and assumed liabilities of the acquiree, which are all written up or down to their respective fair market values, the difference between the purchase price and the net assets acquired being attributed to goodwill.

Purchase
To buy, to be long, to have an ownership position.

Publicly traded assets
Assets that can be traded in a public market, such as the stock market.

Public Securities Administration (PSA)
The trade association for primary dealers in US government securities, including MBSs.

Project loan securities
Securities backed by a variety of FHA-insured loan types - primarily multi-family apartment buildings, hospitals, and nursing homes.

Primitive security
An instrument such as a stock or bond for which payments depend only on the financial status of the issuer.

Present value of growth opportunities (PVGO)
The net present value (NPV) of investments the firm is expected to make in the future.

Present value factor
Factor used to calculate an estimate of the present value of an amount to be received in a future period.

Present value
The amount of cash today that is equivalent in value to a payment, or to a stream of payments, to be received in the future.

Possessions corporation
A type of corporation permitted under the U.S. tax code whereby a branch operation in a U.S. possessions can obtain tax benefits as though it were operating as a foreign subsidiary.

Portfolio separation theorem
An investor's choice of a risky investment portfolio is separate from his attitude towards risk.

Portfolio opportunity set
The expected return/standard deviation pairs of all portfolios that can be constructed from a given set of assets.

Policy asset allocation
A long-term asset allocation method, in which the investor seeks to assess an appropriate long-term "normal" asset mix that represents an ideal blend of controlled risk and enhanced return.

Pass-through securities
A pool of fixed-income securities backed by a package of assets (i.e. mortgages) where the holder receives the principal and interest payments.

Other current assets
Value of non-cash assets, including prepaid expenses and accounts receivable, due within 1 year.

Option seller
Also called the option writer , the party who grants a right to trade a security at a given price in the future.

Opportunity set
The possible expected return and standard deviation pairs of all portfolios that can be constructed from a given set of assets.

Operating lease
Short-term, cancelable lease. A type of lease in which the period of contract is less than the life of the equipment and the lessor pays all maintenance and servicing costs.

Opening purchase
A transaction in which the purchaser's intention is to create or increase a long position in a given series of options.

Open-market purchase operation
A systematic program of repurchasing shares of stock in market transactions at current market prices, in competition with other prospective investors.

Official reserves
Holdings of gold and foreign currencies by official monetary institutions.

Nonrecourse
Without recourse, as in a non-recourse lease.

Non-reproducible assets
A tangible asset with unique physical properties, like a parcel of land, a mine, or a work of art.

Non-financial services
Include such things as freight, insurance, passenger services, and travel.

Noise
Price and volume fluctuations that can confuse interpretation of market direction.

New York Stock Exchange (NYSE)
Also known as the Big Board or The Exhange. More than 2,000 common and preferred stocks are traded. The exchange is the older in the United States, founded in 1792, and the largest. It is lcoated on Wall Street in New York City

Net present value rule
An investment is worth making if it has a positive NPV. Projects with negative NPVs should be rejected.

Net present value of future investments
The present value of the total sum of NPVs expected to result from all of the firm's future investments.

Net present value of growth opportunities
A model valuing a firm in which net present value of new investment opportunities is explicitly examined.

Net present value (NPV)
The present value of the expected future cash flows minus the cost.

Net operating losses
Losses that a firm can take advantage of to reduce taxes.

Net lease
A lease arrangement under which the lessee is responsible for all property taxes, maintenance expenses, insurance, and other costs associated with keeping the asset in good working condition.

Net assets
The difference between total assets on the one hand and current liabilities and noncapitalized longterm liabilities on the other hand.

Net asset value (NAV)
The value of a fund's investments. For a mutual fund, the net asset value per share usually represents the fund's market price, subject to a possible sales or redemption charge. For a closed end fund, the market price may vary significantly from the net asset value.

Net adjusted present value
The adjusted present value minus the initial cost of an investment.

Negative pledge clause
A bond covenant that requires the borrower to grant lenders a lien equivalent to any liens that may be granted in the future to any other currently unsecured lenders.

Mutual offset
A system, such as the arrangement between the CME and SIMEX, which allows trading positions established on one exchange to be offset or transferred on another exchange.

Multicurrency clause
Such a clause on a Euro loan permits the borrower to switch from one currency to another currency on a rollover date.

Mortgage-backed securities (MBS)
Securities backed by a pool of mortgage loans.

Mortgage-Backed Securities Clearing Corporation
A wholly owned subsidiary of the Midwest Stock Exchange that operates a clearing service for the comparison, netting, and margining of agency-guaranteed MBSs transacted for forward delivery.

Mortgage pass-through security
Also called a passthrough, a security created when one or more mortgage holders form a collection (pool) of mortgages sells shares or participation certificates in the pool. The cash flow from the collateral pool is "passed through" to the security holder as monthly payments of principal, interest, and prepayments. This is the predominant type of MBS traded in the secondary market.

Monthly income preferred security (MIP)
Preferred stock issued by a subsidiary located in a tax haven. The subsidiary relends the money to the parent.

Money purchase plan
A defined benefit contribution plan in which the participant contributes some part and the firm contributes at the same or a different rate. Also called and individual account plan.

Money base
Composed of currency and coins outside the banking system plus liabilities to the deposit money banks.

Minimum purchases
For mutual funds, the amount required to open a new account (Minimum Initial Purchase) or to deposit into an existing account (Minimum Additional Purchase). These minimums may be lowered for buyers participating in an automatic purchase plan

Merchandise
All movable goods such as cars, textiles, appliances, etc. and 'f.o.b.' means free on board.

Membership or a seat on the exchange
A limited number of exchange positions that enable the holder to trade for the holder's own accounts and charge clients for the execution of trades for their accounts.

MBS servicing
The requirement that the mortgage servicer maintain payment of the full amount of contractually due principal and interest payments whether or not actually collected.

Maturity phase
A phase of company development in which earnings continue to grow at the rate of the general economy.

Markowitz efficient set of portfolios
The collection of all efficient portfolios, graphically referred to as the Markowitz efficient frontier.

Market segmentation or preferred habitat theory
A biased expectations theory that asserts that the shape of the yield curve is determined by the supply of and demand for securities within each maturity sector.

Market sectors
The classifications of bonds by issuer characteristics, such as state government, corporate, or utility.

Manufactured housing securities (MHSs)
Loans on manufactured homes - that is, factory-built or prefabricated housing, including mobile homes.

Long-term assets
Value of property, equipment and other capital assets minus the depreciation. This is an entry in the bookkeeping records of a company, usually on a "cost" basis and thus does not necessarily reflect the market value of the assets.

Liquid asset
Asset that is easily and cheaply turned into cash - notably cash itself and short-term securities.

Lintner's observations
John Lintner's work (1956) suggested that dividend policy is related to a target level of dividends and the speed of adjustment of change in dividends.

Limitation on sale-and-leaseback
A bond covenant that restricts in some way a firm's ability to enter into sale and lease-back transactions.

Limitation on asset dispositions
A bond covenant that restricts in some way a firm's ability to sell major assets.

Leveraged lease
A lease arrangement under which the lessor borrows a large proportion of the funds needed to purchase the asset and grants the lender a lien on the assets and a pledge of the lease payments to secure the borrowing.

Lessee
An entity that leases an asset from another entity.

Lease Rate
The payment per period stated in a lease contract.

Lease
A long-term rental agreement, and a form of secured long-term debt.

Lag response of prepayments
There is typically a lag of about three months between the time the weighted average coupon of an MBS pool has crossed the threshold for refinancing and an acceleration in prepayment speed is observed.

Macaroni defense
The macaroni defense is a tactic used by a corporation that is the target of a hostile takeover bid involving the issue of a large number of bonds that must be redeemed at a higher value if the company is taken over.

Open market purchase
An order placed by an insider, after all appropriate documentation has been filed, to buy restricted securities openly on an exchange.

A lick and a promise
Incomplete or limited preparation

Whose ox gets gored
...who will be harmed by this plan

Vancouver Stock Exchange (VSE)
The Vancouver Stock exchange (VSE) was one of Canada's junior company stock exchanges. On March 15, 1999, the VSE and the ASE (Alberta Stock Exchange) agreed to merge and form the CDNX - the Canadian Venture Exchange - which will also take on some junior Toronto and Montreal Exchange companies. The VSE got a bad reputation in the 80's due to many unscrupulous scam artists manipulating VSE listed companies. New regulatory controls and surveillance systems which had been implemented on the VSE wer ...

TSE300
An index for shares trading on the Toronto Stock Exchange, i.e. the TSE300 is a collection of 300 companies and is a measure of how the TSE "market" is performing. (see also "Index"). This index has been replaced by the Standard & Poor's TSX Index.

Series A
Series A usually refers to a class of shares subscribed for by venture capitalists. These shares usually carry specified privileges and attributes required by professional venture investors.

SEDAR
SEDAR (System for Electronic Document Analysis and Retrieval) is the Canadian depository for public corporate records. Before the internet, companies had to report regularly to securities commissions across Canada. Now, they all file with SEDAR and SEDAR makes all these filings available to the public via the SEDAR website.

Reverse Takeover (RTO)
A reverse takeover is one way of going public. A public company can take over another company by issuing a large number of shares to the shareholders of the target company. This may result in the new shareholders owning more shares than the original controlling shareholders - hence a change of control. Hence, this is referred to as a reverse takeover. Although the smaller company has technically taken over the larger one, the larger one's owners are now in charge.

Example: I have a pub ...

Selling Away
When a broker solicits you to purchase securities not held or offered by the brokerage firm. As a general rule, such activities are a violation of securities regulations. Typically, when a broker is "selling away," the investments are in the form of private placements or other non-public investments.

Kuala Lumpur Stock Exchange (KLSE)
Incorporated in 1965 as Kuala Lumpur's stock exchange (although share-trading activity dated from the 1930s).

Bank for International Settlements (BIS)
An international bank headquartered in Basel, Switzerland, which serves as a forum for monetary cooperation among several European central banks, the Bank of Japan, and the U.S. Federal Reserve System. Founded in 1930 to handle the German payment of World War I reparations, it now monitors and collects data on international banking activity and promulgates rules concerning international bank regulation.

Bargain-purchase-price option
Gives the lessee the option to purchase the asset at a price below fair market value when the lease expires.

Base probability of loss
The probability of not achieving a portfolio expected return.

Block house
Brokerage firms that help to find potential buyers or sellers of large block trades.

Book-entry securities
The Treasury and federal agencies are moving to a book-entry system in which securities are not represented by engraved pieces of paper but are maintained in computerized records at the Fed in the names of member banks, which in turn keep records of the securities they own as well as those they are holding for customers. In the case of other securities where a book-entry has developed, engraved securities do exist somewhere in quite a few cases. These securities do not move from holder to ho ...

Break-even lease payment
The lease payment at which a party to a prospective lease is indifferent between entering and not entering into the lease arrangement.

Buy on close
To buy at the end of the trading session at a price within the closing range.

Capital lease
A lease obligation that has to be capitalized on the balance sheet.

Cash settlement contracts
Futures contracts, such as stock index futures, that settle for cash, not involving the delivery of the underlying.

Chinese wall
Communication barrier between financiers (investment bankers) and traders. This barrier is erected to prevent the sharing of inside information that bankers are likely to have.

Clearing House Automated Payments System (CHAPS)
A computerized clearing system for sterling funds that began operations in 1984. It includes 14 member banks, nearly 450 participating banks, and is one of the clearing companies within the structure of the Association for Payment Clearing Services (APACS).

Clearing House Interbank Payments System (CHIPS)
An international wire transfer system for high-value payments operated by a group of major banks.

Clearing House
An adjunct to a futures exchange through which transactions executed its floor are settled by a process of matching purchases and sales. A clearing organization is also charged with the proper conduct of delivery procedures and the adequate financing of the entire operation.

Close, the
The period at the end of the trading session. Sometimes used to refer to closing price.

Closed-end fund
An investment company that sells shares like any other corporation and usually does not redeem its shares. A publicly traded fund sold on stock exchanges or over the counter that may trade above or below its net asset value.

Closed-end mortgage
Mortgage against which no additional debt may be issued.

Closing purchase
A transaction in which the purchaser's intention is to reduce or eliminate a short position in a stock, or in a given series of options.

Commission house
A firm which buys and sells future contracts for customer accounts.

Common-base-year analysis
The representing of accounting information over multiple years as percentages of amounts in an initial year.

Comparison universe
The collection of money managers of similar investment style used for assessing relative performance of a portfolio manager.

Concentration services
Movement of cash from different lockbox locations into a single concentration account from which disbursements and investments are made.

Consensus forecast
The mean of all financial analysts' forecasts for a company.

Controlled disbursement
A service that provides for a single presentation of checks each day (typically in the early part of the day).

Convertible security
A security that can be converted into common stock at the option of the security holder, including convertible bonds and convertible preferred stock.

Cost of lease financing
A lease's internal rate of return.

Country selection
A type of active international management that measures the contribution to performance attributable to investing in the better-performing stock markets of the world.

Cross-sectional approach
A statistical methodology applied to a set of firms at a particular point in time.

Currency selection
Asset allocation in which the investor chooses among investments denominated in different currencies.

Like an Edsel
A failure. Ford Motor Company introduced the Edsel with great fanfare in the 1950s. The car was based on out-of-date research and contained gimmicks rather than added value for consumers and was a dismal failure.

Lip service
Officially agreeing with, even though you may have reservations about the issue.

Franchise
The right to sell products or services under a corporate name or trade mark (established by someone else). This right is usually purchased for cash in addition to a royalty fee on, or a percentage of, all sales.

Authorised capital
The maximum amount of share capital that a public limited company or a private limited company can issue according to its articles of association. Part of the authorised capital can remain unissued.

Basel II (Basel Capital Accord)
Basel II - short for the new Basel Capital Accord - lays down new guidelines for determining the minimum solvency requirements for banks. The main change in these guidelines is a new system for weighting the risks run by banks in their loans to retail and corporate customers. The objective of Basel II is to improve the soundness of the financial system.

Cabinet security
A stock or bond listed on a major exchange with low daily traded volume.

Defensive securities
Low-risk stocks or bonds that will provide a predictable and safe return on an investor's money.

Basel Committee on Banking Supervision
A committee that meets under the auspices of the Bank for International Settlements in Basel, Switzerland to set bank regulatory standards.

Separate Trading of Registered Interest (STRIPS)
Separate Trading of Registered Interest and Principal Securities (STRIPS) are securities that have their periodic interest payments separated from the final maturity payment and the two cash flows are sold to different investors.

Seed investing
Investment by a venture capital firm in a company before it has a real product or is even clearly organized as a company.

Financial Services Authority (FSA)
The Financial Services Authority was created by the incoming UK Labor Government in 1997 as the regulatory body for the whole financial services industry. A number of separate regulatory bodies were brought together into the FSA. The FSA also took over the responsibilities that the Bank of England had for supervising banks and other financial institutions. The Chairman of the FSA is Howard Davies, an ex deputy governor of the Bank, and now a member of the Court of Directors. The Bank and the FSA ...

Household income
The total level of income earned by all the households in the economy. This will be a significant part of the overall level of National Income.

Adverse trustee
One who has a substantial, beneficial interest in the trust assets as well as the income or benefits derived from the trust. A trustee that is related to the creator by birth, marriage or in an employer/employee relationship.

Asset Protection Trust (APT)
A special form of irrevocable trust, usually created (settled) offshore for the principal purposes of preserving and protecting part of one's wealth offshore against creditors. Title to the asset is transferred to a person named the trustee. Generally used for asset protection and usually tax neutral. Its ultimate function is to provide for the beneficiaries of the APT.

The Securities Industry Protection Corporation
Commonly named the SIPC. Provides up to $500,000 insurance protection for your U.S. stock brokerage account.

Seat
Refers to membership on an exchange. A seat can be purchased or leased. Some exchanges offer different types of membership or trading privileges. These can be full membership, associate membership, time-limited membership, and product-limited membership.

Precious Metals Lease
A vehicle or technique used to finance precious metals inventories. It is related to the term structure of precious metals prices.

Montreal Stock Exchange (MSE)
One of the four major stock exchanges in Canada.

Seasonal Adjustment
A statistical technique used to remove the effect of normal seasonal fluctuations in data so underlying trends become more evident. For example, the seasonally-adjusted unemployment rate smoothes out the changes in unemployment due to the typical seasonal hiring in the summer and layoffs in the winter for workers in industries such as agriculture and construction.

Secondary Distribution
The redistribution to the public of a block of shares owned by an existing shareholder (not from the corporate treasury).

Segregated Funds
These funds guarantee that, regardless how the fund performs, at least a minimum percentage (usually 75 per cent or more) of the investor's payments into the fund will be returned when the fund matures.

Seller's Option
The right of a seller to select, within the limits prescribed by a contract, the quality of the commodity delivered and the time and place of delivery.

Ease Off
A minor and/or slow decline in the price of a market.

Offset
Liquidating a purchase of futures contracts through the sale of an equal number of contracts of the same delivery month, or liquidating a short sale of futures through the purchase of an equal number of contracts of the same delivery month.

Jensen index
Index that uses the capital asset pricing model to determine whether a money manager outperformed a market index. The alpha of an investment or investment manager.

Johannesburg Securities Exchange (JSE)
Established in 1886, the Johannesburg Securities Exchange is the only stock exchange in South Africa. Gold and mining stocks form the majority of shares listed. The discovery of the Witwatersrand goldfields in 1886 and the subsequent formation of mining and financial companies, meant investors needed a facility through which to buy and sell shares. Benjamin Woollan provided that facility when he founded the JSE in November 1887. The JSE was admitted as a member of the Federation Internatio ...

Jensen Model
Jensen's model proposes another risk adjusted performance measure. This measure was developed by Michael C. Jensen and is sometimes referred to as the Differential Return Method. This measure involves evaluation of the returns that the fund has generated vs. the returns actually expected out of the fund given the level of its systematic risk. The surplus between the two returns is called Alpha, which measures the performance of a fund compared with the actual returns over the period. Required re ...

Admitted Assets
Assets admitted by state law to be included in an insurance company's annual statement. These assets are an important item when regulators measure insurance company solvency. They may include mortgages, stocks, bonds and real estate.