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valign=top><font
face=arial
size=+1><b>Financial Glossary</b></font></td></tr></table></td></tr></table><center><a
href=aa.html>A</A>
<a
href=bb.html>B</A>
<a
href=cc.html>C</A>
<a
href=dd.html>D</A>
<a
href=ee.html>E</A>
<a
href=ff.html>F</A>
<a
href=gg.html>G</A>
<a
href=hh.html>H</A>
<a
href=ii.html>I</A>
<a
href=jj.html>J</A>
<a
href=kk.html>K</A>
<a
href=ll.html>L</A>
<a
href=mm.html>M</A>
<a
href=nn.html>N</A>
<a
href=oo.html>O</A>
<a
href=pp.html>P</A>
<a
href=qq.html>Q</A>
<a
href=rr.html>R</A>
<a
href=ss.html>S</A>
<a
href=tt.html>T</A>
<a
href=uu.html>U</A>
<a
href=vv.html>V</A>
<a
href=ww.html>W</A>
<a
href=xx.html>X</A>
<a
href=yy.html>Y</A>
<a
href=zz.html>Z</A></center><p><table><tr><td
colspan=2><br><b>A</B></td></tr><tr><td
width=10></td><td>Fifth letter of a <a
href="nn.html#j">Nasdaq</A>
stock symbol specifying Class A shares.</td></tr><tr><td
colspan=2><br><b>AAII</B></td></tr><tr><td></td><td>See:
<a
href="aa.html#bs">American Association of Individual Investors</A></td></tr><tr><td
colspan=2><br><b>ABO</B></td></tr><tr><td></td><td>See:
<a
href="aa.html#s">Accumulated Benefit Obligation</A></td></tr><tr><td
colspan=2><br><b>ABS</B></td></tr><tr><td></td><td>See:
<a
href="aa.html#c9">Automated Bond System</A></td></tr><tr><td
colspan=2><br><b>ACAT</B></td></tr><tr><td></td><td>See:
<a
href="aa.html#db">Automated Customer Account Transfer</A></td></tr><tr><td
colspan=2><br><b>ACES</B></td></tr><tr><td></td><td>See:
<a
href="aa.html#bc">Advance Computerized Execution System</A></td></tr><tr><td
colspan=2><br><b>ACH</B></td></tr><tr><td></td><td>See:
<a
href="aa.html#da">Automated Clearing House</A></td></tr><tr><td
colspan=2><br><b>ACRS</B></td></tr><tr><td></td><td>See:
<a
href="aa.html#g">Accelerated cost recovery system</A></td></tr><tr><td
colspan=2><br><b>ACU</B></td></tr><tr><td></td><td>See:
<a
href="aa.html#cn">Asian currency units</A></td></tr><tr><td
colspan=2><br><b>ADB</B></td></tr><tr><td></td><td>See:
<a
href="aa.html#9">Adjusted Debit Balance</A></td></tr><tr><td
colspan=2><br><b><a
name=a>ADR</A></B></td></tr><tr><td></td><td>See:
<a
href="aa.html#bt">American Depository Receipt</A></td></tr><tr><td
colspan=2><br><b>ADS</B></td></tr><tr><td></td><td>See:
<a
href="aa.html#bu">American Depository Share</A></td></tr><tr><td
colspan=2><br><b><a
name=b>AEX</A></B></td></tr><tr><td></td><td>See:
<a
href="aa.html#b0">Amsterdam Exchange</A></td></tr><tr><td
colspan=2><br><b>AFM</B></td></tr><tr><td></td><td>See:
<a
href="aa.html#by">Amman Financial Market</A></td></tr><tr><td
colspan=2><br><b>AIBD</B></td></tr><tr><td></td><td>Association
of International Bond Dealers</td></tr><tr><td
colspan=2><br><b>AON</B></td></tr><tr><td></td><td>See:
<a
href="aa.html#bp">All or none order</A></td></tr><tr><td
colspan=2><br><b><a
name=c>AOS</A></B></td></tr><tr><td></td><td>See:
<a
href="aa.html#dc">Automated Order System</A></td></tr><tr><td
colspan=2><br><b>AMEX</B></td></tr><tr><td></td><td>See:
<a
href="aa.html#bw">American Stock Exchange</A></td></tr><tr><td
colspan=2><br><b>AMPS</B></td></tr><tr><td></td><td>See:
<a
href="aa.html#c2">Auction Market Preferred Stock</A></td></tr><tr><td
colspan=2><br><b>APR</B></td></tr><tr><td></td><td>See:
<a
href="aa.html#b4">Annual Percentage Rate</A></td></tr><tr><td
colspan=2><br><b>APT</B></td></tr><tr><td></td><td>See:
<a
href="aa.html#ch">Arbitrage Pricing Theory</A></td></tr><tr><td
colspan=2><br><b>APT</B></td></tr><tr><td></td><td>See:
<a
href="aa.html#dd">Automated Pit Trading</A></td></tr><tr><td
colspan=2><br><b>APV</B></td></tr><tr><td></td><td>See:
<a
href="aa.html#bb">Adjusted Present Value</A></td></tr><tr><td
colspan=2><br><b>APY</B></td></tr><tr><td></td><td>See:
<a
href="aa.html#b5">Annual Percentage Yield</A></td></tr><tr><td
colspan=2><br><b>ARM</B></td></tr><tr><td></td><td>See:
<a
href="aa.html#6">Adjustable-rate mortgage</A></td></tr><tr><td
colspan=2><br><b>ARPS</B></td></tr><tr><td></td><td>See:
<a
href="aa.html#7">Adjustable-rate preferred stock</A></td></tr><tr><td
colspan=2><br><b>ARPS</B></td></tr><tr><td></td><td>See:
<a
href="aa.html#c4">Auction rate preferred stock</A></td></tr><tr><td
colspan=2><br><b>ARR</B></td></tr><tr><td></td><td>See:
<a
href="aa.html#dj">Average rate of return</A></td></tr><tr><td
colspan=2><br><b><a
name=d>ASE</A></B></td></tr><tr><td></td><td>See:
<a
href="aa.html#c1">Athens Stock Exchange</A>.</td></tr><tr><td
colspan=2><br><b>ASX</B></td></tr><tr><td></td><td>See:
<a
href="aa.html#c6">Australian Stock Exchange</A></td></tr><tr><td
colspan=2><br><b>ATP</B></td></tr><tr><td></td><td>See:
<a
href="aa.html#ci">Arbitrage Trading Program</A></td></tr><tr><td
colspan=2><br><b>Abandonment</B></td></tr><tr><td></td><td>Controlling
party giving up rights to property voluntarily.</td></tr><tr><td
colspan=2><br><b>Abandonment option</B></td></tr><tr><td></td><td>The
<a
href="oo.html#3">option</A>
of terminating an
investment earlier than originally planned.</td></tr><tr><td
colspan=2><br><b>ABC agreement</B></td></tr><tr><td></td><td>A
<a
href="cc.html#dv">contract</A> between an employee and a brokerage firm outlining the rights of the firm purchasing an <a
href="nn.html#c">NYSE</A> membership for that employee.</td></tr><tr><td
colspan=2><br><b>Ability to pay</B></td></tr><tr><td></td><td>Refers
to the <a
href="bb.html#ce">borrower's</A> ability to make <a
href="ii.html#bu">interest</A> and <a
href="pp.html#c0">principal</A>
payments on <a
href="dd.html#j">debts.</A> See: <a
href="ff.html#bx">Fixed
charge coverage ratio</A>.<p>In context of <a
href="mm.html#ct">municipal
bonds</A>, refers to the <a
href="ii.html#db">issuer's</A>
present and future ability to create sufficient tax revenue to fulfill its contractual obligations, accounting for municipal income and property values.<p>In
context of taxation, notion that tax rates should be determined according to income or wealth.</td></tr><tr><td
colspan=2><br><b><a
name=e>Abnormal returns</A></b></td></tr><tr><td></td><td>The
component of the <a
href="rr.html#b8">return</A>
that is not
due to <a
href="ss.html#ez">systematic</A> influences (market-wide influences). In other words, abnormal returns are above those predicted by the <a
href="mm.html#n">market</A> movement alone. Related: <a
href="ee.html#bw">excess returns</A>.</td></tr><tr><td
colspan=2><br><b>Above par</B></td></tr><tr><td></td><td>See:
<a
href="pp.html#f">Par</A>.</td></tr><tr><td
colspan=2><br><b>Absolute
priority</B></td></tr><tr><td></td><td>Rule in <a
href="bb.html#q">bankruptcy</A>
proceedings
requiring senior <a
href="cc.html#e8">creditors</A>
to be paid in full before junior creditors receive any payment.</td></tr><tr><td
colspan=2><br><b><a
name=f>Absorbed</A></B></td></tr><tr><td></td><td>Used
in context of general equities. Securities are "absorbed" as long as there are corresponding <a
href="oo.html#bf">orders</A> to <a
href="bb.html#cy">buy</A>
and sell. The <a
href="mm.html#n">market</A> has reached the absorption point when further assimilation is impossible without an adjustment in price. See: <a
href="ss.html#9">Sell the book.</A></td></tr><tr><td
colspan=2><br><b>Abusive
tax shelter</B></td></tr><tr><td></td><td>A <a
href="ll.html#9">limited
partnership</A> that the <a
href="ii.html#b9">IRS</A>
judges to be claiming <a
href="tt.html#r">tax deductions</A>
illegally.</td></tr><tr><td
colspan=2><br><b><a
name=g>Accelerated
cost recovery
system (ACRS)</A></B></td></tr><tr><td></td><td>Schedule of <a
href="dd.html#bk">depreciation</A>
rates allowed for tax purposes.</td></tr><tr><td
colspan=2><br><b>Acceleration
clause</B></td></tr><tr><td></td><td>A <a
href="cc.html#dv">contract</A>
stating that the unpaid balance becomes due and payable if specific actions transpire, such as failure to make <a
href="ii.html#bu">interests</A> payments on time.</td></tr><tr><td
colspan=2><br><b><a
name=h>Accelerated depreciation</A></B></td></tr><tr><td></td><td>Any
<a
href="dd.html#bk">depreciation</A>
method that
produces larger deductions for depreciation in the
early years of a
asset's life. <a
href="aa.html#g">Accelerated cost recovery system (ACRS)</A>,
which is a depreciation schedule allowed for tax purposes, is one such example.</td></tr><tr><td
colspan=2><br><b>Acceptance</B></td></tr><tr><td></td><td>Contractual
agreement instigated when the drawee of a <a
href="tt.html#bu">time
draft</A> "accepts" the draft by writing the word "accepted" thereon. The drawee assumes responsibility as the acceptor and for payment at <a
href="mm.html#be">maturity</A>. See: <a
href="ll.html#u">Letter
of credit</A> and <a
href="bb.html#p">banker's acceptance</A>.</td></tr><tr><td
colspan=2><br><b>Accommodative monetary policy</B></td></tr><tr><td></td><td><a
href="ff.html#1">Federal Reserve System</A> policy to increase the amount of money available to banks for lending. See: <a
href="mm.html#b1">Monetary policy</A>.</td></tr><tr><td
colspan=2><br><b><a
name=i>Account</A></B></td></tr><tr><td></td><td>In
the context of bookkeeping, refers to the ledger pages upon which various <a
href="aa.html#cq">assets</A>, <a
href="ll.html#1">liabilities</A>,
income, and expenses are represented.<p>In the context of <a
href="ii.html#cr">investment banking</A>, refers to the status of <a
href="ss.html#4">securities</A> sold and owned or the relationship between parties to an <a
href="uu.html#k">underwriting syndicate</A>.
In the context of <a
href="ss.html#4">securities</A>,
the relationship between a client and a <a
href="bb.html#ck">broker</A>/<a
href="dd.html#f">dealer</A> <a
href="ff.html#bq">firm</A>
allowing the firm's employee to be the client's buying and selling <a
href="aa.html#bj">agent</A>. See: <a
href="aa.html#k">Account
executive</A>; <a
href="aa.html#l">account statement</A>.</td></tr><tr><td
colspan=2><br><b><a
name=j>Account balance</A></B></td></tr><tr><td></td><td><a
href="cc.html#e2">Credits</A> minus debits at the end of a reporting period.</td></tr><tr><td
colspan=2><br><b><a
name=k>Account executive</A></b></td></tr><tr><td></td><td>The
brokerage firm employee who handles <a
href="ss.html#stock">stock</A>
<a
href="oo.html#bf">orders</A> for clients. See: <a
href="bb.html#ck">Broker</A>.</td></tr><tr><td
colspan=2><br><b>Account
reconciliation</B></td></tr><tr><td></td><td>The reviewing and adjusting of the balance in a personal checkbook to match your bank statement.</td></tr><tr><td
colspan=2><br><b><a
name=l>Account statement</A></B></td></tr><tr><td></td><td>In
the context of banking, refers to a summary of all balances.<p>In
the context of <a
href="ss.html#4">securities</A>, a summary of all <a
href="tt.html#cl">transactions</A> and <a
href="pp.html#b4">positions</A>
(<a
href="ll.html#bx">long</A> and <a
href="ss.html#bw">short</A>)
between a <a
href="bb.html#ck">broker</A>/<a
href="dd.html#f">dealer</A>
and a client. See also: <a
href="oo.html#6">Option agreement</A>.</td></tr><tr><td
colspan=2><br><b><a
name=m>Accountant's opinion</A></B></td></tr><tr><td></td><td>A
signed statement from an independent public accountant after examination of a <a
href="ff.html#bq">firm's</A> records and accounts. The opinion may be unqualified or qualified. See: <a
href="qq.html#a">Qualified opinion</A>.</td></tr><tr><td
colspan=2><br><b>Accounting earnings</B></td></tr><tr><td></td><td><a
href="ee.html#b">Earnings</A> of a firm as reported on its <a
href="ii.html#r">income statement</A>.</td></tr><tr><td
colspan=2><br><b><a
name=n>Accounting exposure</A></B></td></tr><tr><td></td><td>The
change in the value of a firm's <a
href="ff.html#cn">foreign
currency</A>-denominated accounts due to a change in <a
href="ee.html#b2">exchange rates</A>.</td></tr><tr><td
colspan=2><br><b>Accounting insolvency</B></td></tr><tr><td></td><td>Total
<a
href="ll.html#1">liabilities</A>
exceed total
<a
href="aa.html#cq">assets</A>. A firm with a negative <a
href="nn.html#1">net worth</A> is <a
href="ii.html#bj">insolvent</A>
on the books.</td></tr><tr><td
colspan=2><br><b>Accounting liquidity</B></td></tr><tr><td></td><td>The
ease and quickness with which <a
href="aa.html#cq">assets</A>
can be converted to cash.</td></tr><tr><td
colspan=2><br><b><a
name=o>Accounts payable</A></B></td></tr><tr><td></td><td>Money
owed to suppliers.</td></tr><tr><td
colspan=2><br><b><a
name=p>Accounts receivable</A></B></td></tr><tr><td></td><td>Money
owed by customers.</td></tr><tr><td
colspan=2><br><b>Accounts
receivable financing</B></td></tr><tr><td></td><td>A
short-term financing method in which <a
href="aa.html#p">accounts
receivable</A> are <a
href="cc.html#cr">collateral</A>
for cash advances. See: <a
href="ff.html#f">Factoring</A>.</td></tr><tr><td
colspan=2><br><b><a
name=q>Accounts receivable turnover</A></b></td></tr><tr><td></td><td>The
ratio of net credit sales to <a
href="aa.html#df">average</A>
<a
href="aa.html#p">accounts receivable</A>, which is a measure of how quickly customers pay their bills.</td></tr><tr><td
colspan=2><br><b>Accredited investor</b></td></tr><tr><td></td><td>Refers
to a wealthy <a
href="ii.html#c5">investor</A> (net worth $7 million or annual income &gt;200,000) who does not count to the maximum of 35 people allowed to invest in a <a
href="pp.html#c8">private limited partnership</A>.</td></tr><tr><td
colspan=2><br><b>Accretion (of a discount)</B></td></tr><tr><td></td><td>In
portfolio accounting, a straight-line accumulation of <a
href="cc.html#4">capital gains</A> on a <a
href="dd.html#b0">discount
bond</A> in anticipation of receipt of <a
href="pp.html#g">par</A>
at <a
href="mm.html#be">maturity</A>.</td></tr><tr><td
colspan=2><br><b>Accrual basis</B></td></tr><tr><td></td><td>In
the context of accounting, practice in which expenses and income are accounted for as if they are earned or incurred, whether or not they have been received or paid. Antithesis of <a
href="cc.html#bi">cash basis accounting</A>.</td></tr><tr><td
colspan=2><br><b>Accrual bond</B></td></tr><tr><td></td><td>A
<a
href="bb.html#bond">bond</A> on which <a
href="aa.html#r">interest
accrues</A> but is not paid to the <a
href="ii.html#c5">investor</A>
during the time of accrual. The amount of <a
href="aa.html#r">accrued
interest</A> is added to the remaining <a
href="pp.html#c0">principal</A>
of the bond and is paid at <a
href="mm.html#be">maturity.</A></td></tr><tr><td
colspan=2><br><b>Accrued benefits</B></td></tr><tr><td></td><td>The
pension benefits earned by an employee accourding to the years of the employee's service.</td></tr><tr><td
colspan=2><br><b><a
name=r>Accrued interest</A></B></td></tr><tr><td></td><td>Applies
mainly to convertible securities. <a
href="ii.html#bu">Interest</A>
that has accumulated between the most recent payment and the sale of a <a
href="bb.html#bond">bond</A> or other fixed-income <a
href="ss.html#4">security</A>. At the time of sale, the buyer pays the seller the <a
href="bb.html#bond">bond's</A> price plus "accrued interest," calculated by multiplying the <a
href="cc.html#coupon_rate">coupon rate</A> by the fraction of the <a
href="cc.html#es">coupon</A> period that has elapsed since the last payment. (If a <a
href="bb.html#b8">bondholder</A> receives $40 in <a
href="cc.html#eu">coupon
payments</A> per bond semiannually and sells the bond one-quarter of the way into the coupon period, the buyer pays the seller $10 as the latter's proportion of interest earned.)</td></tr><tr><td
colspan=2><br><b>Accrued market discount</b></td></tr><tr><td></td><td>The
rise in the <a
href="mm.html#5">market value</A> of a <a
href="dd.html#b0">discount bond</A> as it approaches <a
href="mm.html#be">maturity</A> (when it is <a
href="rr.html#r">redeemable</A>
at <a
href="pp.html#f">par</A>) and not because of falling market <a
href="ii.html#bz">interest rates</A>.</td></tr><tr><td
colspan=2><br><b>Accumulate</b></td></tr><tr><td></td><td>Broker/analyst
recommendation that could mean slightly different things
depending on the broker/analyst. In general, it means to increase the number of shares of a particular security over the near term, but not to liquidate other parts of the portfolio to buy a security that might skyrocket. A buy recommendation, but not an urgent buy.</td></tr><tr><td
colspan=2><br><b><a
name=s>Accumulated Benefit Obligation (ABO)</A></B></td></tr><tr><td></td><td>An
approximate measure of the <a
href="ll.html#1">liability</A>
of a pension plan in the event of a termination at the date the calculation is performed. Related: <a
href="pp.html#dp">Projected benefit obligation</A>.</td></tr><tr><td
colspan=2><br><b><a
name=t>Accumulated dividend</A></b></td></tr><tr><td></td><td>A
<a
href="dd.html#cd">dividend</A> that has reached its <a
href="dd.html#c0">due date</A>, but is not paid out. See: <a
href="cc.html#ff">Cumulative preferred stock</A>.</td></tr><tr><td
colspan=2><br><b><a
name=u>Accumulated profits tax</A></b></td></tr><tr><td></td><td>A
tax on earnings kept in a <a
href="ff.html#bq">firm</A>
to prevent the higher personal <a
href="ii.html#s">income
tax</A> rate that would obtain if profits were paid out as <a
href="dd.html#cd">dividends</A> to the owners.</td></tr><tr><td
colspan=2><br><b>Accumulation</B></td></tr><tr><td></td><td>In
the context of <a
href="cc.html#ed">corporate finance</A>,
refers to <a
href="pp.html#df">profits</A> that are added to the <a
href="cc.html#x">capital</A> base of the company rather than paid out as <a
href="dd.html#cd">dividends</A>. See: <a
href="aa.html#u">Accumulated
profits tax</A>.<p>In the context of <a
href="ii.html#cp">investments</A>,
refers to the purchase by an <a
href="ii.html#bl">institutional broker</A>
of a large number of <a
href="ss.html#bs">shares</A>
over a period of time in order to avoid pushing the price of that share up.<p>In
the context of <a
href="mm.html#cv">mutual funds</A>,
refers to the regular investing of a fixed amount while reinvesting <a
href="dd.html#cd">dividends</A> and <a
href="cc.html#4">capital
gains</A>.</td></tr><tr><td
colspan=2><br><b><a
name=v>Accumulation
area</A></B></td></tr><tr><td></td><td>A price <a
href="rr.html#g">range</A>
within which a buyer accumulates <a
href="ss.html#bs">shares</A>
of a <a
href="ss.html#stock">stock</A>. See: <a
href="oo.html#l">On-balance</A>
volume and <a
href="dd.html#b9">distribution area</A>.</td></tr><tr><td
colspan=2><br><b><a
name=w>Acid test ratio</A></B></td></tr><tr><td></td><td>Also
called the <a
href="qq.html#g">quick ratio,</A> the ratio of <a
href="cc.html#fo">current assets</A> minus inventories, accruals, and prepaid items to <a
href="cc.html#fp">current liabilities</A>.</td></tr><tr><td
colspan=2><br><b>Acquired surplus</b></td></tr><tr><td></td><td>The
surplus acquired when a company is purchased in a <a
href="pp.html#bw">pooling of interests</A> combination, i.e. the <a
href="nn.html#1">net worth</A> not considered to be <a
href="cc.html#ba">capital stock</A>.</td></tr><tr><td
colspan=2><br><b><a
name=x>Acquiree</A></B></td></tr><tr><td></td><td>A
firm that is being acquired.</td></tr><tr><td
colspan=2><br><b><a
name=y>Acquirer</A></B></td></tr><tr><td></td><td>A firm or individual that is acquiring something.</td></tr><tr><td
colspan=2><br><b><a
name=z>Acquisition</A></B></td></tr><tr><td></td><td>When
a firm buys another firm.</td></tr><tr><td
colspan=2><br><b>Acquisition
cost</B></td></tr><tr><td></td><td>Refers to the price (including the <a
href="cc.html#cl">closing costs</A>) to purchase another company or property.<p>In
the context of <a
href="ii.html#cp">investments</A>,
refers to price plus brokerage <a
href="cc.html#c3">commissions</A>,
of a <a
href="ss.html#4">security</A>, or the sales charge applied to <a
href="ll.html#load_fund">load funds</A>. See: <a
href="tt.html#o">Tax
basis</A>.</td></tr><tr><td
colspan=2><br><b><a
name=0>Acquisition
of assets</A></B></td></tr><tr><td></td><td>A <a
href="mm.html#bo">merger</A>
or <a
href="cc.html#dm">consolidation</A> in which an acquirer purchases the selling firm's <a
href="aa.html#cq">assets</A>.</td></tr><tr><td
colspan=2><br><b>Acquisition
of stock</B></td></tr><tr><td></td><td>A <a
href="mm.html#bo">merger</A>
or <a
href="cc.html#dm">consolidation</A> in which an acquirer purchases the acquiree's <a
href="cc.html#dd">stock</A>.</td></tr><tr><td
colspan=2><br><b>Across
the board</B></td></tr><tr><td></td><td>Movement or <a
href="tt.html#c0">trend</A> in the <a
href="ss.html#dp">stock
market</A> that affects almost all stocks in all <a
href="ss.html#y">sectors</A>
to move in the same direction.</td></tr><tr><td
colspan=2><br><b>Acting
in concert</B></td></tr><tr><td></td><td><a
href="ii.html#c5">Investors</A>
working together and performing identical actions to attain the same <a
href="ii.html#cp">investment</A> goal.</td></tr><tr><td
colspan=2><br><b>Act of state doctrine</B></td></tr><tr><td></td><td>This
doctrine says that a nation is sovereign within its own borders, and its domestic actions may not be questioned in the courts of another nation.</td></tr><tr><td
colspan=2><br><b><a
name=1>Active</A></B></td></tr><tr><td></td><td>A
<a
href="mm.html#n">market</A> in which there is frequent <a
href="tt.html#cf">trading</A>.</td></tr><tr><td
colspan=2><br><b>Active
account</B></td></tr><tr><td></td><td>Refers to a brokerage <a
href="aa.html#i">account</A> in which many <a
href="tt.html#cl">transactions</A>
occur. Brokerage firms may levy a fee if an account generates an inadequate level of activity.</td></tr><tr><td
colspan=2><br><b>Active bond crowd</B></td></tr><tr><td></td><td>Refers
to members of the <a
href="bb.html#bond">bond</A> department of the <a
href="nn.html#c">NYSE</A> who <a
href="tt.html#ca">trade</A>
the most <a
href="bb.html#bond">bonds</A>. Antithesis of <a
href="cc.html#e">cabinet crowd</A>.</td></tr><tr><td
colspan=2><br><b>Active
box</B></td></tr><tr><td></td><td><a
href="ss.html#4">Securities</A>
that are held in safekeeping and are available as <a
href="cc.html#cr">collateral</A> for securing <a
href="bb.html#ck">brokers'</A>
loans or customers' <a
href="mm.html#i">margin</A> <a
href="pp.html#b4">positions</A>.</td></tr><tr><td
colspan=2><br><b><a
name=2>Active portfolio strategy</A></b></td></tr><tr><td></td><td>A
strategy that uses available information and forecasting techniques to seek better performance than a buy and hold <a
href="pp.html#by">portfolio</A>. Related: <a
href="pp.html#x">Passive
portfolio strategy</A>.</td></tr><tr><td
colspan=2><br><b><a
name=3>Actual market</A></B></td></tr><tr><td></td><td>Used
in context of general equities. <a
href="ff.html#br">Firm
market</A>. Antithesis of <a
href="ss.html#ea">Subject market</A>.</td></tr><tr><td
colspan=2><br><b>Actuals</b></td></tr><tr><td></td><td>The
physical <a
href="cc.html#c9">commodities</A> <a
href="uu.html#c">underlying</A>
a <a
href="ff.html#dm">futures contract</A>. <a
href="cc.html#bk">Cash
commodity</A>, physical asset.</td></tr><tr><td
colspan=2><br><b><a
name=4>A-D</A></b></td></tr><tr><td></td><td>Advance-Decline, or measurement of the number of <a
href="ii.html#da">issues</A> <a
href="tt.html#cf">trading</A>
above their previous closing prices less the number trading below their previous closing prices over a particular period. As a technical measure of <a
href="mm.html#n">market</A> breadth, the steepness of the A-D line indicates whether a strong <a
href="bb.html#co">bull</A> or <a
href="bb.html#2">bear</A>
market is under way.</td></tr><tr><td
colspan=2><br><b>Additional
bonds test</B></td></tr><tr><td></td><td>A test for ensuring that <a
href="bb.html#bond">bond</A> <a
href="ii.html#db">issuers</A>
can meet the <a
href="dd.html#q">debt service</A> requirements of issuing any new additional bonds.</td></tr><tr><td
colspan=2><br><b>Additional hedge</B></td></tr><tr><td></td><td>A
protection against borrower <a
href="ff.html#k">fallout risk</A>
in the <a
href="mm.html#cj">mortgage pipeline</A>.</td></tr><tr><td
colspan=2><br><b>Adequacy of coverage</B></td></tr><tr><td></td><td>A
test that measures the extent to which the value of an <a
href="aa.html#cq">asset</A> is protected from potential loss either through <a
href="ii.html#bp">insurance</A> or <a
href="hh.html#d">hedging</A>.</td></tr><tr><td
colspan=2><br><b><a
name=5>Adjustable rate</A></B></td></tr><tr><td></td><td>Applies
mainly to convertible securities. Refers to <a
href="ii.html#bz">interest
rate</A> or <a
href="dd.html#cd">dividend</A> that is adjusted periodically, usually according to a standard market rate outside the control of the bank or savings institution, such as that prevailing on <a
href="tt.html#cw">Treasury bonds</A> or <a
href="nn.html#bi">notes</A>.
Typically, such <a
href="ii.html#da">issues</A> have a set floor or ceiling, called <a
href="cc.html#w">caps</A> and <a
href="cc.html#cq">collars</A>
that limits the adjustment.</td></tr><tr><td
colspan=2><br><b><a
name=6>Adjustable-rate mortgage (ARM)</A></B></td></tr><tr><td></td><td>A
<a
href="mm.html#ce">mortgage</A> that features predetermined adjustments of the loan <a
href="ii.html#bz">interest rate</A> at regular intervals based on an established index. The <a
href="ii.html#bz">interest rate</A> is adjusted at each interval to a rate equivalent to the <a
href="ii.html#u">index</A> value plus a predetermined <a
href="ss.html#c3">spread,</A> or <a
href="mm.html#i">margin</A>,
over the index, usually subject to per-interval and to life-of-loan interest rate and/or payment rate <a
href="cc.html#w">caps.</A></td></tr><tr><td
colspan=2><br><b><a
name=7>Adjustable-rate preferred stock (ARPS)</A></B></td></tr><tr><td></td><td>Publicly
<a
href="tt.html#ca">traded</A> <a
href="ii.html#da">issues</A>
that may be
<a
href="cc.html#cr">collateralized</A> by <a
href="mm.html#ce">mortgages</A>
and <a
href="mm.html#cf">MBS</A></td></tr><tr><td
colspan=2><br><b><a
name=8>Adjusted balance method</A></B></td></tr><tr><td></td><td>Method
of calculating <a
href="ff.html#6">finance</A> charges that uses the <a
href="aa.html#j">account balance</A> remaining after adjusting for all <a
href="tt.html#cl">transactions</A> posted during the given billing period as its basis. Related: <a
href="aa.html#dh">Average daily balance</A> method, <a
href="pp.html#cn">previous balance method</A>, past due balance method.</td></tr><tr><td
colspan=2><br><b>Adjusted basis</B></td></tr><tr><td></td><td>Price
from which to calculate and derive <a
href="cc.html#4">capital
gains</A> or <a
href="ll.html#b6">losses</A> upon sale of an <a
href="aa.html#cq">asset</A>. Account actions such as any <a
href="ss.html#ds">stock splits</A> that have occurred since the initial purchase must be accounted for.</td></tr><tr><td
colspan=2><br><b><a
name=9>Adjusted debit balance (ADB)</A></B></td></tr><tr><td></td><td>The
account balance for a <a
href="mm.html#j">margin account</A>
that is calculated by combining the balance owed to a <a
href="bb.html#ck">broker</A> with any outstanding balance in the special miscellaneous account, and any paper <a
href="pp.html#df">profits</A> on <a
href="ss.html#bw">short</A>
accounts.</td></tr><tr><td
colspan=2><br><b>Adjusted exercise price</B></td></tr><tr><td></td><td>Term
used in <a
href="oo.html#3">options</A> on <a
href="gg.html#l">Ginnie
Mae</A> (Government National Mortgage Association) <a
href="cc.html#dv">contracts</A>. The final <a
href="ee.html#b8">exercise
price</A> of the <a
href="oo.html#3">option</A> accounts for the <a
href="cc.html#coupon_rate">coupon rates</A> carried on <a
href="gg.html#l">Ginnie Mae</A> <a
href="mm.html#ce">mortgages</A>.
For example, if the standard GNMA <a
href="mm.html#ce">mortgage</A>
has an 9% <a
href="yy.html#b">yield</A>, the price of GNMA pools with 13% mortgages in them is altered so that the <a
href="ii.html#c5">investor</A> receives the same <a
href="yy.html#b">yield</A>.</td></tr><tr><td
colspan=2><br><b><a
name=ba>Adjusted gross income (AGI)</A></B></td></tr><tr><td></td><td><a
href="gg.html#8">Gross income</A> less allowable adjustments, is the income on which an individual is taxed by the federal government.</td></tr><tr><td
colspan=2><br><b><a
name=bb>Adjusted present value (APV)</A></B></td></tr><tr><td></td><td>The
<a
href="nn.html#y">net present value</A> analysis of an <a
href="aa.html#cq">asset</A> if financed solely by <a
href="ee.html#4">equity</A> (present value of unlevered <a
href="cc.html#bm">cash flows</A>), plus the <a
href="pp.html#cl">present
value</A> of any financing decisions (levered cash flows). In other words, the various <a
href="tt.html#z">tax shields</A> provided by the deductibility of <a
href="ii.html#bu">interest</A> and the benefits of other <a
href="ii.html#c3">investment tax credits</A> are calculated separately. This analysis is often used for highly leveraged transactions such as a <a
href="ll.html#z">leveraged buyout</A>.</td></tr><tr><td
colspan=2><br><b>Adjustment bond</B></td></tr><tr><td></td><td>A
<a
href="bb.html#bond">bond</A> issued in exchange for <a
href="oo.html#bp">outstanding</A> bonds when a corporation facing <a
href="bb.html#q">bankruptcy</A> is recapitalized.</td></tr><tr><td
colspan=2><br><b>Administrative pricing rules</B></td></tr><tr><td></td><td>IRS
rules used to allocate income on export sales to a <a
href="ff.html#ct">foreign sales corporation</A>.</td></tr><tr><td
colspan=2><br><b>Advance</B></td></tr><tr><td></td><td>Increase
in the <a
href="mm.html#y">market price</A> of <a
href="ss.html#stock">stocks</A>,
<a
href="bb.html#bond">bonds</A>, <a
href="cc.html#c9">commodities</A>,
or other <a
href="aa.html#cq">assets</A>.</td></tr><tr><td
colspan=2><br><b>Advance commitment</B></td></tr><tr><td></td><td>A
promise to sell an <a
href="aa.html#cq">asset</A> before the seller has lined up purchase of the asset. This seller can <a
href="oo.html#i">offset</A> <a
href="rr.html#cn">risk</A>
by purchasing a <a
href="ff.html#dm">futures contract</A>
to fix the sales price approximately.</td></tr><tr><td
colspan=2><br><b><a
name=bc>Advance Computerized Execution System (ACES)</A></B></td></tr><tr><td></td><td>Refers
to the Advance Computerized Execution System, run by <a
href="nn.html#b">Nasdaq</A>. ACES automates <a
href="tt.html#ca">trades</A>
between <a
href="oo.html#bf">order</A> entry and <a
href="mm.html#s">market
maker</A> <a
href="ff.html#bq">firms</A> that have established <a
href="tt.html#cf">trading</A> relationships with each other. <a
href="ss.html#4">Securities</A> are designated as specified for automatic <a
href="ee.html#b6">execution</A>.</td></tr><tr><td
colspan=2><br><b>Advance
funded pension plan</B></td></tr><tr><td></td><td>A <a
href="pp.html#9">pension plan</A> in which funds are set aside in advance of the date of retirement.</td></tr><tr><td
colspan=2><br><b>Advance refunding</B></td></tr><tr><td></td><td>In
the context of <a
href="mm.html#ct">municipal bonds</A>,
refers to the sale of new <a
href="bb.html#bond">bonds</A>
(the <a
href="rr.html#u">refunding</A> <a
href="ii.html#da">issue</A>)
before the first <a
href="cc.html#h">call date</A> of old <a
href="bb.html#bond">bonds</A> (the <a
href="ii.html#da">issue</A>
to be refunded). The refunding issue usually specifies a rate lower than the <a
href="ii.html#da">issue</A> to be refunded, and the proceeds are invested, usually in government <a
href="ss.html#4">securities</A>, until the higher-rate bonds become <a
href="cc.html#p">callable</A>. See: <a
href="rr.html#v">Refunding
escrow deposits</A>.</td></tr><tr><td
colspan=2><br><b>Adverse
opinion</B></td></tr><tr><td></td><td>An independent auditor's opinion expressing that a <a
href="ff.html#bq">firm's</A> financial statements do not reflect the company's <a
href="pp.html#b4">position</A> accurately. See also: <a
href="qq.html#a">Qualified opinion</A>.</td></tr><tr><td
colspan=2><br><b>Adverse selection</B></td></tr><tr><td></td><td>Refers
to a situation in which sellers have relevant information that buyers lack (or vice versa) about some aspect of product quality.</td></tr><tr><td
colspan=2><br><b>Advisory letter</B></td></tr><tr><td></td><td>A
newsletter offering financial advice to its readers.</td></tr><tr><td
colspan=2><br><b><a
name=bd>Affiliate</A></B></td></tr><tr><td></td><td>Relationship
between two companies when one company owns substantial <a
href="ii.html#bu">interest,</A> but less than a majority of the <a
href="vv.html#o">voting stock</A> of another company, or when two companies are both <a
href="ss.html#eg">subsidiaries</A> of a third company. See: <a
href="ss.html#eg">Subsidiaries</A>, <a
href="pp.html#i">parent
company</A>.</td></tr><tr><td
colspan=2><br><b>Affiliated corporation</B></td></tr><tr><td></td><td>A
corporation that is an <a
href="aa.html#bd">affiliate</A>
to the parent company.</td></tr><tr><td
colspan=2><br><b><a
name=be>Affiliated person</A></B></td></tr><tr><td></td><td>An
individual who possesses enough influence and control in a corporation as to be able to alter the actions of the corporation.</td></tr><tr><td
colspan=2><br><b><a
name=bf>Affirmative covenant</A></B></td></tr><tr><td></td><td>A
<a
href="bb.html#b1">bond covenant</A>
that specifies
certain actions the firm must take.</td></tr><tr><td
colspan=2><br><b>Affordability
index</B></td></tr><tr><td></td><td>An <a
href="ii.html#u">index</A>
that measures the financial ability of consumers to purchase a home.</td></tr><tr><td
colspan=2><br><b>After acquired clause</B></td></tr><tr><td></td><td>A
contractual clause in a <a
href="mm.html#ce">mortgage</A>
agreement stating that any additional mortgageable property attained by the <a
href="bb.html#ce">borrower</A> after the <a
href="mm.html#ce">mortgage</A>
is signed will be regarded as additional <a
href="ss.html#4">security</A>
for the obligation addressed in the <a
href="mm.html#ce">mortgage</A>.</td></tr><tr><td
colspan=2><br><b>After-hours dealing or trading</B></td></tr><tr><td></td><td><a
href="ss.html#4">Securities</A> <a
href="tt.html#cf">trading</A>
after regular trading hours on organized <a
href="ee.html#bx">exchanges</A>.</td></tr><tr><td
colspan=2><br><b>Aftermarket</B></td></tr><tr><td></td><td>See:
<a
href="ss.html#w">Secondary market</A>.</td></tr><tr><td
colspan=2><br><b>After-tax basis</B></td></tr><tr><td></td><td>The
comparison basis used to analyze the net after-tax <a
href="rr.html#b8">returns</A> on a corporate taxable <a
href="bb.html#bond">bond</A> and a municipal tax-free bond.</td></tr><tr><td
colspan=2><br><b>After-tax profit margin</b></td></tr><tr><td></td><td>The
ratio of <a
href="nn.html#v">net income</A> to <a
href="nn.html#0">net
sales</A>.</td></tr><tr><td
colspan=2><br><b>After-tax real rate of return</B></td></tr><tr><td></td><td>The
after-tax rate of return minus the <a
href="ii.html#7">inflation</A>
rate.</td></tr><tr><td
colspan=2><br><b>Against the box</B></td></tr><tr><td></td><td>See:
<a
href="ss.html#bf">Selling short against the box</A>.</td></tr><tr><td
colspan=2><br><b>Aged fail</B></td></tr><tr><td></td><td>An
account between two <a
href="bb.html#ck">broker</A>/<a
href="dd.html#f">dealers</A> that remains intact after 30 days after the <a
href="ss.html#bo">settlement date</A>. The receiving <a
href="ff.html#bq">firm</A> must adjust its <a
href="cc.html#x">capital</A>
as it can no longer treat this account as an <a
href="aa.html#cq">assets.</A></td></tr><tr><td
colspan=2><br><b>Agencies</B></td></tr><tr><td></td><td>See:
<a
href="ff.html#p">Federal agency securities</A>.</td></tr><tr><td
colspan=2><br><b><a
name=bg>Agency</A></b></td></tr><tr><td></td><td>In
context of general equities, buying or selling for the account and <a
href="rr.html#cn">risk</A> of a customer. Generally, an agent, or <a
href="bb.html#ck">broker</A>, acts as intermediary between buyer and seller, taking no financial risk personally or as a firm, and charging a commission for the service. The broker represents a customer buyer/seller to a customer seller/buyer and does not act as <a
href="pp.html#c0">principal</A> for the firm's own <a
href="tt.html#cf">trading</A> account. Antithesis of <a
href="pp.html#c0">principal.</A> See: <a
href="dd.html#f">Dealer</A>.</td></tr><tr><td
colspan=2><br><b>Agency bank</B></td></tr><tr><td></td><td>A
form of organization commonly used by foreign banks to enter the	U.S. <a
href="mm.html#n">market</A>. An agency bank cannot accept deposits or extend <a
href="ll.html#bp">loans</A> in its own name; it acts as agent for the parent bank. It is also the financial institution that <a
href="ii.html#da">issues</A> <a
href="aa.html#a">ADRs</A>
to the general <a
href="mm.html#n">market</A>.</td></tr><tr><td
colspan=2><br><b>Agency basis</b></td></tr><tr><td></td><td>A
means of compensating the <a
href="bb.html#ck">broker</A>
of a <a
href="pp.html#dk">program trade</A> solely on the basis of <a
href="cc.html#c3">commission</A> established through <a
href="bb.html#bg">bids</A> submitted by various brokerage firms.</td></tr><tr><td
colspan=2><br><b>Agency cost view</B></td></tr><tr><td></td><td>The
argument that specifies that the various <a
href="aa.html#bh">agency
costs</A> create a complex environment in which total agency costs are at a minimum with some, but less than 100%, <a
href="dd.html#j">debt</A> financing.</td></tr><tr><td
colspan=2><br><b><a
name=bh>Agency costs</A></B></td></tr><tr><td></td><td>The
incremental costs of having an <a
href="aa.html#bj">agent</A>
make decisions for a <a
href="pp.html#c0">principal</A>.</td></tr><tr><td
colspan=2><br><b>Agency incentive arrangement</B></td></tr><tr><td></td><td>A
means of compensating the broker of a <a
href="pp.html#dk">program
trade</A> using <a
href="bb.html#8">benchmark</A> <a
href="pp.html#ct">prices</A> for <a
href="ii.html#da">issues</A>
to be traded in determining <a
href="cc.html#c3">commissions</A>
or fees.</td></tr><tr><td
colspan=2><br><b><a
name=bi>Agency
pass-throughs</A></b></td></tr><tr><td></td><td><a
href="mm.html#ci">Mortgage
pass-through securities</A> whose <a
href="pp.html#c0">principal</A>
and <a
href="ii.html#bu">interest</A> payments are guaranteed by	government agencies, such as the <a
href="gg.html#l">Government National Mortgage Association (Ginnie Mae)</A>,
<a
href="ff.html#c5">Federal Home Loan Mortgage Corporation (Freddie Mac)</A>,
and <a
href="ff.html#x">Federal National Mortgage Association(Fannie Mae)</A>.</td></tr><tr><td
colspan=2><br><b>Agency problem</B></td></tr><tr><td></td><td>Conflicts
of interest among <a
href="ss.html#dt">stockholders</A>,
<a
href="bb.html#b8">bondholders</A>, and <a
href="mm.html#b3">managers</A>.</td></tr><tr><td
colspan=2><br><b>Agency securities</B></td></tr><tr><td></td><td><a
href="ss.html#4">Securities</A> <a
href="ii.html#da">issued</A>
by federally related institutions and U.S. government-sponsored entities. Such agencies were created to reduce <a
href="bb.html#ce">borrowing</A> costs for certain <a
href="ss.html#y">sectors</A> of the economy, such as agriculture.</td></tr><tr><td
colspan=2><br><b>Agency theory</B></td></tr><tr><td></td><td>The
analysis of <a
href="pp.html#c1">principal-agent relationships</A>,
in which one person, an <a
href="aa.html#bj">agent</A>,
acts on behalf of another person, a
<a
href="pp.html#c0">principal</A>.</td></tr><tr><td
colspan=2><br><b><a
name=bj>Agent</A></B></td></tr><tr><td></td><td>The decision-maker in a <a
href="pp.html#c1">principal-agent relationship</A>.</td></tr><tr><td
colspan=2><br><b>Aggregate exercise price</B></td></tr><tr><td></td><td>The
<a
href="ee.html#b8">exercise price</A> multiplied by the number of <a
href="ss.html#bs">shares</A> in a <a
href="pp.html#d8">put</A>
or <a
href="cc.html#g">call</A> <a
href="cc.html#dv">contract</A>.
The <a
href="oo.html#7">option premium</A> is excluded in the aggregate exercise price. In tje case of <a
href="oo.html#3">options</A> traded on <a
href="dd.html#m">debt
instruments</A>, the aggregate exercise price is the <a
href="ee.html#b8">exercise price</A> of the <a
href="uu.html#e">underlying
security</A> multiplied by its <a
href="ff.html#c">face
value</A>.</td></tr><tr><td
colspan=2><br><b><a
name=bk>Aggregation</A></B></td></tr><tr><td></td><td>Process
in corporate <a
href="ff.html#bi">financial planning</A>
whereby the smaller investment proposals of
each of the firm's operational units are aggregated and effectively treated as a whole.</td></tr><tr><td
colspan=2><br><b>Aggressive growth mutual fund</B></td></tr><tr><td></td><td>A
<a
href="mm.html#cv">mutual fund</A> designed for maximum <a
href="cc.html#x">capital</A> <a
href="aa.html#ce">appreciation</A>
that places its money in companies with high growth rates.</td></tr><tr><td
colspan=2><br><b><a
name=bl>Aggressively</A></b></td></tr><tr><td></td><td>Used
in context of general equities. For a customer it means working to <a
href="bb.html#cy">buy</A> or sell one's <a
href="ss.html#stock">stock</A>,
with an emphasis on execution over price. For a <a
href="tt.html#ce">trader</A>
it means acting in a way that puts the firm's capital at higher risk through paying a higher price, selling cheaper, or making a larger <a
href="ss.html#b1">short sale</A> or <a
href="pp.html#d1">purchase</A>
than the trader would under normal circumstances.</td></tr><tr><td
colspan=2><br><b>Aging schedule</B></td></tr><tr><td></td><td>A
table of <a
href="aa.html#p">accounts receivable</A>
broken 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 to schedule.</td></tr><tr><td
colspan=2><br><b><a
name=bm>Agreement among underwriters</A></B></td></tr><tr><td></td><td>A
<a
href="cc.html#dv">contract</A> amoung participating members of a <a
href="ss.html#ew">syndicate</A> that defines the members' proportionate <a
href="ll.html#1">liability</A>, which is usually limited to and based on the participants' level of involvement. The <a
href="cc.html#dv">contract</A> outlines the payment schedule on the <a
href="ss.html#bo">settlement date</A>. Compare: <a
href="uu.html#i">Underwriting
agreement</A>.</td></tr><tr><td
colspan=2><br><b>Ahead of itself</b></td></tr><tr><td></td><td>In
context of general equities, refers to equities that are <a
href="oo.html#bt">overbought</A> or <a
href="oo.html#bx">oversold</A>
on a fundamental basis.</td></tr><tr><td
colspan=2><br><b><a
name=bn>Ahead of you</A></B></td></tr><tr><td></td><td>Used
for listed equity securities. At the same price but entered ahead of your <a
href="oo.html#bf">order</A>/interest, usually referring to the <a
href="ss.html#co">specialist's book.</A> See: <a
href="bb.html#6">Behind,</A>
<a
href="mm.html#bc">matched orders,</A> <a
href="pp.html#c5">priority,</A>
<a
href="ss.html#dh">stock ahead</A>.</td></tr><tr><td
colspan=2><br><b>AIMR Performance Presentation Standards Implementation Committee</B></td></tr><tr><td></td><td>The
Association for Investment Management and Research (AIMR) Performance Presentation Standards Implementation Committee is charged with the responsibility to interpret, revise, and update the AIMR Performance Presentation Standards (AIMR-PPS(TM) for <a
href="pp.html#by">portfolio</A> performance presentations.</td></tr><tr><td
colspan=2><br><b>Air pocket stock</B></td></tr><tr><td></td><td>A
<a
href="ss.html#stock">stock</A> whose price drops precipitously, often on the unexpected news of poor results.</td></tr><tr><td
colspan=2><br><b><a
name=bo>Alien corporation</A></B></td></tr><tr><td></td><td>A
company incorporated under the laws of a foreign country regardless of where the company conducts its operations.</td></tr><tr><td
colspan=2><br><b>All equity rate</B></td></tr><tr><td></td><td>The
<a
href="dd.html#b2">discount rate</A> that reflects only the <a
href="bb.html#cv">business risks</A> of a project, distinct from the effects of financing.</td></tr><tr><td
colspan=2><br><b>All in</B></td></tr><tr><td></td><td>Refers
to an <a
href="ii.html#db">issuer's</A> <a
href="ii.html#bz">interest
rate</A> after accounting for <a
href="cc.html#c3">commissions</A>
and various related expenses.</td></tr><tr><td
colspan=2><br><b>All
Ordinaries Index</B></td></tr><tr><td></td><td>The major <a
href="ii.html#u">index</A> of Australian stocks comprising 330 of the major companies listed on the <a
href="aa.html#c6">Australian Stock Exchange</A>.</td></tr><tr><td
colspan=2><br><b><a
name=bp>All or none order (AON)</A></b></td></tr><tr><td></td><td>Used
in context of general equities. A <a
href="ll.html#ba">limited
price order</A> that is to be <a
href="ee.html#b6">executed</A>
in its entirety or not at all (no partial transaction), and thus is testing the strength/conviction of the counterparty. Unlike an <a
href="ff.html#b">FOK order</A>, an AON order is not to be treated as <a
href="cc.html#v">cancelled</A> if not executed as soon as it is represented in the <a
href="cc.html#fc">trading crowd</A>, but instead remains alive until executed or cancelled. The making of "all or none" <a
href="bb.html#bg">bids</A> or <a
href="oo.html#e">offers</A>
in <a
href="ss.html#stock">stocks</A> is prohibited, and the making of "all or none" <a
href="bb.html#bg">bids</A> or <a
href="oo.html#e">offers</A>
in <a
href="bb.html#bond">bonds</A> is subject to the restrictions of Rule 61. AON orders are not shown on the <a
href="ss.html#cp">specialist's book</A> because they cannot be traded in pieces. Antithesis of <a
href="aa.html#cc">any-part-of order</A>. See: <a
href="ff.html#b">FOK
order</A>.</td></tr><tr><td
colspan=2><br><b>All-in cost</B></td></tr><tr><td></td><td>Total
costs, explicit and implicit.</td></tr><tr><td
colspan=2><br><b>All-or-none
underwriting</B></td></tr><tr><td></td><td>An arrangement whereby a <a
href="ss.html#4">security</A> <a
href="ii.html#da">issue</A>
is <a
href="cc.html#v">cancelled</A> if the <a
href="uu.html#g">underwriter</A>
is unable to resell
the entire issue.</td></tr><tr><td
colspan=2><br><b>Allied
member</B></td></tr><tr><td></td><td>A partner or <a
href="ss.html#dt">stockholder</A> of a <a
href="ff.html#bq">firm</A>
that is a member of the <a
href="nn.html#c">NYSE</A>,
the <a
href="pp.html#s">partner</A> or stockholder is not personally a member of the NYSE.</td></tr><tr><td
colspan=2><br><b>Alligator spread</B></td></tr><tr><td></td><td>The
term used to describe a <a
href="ss.html#c3">spread</A>
in the <a
href="oo.html#3">options</A> market that generates such a large <a
href="cc.html#c3">commission</A> that the client is unlikely to make a <a
href="pp.html#df">profit</A> even if the <a
href="mm.html#n">markets</A>
move as the <a
href="ii.html#c5">investor</A> anticipated.</td></tr><tr><td
colspan=2><br><b>Allotment</B></td></tr><tr><td></td><td>The
number of <a
href="ss.html#4">securities</A> assigned to each of the participants in an <a
href="uu.html#k">underwriting syndicate</A>.</td></tr><tr><td
colspan=2><br><b><a
name=bq>Alpha</A></b></td></tr><tr><td></td><td>Measure
of risk-adjusted performance. An alpha is usually generated by regressing the <a
href="ss.html#4">security</A> or <a
href="mm.html#cv">mutual
fund's</A> <a
href="ee.html#bw">excess return</A> on the <a
href="ss.html#k">S&amp;P</A> 500 excess return. The <a
href="bb.html#be">beta</A> adjusts for the <a
href="rr.html#cn">risk</A>
(the slope coefficient). The alpha is the intercept. Example: Suppose the mutual fund has a return of 25%, and the short-term <a
href="ii.html#bz">interest rate</A> is 5% (excess return is 20%). During the same time the market excess return is 9%. Suppose the beta of the mutual fund is 2.0 (twice as risky as the S&amp;P 500). The <a
href="ee.html#cd">expected excess return</A> given the risk is 2 x 9%=18%. The actual excess return is 20%. Hence, the alpha is 2% or 200 <a
href="bb.html#w">basis points</A>. Alpha is also known as the <a
href="jj.html#b">Jensen Index</A>. Related: <a
href="rr.html#cy">Risk-adjusted
return</A>.</td></tr><tr><td
colspan=2><br><b><a
name=alpha_equation>Alpha
equation</A></b></td></tr><tr><td></td><td>Regression usually run over 36-60 months of data: Return-<a
href="tt.html#cv">Treasury bill</A>= alpha + beta (<a
href="ss.html#k">S&amp;P</A> 500 - Treasury bill) + error. The alpha is the intercept. Note that the <a
href="bb.html#8">benchmark</A> does not necessarily have to be the <a
href="ss.html#k">S&amp;P</A> 500. A <a
href="mm.html#cv">mutual
fund</A> specializing in international investment might be benchmarked to a broader world market index, such as the MSCI World Index.</td></tr><tr><td
colspan=2><br><b>Alphabet stock</B></td></tr><tr><td></td><td>Categories
of <a
href="cc.html#dd">common stock</A> of a corporation associated with a particular <a
href="ss.html#eg">subsidiary</A> resulting from <a
href="aa.html#z">acquisitions</A>
and <a
href="rr.html#b2">restructuring</A>. The various alphabetical categories have different <a
href="vv.html#n">voting rights</A> and pay <a
href="dd.html#cd">dividends</A>
tied to the operating performance of the particular divisions. See also: <a
href="tt.html#b9">Tracking stocks</A>.</td></tr><tr><td
colspan=2><br><b>Alternative Minimum Tax (AMT)</B></td></tr><tr><td></td><td>A
federal tax aimed at ensuring that wealthy individuals, estates, <a
href="tt.html#c3">trusts</A>, and corporations pay a minimal level <a
href="ii.html#s">income tax</A>. For individuals, the AMT is calculated by adding <a
href="aa.html#ba">adjusted gross income</A> to <a
href="tt.html#u">tax
preference items</A>.</td></tr><tr><td
colspan=2><br><b>Alternative
mortgage
instruments</B></td></tr><tr><td></td><td>Variations of <a
href="mm.html#cf">mortgage</A> <a
href="ii.html#bo">instruments</A>
such as <a
href="aa.html#6">adjustable-rate</A> and variable-rate mortgages, <a
href="gg.html#3">graduated-payment mortgages</A>, <a
href="rr.html#e">reverse-annuity mortgages,</A> and several seldom-used variations.</td></tr><tr><td
colspan=2><br><b><a
name=br>Alternative order</A></b></td></tr><tr><td></td><td>Used
in context of general equities. <a
href="oo.html#bf">Order</A>
giving a <a
href="bb.html#ck">broker</A> a choice between two courses of action, either to <a
href="bb.html#cy">buy</A> or sell, never both. <a
href="ee.html#b6">Execution</A>
of one course automatically eliminates the other. An example is a combination buy limit/buy <a
href="ss.html#dx">stop order</A>, where the buy limit is below the current <a
href="mm.html#n">market</A> and the buy stop is above. If the order is for one unit of <a
href="tt.html#cf">trading</A>, when one part of the order is executed on the occurrence of one alternative, the order on the other alternative is to be treated as <a
href="cc.html#v">cancelled</A>. If the order is for an amount of more than one unit of trading, the number of units executed determines the amount of the alternative order to be treated as cancelled. See: <a
href="ee.html#r">Either-or order</A>.</td></tr><tr><td
colspan=2><br><b><a
name=bs>American Association of Individual Investors (AAII)</A></B></td></tr><tr><td></td><td>A
not-for-profit organization to educate individual <a
href="ii.html#c5">investors</A> about <a
href="ss.html#stock">stocks</A>,
<a
href="bb.html#bond">bonds</A>, <a
href="mm.html#cv">mutual
funds</A>, and other financial instruments.</td></tr><tr><td
colspan=2><br><b><a
name=bt>American
Depository Receipt
(ADR)</A></b></td></tr><tr><td></td><td>Certificates
issued by a U.S. depository bank, representing foreign
<a
href="ss.html#bs">shares</A> held by the bank, usually by a branch or correspondent in the country of issue. One ADR may represent a portion of a foreign share, one share or a bundle of shares of a foreign corporation. If the ADR's are "sponsored," the corporation provides financial information and other assistance to the bank and may subsidize the administration of the ADR "Unsponsored" ADRs do not receive such assistance. ADRs are subject to the same currency, political, and economic risks as the <a
href="uu.html#c">underlying</A> foreign share. Arbitrage keeps the prices of ADRs and underlying foreign shares, adjusted for the <a
href="ss.html#cn">SDR</A>/ordinary ratio essentially equal. <a
href="aa.html#bu">American depository shares (ADS)</A>
are a similar form of certification.</td></tr><tr><td
colspan=2><br><b>American Depository Receipt Fees</B></td></tr><tr><td></td><td>Fees
associated with the creating or releasing of <a
href="aa.html#bt">ADRs</A>
from ordinary <a
href="ss.html#bs">shares</A>, charged by the commercial banks with correspondent banks in the international sites.</td></tr><tr><td
colspan=2><br><b>American Depository Receipt Ratio</B></td></tr><tr><td></td><td>The
number of ordinary <a
href="ss.html#bs">shares</A> into which an <a
href="aa.html#bt">ADR</A> can be converted.</td></tr><tr><td
colspan=2><br><b><a
name=bu>American Depository Share (ADS)</A></B></td></tr><tr><td></td><td>Foreign
stock <a
href="ii.html#da">issued</A> in the U.S. and registered in the <a
href="aa.html#bt">ADR</A> system.</td></tr><tr><td
colspan=2><br><b><a
name=bv>American option</A></b></td></tr><tr><td></td><td>An
<a
href="oo.html#3">option</A> that may be exercised at any time up to and including the <a
href="ee.html#ci">expiration date</A>. Related: <a
href="ee.html#bm">European
option</A></td></tr><tr><td
colspan=2><br><b>American shares</B></td></tr><tr><td></td><td>Securities
certificates <a
href="ii.html#da">issued</A> in the U.S. by a <a
href="tt.html#cp">transfer agent</A> acting on behalf of the foreign <a
href="ii.html#db">issuer</A>. The certificates represent claims to foreign equities.</td></tr><tr><td
colspan=2><br><b><a
name=bw>American Stock Exchange (AMEX)</A></B></td></tr><tr><td></td><td><a
href="ss.html#dm">Stock exchange</A> with the third highest volume of trading in the U.S. Located at 86 Trinity Place in downtown Manhattan. The bulk of trading on AMEX consists of <a
href="ii.html#x">index options</A> (computer technology index, institutional index, major market index) and <a
href="ss.html#bs">shares</A> of small to medium-sized companies are predominant. Recently merged with <a
href="nn.html#b">Nasdaq</A> See: <a
href="cc.html#fi">Curb</A>.</td></tr><tr><td
colspan=2><br><b><a
name=bx>American-style option</A></b></td></tr><tr><td></td><td>An
<a
href="oo.html#3">option</A> <a
href="cc.html#dv">contract</A>
that can be <a
href="ee.html#b7">exercised</A> at any time between the date of purchase and the <a
href="ee.html#ci">expiration date</A>. Most <a
href="ee.html#bx">exchange</A>-traded
<a
href="oo.html#3">options</A> are American style.</td></tr><tr><td
colspan=2><br><b><a
name=by>Amman Financial Market (AFM)</A></B></td></tr><tr><td></td><td>Established
in 1976, the AFM is the only <a
href="ss.html#dm">stock exchange</A>
in Jordan.</td></tr><tr><td
colspan=2><br><b><a
name=bz>Amortization</A></B></td></tr><tr><td></td><td>The
repayment of a <a
href="ll.html#bp">loan</A> by installments.</td></tr><tr><td
colspan=2><br><b>Amortization factor</B></td></tr><tr><td></td><td>The
<a
href="pp.html#bv">pool factor</A> implied by the scheduled <a
href="aa.html#bz">amortization</A> assuming no <a
href="pp.html#ck">prepayments</A>.</td></tr><tr><td
colspan=2><br><b>Amortizing interest rate swap</B></td></tr><tr><td></td><td><a
href="ss.html#eq">Swap</A> in which the <a
href="pp.html#c0">principal</A>
or <a
href="nn.html#bl">notional amount rises</A> (falls) as <a
href="ii.html#bz">interest rates</A> rise (decline).</td></tr><tr><td
colspan=2><br><b><a
name=b0>Amsterdam Exchange (AEX)</A></B></td></tr><tr><td></td><td>Exchange
that comprises the AEX-Effectenbeurs, the AEX-Optiebeurs (formerly the <a
href="ee.html#bn">European Options Exchange or EOE</A>)
and the AEX-Agrarische Termijnmarkt. AEX-Data Services is the operating company responsible for the dissemination of data from the Amsterdam Exchange via its integrated Mercury 2000 system.</td></tr><tr><td
colspan=2><br><b>AMTEL</B></td></tr><tr><td></td><td>Used
in context of general equities. In-house message system entered and displayed through Quotron A page.</td></tr><tr><td
colspan=2><br><b><a
name=b1>Analyst</A></b></td></tr><tr><td></td><td>Employee
of a brokerage or fund management house who studies companies and makes <a
href="bb.html#cy">buy</A>-and-sell recommendations on <a
href="ss.html#stock">stocks</A> of these companies. Most specialize in a specific <a
href="ii.html#6">industry</A>.</td></tr><tr><td
colspan=2><br><b>And
interest</B></td></tr><tr><td></td><td>An indication that the buyer will receive <a
href="aa.html#r">accrued interest</A> in addition to the price quoted for a <a
href="bb.html#bond">bond</A>.</td></tr><tr><td
colspan=2><br><b>Angel</B></td></tr><tr><td></td><td>An
<a
href="ii.html#cv">investment-grade bond</A>. Antithesis to <a
href="ff.html#j">fallen angel</A>. In the context of venture capital, the first investor.</td></tr><tr><td
colspan=2><br><b>Angels</B></td></tr><tr><td></td><td>Individuals
providing <a
href="vv.html#j">venture capital</A>.</td></tr><tr><td
colspan=2><br><b>Ankle biter</B></td></tr><tr><td></td><td><a
href="ss.html#stock">Stock</A> issued with a <a
href="mm.html#market_capitalization">market
capitalization</A> of less than $500 million.</td></tr><tr><td
colspan=2><br><b>Announcement date</B></td></tr><tr><td></td><td>Date
on which particular news concerning a given company is announced to the public. Used in <a
href="ee.html#br">event studies,</A> which researchers use to evaluate the economic impact of events of interest.</td></tr><tr><td
colspan=2><br><b><a
name=b2>Annual basis</A></B></td></tr><tr><td></td><td>The
technique in statistics of taking a figure covering a period of less than one year and extrapolating it to cover a full one year period. The process is known as <a
href="aa.html#b8">annualizing</A>.</td></tr><tr><td
colspan=2><br><b><a
name=b3>Annual effective yield</A></B></td></tr><tr><td></td><td>See:
<a
href="aa.html#b5">Annual percentage yield</A>.</td></tr><tr><td
colspan=2><br><b>Annual exclusion</B></td></tr><tr><td></td><td>A
tax rule allowing the <a
href="dd.html#u">deduction</A>
of certain income from taxation.</td></tr><tr><td
colspan=2><br><b>Annual
fund operating expenses</b></td></tr><tr><td></td><td>For
investment companies, the <a
href="mm.html#f">management fee</A>
and "other expenses," including the expenses for maintaining <a
href="ss.html#br">shareholder</A> records, providing shareholders with financial statements, and providing custodial and accounting services. For <a
href="tt.html#db">12b-1 funds</A>, selling and marketing costs are also included.</td></tr><tr><td
colspan=2><br><b><a
name=b4>Annual percentage rate (APR)</A></B></td></tr><tr><td></td><td>The
<a
href="pp.html#bf">periodic rate</A> times the number of periods in a year. For example, a 5% quarterly return has an A.P.R. of 20%.</td></tr><tr><td
colspan=2><br><b><a
name=b5>Annual percentage yield (APY)</A></B></td></tr><tr><td></td><td>The
effective, or true, <a
href="aa.html#b6">annual rate of return</A>.
The APY is the rate actually earned or paid in one year, taking into account the effect of <a
href="cc.html#df">compounding.</A> The APY is calculated by taking one plus the periodic rate and raising it to the number of periods in a year. For example, a 1% per month rate has an APY of 12.68% (1.01^12 -1).</td></tr><tr><td
colspan=2><br><b><a
name=b6>Annual rate of return</A></B></td></tr><tr><td></td><td>There
are many ways of calculating the annual rate of return. If the <a
href="rr.html#h">rate of return</A> is calculated on a monthly basis, we sometimes multiply this by 12 to express an annual rate of return. This is often called the <a
href="aa.html#b4">annual percentage rate (APR</A>). The <a
href="aa.html#b5">annual percentage yield (APY</A>), includes the effect of compounding interest.</td></tr><tr><td
colspan=2><br><b>Annual renewable term insurance</B></td></tr><tr><td></td><td>See:
<a
href="tt.html#bb">Term insurance</A>.</td></tr><tr><td
colspan=2><br><b><a
name=b7>Annual report</A></b></td></tr><tr><td></td><td>Yearly
record of a publicly held company's financial condition. It includes a description of the firm's operations, as well as <a
href="bb.html#h">balance sheet</A>, <a
href="ii.html#r">income
statement</A>, and cash flow statement information. <a
href="ss.html#b">SEC</A> rules require that it be distributed to all <a
href="ss.html#br">shareholders</A>. A more detailed version is called a <a
href="tt.html#6">10-K</A>.</td></tr><tr><td
colspan=2><br><b>Annualized
gain</B></td></tr><tr><td></td><td>If stock X appreciates 1.5% in one month, the annualized gain for that stock over a twelve month period is 121.5% = 18%. <a
href="cc.html#df">Compounded</A> over the 12 month period, the gain is (1.015)^12 -1 = 19.6%.</td></tr><tr><td
colspan=2><br><b>Annualized holding-period return</B></td></tr><tr><td></td><td>The
<a
href="aa.html#b6">annual rate of return</A> that when <a
href="cc.html#df">compounded</A> <i>t </I>times generates the same <i>t</I>-period
holding return as actually occurred from period 1 to period <i>t</I>.</td></tr><tr><td
colspan=2><br><b><a
name=b8>Annualizing</A></B></td></tr><tr><td></td><td>See:
<a
href="aa.html#b2">Annual basis</A>.</td></tr><tr><td
colspan=2><br><b>Annual meeting</B></td></tr><tr><td></td><td>Meeting
of <a
href="ss.html#dt">stockholder</A> held once a year at which the managers of a company report to the <a
href="ss.html#dt">stockholders</A> on the year's results.</td></tr><tr><td
colspan=2><br><b><a
name=b9>Annuitant</A></B></td></tr><tr><td></td><td>An
individual who receives benefits from an <a
href="aa.html#ca">annuity</A>.</td></tr><tr><td
colspan=2><br><b>Annuitize</B></td></tr><tr><td></td><td>To
commence a series of payments from the <a
href="cc.html#x">capital</A>
that has accumulated in an <a
href="aa.html#ca">annuity</A>.
The payments may be a fixed amount, for a fixed period of time, or for a lifetime.</td></tr><tr><td
colspan=2><br><b><a
name=ca>Annuity</A></b></td></tr><tr><td></td><td>A
regular periodic payment made by an insurance company to a policyholder for a specified period of time.</td></tr><tr><td
colspan=2><br><b>Annuity certain</B></td></tr><tr><td></td><td>An
<a
href="aa.html#ca">annuity</A> that pays a specific amount on a monthly <a
href="bb.html#v">basis</A> for a set amount of time.</td></tr><tr><td
colspan=2><br><b>Annuity due</B></td></tr><tr><td></td><td>An
<a
href="aa.html#ca">annuity</A> with <i>n </I>payments, where the first payment is made at time <i>t
= </I>0, and the last payment is made at time <i>t = n - </I>1.</td></tr><tr><td
colspan=2><br><b>Annuity factor</B></td></tr><tr><td></td><td><a
href="pp.html#cl">Present value</A> of $1 paid for each of <i>t</I>
periods.</td></tr><tr><td
colspan=2><br><b>Annuity in arrears</B></td></tr><tr><td></td><td>An
<a
href="aa.html#ca">annuity</A> with a first payment one full period hence, rather than immediately.</td></tr><tr><td
colspan=2><br><b>Annuity starting date</B></td></tr><tr><td></td><td>The
date when an <a
href="aa.html#b9">annuitant</A> starts receiving payments from an <a
href="aa.html#ca">annuity</A>.</td></tr><tr><td
colspan=2><br><b>Anticipated
holding
period</B></td></tr><tr><td></td><td>The period of time an individual expects to hold an <a
href="aa.html#cq">asset</A>.</td></tr><tr><td
colspan=2><br><b>Anticipation</B></td></tr><tr><td></td><td>Paying
what is owed before it is due (usually to save interest charges).</td></tr><tr><td
colspan=2><br><b>Antidilutive effect</B></td></tr><tr><td></td><td>Result
of a transaction that increases <a
href="ee.html#h">earnings
per common share</A> (e.g., by decreasing the number of <a
href="ss.html#bs">shares</A> <a
href="oo.html#br">outstanding</A>).</td></tr><tr><td
colspan=2><br><b>Antitrust laws</B></td></tr><tr><td></td><td>Legislation
established by the federal government to prevent the formation of <a
href="mm.html#b8">monopolies</A> and to regulate <a
href="tt.html#ca">trade</A>.</td></tr><tr><td
colspan=2><br><b>Any-interest-date</B></td></tr><tr><td></td><td>A
<a
href="cc.html#o">call provision</A> in a <a
href="mm.html#ct">municipal
bond</A> <a
href="ii.html#t">indenture</A> that establishes the right of <a
href="rr.html#r">redemption</A> for the <a
href="ii.html#db">issuer</A>
on any <a
href="ii.html#bu">interest</A> payment due date.</td></tr><tr><td
colspan=2><br><b><a
name=cb>Any-or-all bid</A></b></td></tr><tr><td></td><td>Often
used in risk arbitrage. <a
href="tt.html#f">Takeover</A>
<a
href="bb.html#bg">bid</A> in which the acquirer <a
href="oo.html#e">offers</A> to pay a set price for all <a
href="oo.html#br">outstanding shares</A> of the <a
href="tt.html#j">target
company,</A> or any part thereof; contrasts with two-tier bid.</td></tr><tr><td
colspan=2><br><b><a
name=cc>Any-part-of order</A></b></td></tr><tr><td></td><td>In
context of general equities, order to <a
href="bb.html#cy">buy</A>
or sell a quantity of <a
href="ss.html#stock">stock</A>
in pieces if necessary. Antithesis of an <a
href="aa.html#bp">all-or-none
order (AON</A>).</td></tr><tr><td
colspan=2><br><b>Appraisal
ratio</B></td></tr><tr><td></td><td>The signal-to-noise ratio of an <a
href="aa.html#b1">analyst's</A> forecasts. The ratio of <a
href="aa.html#bq">alpha</A> to residual <a
href="ss.html#c7">standard
deviation</A>.</td></tr><tr><td
colspan=2><br><b><a
name=cd>Appraisal
rights</A></B></td></tr><tr><td></td><td>A right of <a
href="ss.html#br">shareholders</A> in a <a
href="mm.html#bo">merger</A>
to demand the payment of a fair price for their <a
href="cc.html#dd">shares</A>,
as determined independently.</td></tr><tr><td
colspan=2><br><b><a
name=ce>Appreciation</A></B></td></tr><tr><td></td><td>Increase
in the value of an <a
href="aa.html#cq">asset</A>.</td></tr><tr><td
colspan=2><br><b>Appropriation request</B></td></tr><tr><td></td><td>Formal
request for funds for capital investment project.</td></tr><tr><td
colspan=2><br><b>Approved list</B></td></tr><tr><td></td><td>A
list of <a
href="ee.html#4">equities</A> and other <a
href="ii.html#cp">investments</A> that a financial institution or <a
href="mm.html#cv">mutual fund</A> is approved to make. See: <a
href="ll.html#m">Legal list</A>.</td></tr><tr><td
colspan=2><br><b>APS</B></td></tr><tr><td></td><td>Auction
Preferred Stock. A type of <a
href="dd.html#c3">Dutch Auction Preferred Stock</A>
(Goldman Sachs product).</td></tr><tr><td
colspan=2><br><b><a
name=cf>Arbitrage</A></b></td></tr><tr><td></td><td>The
simultaneous buying and selling of a <a
href="ss.html#4">security</A>
at two different <a
href="pp.html#ct">prices</A> in two different <a
href="mm.html#n">markets</A>, resulting in <a
href="pp.html#df">profits</A>
without <a
href="rr.html#cn">risk</A>. Perfectly <a
href="ee.html#p">efficient
markets</A> present no arbitrage opportunities. Perfectly <a
href="ee.html#p">efficient markets</A> seldom exist, but, arbitrage opportunities are often precluded because of transactions costs.</td></tr><tr><td
colspan=2><br><b>Arbitrage bonds</B></td></tr><tr><td></td><td><a
href="mm.html#ct">Municipality</A> <a
href="ii.html#da">issued</A>
<a
href="bb.html#bond">bonds</A> issued intended to gain an <a
href="ii.html#bz">interest rate</A> advantage by refunding a higher-rate <a
href="bb.html#bond">bond</A> in ahead of their <a
href="cc.html#h">call
date</A>. Lower-rate <a
href="rr.html#u">refunding</A>
<a
href="ii.html#da">issue</A> proceeds are invested in <a
href="tt.html#cu">Treasuries</A> until the first <a
href="cc.html#h">call
date</A> of the higher-rate <a
href="ii.html#da">issue</A>.</td></tr><tr><td
colspan=2><br><b><a
name=cg>Arbitrage-free option-pricing models</A></B></td></tr><tr><td></td><td><a
href="yy.html#d">Yield curve option-pricing models.</A></td></tr><tr><td
colspan=2><br><b><a
name=ch>Arbitrage Pricing Theory (APT)</A></b></td></tr><tr><td></td><td>An
alternative model to the <a
href="cc.html#0">capital asset pricing model</A>
developed by Stephen Ross and based purely on <a
href="aa.html#cf">arbitrage</A>
arguments. The APT implies that there are multiple <a
href="rr.html#cr">risk factors</A> that need to be taken into account when calculating risk-adjusted performance or <a
href="aa.html#bq">alpha.</A></td></tr><tr><td
colspan=2><br><b><a
name=ci>Arbitrage Trading Program (ATP)</A></B></td></tr><tr><td></td><td>See:
<a
href="pp.html#dk">Program trading</A>.</td></tr><tr><td
colspan=2><br><b><a
name=cj>Arbitrageur</A></B></td></tr><tr><td></td><td>One
who profits from the differences in price when the same, or extremely similar, <a
href="ss.html#4">security</A>, <a
href="cc.html#fj">currency,</A>
or <a
href="cc.html#c9">commodity</A> is <a
href="tt.html#ca">traded</A>
on two or more <a
href="mm.html#n">markets</A>. The Arbitrageur profits by simultaneously purchasing and selling these securities to take advantage of pricing differentials (<a
href="ss.html#c3">spreads</A>) created by market conditions. See: <a
href="rr.html#cp">Risk arbitrage,</A> <a
href="cc.html#d4">convertible
arbitrage,</A> <a
href="ii.html#v">index arbitrage,</A>
and <a
href="ii.html#ca">international arbitrage</A>.</td></tr><tr><td
colspan=2><br><b>Are you open?</B></td></tr><tr><td></td><td>Used
in context of general equities. "Can a new customer still participate on opposing side of the <a
href="tt.html#ca">trade</A> from that which the first customer initiated?", Inquiring as to whether any portion of that trade is still available See: <a
href="oo.html#q">Open</A>.</td></tr><tr><td
colspan=2><br><b>Arithmetic
average (mean)
rate of return</B></td></tr><tr><td></td><td><a
href="aa.html#ck">Arithmetic
mean return</A>.</td></tr><tr><td
colspan=2><br><b><a
name=ck>Arithmetic mean return</A></b></td></tr><tr><td></td><td>An
<a
href="aa.html#df">average</A> of the <a
href="ss.html#ed">subperiod
returns</A>, calculated by summing the subperiod returns and dividing by the number of subperiods.</td></tr><tr><td
colspan=2><br><b>Arm's length price</B></td></tr><tr><td></td><td>The
price at which a willing buyer and a willing unrelated seller would freely agree to transact.</td></tr><tr><td
colspan=2><br><b><a name=arms_index>Arms index</a></b></td></tr><tr><td></td><td>Also
known as a trading index (<a
href="tt.html#c2">TRIN</A>)
(total up <a
href="vv.html#m">volume</A>)/(total down volume). An advance/decline <a
href="mm.html#n">market</A> indicator. Less than 1.0 indicates <a
href="bb.html#2">bearish</A> demand, while above 1.0 is <a
href="bb.html#co">bullish.</A> The index often is smoothed with a simple moving <a
href="aa.html#df">average</A>.</td></tr><tr><td
colspan=2><br><b>Around
us</B></td></tr><tr><td></td><td>Used in context of general equities. See: <a
href="aa.html#dl">Away from you</A>.</td></tr><tr><td
colspan=2><br><b>Arrearage</B></td></tr><tr><td></td><td>In
the context of <a
href="ii.html#cp">investments</A>,
refers to the amount by which <a
href="ii.html#bu">interest</A>
on <a
href="bb.html#bond">bonds</A> or <a
href="dd.html#cd">dividends</A>
on <a
href="cc.html#ff">cumulative preferred stock</A>
is due and unpaid.</td></tr><tr><td
colspan=2><br><b><a
name=cl>Articles of incorporation</A></B></td></tr><tr><td></td><td>Legal
document establishing a corporation and its structure and purpose.</td></tr><tr><td
colspan=2><br><b>Artificial currency</B></td></tr><tr><td></td><td>A
currency substitute, e.g., <a
href="ss.html#cn">special drawing rights</A>
(SDRs).</td></tr><tr><td
colspan=2><br><b><a
name=cm>Ascending
tops</A></B></td></tr><tr><td></td><td>A chart <a
href="pp.html#z">pattern</A>
that depicts that each peak in a <a
href="ss.html#4">security's</A>
price over a period of time is higher than the preceding peak. Antithesis of <a
href="dd.html#bo">descending tops</A>.</td></tr><tr><td
colspan=2><br><b><a
name=cn>Asian Currency Units (ACU)</A></B></td></tr><tr><td></td><td>Dollar
deposits held in Singapore or other Asian centers.</td></tr><tr><td
colspan=2><br><b>Asian option</B></td></tr><tr><td></td><td><a
href="oo.html#3">Option</A> based on the average price	of the <a
href="uu.html#d">underlying assets</A> during the life of the option.</td></tr><tr><td
colspan=2><br><b><a
name=co>Ask</A></B></td></tr><tr><td></td><td>This
is the quoted ask, or the lowest price an <a
href="ii.html#c5">investor</A>
will accept to sell a <a
href="ss.html#stock">stock</A>.
Practically speaking, this is the quoted <a
href="oo.html#e">offer</A>
at which an <a
href="ii.html#c5">investor</A> can <a
href="bb.html#cy">buy</A> <a
href="ss.html#bs">shares</A>
of <a
href="ss.html#stock">stock</A>; also called the <a
href="oo.html#f">offer price</A>.</td></tr><tr><td
colspan=2><br><b><a
name=cp>Asked price</A></B></td></tr><tr><td></td><td>In
context of general equities, price at which a <a
href="ss.html#4">security</A>
or <a
href="cc.html#c9">commodity</A> is <a
href="oo.html#e">offered</A>
for sale on an <a
href="ee.html#bx">exchange</A> or in the <a
href="oo.html#bs">OTC</A> Market.</td></tr><tr><td
colspan=2><br><b>Asked
to bid/offer</B></td></tr><tr><td></td><td>Used in context of general equities. Usually a seller (buyer) looking to <a
href="aa.html#bl">aggressively</A> sell (<a
href="bb.html#cy">buy</A>)
<a
href="ss.html#stock">stock</A>, usually asking for a capital commitment from an <a
href="ii.html#cr">investment bank.</A></td></tr><tr><td
colspan=2><br><b>Aspirin</B></td></tr><tr><td></td><td>Australian
Stock Price Riskless Indexed Notes. <a
href="zz.html#b">Zero-coupon</A>
four-year <a
href="bb.html#bond">bonds</A> repayable at <a
href="ff.html#c">face value</A> plus the percentage increase by which the Australian stock index of all ordinaries (<a
href="cc.html#dd">common stocks</A>) rises above a predefined level during the given period.</td></tr><tr><td
colspan=2><br><b>Assay</B></td></tr><tr><td></td><td>Metal
purity test to confirm that the metal meets the standards for <a
href="tt.html#cf">trading</A> on a <a
href="cc.html#c8">commodities
exchange</A> (commodities exchange center).</td></tr><tr><td
colspan=2><br><b>Assessed valuation</B></td></tr><tr><td></td><td>The
value assigned to property by a <a
href="mm.html#ct">municipality</A>
for the purpose of tax assessment. Such an assessed valuation is important to <a
href="ii.html#c5">investors</A> in <a
href="mm.html#ct">municipal
bonds</A> that are backed by <a
href="pp.html#dq">property taxes</A>.</td></tr><tr><td
colspan=2><br><b><a
name=cq>Asset</A></b></td></tr><tr><td></td><td>Any
possession that has value in an <a
href="ee.html#bx">exchange</A>.</td></tr><tr><td
colspan=2><br><b>Asset activity ratios</B></td></tr><tr><td></td><td><a
href="ff.html#bj">Ratios</A> that measure how effectively the firm is managing its <a
href="aa.html#cq">assets</A>.</td></tr><tr><td
colspan=2><br><b><a
name=cr>Asset allocation decision</A></b></td></tr><tr><td></td><td>The
decision regarding how an institution's funds should be distributed among the major <a
href="aa.html#cu">classes of assets</A> in which it may invest.</td></tr><tr><td
colspan=2><br><b>Asset allocation mutual fund</B></td></tr><tr><td></td><td>A
<a
href="mm.html#cv">mutual fund</A> that rotates amoung <a
href="ss.html#stock">stocks</A>, <a
href="bb.html#bond">bonds</A>,
and <a
href="mm.html#b4">money market</A> securities to maximize <a
href="rr.html#b8">return</A> on <a
href="ii.html#cp">investment</A>
and minimize <a
href="rr.html#cn">risk</A>.</td></tr><tr><td
colspan=2><br><b><a
name=cs>Asset-backed security</A></B></td></tr><tr><td></td><td>A
<a
href="ss.html#4">security</A> that is <a
href="cc.html#cr">collateralized</A>
by <a
href="ll.html#bp">loans,</A> <a
href="ll.html#k">leases</A>,
receivables, or installment <a
href="cc.html#dv">contracts</A>
on personal property, not real estate.</td></tr><tr><td
colspan=2><br><b><a
name=ct>Asset-based financing</A></B></td></tr><tr><td></td><td>Methods
of financing in which <a
href="ll.html#q">lenders</A>
and equity investors look principally to the <a
href="cc.html#bm">cash
flow</A> from a particular <a
href="aa.html#cq">asset</A>
or set of assets for a <a
href="rr.html#b8">return</A>
on, and the return of, their financing.</td></tr><tr><td
colspan=2><br><b><a
name=cu>Asset classes</A></b></td></tr><tr><td></td><td>Categories
of <a
href="aa.html#cq">assets</A>, such as <a
href="ss.html#stock">stocks</A>,
<a
href="bb.html#bond">bonds</A>, real estate, and foreign securities.</td></tr><tr><td
colspan=2><br><b>Asset-coverage test</B></td></tr><tr><td></td><td>A
<a
href="bb.html#b4">bond indenture</A> restriction	that permits additional borrowing if the ratio of <a
href="aa.html#cq">assets</A> to <a
href="dd.html#j">debt</A>
does not fall below a specified minimum.</td></tr><tr><td
colspan=2><br><b>Asset Depreciation Range System</B></td></tr><tr><td></td><td>A
range of depreciable lives the <a
href="ii.html#b9">IRS</A>
allows for particular <a
href="cc.html#b8">classes</A>
of <a
href="aa.html#cq">assets</A>.</td></tr><tr><td
colspan=2><br><b>Asset/equity
ratio</b></td></tr><tr><td></td><td>The ratio of total <a
href="aa.html#cq">assets</A> to <a
href="ss.html#du">stockholder
equity</A>.</td></tr><tr><td
colspan=2><br><b>Asset for asset swap</B></td></tr><tr><td></td><td><a
href="cc.html#e8">Creditors</A> exchange the <a
href="dd.html#j">debt</A>
of one <a
href="dd.html#v">defaulting</A> borrower for the debt of another defaulting borrower.</td></tr><tr><td
colspan=2><br><b>Asset/liability management</b></td></tr><tr><td></td><td>The
task of managing the funds of a financial institution to accomplish the two goals of a financial institution: (1) to earn an adequate <a
href="rr.html#b8">return</A> on funds invested and (2) to maintain a comfortable surplus of <a
href="aa.html#cq">assets</A> beyond <a
href="ll.html#1">liabilities.</A>
Also called <a
href="ss.html#eo">surplus management</A>.</td></tr><tr><td
colspan=2><br><b>Asset management account</B></td></tr><tr><td></td><td>Account
at a brokerage house, bank, or savings institution that integrates banking services and brokerage features.</td></tr><tr><td
colspan=2><br><b>Asset play</b></td></tr><tr><td></td><td>A
company with <a
href="aa.html#cq">assets</A> that are not believed to be accurately reflected in its <a
href="ss.html#stock">stock</A> price, making it an attractive buy or play.</td></tr><tr><td
colspan=2><br><b><a
name=cv>Asset pricing model</A></B></td></tr><tr><td></td><td>A
model for determining the required or expected rate of <a
href="rr.html#b8">return</A> on an <a
href="aa.html#cq">asset</A>.
Related: <a
href="cc.html#0">Capital asset pricing model</A>
and <a
href="aa.html#ch">arbitrage pricing theory</A>.</td></tr><tr><td
colspan=2><br><b>Asset stripper</B></td></tr><tr><td></td><td>A
corporate <a
href="rr.html#b">raider</A> (company A) that takes over a <a
href="tt.html#j">target company</A> (company B) in order to sell large <a
href="aa.html#cq">assets</A> of company B to repay <a
href="dd.html#j">debt</A>. Company A calculates that the net selling of the assets and paying off the debt, will leave the raider with assets that are worth more than what it paid for company B.</td></tr><tr><td
colspan=2><br><b>Asset substitution</B></td></tr><tr><td></td><td>Occurs
when a firm invests in <a
href="aa.html#cq">assets</A>
that are riskier than those that the	<a
href="dd.html#r">debtholders</A>
expected.</td></tr><tr><td
colspan=2><br><b><a
name=cw>Asset
substitution problem</A></B></td></tr><tr><td></td><td>Arises
when the <a
href="ss.html#dt">stockholders</A> substitute <a
href="rr.html#cn">riskier</A> <a
href="aa.html#cq">assets</A>
for the firm's existing assets and expropriate value from the <a
href="dd.html#r">debtholders</A>.</td></tr><tr><td
colspan=2><br><b>Asset
swap</b></td></tr><tr><td></td><td>An <a
href="ii.html#b4">interest
rate swap</A> used to alter the <a
href="cc.html#bm">cash
flow</A>
characteristics of an
institution's <a
href="aa.html#cq">assets</A> in order to provide a better match with its <a
href="ll.html#1">liabilities</A>.</td></tr><tr><td
colspan=2><br><b><a
name=cx>Asset turnover</A></b></td></tr><tr><td></td><td>The
ratio of net sales to total <a
href="aa.html#cq">assets</A>.</td></tr><tr><td
colspan=2><br><b>Asset value</B></td></tr><tr><td></td><td>The
net <a
href="mm.html#5">market value</A> of a corporation's <a
href="aa.html#cq">assets</A> on a per-share <a
href="bb.html#v">basis</A>,
not the <a
href="mm.html#5">market value</A> of the <a
href="ss.html#bs">shares</A>. A company is undervalued in the market when <a
href="aa.html#cq">asset</A> value exceeds market value.</td></tr><tr><td
colspan=2><br><b>Assets</B></td></tr><tr><td></td><td>A
firm's productive resources.</td></tr><tr><td
colspan=2><br><b>Assets
requirements</B></td></tr><tr><td></td><td>A common element of a financial plan that describes projected capital spending and the proposed uses of net <a
href="ww.html#u">working capital</A>.</td></tr><tr><td
colspan=2><br><b>Assignment</b></td></tr><tr><td></td><td>The
receipt of an <a
href="ee.html#b7">exercise</A> notice by an <a
href="oo.html#3">options</A> <a
href="ww.html#0">writer</A>
that requires the writer to sell (in the case of a <a
href="cc.html#g">call</A>) or <a
href="pp.html#d1">purchase</A>
(in the case of a <a
href="pp.html#d8">put</A>) the <a
href="uu.html#e">underlying security</A>
at the specified
<a
href="ss.html#d3">strike price</A>.</td></tr><tr><td
colspan=2><br><b>Assimilation</B></td></tr><tr><td></td><td>The
public absorption of a new <a
href="ii.html#da">issue</A>
of <a
href="ss.html#stock">stocks</A> once the stock has been completely sold by <a
href="uu.html#g">underwriter</A>. See: <a
href="aa.html#f">Absorbed</A>.</td></tr><tr><td
colspan=2><br><b>Assumed interest rate</B></td></tr><tr><td></td><td>Rate
of <a
href="ii.html#bu">interest</A> used by an <a
href="ii.html#bp">insurance</A>
company to calculate the payout on an <a
href="aa.html#ca">annuity</A>
<a
href="cc.html#dv">contract</A>.</td></tr><tr><td
colspan=2><br><b>Assumption</B></td></tr><tr><td></td><td>Becoming
responsible for the <a
href="ll.html#1">liabilities</A>
of another party.</td></tr><tr><td
colspan=2><br><b>ASX
Derivatives and Options Market (ASXD)</B></td></tr><tr><td></td><td><a
href="oo.html#3">Options</A> market <a
href="tt.html#cf">trading</A>
options on more than 50 of Australia's and New Zealand's leading companies.</td></tr><tr><td
colspan=2><br><b><a
name=cy>Asymmetric information</A></B></td></tr><tr><td></td><td>Information
that is known to some people but not to other people.</td></tr><tr><td
colspan=2><br><b>Asymmetric taxes</B></td></tr><tr><td></td><td>When
participants in a transaction have different net tax rates.</td></tr><tr><td
colspan=2><br><b>Asymmetric volatility</B></td></tr><tr><td></td><td>Phenomenon
that <a
href="vv.html#l">volatility</A> is higher in down markets than in up markets.</td></tr><tr><td
colspan=2><br><b>Asymmetry</B></td></tr><tr><td></td><td>A
lack of equivalence between two things, such as the
unequal tax
treatment of <a
href="ii.html#bw">interest expense</A>
and <a
href="dd.html#cd">dividend</A> payments.</td></tr><tr><td
colspan=2><br><b>"At"/"for"</B></td></tr><tr><td></td><td>Used
in context of general equities. Paramount terms used to differentiate an <a
href="oo.html#h">offering</A>. Stock is offered at; stock is bid for. In an <a
href="oo.html#h">offering</A>, the trading syntax followed is "Quantity-at-Price"; in a bid, the syntax followed is "Price-for-Quantity."</td></tr><tr><td
colspan=2><br><b>At par</B></td></tr><tr><td></td><td>A
price equal to nominal or <a
href="ff.html#c">face value</A>
of a <a
href="ss.html#4">security</A>. See: <a
href="pp.html#f">Par</A>.</td></tr><tr><td
colspan=2><br><b>At risk</B></td></tr><tr><td></td><td>The
exposure to the danger of economic loss. Frequently used in the context of claiming <a
href="tt.html#r">tax deductions</A>. For example, a person can claim a <a
href="tt.html#r">tax deduction</A> in a <a
href="ll.html#9">limited
partnership</A> if the taxpayer can show it is at <a
href="rr.html#cn">risk</A> of never realizing a <a
href="pp.html#df">profit</A>
and of losing its initial <a
href="ii.html#cp">investment</A>.
See: <a
href="vv.html#d">Value at risk</A>.</td></tr><tr><td
colspan=2><br><b>At the bell</B></td></tr><tr><td></td><td>In
context of general equities, at the <a
href="oo.html#w">opening</A>
or <a
href="cc.html#ci">close</A> of the market. See: <a
href="mm.html#u">MOC Order</A>.</td></tr><tr><td
colspan=2><br><b>At
the close order</B></td></tr><tr><td></td><td>In the context of <a
href="ss.html#4">securities</A>, an <a
href="aa.html#bp">all
or none</A> <a
href="mm.html#v">market order</A> that is to be <a
href="ee.html#b6">executed</A> at the closing price of the <a
href="ss.html#4">security</A> on the <a
href="ee.html#bx">exchange</A>.
If the <a
href="ee.html#b6">execution</A> cannot be made under this condition, the <a
href="oo.html#bf">order</A> is to be treated as <a
href="cc.html#v">cancelled</A>.<p>In
the context of <a
href="ff.html#dk">futures</A> and <a
href="oo.html#3">options</A>, refers to a <a
href="cc.html#dv">contract</A>
that is to be <a
href="ee.html#b6">executed</A> on some <a
href="ee.html#bx">exchanges</A> during the <a
href="cc.html#ci">closing
period</A>, a period in which there is a <a
href="rr.html#g">range</A>
of prices.</td></tr><tr><td
colspan=2><br><b><a
name=cz>At
the figure</A></B></td></tr><tr><td></td><td>In context of general equities, at the whole integer price (excluding the fraction) closest to the side of the <a
href="mm.html#n">market</A> (<a
href="bb.html#bg">bid</A>/ask)
being discussed. <a
href="aa.html#c0">At the full</A>.</td></tr><tr><td
colspan=2><br><b><a
name=c0>At the full</A></B></td></tr><tr><td></td><td>Used
in context of general equities. <a
href="aa.html#cz">At
the figure</A>.</td></tr><tr><td
colspan=2><br><b>At the market</B></td></tr><tr><td></td><td>See:
<a
href="mm.html#v">Market order</A>.</td></tr><tr><td
colspan=2><br><b>At-the-money</b></td></tr><tr><td></td><td>An
<a
href="oo.html#3">option</A>
is at the money if the
<a
href="ss.html#d3">strike price</A> of the option is equal to the <a
href="mm.html#y">market price</A> of the <a
href="uu.html#e">underlying
security</A>. For example, if xyz stock is trading at 54, then the xyz 54 <a
href="oo.html#3">option</A> is at the money.</td></tr><tr><td
colspan=2><br><b>At the opening order</B></td></tr><tr><td></td><td>In
context of general equities, <a
href="mm.html#v">market order</A>
or <a
href="ll.html#7">limited price order</A> that is to be <a
href="ee.html#b6">executed</A> at the <a
href="oo.html#y">opening</A>
(and corresponding price) of the <a
href="ss.html#stock">stock</A>
or not at all, and any such <a
href="oo.html#bf">order</A>
or portion thereof not so executed is to be treated as <a
href="cc.html#v">cancelled</A>.</td></tr><tr><td
colspan=2><br><b>Attribute
bias</B></td></tr><tr><td></td><td>The tendency of <a
href="ss.html#stock">stocks</A>
preferred by the
<a
href="dd.html#ce">dividend discount model</A>
to share certain <a
href="ee.html#4">equity</A> attributes such as low <a
href="pp.html#p_e_ratio">price-earnings ratios</A>, high <a
href="dd.html#cl">dividend yield</A>, high <a
href="bb.html#cc">book
value</A> ratio, or membership in a particular <a
href="ii.html#6">industry</A>
sector.</td></tr><tr><td
colspan=2><br><b><a
name=c1>Athens
Stock Exchange (ASE)</A></B></td></tr><tr><td></td><td>Greece's
principal <a
href="ss.html#dm">stock exchange</A>.</td></tr><tr><td
colspan=2><br><b><a
name=c2>Auction Market Preferred Stock (AMPS)</A></B></td></tr><tr><td></td><td>A
type of <a
href="dd.html#c3">Dutch Auction Preferred Stock</A>
(A Merrill Lynch product).</td></tr><tr><td
colspan=2><br><b><a
name=c3>Auction markets</A></B></td></tr><tr><td></td><td>Markets
in which the prevailing <a
href="mm.html#y">price</A>
is determined through the free interaction of prospective buyers and sellers, as on the floor of the stock <a
href="ee.html#bx">exchange</A>.</td></tr><tr><td
colspan=2><br><b><a
name=c4>Auction rate preferred stock (ARPS)</A></B></td></tr><tr><td></td><td>Floating-rate
<a
href="pp.html#preferred_stock">preferred
stock</A>, whose <a
href="dd.html#cd">dividend</A> is adjusted every seven weeks through a <a
href="dd.html#c2">Dutch auction</A>.</td></tr><tr><td
colspan=2><br><b><a
name=c5>Audit</A></B></td></tr><tr><td></td><td>An
examination of a company's accounting records and books conducted by an outside professional in order to determine whether the company is maintaining records according to <a
href="gg.html#f">generally accepted accounting principles</A>.
See: <a
href="aa.html#m">aAcountant's opinion</A>.</td></tr><tr><td
colspan=2><br><b>Audit trail</B></td></tr><tr><td></td><td>Resolves
the validity of an accounting entry by a step-by-step record by which accounting data can be traced to their source.</td></tr><tr><td
colspan=2><br><b>Auditor's certificate</B></td></tr><tr><td></td><td>See:
<a
href="aa.html#m">Accountant's opinion</A>.</td></tr><tr><td
colspan=2><br><b>Auditor's report</b></td></tr><tr><td></td><td>A
section of an <a
href="aa.html#b7">annual report</A>
that includes the auditor's opinion about the veracity of the financial statements.</td></tr><tr><td
colspan=2><br><b>Aunt Millie</B></td></tr><tr><td></td><td>An
unsophisticated <a
href="ii.html#c5">investor</A>.</td></tr><tr><td
colspan=2><br><b><a
name=c6>Australian Stock Exchange (ASX)</A></B></td></tr><tr><td></td><td>Established
in 1987 following the amalgamation of the six independent <a
href="ss.html#dm">stock exchanges</A> operating in the Australian state capitals. The ASX is the tenth-largest <a
href="ss.html#dm">stock exchange</A>
in the world on the basis of domestic <a
href="cc.html#bc">capitalization</A>.</td></tr><tr><td
colspan=2><br><b><a
name=c7>Autex</A></b></td></tr><tr><td></td><td>Video
communication network through which brokerage houses alert <a
href="ii.html#bn">institutional investors</A> of their desire to transact <a
href="bb.html#bq">block</A> business (a purchase or sale) in a given <a
href="ss.html#4">security</A>. <a
href="ii.html#1">Indications</A>
transmit small, medium, and large sizes only, with occasional limits mentioned. <a
href="ss.html#ej">Supers</A> are messages with specific size and price included. Both "indications" and "supers" can be only seen by customers (institutional subscribers to Autex). Trade recaps, advertised <a
href="bb.html#bq">block</A> trades entered by the <a
href="dd.html#f">dealer</A>/subscribers, are also displayed, but can be seen by both institutions and dealers. See: <a
href="ee.html#ck">Expunge</A>, <a
href="ss.html#cd">size.</A></td></tr><tr><td
colspan=2><br><b>Authentication</B></td></tr><tr><td></td><td>In
the context of <a
href="bb.html#bond">bonds</A>, refers to the validation of a bond certificate.</td></tr><tr><td
colspan=2><br><b>Authority bond</B></td></tr><tr><td></td><td>A
<a
href="bb.html#bond">bond</A> issued by a government agency or a corporation created to manage a revenue-producing public enterprise. The difference between an authority bond and a <a
href="mm.html#ct">municipal bond</A> is that <a
href="mm.html#i">margin</A>
protections may be incorporated in the authority bond <a
href="cc.html#dv">contract</A> as well as in the legislation that enables the authority.</td></tr><tr><td
colspan=2><br><b>Authorized shares</B></td></tr><tr><td></td><td>Number
of <a
href="ss.html#bs">shares</A> authorized for <a
href="ii.html#da">issuance</A> by a firm's corporate charter.</td></tr><tr><td
colspan=2><br><b><a
name=c8>Autocorrelation</A></B></td></tr><tr><td></td><td>The
<a
href="cc.html#eh">correlation</A> of a <a
href="vv.html#e">variable</A>
with itself over successive time intervals. Sometimes called serial correlation.</td></tr><tr><td
colspan=2><br><b><a
name=c9>Automated bond system (ABS)</A></B></td></tr><tr><td></td><td>The
computerized system that records <a
href="bb.html#bg">bids</A>
and <a
href="oo.html#e">offers</A> for inactively <a
href="tt.html#ca">traded</A> <a
href="bb.html#bond">bonds</A>
until they are <a
href="cc.html#v">cancelled</A> or <a
href="ee.html#b6">executed</A> on the <a
href="nn.html#c">NYSE</A>.</td></tr><tr><td
colspan=2><br><b><a
name=da>Automated Clearing House (ACH)</A></B></td></tr><tr><td></td><td>A
collection of 32 regional electronic interbank networks used to process transactions electronically with a guaranteed one-day bank <a
href="cc.html#cv">collection float</A>.</td></tr><tr><td
colspan=2><br><b><a
name=db>Automated Customer Account Transfer (ACAT)</A></b></td></tr><tr><td></td><td>For
transfers of securities from a non-equity trading account to your equity trading account with your broker.</td></tr><tr><td
colspan=2><br><b><a
name=dc>Automated Order System (AOS)</A></B></td></tr><tr><td></td><td><a
href="ii.html#cr">Investment banks</A>, computerized order entry system that sends single order entries to <a
href="dd.html#a">DOT</A> (Odd-Lot) or to <a
href="ii.html#cr">investment
banks</A>, <a
href="ff.html#cc">floor brokers</A> on the <a
href="ee.html#bx">exchange.</A> See: <a
href="rr.html#c3">Round
lot</A>, <a
href="gg.html#y">GTC orders</A>.</td></tr><tr><td
colspan=2><br><b><a
name=dd>Automated Pit Trading (APT)</A></B></td></tr><tr><td></td><td>Introduced
in 1989, APT is the <a
href="ll.html#bv">LIFFE</A>
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 major futures
contracts as well as to provide a daytime trading environment
for non-floor
trading products.</td></tr><tr><td
colspan=2><br><b>Automatic
extension</B></td></tr><tr><td></td><td>An automatic extension of time granted to a taxpayer to file a tax return.</td></tr><tr><td
colspan=2><br><b>Automatic funds transfer</B></td></tr><tr><td></td><td>A
transfer of funds from one account or <a
href="ii.html#cp">investment</A>
vehicle to another using electronic or telecommunications technology.</td></tr><tr><td
colspan=2><br><b>Automatic investment program</B></td></tr><tr><td></td><td>A
program in which an <a
href="ii.html#c5">investor</A>
can invest or withdraw funds automatically. A <a
href="mm.html#cv">mutual
fund</A>, for example, automatically withdraw a pre determined specified amount from the investor's bank account on a regular basis.</td></tr><tr><td
colspan=2><br><b>Automatic reinvestment</B></td></tr><tr><td></td><td>See:
<a
href="cc.html#dn">Constant dollar plan</A>.</td></tr><tr><td
colspan=2><br><b>Automatic stay</B></td></tr><tr><td></td><td>The
restricting of <a
href="ll.html#1">liability</A>holders from collection efforts related to <a
href="cc.html#cr">collateral</A> seizure. Automatically imposed when a firm files for bankruptcy under Chapter 11.</td></tr><tr><td
colspan=2><br><b>Automatic withdrawal</B></td></tr><tr><td></td><td>A
<a
href="mm.html#cv">mutual fund</A> that gives <a
href="ss.html#br">shareholders</A>
the right to receive a fixed payment from <a
href="dd.html#cd">dividends</A>
on a quarterly or monthly basis.</td></tr><tr><td
colspan=2><br><b>Autoquote</B></td></tr><tr><td></td><td>Autoquote
indicative prices are generated for many of the financial <a
href="oo.html#bd">options contracts</A> traded at <a
href="ll.html#bv">LIFFE</A>
using standard mathematical models as derived by <a
href="bb.html#bo">Black
and Scholes</A> and Cox, Ross, Rubinstein. Autoquote calculates prices for all series by processing <a
href="vv.html#e">variables</A> captured in real-time from other systems and trading members each time the <a
href="uu.html#c">underlying</A> price changes. Autoquotes indicate where a <a
href="ss.html#bk">series</A> may <a
href="tt.html#ca">trade</A>,
given the current level of the <a
href="uu.html#c">underlying</A>
<a
href="ii.html#bo">instrument</A>.</td></tr><tr><td
colspan=2><br><b><a
name=de>Autoregressive</A></b></td></tr><tr><td></td><td>Using
past data or <a
href="vv.html#e">variable</A> of interest to predict future values of the same variable.</td></tr><tr><td
colspan=2><br><b>Availability float</B></td></tr><tr><td></td><td>Checks
deposited by a company that have not yet been cleared.</td></tr><tr><td
colspan=2><br><b>Available on the way in</B></td></tr><tr><td></td><td>In
context of general equities, <a
href="ss.html#stock">stock</A>
is available to new customer as <a
href="tt.html#ca">trade</A>
initiated by another customer is about to be consummated (on the <a
href="ee.html#bx">exchange</A> floor). Usually said to an inquiring salesperson. See: <a
href="oo.html#q">Open</A>.</td></tr><tr><td
colspan=2><br><b><a
name=df>Average</A></b></td></tr><tr><td></td><td>An <a
href="aa.html#ck">arithmetic mean return</A>
of selected
<a
href="ss.html#stock">stocks</A> intended to represent the behavior of the <a
href="mm.html#n">market</A> or some component of it. One good example is the widely quoted <a
href="dd.html#cw">Dow
Jones
Industrial Average</A>, which adds the current <a
href="pp.html#ct">prices</A>
of the 30 DJIA stocks, and divides the results by a predetermined number, the divisor.</td></tr><tr><td
colspan=2><br><b>Average accounting return</B></td></tr><tr><td></td><td>The
average project <a
href="ee.html#b">earnings</A>
after taxes and <a
href="dd.html#bk">depreciation</A>
divided by the average <a
href="bb.html#cc">book value</A>
of the investment during its life.</td></tr><tr><td
colspan=2><br><b>Average
(across-day) measures</b></td></tr><tr><td></td><td>An
estimation of price that uses the <a
href="aa.html#df">average</A>
or representative price of a large number of <a
href="tt.html#ca">trades</A>.</td></tr><tr><td
colspan=2><br><b>Average age of accounts receivable</B></td></tr><tr><td></td><td>The
weighted-average age of all the firm's outstanding invoices.</td></tr><tr><td
colspan=2><br><b>Average collection period, or days' receivables</B></td></tr><tr><td></td><td>The
ratio of <a
href="aa.html#p">accounts receivables</A>
to sales, or the total amount of <a
href="cc.html#e2">credit</A>
extended per dollar of daily sales (average AR/sales 365).</td></tr><tr><td
colspan=2><br><b><a
name=dg>Average cost</A></B></td></tr><tr><td></td><td>In
the context of investing, refers to the average cost of <a
href="ss.html#bs">shares</A> or <a
href="ss.html#stock">stock</A>
bought at different prices over time.</td></tr><tr><td
colspan=2><br><b>Average cost of capital</B></td></tr><tr><td></td><td>A
firm's required payout to <a
href="bb.html#b8">bondholders</A>
and <a
href="ss.html#dt">stockholders</A> expressed as a percentage of capital contributed to the firm. Average cost of capital is computed by dividing the total required cost of capital by the total amount of contributed capital.</td></tr><tr><td
colspan=2><br><b><a
name=dh>Average daily balance</A></B></td></tr><tr><td></td><td>A
method for calculating <a
href="ii.html#bu">interest</A>
in which the balance owed each day by a customer is divided by the number of days. See also: <a
href="aa.html#8">Adjusted balance method</A> and <a
href="pp.html#cn">previous
balance method</A>.</td></tr><tr><td
colspan=2><br><b>Average
down</B></td></tr><tr><td></td><td>A strategy used by <a
href="ii.html#c5">investors</A> to reduce the <a
href="aa.html#dg">average
cost</A> of <a
href="ss.html#bs">shares</A>, in which the <a
href="ii.html#c5">investor</A> purchases more shares with a fixed amount of <a
href="cc.html#x">capital</A> as the price of the shares decrease. The <a
href="ii.html#c5">investor</A> receives more shares per dollar and decreases the average price per share.</td></tr><tr><td
colspan=2><br><b>Average equity</B></td></tr><tr><td></td><td>A
customer's <a
href="aa.html#dh">average daily balance</A>
in a <a
href="tt.html#ca">trading</A> account at a brokerage firm.</td></tr><tr><td
colspan=2><br><b><a
name=di>Average life</A></B></td></tr><tr><td></td><td>Also
referred to as the <a
href="ww.html#i">weighted-average life (WAL)</A>.
The average number of years that each dollar of unpaid <a
href="pp.html#c0">principal</A> due on the <a
href="mm.html#ce">mortgage</A>
remains <a
href="oo.html#bp">outstanding</A>. Average life is computed as the weighted-average time to the receipt of all future <a
href="cc.html#bm">cash flows</A>, using as the weights the dollar amounts of the principal paydowns.</td></tr><tr><td
colspan=2><br><b>Average maturity</b></td></tr><tr><td></td><td>The
<a
href="aa.html#df">average</A> time to <a
href="mm.html#be">maturity</A>
of <a
href="ss.html#4">securities</A> held by a <a
href="mm.html#cv">mutual
fund</A>. Changes in <a
href="ii.html#bu">interest</A>
rates have greater impact on funds with longer average maturity.</td></tr><tr><td
colspan=2><br><b><a
name=dj>Average rate of return (ARR)</A></B></td></tr><tr><td></td><td>The
ratio of the average cash inflow to the amount invested.</td></tr><tr><td
colspan=2><br><b>Average tax rate</B></td></tr><tr><td></td><td>Taxes
as a fraction of income; total taxes divided by total <a
href="tt.html#0">taxable income</A>.</td></tr><tr><td
colspan=2><br><b>Average up</B></td></tr><tr><td></td><td>A
strategy used by <a
href="ii.html#c5">investors</A>
to lower the overall cost of <a
href="ss.html#bs">shares</A>
by buying as many shares with a given amount of <a
href="cc.html#x">capital</A>
in an increasing market. Buying $1000 worth of shares at $30, $35, $40, and $45, for instance, will make the average cost of the shares $37.50.</td></tr><tr><td
colspan=2><br><b>Averaging</B></td></tr><tr><td></td><td>See:
<a
href="cc.html#dn">Constant dollar plan</A>.</td></tr><tr><td
colspan=2><br><b>Away</B></td></tr><tr><td></td><td>A
<a
href="tt.html#ca">trade</A>, quote, or <a
href="mm.html#n">market</A>
that does not originate with the <a
href="dd.html#f">dealer</A>
in question, e.g., "the <a
href="bb.html#bg">bid</A>
is 98-10 away from me."</td></tr><tr><td
colspan=2><br><b><a
name=dk>Away from the market</A></b></td></tr><tr><td></td><td>In
context of general equities, out of line with the <a
href="ii.html#be">inside market</A> at this time, such as when a <a
href="bb.html#bg">bid</A> on a <a
href="ll.html#6">limit
order</A> is lower or the <a
href="oo.html#f">offer price</A>
is higher than the current <a
href="mm.html#y">market price</A>
for the <a
href="ss.html#4">security</A>; held by the <a
href="ss.html#co">specialist</A> for later <a
href="ee.html#b6">execution</A>
unless <a
href="ff.html#5">FOK</A>. Antithesis of <a
href="ii.html#m">in-line</A>.</td></tr><tr><td
colspan=2><br><b><a
name=dl>Away from us</A></B></td></tr><tr><td></td><td>Used
in context of general equities, to characterize role of a competing <a
href="bb.html#ck">broker</A>/<a
href="dd.html#f">dealer</A>.
Trading away from us signifies that <a
href="ss.html#stock">stock</A>
is bought and/or sold with institutions using other trading firms.</td></tr><tr><td
colspan=2><br><b>Away from you</B></td></tr><tr><td></td><td>Used
for listed equity securities. See: <a
href="oo.html#bo">Outside
of you</A>.</td></tr><tr><td
colspan=2><br><b>Axe to grind</B></td></tr><tr><td></td><td>Used
in context of general equities. Involvement in a <a
href="ss.html#4">security</A>,
whether through a <a
href="pp.html#b4">position</A>,
<a
href="oo.html#bf">order</A>, or <a
href="ii.html#bd">inquiry</A>.</td></tr></table>
<hr><center>Copyright &copy; 2003 <a
href="http://www.duke.edu/~charvey/">Campbell R. Harvey</a>,
Professor of
Finance, Fuqua School of Business at Duke
University<br></center><br
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