A

Question 1

Accredited Investor

Answer 1

An individual or institutional investor who
meets certain minimum requirement
relating to income, net worth, or investment
knowledge. Also referred to as a sophisticated
investor

Question 2

Accrued Interest

Answer 2

Interest accumulated on a bond or debenture

since the last interest payment date

Question 3

Adjusted Cost Base

Answer 3

The deemed cost of an asset representing
the sum of the amount originally paid plus
any additional costs, such as brokerage fees
and commissions

Question 4

Advance-Decline Line

Answer 4

A tool used in technical analysis to measure
the breadth of the market. The analyst takes
difference between the number of stocks
that increased in value each day less the
number that have decreased.

Question 5

After Acquired Clause

Answer 5

A protective clause found in a bond’s
indenture or contract that binds the bond
issuer to pledging all subsequently purchased
assets as part of the collateral for a bond
issue

Question 6

After Market Stabilization

Answer 6

A type of arrangement where the dealer
supports the offer price of a newly issued
stock once it begins trading in the
secondary market.

Question 7

Agency Traders

Answer 7

Manage trades for institutional clients.
They do not trade the dealer member’s
capital, and they trade only when acting on
behalf of clients. Agency traders do not
merely take orders; they must manage
institutional orders with minimal market
impact and act as the client’s eyes and ears
for relevant market intelligence.

Question 8

Agent

Answer 8

An investment dealer operates as an agent
when it acts on behalf of a buyer or a seller
of a security and does not itself own title to
the securities at any time during the
transactions. See also Principal.

Question 9

All or None Order (AON)

Answer 9

An order that must be executed in its

entirety – partial fills will not be accepted.

Question 10

Allocation

Answer 10

The administrative procedure by which
income generated by the segregated fund’s
investment portfolio is flowed through to
the individual contract holders of the fund.

Question 11

Alpha

Answer 11

A statistical measure of the value a fund
manager adds to the performance of the
fund managed. If alpha is positive, the
manager has added value to the portfolio. If
the alpha is negative, the manager has
underperformed the market

Question 12

Alternative Trading Systems (ATS)

Answer 12

Privately-owned computerized networks
that match orders for securities outside of
recognized exchange facilities. Also referred
to as Proprietary Electronic Trading Systems
(PETS).

Question 13

American-Style Option

Answer 13

An option that can be exercised at any time
during the option’s lifetime. See also
European-Style Option.

Question 14

Amortization

Answer 14

Gradually writing off the value of an
intangible asset over a period of time.
Commonly applied to items such as
goodwill, improvements to leased premises,
or expenses of a new stock or bond issue.
See also Depreciation

Question 15

Annual Information Form (AIF)

Answer 15

A document in which an issuer is required
to disclose information about presently
known trends, commitments, events or
uncertainties that are reasonably expected
to have a material impact on the issuer’s
business, financial condition or results of
operations. Although investors are typically
not provided with the AIF, the prospectus
must state that it is available on request.

Question 16

Annual Report

Answer 16

The formal financial statements and report
on operations issued by a company to its
shareholders after its fiscal year-end.

Question 17

Annuitant

Answer 17

Person on whose life the maturity and
death benefit guarantees are based. It can be
the contract holder or someone else
designated by the contract holder. In
registered plans, the annuitant and contract
holder must be the same person.

Question 18

Annuity

Answer 18

A contract usually sold by life insurance
companies that guarantees an income to the
benefi ciary or annuitant at some time in the
future. The income stream can be very
fl exible. The original purchase price may be
either a lump sum or a stream of payments.
See Deferred Annuity and Immediate
Annuity

Question 19

Any Part Order

Answer 19

A type of order in which the client will
accept all stock in odd, broken or standard
trading units up to the full amount of the
order

Question 20

Arbitrage

Answer 20

The simultaneous purchase of a security on
one stock exchange and the sale of the same
security on another exchange at prices which
yield a profit to the arbitrageur.

Question 21

Arbitration

Answer 21

A method of dispute resolution in which an
independent arbitrator is chosen to assist
aggrieved parties recover damages.

Question 22

Arrears

Answer 22

Interest or dividends that were not paid
when due but are still owed. For example,
dividends owed but not paid to cumulative
preferred shareholders accumulate in a
separate account (arrears). When payments
resume, dividends in arrears must be paid
to the preferred shareholders before the
common shareholders.

Question 23

Ask

Answer 23

The lowest price a seller will accept for the
financial instrument being quoted. See also
Bid.

Question 24

Asset

Answer 24

Everything a company or a person owns or
has owed to it. A statement of financial
position category.

Question 25

Asset Allocation

Answer 25

Apportioning investment funds among
different categories of assets, such as cash,
fixed income securities and equities. The
allocation of assets is built around an
investor’s risk tolerance.

Question 26

Asset-backed commercial paper

ABCP

Answer 26

A type of security that has a maturity date
of less than one year, typically in the range
of 90 to 180 days, with a legal and design
structure of an asset-backed security

Question 27

Asset Mix

Answer 27

The percentage distribution of assets in a
portfolio among the three major asset classes:
cash and equivalents, fixed income and
equities.

Question 28

Assuris

Answer 28

A not for profit company whose member
firms are issuers of life-insurance contracts
and whose mandate is to provide protection
to contract holders against the insolvency of
a member company, up to 60k per policy holder per institution(restricted to death benefits and maturity guarantees)

Question 29

At-the-Money

Answer 29

An option with a strike price equal to (or almost equal to) the market price of the underlying security. See also out-of-the-money and in-the-money.

Question 30

Attribution Rules

Answer 30

A Canada Revenue Agency rule stating that
an investor cannot avoid paying taxes at their
marginal rate by transferring assets to other
family members who have lower personal
tax rates.

Question 31

Auction Market

Answer 31

Market in which securities are bought and
sold by brokers acting as agents for their
clients, in contrast to a dealer market where
trades are conducted over-the-counter. For
example, the Toronto Stock Exchange is an
auction market.

Question 32

Audit

Answer 32

A professional review and examination of a
company’s financial statements required
under corporate law for the purpose of
ensuring that the statements are fair,
consistent and conform with International
Financial Reporting Standards (IFRS).

Question 33

Authorized Shares

Answer 33

The maximum number of common (or
preferred) shares that a corporation may
issue under the terms of its charter.

Question 34

Autorité des marchés fi nanciers
(Financial Services Authority)
(AMF)

Answer 34

The body that administers the regulatory
framework surrounding Québec’s financial
sector: securities sector, the distribution of
financial products and services sector, the
financial institutions sector and the
compensation sector.

Question 35

Averages

Answer 35

A statistical tool used to measure the
direction of the market. The most common
average is the Dow Jones Industrial
Average.