G, H, I

Question 1

Good Delivery Form

Answer 1

When a security is sold it must be delivered
to the broker properly endorsed, not
mutilated and with (if any) coupons
attached. To avoid these difficulties and as a
general practice most securities are held in
street form with the broker.

Question 2

Good Faith Deposit

Answer 2

A deposit of money by the buyer or seller of
a futures product which acts as a financial
guarantee as to the fulfilment of the
contractual obligations of the futures
contract. Also called a performance bond or
margin.

Question 3

Good Through Order

Answer 3

An order to buy or sell that is good for a
specifi ed number of days and then is
automatically cancelled if it has not been
fi lled

Question 4

Good Till Cancelled Order

Answer 4

An order that is valid from the date entered
until the close of business on the date
specified in the order. If the order has not
been filled by the close of the market on
that date, it is cancelled. This type of order
can be cancelled or changed at any time.

Question 5

Goodwill

Answer 5

Generally understood to represent the value
of a well-respected business – its name,
customer relations, employee relations,
among others. Considered an intangible
asset on the statement of financial
position.

Question 6

Government Securities

Distributors

Answer 6

Typically an investment dealer or bank that
is authorized to bid at Government of
Canada debt auctions

Question 7

Greensheet

Answer 7

Highlights for the fi rm’s sales representatives
the salient features of a new issue, both pro
and con in order to successfully solicit
interest to the general public. Dealers
prepare this information circular for
in-house use only

Question 8

Gross Domestic Product (GDP)

Answer 8

The value of all goods and services

produced in a country in a year.

Question 9

Gross Profi t Margin

Answer 9

A profitability ratio that shows the
company’s rate of profit after allowing for
cost of sales.

Question 10

Growth Stock

Answer 10

Common stock of a company with excellent
prospects for above-average growth; a
company which over a period of time seems
destined for above-average expansion

Question 11

Guaranteed Amount

Answer 11

The minimum amount payable under
death benefi ts or maturity guarantees
provided for under the terms of the
segregate fund contract

Question 12

Guaranteed Bonds

Answer 12

Bonds issued by a crown corporation but
guaranteed by the applicable government as
to interest and principal payments.

Question 13

Guaranteed Income Supplement

GIS

Answer 13

A pension payable to OAS recipients with

no other or limited income

Question 14

Guaranteed Investment Certificate

GIC

Answer 14

A deposit instrument most commonly
available from trust companies, requiring a
minimum investment at a predetermined
rate of interest for a stated term. Generally
nonredeemable prior to maturity but there
can be exceptions.

Question 15

Guaranteed Minimum Withdrawal 
Benefit Plans (GMWB)

Answer 15

A GMWB plan is similar to a variable
annuity. With a GMWB, the client
purchases the plan, and the GMWB option
gives the planholder the right to withdraw a
certain fixed percentage (7% is typical) of the
initial deposit every year until the entire
principal is returned, no matter how the
fund performs.

Question 16

Halt in Trading

Answer 16

A temporary halt in the trading of a security
to allow signifi cant news to be reported and
widely disseminated. Usually the result of a
pending merger or a substantial change in
dividends or earnings

Question 17

Hedge Funds

Answer 17

Lightly regulated pools of capital in which
the hedge fund manager invests a signifi cant
amount of his or her own capital into the
fund and whose offering memorandum
allows for the fund to execute aggressive
strategies that are unavailable to mutual
funds such as short selling.

Question 18

Hedging

Answer 18

A protective manoeuvre; a transaction
intended to reduce the risk of loss from
price fl uctuations

Question 19

High Water Mark

Answer 19

Used in the context of how a hedge fund 
manager is compensated. The high water 
mark sets the bar above which the fund 
manager is paid a portion of the profi ts 
earned for the fund.

Question 20

Holding Period Return

Answer 20

A transactional rate of return measure that
takes into account all cash fl ows and
increases or decreases in a security’s value
for any time frame. Time frames can be
greater or less than a year

Question 21

Hypothecate

Answer 21

To pledge securities as collateral for a loan.
Referred to as collateral assignment or
hypotec in Québec for segregated funds.

Question 22

ICE Futures Canada (formerly the

Winnipeg Commodity Exchange)

Answer 22

An exchange that trades agricultural futures

and options exclusively

Question 23

Income Splitting

Answer 23

A tax planning strategy whereby the
higher-earning spouse transfers income to
the lower-earning spouse to reduce taxable
income.

Question 24

Income Tax Act (ITA)

Answer 24

The legislation dictating the process and
collection of federal tax in Canada,
administered by Canada Revenue Agency.

Question 25

Income Trusts

Answer 25

A type of investment trust that holds
investments in the operating assets of a
company. Income from these operating
assets fl ows through to the trust, which in
turn passes on the income to the trust
unitholders.

Question 26

Index

Answer 26

A measure of the market as measured by a
basket of securities. An example would be
the S&P/TSX Composite Index or the S&P
500. Fund managers and investors use a
stock index to measure the overall direction
and performance of the market.

Question 27

Index-Linked GICs

Answer 27

A hybrid investment product that combines
the safety of a deposit instrument with
some of the growth potential of an equity
investment. They have grown in popularity,
particularly among conservative investors
who are concerned with safety of capital
but want yields greater than the interest on
standard interest bearing GICs or other
term deposits

Question 28

Indexing

Answer 28

A portfolio management style that involves
buying and holding a portfolio of securities
that matches, closely or exactly, the
composition of a benchmark index.

Question 29

Individual variable insurance

contract (IVIC)

Answer 29

The term used in the IVIC Guidelines to

describe a segregated fund contract.

Question 30

Infl ation

Answer 30

A generalized, sustained trend of rising

prices.

Question 31

Infl ation Rate

Answer 31

The rate of change in prices. See also

Consumer Price Index.

Question 32

Infl ation Rate Risk

Answer 32

The risk that the value of fi nancial assets
and the purchasing power of income will
decline due to the impact of infl ation on
the real returns produced by those fi nancial
assets.

Question 33

Information Circular

Answer 33

Document sent to shareholders with a
proxy, providing details of matters to come
before a shareholders’ meeting

Question 34

Initial Public Offering (IPO)

Answer 34

A new issue of securities offered to the
public for investment for the very fi rst time.
IPOs must adhere to strict government
regulations as to how the investments are
sold to the public.

Question 35

Initial Sales Charge

Answer 35

A commission paid to the fi nancial adviser
at the time that the policy is purchased.
This type of sales charge is also known as an
acquisition fee or a front-end load.

Question 36

Insider

Answer 36

All directors and senior offi cers of a
corporation and those who may also be
presumed to have access to nonpublic or
inside information concerning the company;
also anyone owning more than 10% of the
voting shares in a corporation. Insiders are
prohibited from trading on this information.

Question 37

Insider Report

Answer 37

A report of all transactions in the shares of a
company by those considered to be insiders
of the company and submitted each month
to securities commissions.

Question 38

Instalment Debentures

Answer 38

A bond or debenture issue in which a
predetermined amount of principal matures
each year.

Question 39

Instalment Receipts

Answer 39

A new issue of stock sold with the obligation
that buyers will pay the issue price in a
specifi ed series of instalment payments
instead of one lump sum payment. Also
known as Partially Paid Shares.

Question 40

Institutional Client

Answer 40

A legal entity that represents the collective
fi nancial interests of a large group. A
mutual fund, insurance company, pension
fund and corporate treasury are just a few
examples.

Question 41

Intangible Asset

Answer 41

An asset having no physical substance (e.g.,

goodwill, patents, franchises, copyrights).

Question 42

Integrated Asset Allocation

Answer 42

An asset allocation strategy that refers to
an all-encompassing strategy that includes
consideration of capital market expectations
and client risk tolerance.

Question 43

Interest

Answer 43

Money charged by a lender to a borrower

for the use of his or her money

Question 44

Interest Coverage Ratio

Answer 44

A debt ratio that tests the ability of a
company to pay the interest charges on its
debt and indicates how many times these
charges are covered based upon earnings
available to pay them

Question 45

Interest Rate Risk

Answer 45

The risk that changes in interest rates will
adversely affect the value of an investor’s
portfolio. For example, a portfolio with a
large holding of long-term bonds is
vulnerable to signifi cant loss from changes
in interest rates.

Question 46

International Financial Reporting

Standards (IFRS)

Answer 46

A globally accepted high-quality accounting
standard already used by public companies
in over 100 countries around the world.

Question 47

Interval Funds

Answer 47

A type of mutual fund that has the
fl exibility to buy back its outstanding shares
periodically. Also known as closed-end
discretionary funds.

Question 48

In-the-Money

Answer 48

A call option is in-the-money if its strike
price is below the current market price of
the underlying security. A put option is
in-the-money if its strike price is above the
current market price of the underlying
security. The in-the-money amount is the
option’s intrinsic value.

Question 49

Intrinsic Value

Answer 49

That portion of a warrant or call option’s
price that represents the amount by which
the market price of a security exceeds the
price at which the warrant or call option
may be exercised (exercise price). Considered
the theoretical value of a security (i.e., what
a security should be worth or priced at in
the market)

Question 50

Inventory

Answer 50

The goods and supplies that a company
keeps in stock. A statement of fi nancial
position item.

Question 51

Inventory Turnover Ratio

Answer 51

Cost of sales divided by inventory. The
ratio may also be expressed as the number
of days required to sell current inventory by
dividing the ratio into 365.

Question 52

Investment

Answer 52

The use of money to make more money, to

gain income or increase capital or both.

Question 53

Investment Advisor (IA)

Answer 53

An individual licensed to transact in the full
range of securities. IAs must be registered in
by the securities commission of the province
in which he or she works. The term refers
to employees of SRO member fi rms only.
Also known as a Registrant or Registered
Representative (RR)

Question 54

Investment Company, or Fund

Answer 54

A company which uses its capital to invest
in other companies. There are two principal
types: closed-end and open-end or mutual
fund. Shares in closed-end investment
companies are readily transferable in the
open market and are bought and sold like
other shares. Capitalization is fi xed.
Open-end funds sell their own new shares
to investors, buy back their old shares, and
are not listed. Open-end funds are so-called
because their capitalization is not fi xed;
they normally issue more shares or units as
people want them.

Question 55

Investment Counsellor

Answer 55

A professional engaged to give investment

advice on securities for a fee

Question 56

Investment Dealer

Answer 56

A person or company that engages in the
business of trading in securities in the
capacity of an agent or principal and is a
member of IIROC

Question 57

Investment Industry Association of

Canada (IIAC)

Answer 57

A member-based professional association
that represents the interests of market
participants

Question 58

Investment Industry Regulatory

Organization of Canada (IIROC)

Answer 58

The Canadian investment industry’s
national self-regulatory organization.
IIROC carries out its regulatory
responsibilities through setting and
enforcing rules regarding the profi ciency,
business and fi nancial conduct of dealer
fi rms and their registered employees and
through setting and enforcing market
integrity rules regarding trading activity on
Canadian equity marketplaces.

Question 59

Investment Policy Statement

Answer 59

The agreement between a portfolio
manager and a client that provides the
guidelines for the manager…….

Question 60

Investments in Associates

Answer 60

The ownership a company has in another 
company. As a general rule, signifi cant 
infl uence is presumed to exist when a 
company owns 20% or more of the voting 
rights of the other company

Question 61

Investor

Answer 61

One whose principal concern is the
minimization of risk, in contrast to the
speculator, who is prepared to accept
calculated risk in the hope of making
better-than-average profi ts, or the gambler,
who is prepared to take even greater risks

Question 62

Irrevocable Benefi ciary

Answer 62

A benefi ciary whose entitlements under the
segregated fund contract cannot be
terminated or changed without his or her
consent.

Question 63

Issue

Answer 63

Any of a company’s securities; the act of

distributing such securities.

Question 64

Issued Shares

Answer 64

That part of authorized shares that have
been sold by the corporation and held by
the shareholders of the company.

Question 65

Investment policy statement

Answer 65

A statement developed for a fund’s
investment program by the investment
committee that outlines the investment
aspects of the fund.