gloss

Question 1

arbitrage

Answer 1

simultaneous purchase of security and sale of same security (different exchanges/liquidity sources) at prices that deliver a profit

Question 2

arbitration

Answer 2

independent body chosen to settle a dispute

Question 3

arrears

Answer 3

interest or dividends overdue and still owed. pref shares with dividends in arrears must be paid before common dividends

Question 4

ask

Answer 4

lowest price a seller will currently accept

Question 5

asset

Answer 5

everything a company or person owns or has owed to it

Question 6

asset allocation

Answer 6

apportioning investment funds to different asset categories (built around investor’s risk tolerance)

Question 7

asset backed commercial paper

Answer 7

ABCP - security with maturity date less than 1 year (usually 90-180 days) with legal structure of an asset-backed security

Question 8

asset mix

Answer 8

distribution of assets between 3 major classes - cash&equivalents; FI; equities

Question 9

assuris

Answer 9

not for profit company whose member firms are issuers of life-insurance contracts and whose mandate is to protect contract holders against the insolvency of a member company

Question 10

at the money

Answer 10

option with a strike price equal to underlying’s current market price

Question 11

attribution rules

Answer 11

CRA rule stating an investor cannot avoid paying paying tax at their marginal rate by transferring assets to family members who have lower marginal rates

Question 12

deferred annuity

Answer 12

pays a regular income stream to beneficiary or annuitant at some start date in the future. The original funding is usually a stream of payments made over time, ending before the beginning of annuity payments. NB: usually sold by life insurance companies.