Letter C Vocabulary Flashcards
A financial contract giving the holder the right, but not the obligation, to buy a stock, bond, or other asset at a specific price within a specified time.
Call Option
A bond that can be redeemed by the issuer before its maturity date under certain conditions.
Callable Bond
A type of financial chart that displays high, low, opening, and closing prices for a specific period, used in technical analysis.
Candlestick Chart
A graphical representation of the risk-return profile of risky assets in combination with a risk-free rate.
Capital Allocation Line
Money spent by a business to acquire or improve long-term assets like property, plant, or equipment.
Capital Expenditure
Profits from the sale of investments or real estate.
Capital Gains
The loss incurred when a capital asset is sold for a lower price than its purchase price.
Capital Loss
A graphical representation of the expected return of a portfolio for any given level of non-diversifiable risk.
Capital Market Line
The total shares of a company’s equity, including common and preferred stock.
Capital Stock
The mix of debt and equity that a company uses to finance its operations and growth.
Capital Structure
The total value of a company’s outstanding shares of stock, calculated by multiplying share price by the number of shares.
Capitalization
A brokerage firm that holds client funds and securities, manages clearing and settlement, and provides monthly statements.
Carrying Broker
A brokerage account in which an investor must pay for securities purchased within two business days of the trade.
Cash Account
The total money generated by a business during a given period, taking into account incoming revenues and outgoing expenses.
Cash Flow
A financial statement that provides a summary of the cash inflows and outflows of a business over a specific period.
Cash Flow Statement
The process where the settlement in a contractual arrangement is made in cash rather than physical delivery.
Cash Settlement
A document attesting to the ownership of a security or part of a mutual fund.
Certificate
A time deposit offered by banks with a specific, fixed term and usually a fixed interest rate.
Certificate of Deposit (CD)
Excessive buying and selling of securities by a broker to generate commission fees, often without regard for the client’s best interests.
Churning
Regulatory measures to temporarily halt trading on an exchange to curb panic-selling in steep market declines.
Circuit Breaker
An intermediary between buyers and sellers in financial markets, ensuring the proper execution of trades and transfer of funds.
Clearing House
An investment fund with a fixed number of shares that does not accept new capital after its initial offering.
Closed-End Fund
Assets pledged by a borrower to secure a loan, which can be taken by the lender if the loan is not repaid.
Collateral
A structured financial product backed by a pool of loans or other assets and sold to investors.
Collateralized Debt Obligation (CDO)
A type of mortgage-backed security that separates mortgage pools into different maturity classes.
Collateralized Mortgage Obligation (CMO)
A short-term unsecured promissory note issued by companies to raise funds for short-term liabilities.
Commercial Paper
The fee charged by a broker or investment adviser for buying or selling securities on behalf of a client.
Commission
A central marketplace where commodities and commodity-based securities are traded.
Commodities Exchange
A raw material or primary agricultural product that can be bought and sold, such as gold, oil, or wheat.
Commodity
A type of security representing ownership in a corporation, entitling holders to vote on company matters and receive dividends.
Common Stock
Interest calculated on both the initial principal and the accumulated interest from previous periods.
Compound Interest
A fee charged when certain mutual fund shares are sold before a specified period.
Contingent Deferred Sales Charge (CDSC)
An investment style that goes against prevailing market trends, buying assets that are undervalued or selling when overvalued.
Contrarian Investing
A bond that can be exchanged for a predetermined amount of the issuer’s equity at certain times during its life.
Convertible Bond
A type of preferred stock that can be converted into a specified number of common shares of the issuing company.
Convertible Preferred Stock
A debt security issued by a corporation and sold to investors, typically with a fixed interest rate.
Corporate Bond
A short-term price decline of at least 10% in a stock, bond, commodity, or index to adjust for overvaluation.
Correction
A tax-advantaged savings account in the U.S. designed to encourage savings for future educational expenses.
Coverdell Education Savings Account
An options strategy where an investor holds a long position in an asset and writes (sells) call options on that same asset.
Covered Call
An options strategy where an investor holds a short position in an asset and writes (sells) put options on that same asset.
Covered Put
A financial derivative allowing an investor to “swap” or offset credit risk with that of another investor.
Credit Default Swap (CDS)
An assessment of the creditworthiness of a borrower in respect of a particular debt or financial obligation.
Credit Rating
The risk that a borrower may not repay a loan or fulfill contractual obligations.
Credit Risk
A dividend, typically associated with preferred shares, that accumulates if unpaid and must be paid in full before dividends on common shares.
Cumulative Dividend
A bond’s annual interest payment divided by its current price.
Current Yield
An account created for a minor, managed by a designated custodian until the minor reaches a specified age.
Custodial Account
A financial institution that holds customers’ securities for safekeeping to prevent them from being stolen or lost.
Custodian
