Letter C Vocabulary

Question 1

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.

Answer 1

Call Option

Question 2

A bond that can be redeemed by the issuer before its maturity date under certain conditions.

Answer 2

Callable Bond

Question 3

A type of financial chart that displays high, low, opening, and closing prices for a specific period, used in technical analysis.

Answer 3

Candlestick Chart

Question 4

A graphical representation of the risk-return profile of risky assets in combination with a risk-free rate.

Answer 4

Capital Allocation Line

Question 5

Money spent by a business to acquire or improve long-term assets like property, plant, or equipment.

Answer 5

Capital Expenditure

Question 6

Profits from the sale of investments or real estate.

Answer 6

Capital Gains

Question 7

The loss incurred when a capital asset is sold for a lower price than its purchase price.

Answer 7

Capital Loss

Question 8

A graphical representation of the expected return of a portfolio for any given level of non-diversifiable risk.

Answer 8

Capital Market Line

Question 9

The total shares of a company’s equity, including common and preferred stock.

Answer 9

Capital Stock

Question 10

The mix of debt and equity that a company uses to finance its operations and growth.

Answer 10

Capital Structure

Question 11

The total value of a company’s outstanding shares of stock, calculated by multiplying share price by the number of shares.

Answer 11

Capitalization

Question 12

A brokerage firm that holds client funds and securities, manages clearing and settlement, and provides monthly statements.

Answer 12

Carrying Broker

Question 13

A brokerage account in which an investor must pay for securities purchased within two business days of the trade.

Answer 13

Cash Account

Question 14

The total money generated by a business during a given period, taking into account incoming revenues and outgoing expenses.

Answer 14

Cash Flow

Question 15

A financial statement that provides a summary of the cash inflows and outflows of a business over a specific period.

Answer 15

Cash Flow Statement

Question 16

The process where the settlement in a contractual arrangement is made in cash rather than physical delivery.

Answer 16

Cash Settlement

Question 17

A document attesting to the ownership of a security or part of a mutual fund.

Answer 17

Certificate

Question 18

A time deposit offered by banks with a specific, fixed term and usually a fixed interest rate.

Answer 18

Certificate of Deposit (CD)

Question 19

Excessive buying and selling of securities by a broker to generate commission fees, often without regard for the client’s best interests.

Answer 19

Churning

Question 20

Regulatory measures to temporarily halt trading on an exchange to curb panic-selling in steep market declines.

Answer 20

Circuit Breaker

Question 21

An intermediary between buyers and sellers in financial markets, ensuring the proper execution of trades and transfer of funds.

Answer 21

Clearing House

Question 22

An investment fund with a fixed number of shares that does not accept new capital after its initial offering.

Answer 22

Closed-End Fund

Question 23

Assets pledged by a borrower to secure a loan, which can be taken by the lender if the loan is not repaid.

Answer 23

Collateral

Question 24

A structured financial product backed by a pool of loans or other assets and sold to investors.

Answer 24

Collateralized Debt Obligation (CDO)

Question 25

A type of mortgage-backed security that separates mortgage pools into different maturity classes.

Answer 25

Collateralized Mortgage Obligation (CMO)

Question 26

A short-term unsecured promissory note issued by companies to raise funds for short-term liabilities.

Answer 26

Commercial Paper

Question 27

The fee charged by a broker or investment adviser for buying or selling securities on behalf of a client.

Answer 27

Commission

Question 28

A central marketplace where commodities and commodity-based securities are traded.

Answer 28

Commodities Exchange

Question 29

A raw material or primary agricultural product that can be bought and sold, such as gold, oil, or wheat.

Answer 29

Commodity

Question 30

A type of security representing ownership in a corporation, entitling holders to vote on company matters and receive dividends.

Answer 30

Common Stock

Question 31

Interest calculated on both the initial principal and the accumulated interest from previous periods.

Answer 31

Compound Interest

Question 32

A fee charged when certain mutual fund shares are sold before a specified period.

Answer 32

Contingent Deferred Sales Charge (CDSC)

Question 33

An investment style that goes against prevailing market trends, buying assets that are undervalued or selling when overvalued.

Answer 33

Contrarian Investing

Question 34

A bond that can be exchanged for a predetermined amount of the issuer's equity at certain times during its life.

Answer 34

Convertible Bond

Question 35

A type of preferred stock that can be converted into a specified number of common shares of the issuing company.

Answer 35

Convertible Preferred Stock

Question 36

A debt security issued by a corporation and sold to investors, typically with a fixed interest rate.

Answer 36

Corporate Bond

Question 37

A short-term price decline of at least 10% in a stock, bond, commodity, or index to adjust for overvaluation.

Answer 37

Correction

Question 38

A tax-advantaged savings account in the U.S. designed to encourage savings for future educational expenses.

Answer 38

Coverdell Education Savings Account

Question 39

An options strategy where an investor holds a long position in an asset and writes (sells) call options on that same asset.

Answer 39

Covered Call

Question 40

An options strategy where an investor holds a short position in an asset and writes (sells) put options on that same asset.

Answer 40

Covered Put

Question 41

A financial derivative allowing an investor to "swap" or offset credit risk with that of another investor.

Answer 41

Credit Default Swap (CDS)

Question 42

An assessment of the creditworthiness of a borrower in respect of a particular debt or financial obligation.

Answer 42

Credit Rating

Question 43

The risk that a borrower may not repay a loan or fulfill contractual obligations.

Answer 43

Credit Risk

Question 44

A dividend, typically associated with preferred shares, that accumulates if unpaid and must be paid in full before dividends on common shares.

Answer 44

Cumulative Dividend

Question 45

A bond's annual interest payment divided by its current price.

Answer 45

Current Yield

Question 46

An account created for a minor, managed by a designated custodian until the minor reaches a specified age.

Answer 46

Custodial Account

Question 47

A financial institution that holds customers' securities for safekeeping to prevent them from being stolen or lost.

Answer 47

Custodian