S

Question 1

Sample

Answer 1

A subset drawn from a population.

Question 2

Second Order Risk

Answer 2

Risks that are not related to the market but
to other aspects of trading, such as dealing,
implementing arbitrage structures, or
pricing illiquid or infrequently valued
securities.

Question 3

Sector outperform

Answer 3

A typical rating category that indicates that
the expected return on a stock is greater
than that of other companies in an equity
analyst’s coverage universe. See also
Coverage universe, Equity analyst, and
Rating category

Question 4

Sector perform

Answer 4

A typical rating category that indicates that
the expected return on a stock is about the
same as that of other companies in an
equity analyst’s coverage universe. See also Coverage universe, Equity analyst, and
Rating category

Question 5

Sector rotator

Answer 5

An investor who follows a macroeconomic
approach to top-down investing. See also
Macroeconomic approach.

Question 6

Sector underperform

Answer 6

A typical rating category that indicates that
the expected return on a stock is lower than
that of other companies in an equity
analyst’s coverage universe. See also
Coverage universe, Equity analyst, and
Rating category.

Question 7

Secular trend

Answer 7

A trend that unfolds over many years or
decades, and which may be comprised of
shorter cyclical trends. See also Cyclical
trend

Question 8

Security selection

Answer 8

The selection of securities for inclusion in a

portfolio.

Question 9

Senior issuer

Answer 9

The term given to a company whose
securities are listed on the Toronto Stock
Exchange (TSX). See also Junior issuers

Question 10

Separately Managed Account

Answer 10

A client management system where a new
account is opened for each new managed
account manager or product

Question 11

Sharpe benchmark

Answer 11

A benchmark constructed by combining
a variety of style indices. It is created
statistically using multiple-regression
analysis

Question 12

Sharpe ratio

Answer 12

The excess average return per unit of total
risk for a given time period. See also
Risk-adjusted return.

Question 13

Shelf prospectus

Answer 13

A prospectus filed with the appropriate
regulators that allow a company to issue
debt securities up to two years after filing
for registration by simply updating the
registration information. See also
Medium-term note (MTN) program.

Question 14

Short rebate

Answer 14

The interest earned on cash balances
credited from the opening short position
on a security

Question 15

Short squeeze

Answer 15

Creation of additional buying demand on a
security when a short seller needs to buy
back the security to cover losses.

Question 16

Simple moving average

Answer 16

The most popular type of moving average.
A simple moving average is determined by
summing the closing prices for a certain
number of periods and then dividing by the
number of periods. Simple moving averages
give equal weight to each period’s price. See
also Exponential moving average, Moving
average, and Weighted moving average.

Question 17

Simple regression analysis

Answer 17

A statistical technique that determines the
linear relationship between two variables
from historical data. One variable, known
as the independent variable, is assumed to
influence the dependent variable

Question 18

Single-strategy, multi-manager

hedge fund

Answer 18

A hedge fund that invests in several other
hedge funds that employ a similar strategy.
See also Hedge fund.

Question 19

Sinking fund

Answer 19

An agreement in a debt security’s indenture
that the issuer will set aside a specified
amount of funds to retire some or all of the
outstanding debt security. See also
Purchase fund.

Question 20

Small-cap stock

Answer 20

A stock with a small market capitalization.

See also Large-cap stock.

Question 21

Specific risk

Answer 21

See Unsystematic risk.

Question 22

Square One Approach

Answer 22

An itemized listing of all expenses expected
during retirement in line with the lifestyle
needs identified through discovery. It is the
most precise method (if future expenses can
be estimated accurately) and the most in
line with the wealth management approach.

Question 23

Stable stage

Answer 23

See Mature stage.

Question 24

Standard deviation

Answer 24

A statistical measure of risk that measures
the extent to which returns differ from the
average or expected level of return. The
standard deviation is equal to the square
root of the variance

Question 25

Standard finance

Answer 25

See Traditional finance.

Question 26

Steepening of yield curve

Answer 26

A yield curve twist that causes the yield
curve to have a greater slope than it did
before the twist. See also Yield curve and
Yield curve twist.

Question 27

Stochastic oscillator

Answer 27

An oscillator that measures whether a stock
is closing near its high and lows, which is a
strong characteristic of a trending market.
See also Oscillator.

Question 28

Stock dividend

Answer 28

A dividend paid in form the form of
additional common shares rather than cash.
See also Dividend, Extra dividend, and
Regular dividend.

Question 29

Strategic asset allocation

Answer 29

The benchmark asset mix designed to
achieve a client’s longer-term objectives
while taking into account any constraints.
See also Asset allocation, Asset class, and
Tactical asset allocation.

Question 30

Strategic trading

Answer 30

Trading that establish or maintain a
portfolio’s strategic asset allocation. Because
the strategic asset allocation is a long-term
asset mix, strategic trading tends to be
infrequent. See also Tactical trading.

Question 31

Strategist

Answer 31

See Investment strategist.

Question 32

Stratified sampling approach

Answer 32

A bond indexing approach that takes a
market index and divides it into parts or
“cells” representing different portfolio
characteristics, such as duration, coupon,
maturity, sector, credit rating, and call
features. The goal is to choose securities
that best represent the characteristics of
an entire cell. The cells are then placed
together in appropriate weights to
adequately approximate the index. See
also Optimization approach.

Question 33

Strip coupon

Answer 33

Strip coupon

Question 34

Stripped MBS

Answer 34

Mortgage backed securities that divide the
cash flows from the underlying mortgage
security into two or more new securities.

Question 35

Style-based approach

Answer 35

A bottom-up approach to active equity
investing that focuses on a particular set of stocks that have similar fundamental
characteristics and performance patterns.
Also a top-down approach to active equity
investing that focuses on whatever style
offers the opportunity to outperform at a
particular point in time. See also Growth
stock, Large-cap stock, Small-cap stock,
Value stock, Bottom-up analysis and
Top-down analysis.

Question 36

Style drift

Answer 36

The phenomenon that occurs when

managers stray from their intended style

Question 37

Subordinated voting common

shares

Answer 37

Subordinated voting common

shares

Question 38

Superficial loss rules

Answer 38

Tax rules that states investors cannot buy
the same security 30 days before or after the
loss trade. In addition, the capital loss may
be applied only to the cost base of the
original security.

Question 39

Support level

Answer 39

The price point(s) at which the majority of
investors sense value and are willing to buy
more than the holders of the stock (or short
sellers) are willing to sell. As demand
outstrips supply, prices tend to rise from
support levels. See also Horizontal
support, Horizontal resistance, and
Resistance level.

Question 40

Survivorship bias

Answer 40

The tendency to measure the performance
of a peer group of funds whose membership
has varied over time. One can evaluate the
performance only of the surviving members
of a group, not the past performance of the
starting group.

Question 41

Sustainable growth rate

Answer 41

The estimated rate of growth of earnings
and dividends that can be sustained for a
given level of return on equity (ROE),
assuming the capital structure of the
company is constant over time and that no
additional common stock is issued. The
sustainable growth rate equal the earnings
retention rate multiplied by ROE. See also
Earnings retention rate and Return on
equity

Question 42

Symmetrical triangle

Answer 42

A triangle where the support and resistance
lines are equal in length and slope, although
the slope cannot be horizontal. See also
Ascending triangle, Descending triangle,
and Triangle.

Question 43

Systematic risk

Answer 43

The portion of a security or portfolio’s total
risk that is related to fluctuations in the
return on the overall market. See also
Capital Asset Pricing Model (CAPM) and
Unsystematic risk.