T, U, V, W, Y, Z Flashcards
T3 Form
Referred to as a Statement of Trust Income
Allocations and Designations. When a
mutual fund is held outside a registered
plan, unitholders of an unincorporated
fund is sent a T3 form by the respective
fund.
T4 Form
Referred to as a Statement of Remuneration
Paid. A T4 form is issued annually by
employers to employees reporting total
compensation for the calendar year.
Employers have until the end of February
to submit T4 forms to employees for the
previous calendar year
T5 Form
Referred to as a Statement of Investment
Income. When a mutual fund is held
outside a registered plan, shareholders are
sent a T3 form by the respective fund.
Tactical Asset Allocation
An asset allocation strategy that involves
adjusting a portfolio to take advantage of
perceived ineffi ciencies in the prices of
securities in different asset classes or within
sectors
Takeover Bid
An offer made to security holders of a
company to purchase voting securities of
the company which, with the offeror’s
already owned securities, will in total exceed
20% of the outstanding voting securities of
the company. For federally incorporated
companies, the equivalent requirement is
more than 10% of the outstanding voting
shares of the target company
Tax Free Savings Account (TFSA)
A savings vehicle whereby income earned
within a TFSA will not be taxed in any way
throughout an individual’s lifetime. In
addition, there are no restrictions on the
timing or amount of withdrawals from a
TFSA, and the money withdrawn can be
used for any purpose.
Tax Loss Selling
Selling a security for the sole purpose of
generating a loss for tax purposes. There
may be times when this strategy is
advantageous but investment principles
should not be ignored.
Selling a security for the sole purpose of
generating a loss for tax purposes. There
may be times when this strategy is
advantageous but investment principles
should not be ignored.
Technical Analysis
A method of market and security analysis
that studies investor attitudes and
psychology as revealed in charts of stock
price movements and trading volumes to
predict future price action
Term to Maturity
The length of time that a segregated fund
policy must be held in order to be eligible
for the maturity guarantee. Normally,
except in the event of the death of the
annuitant, the term to maturity of a
segregated-fund policy is 10 years.
Thin Market
A market in which there are comparatively
few bids to buy or offers to sell or both.
The phrase may apply to a single security or
to the entire stock market. In a thin market,
price fluctuations between transactions are
usually larger than when the market is
liquid. A thin market in a particular stock
may reflect lack of interest in that issue, or a
limited supply of the stock.
Tilting of the Yield Curve
The yield curve that results from a decline
in long-term bond yields while short-term
rates are rising.
Time to Expiry
The number of days or months or years
until expiry of an option or other derivative
instrument.
Time Value
The amount, if any, by which the current
market price of a right, warrant or option
exceeds its intrinsic value.
Time-Weighted Rate of Return
TWRR
A measure of return calculated by averaging
the return for each subperiod in which a
cash flow occurs into a return for a
reporting period.
Timely Disclosure
An obligation imposed by securities
administrators on companies, their officers
and directors to release promptly to the
news media any favourable or unfavourable
corporate information which is of a
material nature. Broad dissemination of this
news allows non-insiders to trade the
company’s securities with the same
knowledge about the company as insiders
themselves. See also Continuous
Disclosure.
Tombstone Advertisements
A written advertisement placed by the
investment bankers in a public offering of
securities as a matter of record once the deal
has been completed.
Top-Down Approach
A type of fundamental analysis. First, general trends in the economy are analyzed. This information is then combined with industries and companies within those industries that should benefi t from the general trends identifi ed
Toronto Stock Exchange (TSX)
The largest stock exchange in Canada with
over 1,700 companies listed on the
exchange
Trade Payables
Money owed by a company for goods or
services purchased, payable within one year.
A current liability on the statement of
financial position.
Trade Receivables
Money owed to a company for goods or
services it has sold, for which payment is
expected within one year. A current asset on
the statement of financial position.
Trading Unit
Trading Unit
Trailer Fee
Fee that a mutual fund manager may pay
to the individual or organization that sold
the fund for providing services such as
investment advice, tax guidance and
financial statements to investors. The fee is
paid annually and continues for as long as
the investor holds shares in the fund.
Transaction Date
The date on which the purchase or sale of a
security takes place.
Transfer Agent
An agent, usually a trust company,
appointed by a corporation to maintain
shareholder records, including purchases,
sales, and account balances. The transfer
agent may also be responsible for
distributing dividend cheques
Treasury Bills
Short-term government debt issued in
denominations ranging from $1,000 to
$1,000,000. Treasury bills do not pay
interest, but are sold at a discount and
mature at par (100% of face value). The
difference between the purchase price and
par at maturity represents the lender’s
(purchaser’s) income in lieu of interest. In
Canada, such gain is taxed as interest
income in the purchaser’s hands.
Treasury Shares
Authorized but unissued stock of a
company or previously issued shares that
have been re-acquired by the corporation.
The amount still represents part of those
issued but is not included in the number of
shares outstanding. These shares may be
resold or used as part of the option package for management. Treasury shares do not
have voting rights nor are they entitled to
dividends
Trend
Shows the general movement or direction
of securities prices. The long-term price or
trading volume of a particular security is
either up, down or sideways.
Trust Deed (Bond Contract)
This is the formal document that outlines
the agreement between the bond issuer and
the bondholders. It outlines such things as
the coupon rate, if interest is paid
semi-annually and when, and any other
terms and conditions between both parties.
Trustee
For bondholders, usually a trust company
appointed by the company to protect the
security behind the bonds and to make
certain that all covenants of the trust deed
relating to the bonds are honoured. For a
segregated fund, the trustee administers
the assets of a mutual fund on behalf of the
investors.
TSX Venture Exchange
Canada’s public venture marketplace, the
result of the merger of the Vancouver and
Alberta Stock Exchanges in 1999.
Two-Way Security
A security, usually a debenture or preferred
share, which is convertible into or
exchangeable for another security (usually
common shares) of the same company. Also
indirectly refers to the possibility of
profiting in the future from upward
movements in the underlying common
shares as well as receiving in the interim
interest or dividend payments.
Underlying Security
The security upon which a derivative
contract, such as an option, is based. For
example, the ABC June 35 call options are
based on the underlying security ABC.
Underwriting
The purchase for resale of a security issue
by one or more investment dealers or
underwriters. The formal agreements
pertaining to such a transaction are called
underwriting agreements
Unemployment Rate
The percentage of the work force that is
looking for work but unable to find jobs.
Unifi ed Managed Account
A type of fee-based account that includes the same benefi ts as multi-disciplinary accounts. Enhancements include performance reports from the respective sub-advisors, outlining distinct models contained within the single custody account
Unit
Two or more corporate securities (such as
preferred shares and warrants) offered for
sale to the public at a single, combined
price.
Unit Value
The value of one unit of a segregated fund.
The units have no legal status, and are
simply an administrative convenience used
to determine the income attributable to
contract holders and the level of benefits
payable to beneficiaries.
Universal Market Integrity Rules
UMIR
A common set of trading rules that are
applied in all markets in Canada. UMIR
are designed to promote fair and orderly
markets.
Unlisted
A security not listed on a stock exchange
but traded on the over-the-counter market.
Valuation Day
The day on which the assets of a segregated
fund are valued, based on its total assets less
liabilities. Most funds are valued at the end
of every business day.
Value Manager
A manager that takes a research intensive
approach to finding undervalued securities.
Value Ratios
Financial ratios that show the investor the
worth of the company’s shares or the return
on owning them.
Variable Rate Preferreds
A type of preferred share that pays
dividends in amounts that fl uctuate to
refl ect changes in interest rates. If interest
rates rise, so will dividend payments, and
vice versa.
Variance
Another measure of risk often used
interchangeably with volatility. The greater
the variance of possible outcomes the
greater the risk.
Vested
The employee’s right to the employer
contributions made on his or her behalf
during the employee’s period of enrollment.
Volatility
A measure of the amount of change in the
daily price of a security over a specified
period of time. Usually given as the
standard deviation of the daily price
changes of that security on an annual basis.
Voting Right
The stockholder’s right to vote in the affairs
of the company. Most common shares have
one vote each. Preferred stock usually has
the right to vote only when its dividends
are in arrears. The right to vote may be
delegated by the shareholder to another
person. See also Proxy.
Voting Trust
An arrangement to place the control of a
company in the hands of certain managers
for a given period of time, or until certain
results have been achieved, by shareholders
surrendering their voting rights to a trustee
for a specified period of time.
Waiting Period
The period of time between the issuance of
a receipt for a preliminary prospectus and
receipt for a fi nal prospectus from the
securities administrators
Warrant
A certifi cate giving the holder the right to
purchase securities at a stipulated price
within a specifi ed time limit. Warrants are
usually issued with a new issue of securities
as an inducement or sweetener to investors
to buy the new issue
Working Capital
Current assets minus current liabilities.
This figure is an indication of the
company’s ability to meet its short-term
debts.
Working Capital Ratio
Current assets of a company divided by its
current liabilities.
Wrap Account
Also known as a wrap fee program. A type
of fully discretionary account where a single
annual fee, based on the account’s total
assets, is charged, instead of commissions
and advice and service charges being levied
separately for each transaction. The account
is then managed separately from all other
wrap accounts, but is kept consistent with a
model portfolio suitable to clients with
similar objectives
Writer
The seller of either a call or put option.
The option writer receives payment, called
a premium. The writer in then obligated to
buy (in the case of a put) or sell (in the case
of a call) the underlying security at a
specifi ed price, within a certain period of
time, if called upon to do so
Yield – Bond & Stock
Return on an investment. A stock yield is
calculated by expressing the annual
dividend as a percentage of the stock’s
current market price. A bond yield is more
complicated, involving annual interest
payments plus amortizing the difference
between its current market price and par
value over the bond’s life. See also Current
Yield
Yield Curve
A graph showing the relationship between
yields of bonds of the same quality but
different maturities. A normal yield curve
is upward sloping depicting the fact that
short-term money usually has a lower yield
than longer-term funds. When short-term
funds are more expensive than longer term
funds the yield curve is said to be inverted.
Yield to Maturity
The rate of return investors would receive if
they purchased a bond today and held it to
maturity. Yield to maturity is considered a
long term bond yield expressed as an annual
rate
Yield Spread
The difference between the yields on two
debt securities, normally expressed in basis
points. In general, the greater the difference
in the risk of the two securities, the larger
the spread
Zero Coupon Bonds
See Strip Bonds
