T, U, V, W, Y, Z

Question 1

T3 Form

Answer 1

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.

Question 2

T4 Form

Answer 2

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

Question 3

T5 Form

Answer 3

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.

Question 4

Tactical Asset Allocation

Answer 4

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

Question 5

Takeover Bid

Answer 5

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

Question 6

Tax Free Savings Account (TFSA)

Answer 6

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TFSA, and the money withdrawn can be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.

Question 7

Tax Loss Selling

Answer 7

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.

Question 8

Technical Analysis

Answer 8

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

Question 9

Term to Maturity

Answer 9

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.

Question 10

Thin Market

Answer 10

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.

Question 11

Tilting of the Yield Curve

Answer 11

The yield curve that results from a decline
in long-term bond yields while short-term
rates are rising.

Question 12

Time to Expiry

Answer 12

The number of days or months or years
until expiry of an option or other derivative
instrument.

Question 13

Time Value

Answer 13

The amount, if any, by which the current
market price of a right, warrant or option
exceeds its intrinsic value.

Question 14

Time-Weighted Rate of Return

TWRR

Answer 14

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.

Question 15

Timely Disclosure

Answer 15

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.

Question 16

Tombstone Advertisements

Answer 16

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.

Question 17

Top-Down Approach

Answer 17

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

Question 18

Toronto Stock Exchange (TSX)

Answer 18

The largest stock exchange in Canada with
over 1,700 companies listed on the
exchange

Question 19

Trade Payables

Answer 19

Money owed by a company for goods or
services purchased, payable within one year.
A current liability on the statement of
financial position.

Question 20

Trade Receivables

Answer 20

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.

Question 21

Trading Unit

Answer 21

Trading Unit

Question 22

Trailer Fee

Answer 22

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.

Question 23

Transaction Date

Answer 23

The date on which the purchase or sale of a

security takes place.

Question 24

Transfer Agent

Answer 24

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

Question 25

Treasury Bills

Answer 25

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.

Question 26

Treasury Shares

Answer 26

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

Question 27

Trend

Answer 27

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.

Question 28

Trust Deed (Bond Contract)

Answer 28

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.

Question 29

Trustee

Answer 29

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.

Question 30

TSX Venture Exchange

Answer 30

Canada’s public venture marketplace, the
result of the merger of the Vancouver and
Alberta Stock Exchanges in 1999.

Question 31

Two-Way Security

Answer 31

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.

Question 32

Underlying Security

Answer 32

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.

Question 33

Underwriting

Answer 33

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

Question 34

Unemployment Rate

Answer 34

The percentage of the work force that is

looking for work but unable to find jobs.

Question 35

Unifi ed Managed Account

Answer 35

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

Question 36

Unit

Answer 36

Two or more corporate securities (such as
preferred shares and warrants) offered for
sale to the public at a single, combined
price.

Question 37

Unit Value

Answer 37

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.

Question 38

Universal Market Integrity Rules

UMIR

Answer 38

A common set of trading rules that are
applied in all markets in Canada. UMIR
are designed to promote fair and orderly
markets.

Question 39

Unlisted

Answer 39

A security not listed on a stock exchange

but traded on the over-the-counter market.

Question 40

Valuation Day

Answer 40

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.

Question 41

Value Manager

Answer 41

A manager that takes a research intensive

approach to finding undervalued securities.

Question 42

Value Ratios

Answer 42

Financial ratios that show the investor the
worth of the company’s shares or the return
on owning them.

Question 43

Variable Rate Preferreds

Answer 43

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.

Question 44

Variance

Answer 44

Another measure of risk often used
interchangeably with volatility. The greater
the variance of possible outcomes the
greater the risk.

Question 45

Vested

Answer 45

The employee’s right to the employer
contributions made on his or her behalf
during the employee’s period of enrollment.

Question 46

Volatility

Answer 46

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.

Question 47

Voting Right

Answer 47

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.

Question 48

Voting Trust

Answer 48

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.

Question 49

Waiting Period

Answer 49

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

Question 50

Warrant

Answer 50

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

Question 51

Working Capital

Answer 51

Current assets minus current liabilities.
This figure is an indication of the
company’s ability to meet its short-term
debts.

Question 52

Working Capital Ratio

Answer 52

Current assets of a company divided by its

current liabilities.

Question 53

Wrap Account

Answer 53

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

Question 54

Writer

Answer 54

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

Question 55

Yield – Bond & Stock

Answer 55

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

Question 56

Yield Curve

Answer 56

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.

Question 57

Yield to Maturity

Answer 57

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

Question 58

Yield Spread

Answer 58

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

Question 59

Zero Coupon Bonds

Answer 59

See Strip Bonds