vocab 1 Flashcards
Accounts payble
Money owed by a company for goods or services puchased, payable within one year. A surrent liability on the balance sheet.
Acounts receivable
money owed to a company for goods or sevices it has sold, for which payment is accepted within one year. A current asset on the balance sheet.
Accredited investor
An individual or institutional investor who meets certain minimum requirements in income, net worth or investment knowlege. Also reffered to as a sophisticated investor.
Accrued interest
interest accumulated on a bond or debenture since the last interest date.
adjusted cost base
the deemed cost of an asset representing the sum of the amount originally paid plus any additionsl cost, such as brokerage fees and commissions
Advance-decline line
A tool used in technical analaysis to measure the breadth of the market. The analyst takes difference between the number of stocks that increased in value each day less the number that has decreased.
affiliated company
A company with less than 50% of its shares owned by another corporation, or one whose srock, with that of another company, is owned by the same controlling interest.
After aquired clause
Aprotective clause found in a bonds indenture or contract that binds the bond issuer to pledging all subsequently purchased assets as part of the collateral for a bond issue.
Agent
An investment dealer operates as an agent when it acts on behalf of a buyer or a seller of a security and does not itself own title to thye securities at any time during the transaction.
Allocation
The administrative procedure by which income generated by the segregated fund’s investment portfolio is flowed through to the individual contractholders of the fund.
All or none order (AON order)
A type of order in whereby the trader must execute the total numbers of shares as specified by the number on the order before the client will recieve a fill.
Any part order
A type of order in which the client will accept all stock in odd, broken or board lots up to the full amount of the order.
Alpha
A statistical measure of the value a fund manager adds to the performance of the fund managed. If alpha is positive, the manager has added value to the portfolio. If the alpha is negative, the manager has underperformed the market.
Alternative trading systems (ATS)
Privately-owned computerized networks that match orders for securities outside of recognized exchange facilities. Also reffered to as Proprietary Electronic Trading Systems(PETS) or Non-SRO- Operated Trading Systems (NETS)
American option
An option that can be exercised at any time during the option’s lifetime.
Amortization
Gradually writing off the value of an intangible asset over a period of time. Commonly applied to items such as goodwill, improvements to leased premises, or expenses of a new stock or bond issue.
Annual Information form (AIF)
A document which contains information, requires by law, which is not included in a mutual fund or other company’s simplified prospectus or annual financial statements. Investors do not have to be given a copy of the AIF but the prospectus must state that it is available on request.
Annual Report
The formal financial statement and report on operations issued by a company to its shareholders after its fiscal year end.
Annuitant
Person on whose life the maturity and death benefit guarantees are based. It can be the contract holder or someone else designated by the contract holder. In registered plans, the annuitant and contract holder must be the same person.
Annuity
A contract usually sold by life insurance companies that guarantees an in come to the beneficiary or annuitant at some time in the future .The income stream can be very flexible. The original purchase price may be either a lump sum or a stream of payments.
Arbitrage
The simultaneous purchase of a security on one stock exchange and the sale of the same security on another exchange at prices which yield a profit to the arbitrageur.
Arbitration
A method of dispute resolution in which an independant arbitrator is chosen to assist aggrieved parties to recover damages.
Arrears
Interest or dividends that were not paid when due but are still owed. For example, dividends owed but not paid to cumulative preferred shareholders accumulate in a seperate account(arrears). When payment resume, dividends in arrears must be paid to the preferred shareholders before the common shareholders.
Ask
The lowest price a seller will accept for the financial instrument being quoted.
Assets
Everything a company or a person owns or has owed to it. A balance sheet category.
Asset allocation
Apportioning investment funds among different categories of assets, such as cash, fixed income securities and equities. The allocation of assets is built around an investor’s risk tolerance.
Asset mix
The percentage distribution of assets in a portfolio among the three major asset classes; cash and equivalents, fixed income and equities.
Assignment
The random process by which the clearing corporations allocated the exercise of an option to a members firm. A client of that member firm is then chosen to fulfil the obligation taken on when the option was written, by; in the case of a put, purchasing the underlying security from the put holder; or, in the case of a call, delivering the inderlying security to the call holder.
At-The-Money
An option with a strike price equal to ( or almost equal to) the market price of the underlying security.
Attribution Rules
A Canada custom and revenue agency rule stating that an investor cannot avoid paying taxes at their marginal rate by transferring assets to other family members who have lower personal tax rates.
Auction market
Auction in which securities are bought and sold by brikers acting as agents for their clients, in contrast to a dealer market ehere teades are conducted over-the-counter. For example the Toronto stock exchange is an auction market.
Auction preferred shares
A type of preferred share that offers a dividend rate determined by an auction between the holder and the issuer.
Audit
A professional review and examination of a company’s financial statement required under corporate law for the purpose of ensuring that the statements are fair, consistent and conform with Generally Accepted Accounting Principles (GAAP)
Authorized shares
The maximum number of commom (or preferred) shares that a corporation may issue under the terms of its charter.
Automatic Stabilizers
Elements in the economy which mitigate the extremes of the business cycle by running counter to it. Example; government payouts for unemployment insurance in recessionary periods.
Averages
A statistical tool used to measure the direction of the market. The most common average is the Dow Jones industrial average.
Back-end load
A sale charge applied on the redemption of a mutual fund.
Balance of payments
Canada’s interaction with the rest of the world which are captures in both the current and capital accounts. The balance of payments is divided into two components ; the current account and the capital account.
Balance sheet
A financial statement showing a company’s assets, liabilities and shareholders equity on a given date.
Balloon
In some seriel bond issues or mortgages an extra large amount may mature in the final year of the series - the “balloon” payment.
