COMPLETE STOCK MARKET DICTNOARY

PRESENTED TO YOU BY

VINOD SHARES LTD.

A A Nasdaq stock symbol specifying that the stocks are Class "A" shares of the company A Priori Probability Probability calculated by logically examining exist ing information. A Ton Of Money A slang term used to describe a significant amount of money. The amount implied typically depends on the person, company or situation. A-Share In a family of multi-class mutual funds , this is the class that is characterized by a fron t load structure. Not all fund companies follow this class structure however, it is the prominent method of distinction AAA The highest rating given on bonds by bond rating ag encies Abandonment 1. The act of surrendering a claim to, or interest in, a particular asset. 2. The permitted withdrawal from a forward contract that is made for the purchase of deliverable securities. 3. The act of allowing an option to expire unexerci sed. Abandonment Option A clause granting parties the option of withdrawing from the contract before the fulfillment or completion of all contractual duties. This clause a dds value by giving the parties the ability to end the obligation if it is unprofitable. A type of "real option Abandonment Value The value of a project or asset if it were immediat ely liquidated. Also referred to as the liquidation value. Abatement In general, a decrease in the amount of taxation fa ced by an individual or company Abatement Cost A cost borne by many businesses for the removal and /or reduction of an undesirable item that they have created. Abatement costs are generally incurre d when corporations are required to reduce possible nuisances or negative byproducts created d uring production. ABC Agreement An agreement made between a purchasing member with a seat on the NYSE and the firm in which he or she works. With the approval of the NYSE, this a greement stipulates that the employee of the firm

may: a) transfer the seat to another employee of the fir m b) retain ownership and purchase a new seat for ano ther individual designated by the firm c) sell the seat and transfer any gains to the firm . Ability to Pay The principle that taxes should vary according to a n individual's level of wealth or income. Abnormal Return When the return on an asset or security is in exces s of the expected rate of return. Above the Market An order to buy or sell at a price set higher than the current market price of the security. Examples of above the market orders include: a limit order t o sell, a stop order to buy, or a stop-limit order to buy Above Water The condition of an asset's actual value when it is greater than the asset's book value Absolute Advantage The ability of a country, individual, company, or r egion to produce a good or service at a lower cost per unit than the cost at which any other entity pr oduces that good or service. Absolute Breadth Index - ABI A market indicator used to determine volatility lev els in the market without factoring in price direction. It is calculated by taking the absolute value of the difference between the number of advancing issues and the number of declining issues . Typically, large numbers suggest volatility is increasing which is likely to cause significant cha nges in stock prices in the coming weeks Absolute Priority The principle in bankruptcy proceedings that requir es senior creditors to be fully paid before junior creditors and stockholders may receive any payment. Also known as 'liquidation preference' Absolute Rate The fixed portion of an interest-rate swap , expressed as a percentage rather than as a premiu m or a discount to a reference rate. Absolute Return The return that an asset achieves over a period of time. This measure simply looks at the appreciation or depreciation (expressed as a percen tage) that an asset - usually a stock or a mutual fund - faces over a period of time. Absolute return differs from relative return because it is concerned with the return of the asset being looked at and does not compare it to any other measure Absorbed 1. In a general business sense, when a cost is trea ted as an expense instead of being passed on to the customer in the form of higher prices. 2. In underwriting, when an issue has been complete ly sold to the public. 3. In mergers, when an acquired firm is folded into the acquiring company. Accelerated Cost Recovery System - ACRS A system of depreciation introduced by the Economic Recovery Tax Act of 1981. ACRS depreciation is based on recovery periods instead of useful life . These periods were predetermined by the IRS. Accelerated Depreciation Any method of depreciation used for accounting or i ncome tax purposes that allows greater deductions in the earlier years of the life of an a sset. Acceleration Covenant

A clause included in certain debt securities and sw ap agreements stating that the immediate collection of payment and termination of contract w ill take place should default or a downgrade of debt occur. Accident And Health Benefits Fringe benefits provided to employees for sickness, accidental injury, or accidental death. These benefits include payment of hospital and medical ex penses as well as income payments. Account 1. An arrangement by which an organization accepts a customer's financial assets and holds them on behalf of the customer at his or her discretion. 2. A statement summarizing the record of transactio ns in the form of credits, debits, accruals and adjustments that have occurred and have an affect o n an asset, equity , liability or past, present or future revenue. 3. A relaying of happenings from one party to anoth er. Account Balance The net of debits and credits for an account at the end of a reporting period. Accountable Plan A plan for reimbursing employees for business expen ses. Under this plan, the reimbursement that the employee receives for the expenses is not inclu ded in his/her income. Employees are required to account adequately for expenses with records and re turn any excess reimbursement within a reasonable period of time. Accountant A professional person who performs accounting funct ions. Accountant's Opinion A statement signed by an independent accountant out lining his or her opinion regarding the quality of information contained in a company's financial r eports and records Accounting To provide a record such as funds paid or received for a person or business. Accounting summarizes and submits this information in reports and statements. The reports are intended both for the firm itself and for outside parties. Accounting Earnings A company's earnings as reported in the income stat ement. Accounting Method In terms of taxation, the method by which income an d expenses are determined for taxation purposes. Accounting Noise The effect of complex and extensive accounting rule s that regulate financial statement reporting and are thought to distort a company's true operating p erformance Accounting Period 1. In general, the time period reflected by a set o f financial statements. 2. In terms of taxation, it is the 12-month period a taxpayer uses to determine his or her income tax. Accounting Profit A company's total earnings, calculated according to Generally Accepted Accounting Principles (GAAP), and includes the explicit costs of doing bu siness, such as depreciation, interest and taxes.

Accounting Rate of Return - ARR ARR provides a quick estimate of a project's worth over its useful life. ARR is derived by finding profits before taxes and interest Accounts Payable - AP An accounting entry that represents an entity's obl igation to pay off a short-term debt to its creditors. The accounts payable entry is found on a balance sheet under the heading current liabilities. Accounts payable are often referred to as "payables ". Another common usage of AP refers to a business dep artment or division that is responsible for making payments owed by the company to suppliers an d other creditors. Accounts Payable Turnover Ratio A short-term liquidity measure used to quantify the rate at which a company pays off its suppliers. Accounts payable turnover ratio is calculated by ta king the total purchases made from suppliers and dividing it by the average accounts payable amount during the same period. Accounts Receivable - AR Money owed by customers (individuals or corporation s) to another entity in exchange for goods or services that have been delivered or used, but not yet paid for. Receivables usually come in the form of operating lines of credit and are usually due wi thin a relatively short time period, ranging from a few days to a year. On a public company's balance sheet, accounts recei vable is often recorded as an asset because this represents a legal obligation for the customer to remit cash for its short-term debts Accounts Receivable Financing A type of asset-financing arrangement in which a co mpany uses its receivables - which is money owed by customers - as collateral in a financing ag reement. The company receives an amount that is equal to a reduced value of the receivables pledged . The age of the receivables have a large effect on the amount a company will receive. The older the receivables, the less the company can expect. Also referred to as "factoring". Accredited Investor A term used by the Securities and Exchange Commissi on (SEC) under Regulation D to refer to investors who are financially sophisticated and hav e a reduced need for the protection provided by certain government filings. Also known as "qualified purchaser Accreting Principal Swap A swap whereby the notional value is increasing ove r time. Accretion 1. Asset growth through addition or expansion. 2. In reference to discount bonds, it describes the accumulation of value until maturity Accretive Acquisition An acquisition that will increase the acquiring com pany's EPS Accrual Accounting An accounting method that measures the performance and position of a company by recognizing economic events regardless of when cash transaction s occur. The general idea is that economic events are recognized by matching revenues to expen ses (the matching principle) at the time in which the transaction occurs rather than when payme nt is made (or received). This method allows the current cash inflows/outflows to be combined wi th future expected cash inflows/outflows to give a more accurate picture of a company's current fina ncial condition. Accrual accounting is considered to be the standard accounting practice for most companies, with the exception of very small operations. This method provides a more accurate picture of the

company's current condition, but its relative compl exity makes it more expensive to implement. This is the opposite of cash accounting, which recognize s transactions only when there is an exchange of cash. Accruals Accounts on a balance sheet that represent liabilit ies and non-cash-based assets used in accrual-based accounting. These accounts include, among man y others, accounts payable, accounts receivable, goodwill, future tax liability and futu re interest expense. Accrued Expense An accounting expense recognized in the books befor e it is paid for. It is a liability, usually curren t. These expenses are typically periodic and documente d upon a company's balance sheet due to the high probability of collection. Accrued Interest The interest that has accumulated on a bond since t he last interest payment up to, but not including, the settlement date. There are two methods for calculating accrued inter est: 1. 360-day year method, used for corporate and muni cipal bonds 2. 365-day year method, used for government bonds Accrued Market Discount The gain in the value of a discount bond expected f rom holding it for any duration until its maturity. Accumulated Earnings Tax A tax imposed by the federal government upon compan ies with retained earnings deemed to be unreasonable and in excess of what is considered or dinary. Accumulation 1) In the context of individual investing, it is th e process of contributing cash to invest in securit ies over a period of time in order to build a portfolio of desired value. Dividends and capital gains are also reinvested during this process. 2) In institutional investing, it is the action of a large investor buying up many shares of a public company over an extended period of time. 3) In corporate finance, the retention of company p rofits for reinvestment in business operations, as opposed to the payout of earnings as dividends to s hareholders. Accumulation Phase 1. A period of time when an annuity investor is in the early stages of building up the cash value of the annuity. This is followed by the annuitization phase where payments are paid out to the annuitant. 2. The period of time when an investor builds up th e value of their investment through savings. Accumulation Plan 1) A general financial strategy in which an investo r attempts to build the value of their portfolio to a desired size. 2) In the context of mutual funds, a formal arrange ment in which the investor contributes a specified amount of money to the fund on a periodic basis. By doing so, the investor accumulates a larger and larger investment in the fund through their contrib utions and the growth of the fund itself Accumulation Unit 1) In the case of a variable annuity, a measurement of the value invested in the account during the accumulation period of the contract. The more funds you contribute to your annuity account, the more accumulation units you will build. 2) In the case of a unit trust, a type of investmen t structure where the trust's income is directly reinvested into the trust, instead of being paid ou t as cash to the investor. Accumulation/Distribution

A momentum indicator which tries to gauge supply an d demand by discovering if investors are generally "Accumulating" (buying) or "Distributing" (Selling) a certain stock by identifying divergences between stock price and volume flow. It is calculated using the following formula: Acc/Dist = ((Close - Low) - (High - Close)) / (High - Low) * Period's volume Accumulation/Distribution (Acc/Dis TM) Rating Exclusive rating in Investor's Business Daily . One of the IBD SmartSelect® Corporate Ratings, it tracks the relative degree of institutional buying (accumulation) and selling (distribution) in a particular stock over the last 13 weeks. Updated da ily, stocks are rated on an A+ to E scale. A = Heavy buying B = Moderate buying C = Equal amount of buying and selling D = Moderate selling E = Heavy selling The rating is enhanced by "+" and "-" signs to show additional detail on institutional activity; a "B+ " indicates greater accumulation than a "B" rating, w hereas a "B-" indicates less accumulation than a "B" rating, and so on. Acid-Test Ratio A stringent test that indicates whether a firm has enough short-term assets to cover its immediate liabilities without selling inventory. The acid-tes t ratio is far more strenuous than the working capi tal ratio, primarily because the working capital ratio allows for the inclusion of inventory assets. Calculated by: Acquisition When one company purchases a majority interest in t he acquired Acquisition Debt Debt incurred to construct, improve or acquire a pr incipal or secondary residence Acquisition Fee Charges and commissions paid out for the selection or purchase of property. Some examples are real estate commission, acquisition expense, and de velopment/construction fees. Acquisition Premium The difference between the actual cost for acquirin g a target firm versus the estimate made of its value before the acquisition Across The Board A market-wide directional movement. In other words, a market condition in which most stocks and sectors are moving in the same direction. These mov ements are usually caused by market-wide events. Act of God Bond A bond issued by an insurance company, linking prin cipal and interest to the company's losses due to natural disasters Active Bond A term used to describe fixed-income securities tha t trade frequently on the floor of the NYSE. Active Bond Crowd The name given to members of the NYSE and their spe cific bond trading departments that are acknowledged as frequent traders in active bonds. Active Box This refers to the physical location in a brokerage where securities are kept

Active Income Income for which services have been performed. This includes wages, tips, salaries, commissions and income from businesses in which there is materi al participation.

Active Investing An investment strategy involving ongoing buying and selling actions of th e investor. Active investors will purchase investments and continuousl y monitor their activity in order to exploit profitable conditions Active Management An investing strategy that seeks returns in excess of a specified benchm ark. Active-Participant Status Active-participant status is a reference to an indi vidual's participation in an employer sponsored retirement plan. The plans which qualify include: 1.Qualified plans, such as profit sharing plans, de fined benefit plans, money purchase pension or target benefit plans and 401(k) plans 2. SEP IRAs 3. SIMPLE IRAs 4. 403(b) plans 5. Qualified annuity plans 6. Employee Funded Pension Trusts (created before J une 25, 1959) 7. A plan established for its employees by the Unit ed States, by a State or political subdivision of t he United States, or by an agency or instrumentality o f the United States or any of its subdivisions Activities of Daily Living - ADL Routine activities that people tend do everyday wit hout needing assistance. There are six basic ADLs: eating, bathing, dressing, toileting, transfe rring (walking) and continence. An individual's ability to perform ADLs is important for determinin g what type of long-term care (e.g. nursing-home care or home care) and coverage the individual need s (i.e. Medicare, Medicaid or long-term care insurance Activity Based Budgeting - ABB A method of budgeting in which activities that incu r costs in each function of an organization are established and relationships are defined between a ctivities. This information is then used to decide how much resource should be allocated to each activ ity. Activity Based Management - ABM Using an activity-based costing system to improve t he operations of an organization. Activity Ratio Accounting ratios that measure a firm's ability to convert different accounts within their balance sheets into cash or sales Actual Return The actual gain or loss of an investor. This can be expressed in the following formula: expected return (ex-ante) plus the effect of firm-specific a nd economy-wide news. Actuals 1. A term used to describe the underlying in future and forward contracts, dealing with commodities rather than financial instruments. 2. A term used to describe a securities historical volatitity.

Actuarial Analysis The analysis of an investment's risk done by an act uary. Actuarial Risk The risk that the assumptions that actuaries implem ent into a model to price a specific insurance policy may turn out wrong or somewhat inaccurate. Possible assumptions include the frequency of losse s, severity of losses and the correlation of losses between contracts. Also known as "insurance risk". Actuary A professional statistician working for an insuranc e company. They evaluate your application and medical records to project how long you will live. Ad Valorem Tax A tax based on the assessed value of real estate or personal property. In other words, ad valorem taxes can be property tax or even duty on imported items. Property ad valorem taxes are the major source of revenues for state and municipal governme nts Adaptive Expectations Hypothesis A hypothesis stating that individuals make investme nt decisions based on the direction of recent historical data, such as past inflation rates, and adjust the data (based on their expecta tions) to predict future rates. Add-On Certificate of Deposit A certificate of deposit that allows the bearer to deposit additional funds, after the initial purchas e date, that will bear the same rate of interest. Adding To A Loser The action of a trader/investor increasing a positi on in an asset when its price is heading in the direction that's opposite to what the investor/trad er desires. This is generally not a wise investment decision because unless the asset begins to move in the desired direction, the investor's losses will increase ADF In currencies, this is the abbreviation for the And orran Franc Adjustable-Rate Mortgage - ARM A mortgage that allows adjustments of the loan inte rest rate at pre-specified regular intervals. Adjustable-Rate Preferred Stock - ARPS A type of preferred stock where the dividends issue d will vary with a benchmark, most often a T-bill rate. The value of the dividend from the preferred share is set by a predetermined formula to move with rates, and because of this flexibility preferr ed prices are often more stable then fixed-rate preferred stocks. Adjusted Balance Method A finance/accounting method where costs are based o n the amount(s) owing at the end of the current time period (once credits and payments are posted). Adjusted Basis The proportionate value of an asset or security tha t reflects any deductions taken on, or capital improvements to the asset or security Adjusted Cost Base - ACB An income tax term that refers to the change in an asset's book value resulting from improvements, new purchases, sales, payouts, or other factors.

Adjusted Debit Balance The amount of money owed by a customer to his/her b roker after paper profits and losses are taken into consideration. Adjusted Exercise Price 1. An option's strike price after adjustments have been made for stock splits to its underlying security. 2. A term used to describe the strike prices for op tions written on Ginnie Mae pass through certificates. Adjusted Funds From Operations - AFFO A financial performance measure primarily used in t he analysis of real-estate income trusts (REITs). The AFFO of a REIT, though subject to varying metho ds of computation, is generally equal to the trust's funds from operations (FFO) with adjustment s made for recurring capital expenditures used to maintain the quality of the REIT's underlying as sets. The calculation takes in the adjustment to GAAP straight-lining of rent, leasing costs and oth er material factors. Adjusted Gross Income - AGI Used to determine how much of your income is taxabl e. AGI consists of gross income from taxable sources minus your maximum allowable adjustments Adjusted Present Value - APV The Net Present Value (NPV) of a project if finance d solely by equity plus the Present Value (PV) of any financing benefits (the additional effects of d ebt). Adjustment Bond Issued by a corporation during a restructuring phas e, an adjustment bond is given to the bondholders of an outstanding bond issue prior to t he restructuring. The debt obligation is consolidated and transferred from the outstanding b ond issue to the adjustment bond. This is effectively a recapitalization of the company's out standing debt obligations, which is accomplished by adjusting the terms (such as interest rates and lengths to maturity) to increase the likelihood tha t the company will be able to meet its obligations Adjustment Frequency How often the interest rate changes or resets on an adjustable-rate mortgage. Different adjustable-rate mortgages have different adjustment frequencie s. Typically, the adjustment frequency is once a year, but it can be as often as once a month or as infrequent as once every five years Adjustment in Conversion Terms A term used to describe the adjustment made to a co nvertible securities' conversion factor when the exchangeable stock underlying the convertible under goes a split Adjustment Index A modification made to a piece of numerical data, o r a set of numerical data, by a product of some type of a mathematical formula. There are a number of different types of adjustment indices, ranging in scale and purpose from mortgage rate adjustment to handicapping a golfer's score Administrator 1. A person empowered by a court to act for another person who is deemed incapable of acting for himself/herself. 2. Under the Uniform Securities Act, an entity that enforces the rules and regulations, including registration requirements and post-registration req uirements, of investment advisory professionals. Adoption Credit A per-child tax credit for adopting a child under 1 8.

ADV Form A form that is kept on file with the Securities & E xchange Commission that contains critical financial information about a registered investment advisor ( RIA). Advance Directive A document expressing a person's wishes about criti cal care when he or she is unable to decide for him or herself. However, it does not authorize anyo ne to act on a person's behalf or make decisions the way a power of attorney would Advance Rate A percentage of collateral that determines the loan amount that a lender will issue a company. Advance Refunding 1. A bond issuance used to pay off another outstand ing bond. The new bond will often be issued at a lower rate than the older outstanding bond. 2. A bond issuance in which new bonds are sold at a lower rate than outstanding ones. The proceeds are then invested, and when the older bond s become callable they are paid off with the invested proceeds. Advance/Decline Index A technical analysis tool that represents the total difference between the number of advancing and declining security prices. This index is considered one of the best indicators of market movements as a whole. Stock indexes such as the Dow Jones Ind ustrial Average only tell us the strength of 30 stocks, whereas the advance/decline index can provi de much more insight into the movements of the market. Advance/Decline Line - A/D A technical indicator that plots changes in the val ue of the advance-decline index over a certain time period. Each point on the chart is calculated by ta king the difference between the number of advancing/declining issues and adding the result to the previous period's value, as shown by the following formula: A/D Line = (# of Advancing Stocks - # of Declining Stocks) + Previous Period's A/D Line Value Adverse Opinion A professional opinion made by an auditor indicatin g that a company's financial statements are misrepresented, misstated, and do not accurately re flect its financial performance and health. Adverse Selection 1. The tendency of those in dangerous jobs or high risk lifestyles to get life insurance . 2. A situation where sellers have information that buyers don't (or vice versa) about some aspect of product quality. Advisor A person or company responsible for making investme nts on behalf of, and/or providing advice to, investors. AED In currencies, this is the abbreviation for the U.A .E. Dirham AFA In currencies, this is the abbreviation for the Afg hanistan Afghani Affiliate A type of inter-company relationship in which one o f the companies owns less than a majority of the other company's stock, or a type of inter-company r elationship in which at least two different companies are subsidiaries of a larger company.

Affiliated Companies A situation that occurs when one company owns a min ority interest (less than 50%) in another company. Also refers to companies that are related to each o ther in some way. Affiliated Person An individual who is in a position to influence the actions of a corporation. This includes people such as directors, executives, and owners. Affinity Fraud A type of investment scam in which a con artist tar gets members of an identifiable group based on things such as race, age, religion, etc. The frauds ter either is, or pretends to be, a member of the group. Often the fraudster will be promoting a ponz i or pyramid scheme. Affirmative Obligation An obligation of NYSE specialists to enter the mark et on a particular security (either by posting or bidding and ask) when there is not sufficient marke t demand and supply to efficiently match orders After Tax Operating Income - ATOI A company's total operating income after taxes. Thi s non-GAAP measure excludes any after- tax benefits or charges such as effects from accounting changes . After The Bell After the close of the stock market After-Acquired Clause A provision included in legal contracts ensuring th at subsequent acquisitions of assets will be included in the debtors liability to the lender. After-Hours Market Close The last transaction and final price of a security that is traded in the after-hours market. The after -hours market is generally more volatile than the re gular market, but it can give investors an idea of what to expect at the start of trading the next day . Also referred to as "after-hours close After-Hours Trading - AHT Trading after regular trading hours on the major ex changes. Also known as the "after-hours market". After-Tax Profit Margin A financial performance ratio, calculated by dividi ng net income after taxes by net sales. A company's after-tax profit margin is important beca use it tells investors the percentage of money a company actually earns per dollar of sales. This ra tio is interpreted in the same way as profit margin - the after-tax profit margin is simply more string ent because it takes taxes into account. Against Actual A transaction generally used by two hedgers who wan t to exchange futures for cash positions. Aged Fail A fail that has occurred between two or more partie s to a securities transactions and has lasted for over 30 days

Agency Bond A bond issued by a government-sponsored agency. The se bonds carry an AAA credit rating from Standard & Poor’s (the highest). Agency Costs The costs resulting from an agent performing servic es for a principal. Agency Cross A trade that has only one agent acting for the buye r and seller. Also known as Dual Agency Agency Problem A conflict of interest arising between creditors, s hareholders and management because of differing goals. Agency Security Low risk debt obligations issued by enterprises tha t the U.S. Government sponsors Agency Theory A theory concerning the relationship between a prin cipal (shareholder) and an agent of the principal (company's managers). Agent 1. An individual or firm that places securities tra nsactions for clients. 2. A person licensed by a state to sell insurance. 3. A securities salesperson who represents a broker -dealer or issuer when selling or trying to sell securities to the investing public. Aggregate Demand The total amount of goods and services demanded in the economy at a given overall price level and in a given time period. It is represented by the ag gregate-demand curve, which describes the relationship between price levels and the quantity of output that firms are willing to provide. Normally there is a negative relationship between a ggregate demand and the price level. Also known as "total spending". Aggregate Exercise Price The strike price of a put or call option multiplied by its contract size. Aggregate exercis e prices are used to determine the dollar amount required should the option be exercised. Aggregation 1. Used in corporate financial planning, aggregatio n is a process whereby a number of a firm's smaller projects are combined and treated as an ind ividual project. 2. Used in futures markets , aggregation is a principal involving the combinat ion of all future positions owned or controlled by a single trader or group of traders. Aggregate Supply The total supply of goods and services produced wit hin an economy at a given overall price level in a given time period. It is represented by the aggre gate-supply curve, which describes the relationship between price levels and the quantity of output that firms are willing to provide. Normally, there is a positive relationship between aggregate supply and the price level. Rising prices are usually signals for businesses to expand produc tion to meet a higher level of aggregate demand. Also known as "total output". Aggressive Accounting The practice of inappropriately misconstruing incom e statements for the purpose of pleasing investors and inflating stock prices.

Aggressive Growth Fund A mutual fund that attempts to achieve the highest capital gains . Investments held in these funds are companies that demonstrate high growth potential, u sually accompanied by a lot of share price volatility. These funds are only for non risk-avers e investors willing to accept a high risk-return trade-off. Also commonly referred to as a "capital appreciatio n fund" or "maximum capital gains fund". Aggressive Growth Funds A mutual fund that invests in small or emerging gro wth companies which seeks rapid growth of capital. Some may be heavily focused in one sector (i.e.-technology Aggressive Investment Strategy A method of portfolio management and asset allocation that attempts to achieve maxi mum return Aging A method used by accountants and investors to evalu ate and identify any irregularities within a company's account receivables. Aging is achieved by sorting and inspecting the accounts according to their length outstanding Air Pocket Stock When the price of a stock plunges unexpectedly, sim ilar to an airplane when it hits an air pocket Airbag Swap An interest rate swap whose notional value adjusts according to rising i nterest rates by indexing the floating portion to a Constant Maturity Swap (CMS

Alan Greenspan The former chairman of the Board of Governors of th e Federal Reserve System as well as the Federal Open Market Committee (FOMC), the Fed's pri ncipal monetary policymaking body. His tenure at the helm of the Fed lasted 18 years from 1987 until early 2006 when Ben Bernanke replaced him. He was first appointed to the post by then-pre sident Ronald Reagan and kept at the Fed's helm by successors George H.W. Bush, Bill Clinton and Pr esident George W. Bush. Algorithmic Trading A trading system that utilizes very advanced mathem atical models for making transaction decisions in the financial markets. The strict rules built in to the model attempt to determine the optimal time for an order to be placed that will cause the least amount of impact on a stock's price. Large blocks of shares are usually purchased by dividing the lar ge share block into smaller lots and allowing the complex algorithms to decide when the smaller block s are to be purchased. Alien Any person who is not a citizen of the country in w hich he or she lives Alimony Payments made to a spouse or former spouse under a separation or divorce agreement. ALL In currencies, this is the abbreviation for the Alb anian Lek. All Or None - AON A condition used on a buy or sell order to instruct the broker to fill the order completely or not at all. All Weather Fund A mutual fund that tends to perform well during all economic conditions. All-Holders Rule An SEC regulation that requires tender offers to be available to all holders of the identical class of the security. All-In Cost

Shorthand for "all-included" costs, which are expre ssed as the interest paid or received for total costs of a financial transaction. Alligator Property In real estate, when the cost of mortgage payments, property taxes, insurance and maintenance on a rental property is greater than the income it bring s in. If this situation is not corrected, it will e at up all of the owner's profit, leaving him or her with negative cash flow Alligator Spread A term referring to an unprofitable spread regardle ss of favorable market movements. This loss is due entirely to large commissions charged upon the transactions. Allonge A sheet of paper attached to a bill of exchange for the purpose of documenting endorsements Allotment During an IPO, this is the number of shares granted to each participating underwriting firm that they are permitted to sell. Remaining surpluses are then given to other firms which have won the bid for the right to sell the IPO. Allowance for Doubtful Accounts An estimation made by a company and documented on i ts balance sheet for receivables that might go uncollected. Alpha An expression of how much a stock would have apprec iated or depreciated on average on a daily basis over the last year, assuming the S&P 500 rema ined unchanged during the period. Alternative Asset A term referring to any non-traditional asset with potential economic value that would not be found in a standard investment portfolio. Due to the unco nventional nature of some of these investment assets, valuation may be a problem. Alternative Minimum Tax - AMT A tax calculation that adds certain tax preference items back into adjusted gross income. If AMT is higher than the regular tax liability for the year, the regular tax and the amount by which the AMT exceeds the regular tax are paid. Alternative Order A combination order whereby two separate orders are entered on the same security. The execution of one order cancels the other. Altman Z-Score A predictive model created by Edward Altman in the 1960s. This model combines five different financial ratios to determine the likelihood of ban kruptcy amongst companies. Amended Return A return filed in order to make corrections to a ta x return from a previous year. It can be used to correct errors and claim a more advantageous filing . American Callable Bond A bond that can be redeemed by the issuer at any ti me prior to its maturity. Usually a premium is paid to the bondholder when the bond is called American Currency Quotation A direct quotation in the foreign exchange markets whereby the value of the American dollar is

stated as a per-unit measure of a foreign currency. This type of quotation shows how much U.S. currency it takes to purchase one unit of foreign c urrency. American Depositary Receipt - ADR A negotiable certificate issued by a U.S. bank repr esenting a specified number of shares (or one share) in a foreign stock that is traded on a U.S. exchange. ADRs are denominated in U.S. dollars, with the underlying security held by a U.S. financi al institution overseas. ADRs help to reduce administration and duty costs that would otherwise be levied on each transaction. American Depositary Share - ADS A share issued under deposit agreement that represe nts an underlying security in the issuer's home country. American Option An option that can be exercised anytime during its life. The majority of exchange-traded options are American. American Stock Exchange - AMEX The third-largest stock exchange by trading volume in the United States. The AMEX is located in New York City and handles about 10% of all securiti es traded in the U.S Amortization 1. The paying off of debt in regular installments o ver a period of time. 2. The deduction of capital expenses over a specifi c period of time. Similar to depreciation, it is a method of measuring the consumption of the value of long-term assets like equipment or buildings Analyst A financial professional who has expertise in evalu ating investments and puts together buy, sell and hold recommendations on securities. Also known as a "financial analyst" or a "security analyst". Anchoring The use of irrelevant information as a reference fo r evaluating or estimating some unknown value or information. When anchoring, people base decisions or estimates on events or values known to them, even though these facts may have no bearing o n the actual event or value. Ancillary Revenue Revenue generated from goods or services that diffe r from or enhance the main services or product lines of a company. By introducing new products and services or using existing products to branch into new markets, companies create additional oppor tunities for growth. Andersen Effect A reference to auditors performing more careful due diligence when auditing companies, in order to prevent accounting errors. This extra level of acco unting scrutiny often leads to companies restating earnings even though they have not necessarily inte ntionally misrepresented material accounting information. Andrew's Pitchfork A technical indicator that uses three parallel tren dlines to identify possible levels of support and resistance. The trendlines are created by placing t hree points at the end of identified trends. This i s usually achieved by placing the points in three con secutive peaks or troughs. Once the points have been placed, a straight line is drawn from the firs t point that intersects the midpoint of the other t wo. Also known as "median line studies". ANG In currencies, this is the abbreviation for the Net herlands Antilles Guilder. Angel Bond

A slang term for investment-grade bonds. This is th e opposite of fallen angels, which are bonds that have a 'junk' rating Angel Investor A financial backer providing venture capital funds for small start-ups or entrepreneurs Ankle Biter Stock issues with a market capitalization worth les s than $500 million. Also known as "small cap" stocks. Annual An event that occurs once a year. Annual Addition The maximum dollar amount that may be contributed t o a participant's retirement account under a defined-contribution plan . Annual earnings A longer-term indicator of a company's growth. It c ommonly refers to a company's earnings per share for a particular year. Annual Equivalent Rate - AER Interest calculated under the assumption that inter est is paid and compounded per year

Annual General Meeting - AGM A mandatory yearly meeting of shareholders that all ows stakeholders to stay informed and involved with company decisions and workings. Annual Percentage Rate - APR The annual rate that is charged for borrowing (or m ade by investing), expressed as a single percentage number that represents the actual yearly cost of funds over the term of a loan. This includes any fees or additional costs associated wi th the transaction. Annual Percentage Yield - APY The effective annual rate of return taking into acc ount the effect of compounding interest. APY is calculated by: The resultant percentage number assumes that funds will remain in the investment vehicle for a full 365 days. Annual Report A corporation's annual statement of financial opera tions. Annual reports include a balance sheet, income statement, auditor's report, and a descripti on of the company's operations Annualize 1. To convert a rate of any length into a rate that reflects the rate on an annual (yearly) basis. Thi s is most often done on rates of less than one year, and usually does not take into account the effects of compounding. The annualized rate is not a guarantee but only an estimate, and its accuracy depends on the variance of the rate. This rate is a lso known as "annualized return" and is similar to "run rate". 2. To convert a taxation period of less than one ye ar to an annual (yearly) basis. This helps income earners to set out an effective tax plan and manage any tax implications Annuitant 1. A person who receives the benefits of an annuity or pension. 2. The person upon whom a life-insurance contract is based

Annuitization The process of converting an annuity investment int o a series of periodic income payments. Annuities may be annuitized regularly, over a long or short time period, or in some cases, in one single payment. Annuitization Method A type of annuity distribution structure that gives the annuitant periodic income payments for the rest of his or her life, or a specified period of t ime. This is different than the systematic withdraw al method, with which the annuitant chooses the amount he or she would like to receive each month, which he or she receives until the amount in the ac count runs out. Annuitization Phase The period when the annuitant starts to receive pay ments from the annuity. This period is after the accumulation phase where money is invested into the annuity. Annuity A series of fixed payments paid at regular interval s over the specified period of the annuity. The fixed payments are received after a period of inves tments that are made into the annuity. Annuity Contract The written agreement between an insurance company and a customer outlining each party's obligations in an annuity coverage agreement. This document will include the specific details of the contract, such as the structure of the annuity (var iable or fixed), any penalties for early withdrawal , spousal provisions such as a survivor clause and ra te of spousal coverage, and more. Annuity Due An annuity whose payment is to be made immediately, rather than at the end of the period. Annuity Unit An accumulation unit for which the annuitant has an nuitized their contract. This is a sub-account of the retiree's total accumulated annuity. These unit s represent a fixed share of ownership of the insurer's accounts portfolio. Anonymous Trading Visible bids and offers on the market without the i dentity of the bidder and seller being revealed Anti-Dilution Provision A provision in an option or a convertible security. It protects an investor from dilution resulting fr om later issues of stock at a lower price than the inv estor originally paid. Also known as an "anti-dilution clause". Anti-Greenmail Provision A special clause located within a firm's corporate charter that acts as a deterrence against the board of directors passing a share buy-back. Anti-Martingale System A system of position sizing that correlates the lev els of investment with the risk and portfolio size. Anti-Money Laundering - AML A set of procedures, laws or regulations designed t o stop the practice of generating income through illegal actions. In most cases money launderers hid e their actions through a series of steps that make it look like money coming from illegal or unet hical sources was earned legitimately Anti-Reciprocal Rule A rule created by the National Association of Secur ities Dealers (NASD) to protect individual

investors from conflicts of interest that may arise when brokerage firms and mutual funds collaborate. Anti-Takeover Measure Measures taken on a continual or sporadic basis by a firm's management in order to prevent or deter unwanted takeovers Anti-Takeover Statute A set of state regulations that prevent or deter co mpanies from attempting hostile takeovers. These regulations vary across state lines and typically a ffect only the companies incorporated within the state Antitrust The antitrust laws apply to virtually all industrie s and to every level of business, including manufacturing, transportation, distribution, and ma rketing. They prohibit a variety of practices that restrain trade. Any-and-All Bid A bid made to purchase all stock being offered at a specific price. AON In currencies, this is the abbreviation for the Ang olan New Kwanza APICS Business Outlook Index A national manufacturing index that surveys several manufacturing firms on a monthly basis. If the index is above 50 it signals expansion, if it dips below 50 it indicates contraction. Applicable Federal Rate - AFR The interest rate published by the U.S. Treasury to calculate imputed interest charges. Appraisal A valuation of property (e.g. real estate, a busine ss, an antique) by the estimate of an authorized person. Appraisal Ratio A ratio used to measure the quality of a fund's inv estment picking ability. It compares the fund's alpha (or the adjusted return of the fund assuming the market return is zero) to the portfolio's unsystematic risk (or the risk that could be divers ified away). Appraisal Right The right of shareholders to demand the fair paymen t of securities undergoing a merger by a third party valuator. Appraiser A practitioner who has the knowledge and expertise necessary to estimate the value of an asset, or the likelihood of an event occurring, and the cost of such an occurrence. Ideally, an appraiser acts independently of the buying and selling parties in a transaction in order to arrive at the fair value of an asset without bias. Appreciation The increase in value of an asset. Approved Delivery Facility An exchange authorized facility used as a location for the delivery of commodities tendered upon future contracts.

Approved Participants Institutional investors who are allowed direct acce ss to an exchange's trading environment. Approved participant status usually affords trade e xecution cost savings and the right to install trading terminals in client offices. Arbitrage The simultaneous purchase and sale of an asset in o rder to profit from a difference in the price. This usually takes place on different exchanges or marke tplaces. Also known as a "riskless profit". Arbitrage Bond A lower-rate debt security issued by a municipality prior to the call date of the municipality's exist ing higher-rate security Arbitrage Pricing Theory - APT An alternative to the CAPM, APT differs in its assu mptions and explanation of risk factors associated with the risk of an asset. Arbitrage Trading Program - ATP A program used to place simultaneous orders for sto ck index futures and the underlying stocks. Arbitrageur A type of investor who attempts to profit from pric e inefficiencies in the market by making simultaneous trades that offset each other and capt ure risk-free profits. An arbitrageur would, for example, seek out price discrepancies between stock s listed on more than one exchange, buy the undervalued shares on the one exchange while short selling the same number of overvalued shares on the other exchange, thus capturing risk-free pro fits as the prices on the two exchanges converge. Arbitration An informal hearing regarding a dispute. The disput e is judged by a group of people (generally three) who have been selected by an impartial panel . Once a decision has been reached, there is no further appeal process. Arithmetic Mean A mathematical representation of the typical value of a series of numbers, computed as the sum of all the numbers in the series divided by the count of all numbers in the series. Arithmetic mean is commonly referred to as "average " or simply as "mean Arm's Length Transaction A transaction in which the buyers and sellers of a product act independently of each other and have no relationship to each other. Arms Index - TRIN A short-term technical analysis breadth indicator c alculated as the following Aroon Indicator A technical indicator developed by Tushar Chande us ed for identifying definable trends in an underlying security. It is made up of two lines: on e line is called "Aroon up", which measures the strength of the uptrend, and the other line is call ed "Aroon down", which measures the downtrend. The indicator reports the time it is taking for the price to reach, from a starting point, the highest and lowest points over a given time period, each report ed as a percentage of total time. Both the Aroon up and the Aroon down fluctuate between zero and 10 0, with values close to 100 indicating a strong trend, and zero indicating a weak trend. The lower the Aroon up, the weaker the uptrend and the stronger the downtrend, and vice versa. The main as sumption underlying this indicator is that a stock's price will close at record highs in an uptr end, and record lows in a downtrend. ARP In currencies, this is the abbreviation for the Arg entinian peso.

Arrearage An amount on a loan, cumulative preferred stock , or any credit instrument that is overdue. Also referred to as "Arrears." ARS In currencies, this is the abbreviation for the Arg entinian Nuevo Peso. Articles Of Incorporation A set of documents filed with a government body for the purpose of legally documenting the creation of a corporation. Also referred to as the "corporate charter." Ascending Channel An upward moving channel formed with two parallel, upward sloping trendlines. The upper trendline connects a stock's highs over a period, with each s ubsequent high price higher than the previous. Conversely, the lower trendline connects the stock' s lows, with each subsequent low price higher than the previous. Ascending Tops This refers to a series of peaks, each peak higher than the previous one on the stock's chart pattern. The chart below illustrates a series of four ascend ing tops Ascending Triangle A bullish chart pattern used in technical analysis that is easily recognizable by the distinct shape created by two trendlines. In an ascending tr iangle, one trendline is drawn horizontally at a level that has historically preve nted the price from heading higher, while the second trendline connects a series of increasin g troughs. Traders enter into long positions when the price of the asset breaks above the top resistance. The chart below is an example of an ascending triangle: Asia Ex-Japan The region of countries located in Southeast Asia, not including Japan. These countries are generally considered emerging markets and are of in terest to investors looking for high- growth investment opportunities. Asian Option An option whose payoff depends on the average price of the underlying asset over a certain period of time as opposed to at maturity. Also known as an average option. Asian Tail An option feature whereby a reference price is acti vated at the end of an option should the underlying fall below a specified average before op tion expiry. Ask The price a seller is willing to accept for a secur ity, also known as the offer price. Along with the price, the ask quote will generally also stipulate the amount of the security willing to be sold at th at price. Sometimes called "the ask". Ask Size The number of shares a seller is selling at a quote d ask price. Aspirin Count Theory A market theory that states stock prices and aspiri n production are inversely (opposite) related. Assay

The act of testing the purity of precious metals. Assessable Stock A class of stock in which the issuing company is al lowed to impose levies on stockholders for more funds. In the past, there was no restriction on how much additional money a company could demand or on how often a company could impose a levy on it s stocks. These are the opposite of non-assessable stocks. Assessed Value Dollar value assigned to property for purposes of a ssessing taxes Assessor A local government official who determines the valu e of a property for taxation purposes. Asset 1. A resource having economic value that an individ ual, corporation or country owns or controls with the expectation that it will provide future be nefit. 2. A balance sheet item representing what a firm ow ns. Asset Allocation The process of dividing a portfolio among major ass et categories such as bonds, stocks or cash. The purpose of asset allocation is to reduce risk b y diversifying the portfolio. Asset Allocation Fund - AAF A mutual fund that splits its investment assets amo ng stocks, bonds and other investment vehicles in an attempt to provide a consistent return for th e investor. Also referred to as a "diversification fund Asset Class A specific category of assets or investments, such as stocks, bonds, cash, international securities and real estate. Assets within the same class gener ally exhibit similar characteristics, behave similarly in the marketplace, and are subject to th e same laws and regulations. Asset Coverage Ratio A test that determines a company's ability to cover debt obligations with its assets after all liabili ties have been satisfied. It is calculated as the follow ing: Asset Financing Using balance sheet assets (such as accounts receiv able, short-term investments or inventory) to obtain a loan or borrow money - the borrower provid es a security interest in the assets to the lender. This differs from traditional financing methods, su ch as issuing debt or equity securities, as the company simply pledges some of its assets in exchan ge for a quick cash loan. Asset Management 1. The management of a client's investments by a fi nancial services company, usually an investment bank . The company will invest on behalf of its clients and give them access to a wide range of traditional and alternative product offerings that would not be to the average investor. 2. An account at a financial institution that inclu des checking services, credit cards, debit cards, margin loans, the automatic sweep of cash balances into a money market fund , as well as brokerage services. Also known as an "asset management account" or a "c entral asset account". Asset Play An incorrectly valued stock that is attractive beca use its combined asset value is greater than its market capitalization.

Asset Redeployment The strategic relocation of company assets in order to increase profitability Asset Stripper An individual who determines if the value of a comp any is worth more purchased as a whole or divided into separate assets which are sold off. Th is is usually done in order to fulfill debt agreements. Asset Stripping The process of buying an undervalued company with t he intent to sell off its assets for a profit. The individual assets of the company, such as its equip ment and property, may be more valuable than the company as a whole due to such factors as poor management or poor economic conditions. Asset Swap Similar in structure to a plain vanilla swap, the k ey difference is the underlying of the swap contrac t. Rather than regular fixed and floating loan interes t rates being swapped, fixed and floating investments are being exchanged. Asset Swapped Convertible Option Transaction - ASCO T An option on a convertible bond that is used to separate a convertible bond into i ts two components: 1) a bond and 2) an option to acquire s tock. When the bond is stripped of its conversion feature, the holder has a bond featuring fairly stable returns on debt, and a volatile - bu t potentially very valuable - option Asset Turnover The amount of sales generated for every dollar's wo rth of assets. It is calculated by dividing sales i n dollars by assets in dollars Asset Valuation The process of determining the current worth of a p ortfolio, company, investment, or balance sheet item Asset-Backed Security - ABS A financial security backed by a loan, lease or rec eivables against assets other than real estate and mortgage-backed securities. For investors, asset-ba cked securities are an alternative to investing in corporate debt. Asset-Based Finance A specialized method of providing structured workin g capital and term loans that are secured by accounts receivable, inventory, machinery, equipmen t and/or real estate. This type of funding is great for startup companies, refinancing existing l oans, financing growth, mergers and acquisitions, and management buy-outs (MBOs) and buy-ins (MBIs Asset-Based Lending A business loan secured by collateral (assets). The loan, or line of credit, is secured by inventory, accounts receivable and/or other balance-sheet asse ts. Also known as "commercial finance" or "asset-based financing". Asset-Conversion Loan A short-term loan that is typically repaid by conve rting an asset, usually inventory or receivables, into cash. Asset-or-Nothing Call Option An option payoff that is equal to the asset's price if the asset is above the strike price, otherwise the payoff is zero. Asset-or-Nothing Put Option

An option payoff that is equal to the asset's price if the asset is below the strike price, otherwise the payoff is zero. Asset/Liability Management A technique companies employ in coordinating the ma nagement of assets and liabilities so that an adequate return may be earned. Also known as "surpl us management." Assets Under Management - AUM In general, the market value of assets an investmen t company manages on behalf of investors. Assign The act of clearing houses and brokerages selecting short option and future contract holders to deliver underlying securities or commodities of mat uring or exercised/tendered contracts. Assignable Contract A futures contract with a provision permitting the contract holder to convey his or her rights of assignment to a third party. This enables the contr act holder to assign the rights and obligations of a contract to another to perform and receive the be nefits of that contract before it closes Assignment 1. The transfer of an individual's rights or proper ty to another person or business. 2. A notice received by an option writer stating th at the option sold has been exercised by the purchaser of the option. Assimilation The absorption of stock by the public from a new is sue. Associated Person The name given to participants within the futures m arket that are involved in the solicitation or facilitation of transacting customer orders, the ma intenance of discretionary accounts, or the true participatory involvement in the futures market. Association of Southeast Asian Nations - ASEAN An organization of countries in southeast Asia set up to promote cultural, economic and political development in the region. ASEAN was officially for med in 1967 with the signing of the Bangkok Declaration. Assumable Mortgage A type of financing arrangement in which the outsta nding mortgage and its terms can be transfered from the current owner to a buyer. By assuming the previous owner's remaining debt, the buyer can avoid having to obtain his or her own mortgage. Assumed Interest Rate - AIR The rate of interest, or growth rate, selected by a n insurance company. The assumed interest rate is provided to determine the value of an annuity contr act and, therefore, the periodic income payment which can be provided to the annuitant. Combined wi th other factors such as the annuitant's age upon annuitization, spousal coverage options and th e type of annuity coverage chosen, the AIR determines the monthly payment the annuitant will r eceive. Assurance Coverage of an event that is certain to happen. Ass urance is similar to insurance (and sometimes the terms are interchangeable) except that insuranc e protects policy holders from events that might happen. Asymmetric Digital Subscriber Line - ADSL

A new technology that provides high transmission sp eeds for video and voice to homes over ordinary copper telephone wire. It will be most cos t-effective in areas with a low market penetration of cable TV. Asymmetric Information Information available to some people but not others . At Risk Rules Tax laws limiting the amount of losses an investor (usually a limited partner) can claim. Only the amount actually at risk can be deducted. At The Market An order to buy or sell a futures contract at the best available price upon entrance into the exchange for execution At the Money An option is at-the-money if the strike price of th e option equals the market price of the underlying security At-The-Close Order An order specifying that a trade is to be executed at the close of the market, or as near to the closi ng price as possible. At-The-Opening-Order An order specifying that a trade is to be executed at the opening of the market, otherwise it's canceled Athens Stock Exchange - ATHEX The stock exchange headquartered in Athens, Greece. Atlanta Fed Index A manufacturing survey that covers prominent manufa cturing states like Georgia, Alabama, Florida, Tennessee and Louisiana. ATS In currencies, this is the abbreviation for the Aus trian Schillings. Attachment A legal term referring to the action of seizing pro perty in anticipation of a favorable ruling for a plaintiff who claims to be owed money by the defend ant. Attestation The act of witnessing the signing of a document and then also signing it to verify that it was properl y signed by those bound by its contents. Attornment The act of granting authority or jurisdiction to a party even though no legal rights exist Attractiveness Rank This ranks a stock's Attractiveness Rating within i ts industry group. If a stock ranks 10th out of 100 , for example, its Attractiveness Rating is in the to p 10% of its industry. If 2 or more stocks within a group have the same 1-99 rating, they will receive the same Attractiveness Rank. For example, if 3 stocks have a 99 Attractiveness Rating, they will a ll three be ranked best in group. The stock with the next best rating will be ranked 4th in group. Attractiveness Rating

This timely rating assesses a stock's attractivenes s based on investor demand. It measures current price and volume gauges for each stock and its indu stry group, and compares the results to all other stocks. Rated on a scale from 1 to 99. A 90 rating, for example, indicates the stock’s attractiveness is greater than 90 percent of all other companies. The Attractiveness Rating factors in: ••••Recent and past price and volume activity ••••Alpha ••••Up volume vs. down volume ••••Recent price performance vs. its industry ••••Its industry group’s price performance vs. the S&P 500 index. Components are not equally weighted. Attribution Rules A set of rules created by Canada Customs and Revenu e Agency (CCRA) that prevents investors from transferring assets between family members wit h the intention of avoiding taxes. Attrition The reduction in staff and employees in a company t hrough normal means, such as retirement and resignation. This is natural in any business and in dustry. Auction Market A market in which buyers enter competitive bids and sellers enter competitive offers at the same time. Auction Rate The interest rate that will be paid on a specific s ecurity as determined by the Dutch auction process. The auctions take place at periodic intervals, and the interest rate is fixed until the next auction i s held. This process is commonly used to determine th e interest rate on Treasury bills AUD In the currency market, this is the abbreviation fo r the Australian dollar Audit 1. An unbiased examination and evaluation of the fi nancial statements of an organization. It can be done internally (by employees of the organization) or externally (by an outside firm). 2. An IRS examination of a taxpayer's return or oth er transactions. The IRS performs this examination to verify the accuracy of these filings . Audit Trail A step-by-step record by which accounting data can be traced to their source. The SEC and NYSE will use this method for the explicit reconstructio n of trades when there are questions as to the validity or accuracy of an accounting figure. Auditor's Report Recorded in the annual report, the auditor's report tests to see that a corporation's financial statements comply with GAAP. This is sometimes refe rred to as the clean opinion. Australian Stock Exchange - ASX The stock exchange headquartered in Sydney, Austral ia. Authorized Participant An entity chosen by an exchange-traded fund's spons or to undertake the responsibility of obtaining the underlying assets needed to create an ETF. Auth orized participants are typically large institutional organizations, such as market makers or specialists. Authorized Stock

The maximum number of shares that a corporation is legally permitted to issue, as specified in its articles of incorporation. This figure is usually l isted in the capital accounts section of the balanc e sheet. Also known as "authorized shares" or "authorized ca pital stock". Auto Sales The major producers of domestic automobiles report sales monthly. These numbers are seasonally adjusted by the U.S. Department of Commerce and are available to the public one to five business days after the end of each month. Autocorrelation A mathematical representation of the degree of simi larity between a given time series and a lagged version of itself over successive time intervals. I t is the same as calculating the correlation betwee n two different time series, except that the same tim e series is used twice - once in its original form and once lagged one or more time periods. The term can also be referred to as "lagged correla tion" or "serial correlation". Automated Bond System - ABS The electronic system on the NYSE that records bids and offers for inactively traded bonds until they are canceled or executed Automated Clearing House - ACH An electronic funds-transfer system run by the Nati onal Automated Clearing House Association. This payment system deals with payroll, direct depo sit, tax refunds , consumer bills, tax payment, and many more payment services. Automated Confirmation Transaction Service - ACT An automated system designed to document and report the clearing of trades in the Nasdaq market Automated Customer Account Transfer Service - ACATS A system that facilitates the transfer of securitie s from one trading account to another at a differen t brokerage firm or bank. The National Securities Cle aring Corporation (NSCC) developed the ACATS system, replacing the previous manual asset transfe r system with a fully automated and standardized one. Automatic Exercise A procedure implemented to protect an option holder where the Option Clearing Corporation will automatically exercise an "in the money" option for the holder Automatic Investment Plan An investment program that allows you to contribute small amounts of money (as little as $20 a month) in regular intervals. Funds are automaticall y deducted from your checking/savings account or your paycheck, and invested in a retirement acco unt or mutual fund. Automatic Reinvestment Plan An investment program in which capital gains or other income received from investments are automatically used for reinvestment purposes. In th e case of a mutual fund, for example, capital gains produced by the fund would be used to automat ically purchase more shares of the fund, instead of being distributed to the investor as cas h. Automatic Rollover A rollover of a participant's qualified-plan balanc e to an IRA without the participant's authorization . Automatic Stabilizer An economic policy or program that increases or dec reases automatically to offset the current economic trend without government assistance. Automatic Stay A provision under the U.S. Bankruptcy Code prohibit ing creditors from beginning or continuing

proceedings for collecting owed amounts from a firm who files for bankruptcy under Chapter 11 Autoregressive Using past data to predict future data. Available Seat Miles - ASM This refers to how many seat miles were actually av ailable for purchase on an airline. If all of the seats on the plane are not sold, then the ASM indic ates the overall capacity the airline is operating at. Aval A guarantee added to a debt obligation by a third p arty who ensures payment should the issuing person default Average Annual Growth Rate - AAGR The average increase in the value of a portfolio ov er the period of a year. Average Annual Return - AAR A figure used when reporting the historical return of a mutual fund. The AAR is stated after expenses have been tallied, including administratio n fees, 12b-1 fees, and others Average Daily Balance Method A finance/accounting method where costs (and intere st) are based on the amount(s) owing at the end of each day. Average Directional Index - ADX An indicator used in technical analysis to determin e the strength of a prevailing trend. The ADX is measured on a scale between 0 and 100. Readings bel ow 20 are used to indicate a weak trend, while readings over 40 indicate a strong trend. ADX is no t used to determine the direction of a particular trend, but only to gauge its strength. Average Down The process of buying additional shares in a compan y at lower prices than you originally purchased. This brings the average price you've paid for all y our shares down Average Industrial Wage The mean hourly rate of pay for workforce members o f a given geographical area, such as a country or province, excluding farm employees. This measure ment serves as a reasonable proxy for the wage rate of the average worker in a given country, and is used by labor organizations and employers as a benchmark. Average Life An estimate of the number of terms to maturity, tak ing the possibility of early payments into account. Average life is calculated using the weigh ted average time to the receipt of all future cash flows. Average Price Call A type of option where the payoff is either zero or the amount by which the average price of the asset exceeds the strike. Average Price Put A type of option where the payoff is either zero or the amount by which the strike price exceeds the average price of the asset. Average Qualitative Opinion - AQO AQO is a number that summarizes analysts' ratings f or a particular company. Average Revenue Per Unit - ARPU

A measure of the revenue generated per user or unit . This measure allows for the analysis of a companies revenue generation and growth at the per unit level, which can identify which products are high or low revenue-generators. Average True Range - ATR A measure of volatility introduced by Welles Wilder in his book: New Concepts in Technical Trading Systems. The True Range indicator is the greatest of the fol lowing: -current high less the current low. -the absolute value of the current high less the pr evious close. -the absolute value of the current low less the pre vious close. The Average True Range is a moving average (general ly 14-days) of the True Ranges. Average Up The process of buying additional shares at higher p rices. This raises the average price that the investor pays for all the shares. In the context of short selling, averaging up is achieved by selling additional shares at a price higher than that of th e first transaction. Average-Cost Method A costing method by which the value of a pool of as sets or expenses is assumed to be equal to the average cost of the assets or expenses in the pool Averaging up or down in price After an initial stock purchase, averaging up is th e purchase of additional shares of the stock as it moves up in price. Additional purchases might be wa rranted if the stock is originally purchased at a correct “pivot point” (or buy point) and its price has increased 2% or 3% from the original purchase price. Averaging down is the purchase of additional stock as it declines in price. This is risky. You never know how low a stock could drop. Averaging re fers to the combination of prices paid for each purchase of stock divided by the total number of sh ares purchased. If an initial purchase of 100 shares is made at $50 and a second purchase of 75 s hares is made at $51 ½, the average share price for 175 shares is approximately $50 5/8. Away From Home The IRS criteria used to establish whether or not y ou are within commuting distance from home. If you work away from home for longer than a normal wo rkday and you require sleep, then the associated costs are tax deductible. Away from the Market When the bid on an order is lower (or the ask price is higher) than the current market price for the security AWG In currencies, this is the abbreviation for the Aru ba Guilder. Ax The market maker who is most central to the price a ction of a specific security. The ax can be identified by spending several days studying level II quotes and noting which market maker seems to have the greatest effect on the security's price . Axe The interest a person or trader shows in buying or selling a bond. A trader may have specific interest in a certain type of bond based on his or her existing positions. B A Nasdaq stock symbol specifying that the stock is Class B shares of the company B-Share

A class in a family of multi-class mutual funds. Th is class is characterized by a rear-end load structure that is paid only when selling the fund. Baby Bells A common nickname given to the U.S. regional teleph one companies that were formed from the breakup of AT&T in 1984, which was done to create m ore competition within the industry Baby Bills A nickname given to the hypothetical companies that would have formed if the Justice Department had broken up Microsoft Corporation. Baby Bond Any bond issued with a par value less than $1,000. Baccalaureate Bond A zero-coupon bond issued by certain states to assi st families save for college tuition by means of added tax benefits. Back Door Listing A strategy of going public used by a company that f ails to meet the criteria for listing on a stock exchange. To get onto the exchange, the company des iring to go public acquires an already listed company. Back Fee The premium charged upon the second term or portion of a compound option. Back Months The available futures contracts for a particular co mmodity that possess expirations or delivery dates furthest into the future. Also referred to as defer red futures or forward months. Back Office Administration and support personnel in a financial services company. They carry out functions like settlements, clearances, record maintenance, regula tory compliance, and accounting. When order processing is slow due to high volume, it is common ly referred to as "back office crunch." Back Stop The act of providing last-resort support or securit y in a securities offering for the unsubscribed portion of shares. A company will try and raise cap ital through an issuance and to guarantee the amount received through the issue, the company will get a back stop from an underwriter or major shareholder to buy any of the unsubscribed shares Back Up the Truck The act of a large buyer scooping up huge quantitie s of a stock Back-End Load A fee an investor pays when selling a mutual fund w ithin a certain number of years, usually seven. Back-End Ratio A ratio that indicates what portion of a person's m onthly income goes toward paying debts. Total monthly debt includes expenses such as mortgage pay ments (made up of PITI), credit-card payments, child support and other loan payments. Le nders use this ratio in conjunction with the front-end ratio to approve mortgages. Back-End Ratio = (Total Monthly Debt Expense / Gros s Monthly Income) x 100 Back-to-Back Loan A loan in which two companies in different countrie s borrow offsetting amounts from one another in each other's currency. The purpose of this transact ion is to hedge against currency fluctuations. With the advent of currency swaps this type of tran saction is no longer used very often

Backdating Dating any document by a date earlier than the one on which the document was originally drawn up. Backing Away The act of a market maker failing to honor a posted bid or ask even though the price and quantity are valid. Backlog The total value of sales orders waiting to be fulfi lled. Backpricing A pricing method used in specific futures contracts whereby the price of the commodity to be delivered is priced by the purchaser at some future date after entering into the position. Backspread A type of options spread in which a trader holds mo re long positions than short positions. The premium collected from the sale of the short option is used to help finance the purchase of the long options. This type of spread enables the trader to have significant exposure to expected moves in the underlying asset while limiting the amount of l oss in the event prices do not move in the direction the trader had hoped for. This spread can be created using either all call options or all pu t options. Backtesting The process of testing a trading strategy on prior time periods. Instead of applying a strategy for th e time period forward, which could take years, a trad er can do a simulation of his or her trading strategy on relevant past data in order to gauge th e its effectiveness. Most technical-analysis strategies are tested with this approach Backup Withholding Tax that is levied on investment income, at an esta blished tax rate, as the investor withdraws it. Backup withholding helps to ensure that government tax-collecting agencies (such as the IRS or Canada Revenue Agency) will be able to receive inco me taxes owed to them from investors' earnings. This tax may be imposed for a variety of reasons. In the U.S., for example, backup withholding may be applied when an investor has not met rules regarding taxpayer identification numbers (TIN). At the time the investor withdraws h is or her investment income, the amount mandated by the backup withholding tax is remitted to the government, providing the tax-collecting body with the required funds immediately, but leavi ng the investor with less short-term cash flow. Backward Integration A form of vertical integration that involves the pu rchase of suppliers in order to reduce dependency. Backwardation The theory that says futures prices will tend to ri se over the life of a contract. Therefore the near-term contracts trade at a higher price than the lon ger-term contracts. Bad Debt A debt that is not collectable and therefore worthl ess to the creditor Bag Man Any person in charge of organizing and collecting c ontributions to political parties or funds gathered for political reasons. Bahrain Stock Exchange - BSE The stock exchange headquartered in Manama, Bahrain Balance Of Payments - BOP A record of all transactions made between one parti cular country and all other countries during a

specified period of time. BOP compares the dollar d ifference of the amount of exports and imports, including all financial exports and imports. A nega tive balance of payments means that more money is flowing out of the country than coming in, and v ice versa. Balance Of Trade - BOT The largest component of a country's balance of pay ments. It is the difference between exports and imports. Debit items include imports, foreign aid, domestic spending abroad and domestic investments abroad. Credit items include exports, f oreign spending in the domestic economy and foreign investments in the domestic economy. A coun try has a trade deficit if it imports more than it exports the opposite scenario is a trade surplus. Balance Sheet A financial statement that summarizes a company's a ssets, liabilities and shareholders' equity at a specific point in time. These three balance sheet s egments give investors an idea as to what the company owns and owes, as well as the amount invest ed by the shareholders. The balance sheet must follow the following formula : Assets = Liabilities + Shareholders' Equity Each of the three segments of the balance sheet wil l have many accounts within it that document the value of each. Accounts such as cash, inventory and property are on the asset side of the balance sheet, while on the liability side there are accoun ts such as accounts payable or long-term debt. The exact accounts on a balance sheet will differ by co mpany and by industry, as there is no one set template that accurately accommodates for the diffe rences between different types of businesses. Balanced Fund A mutual fund that invests its assets into the mone y market, bonds, preferred stock, and common stock with the intention to provide both growth and income. Also known as an "asset allocation fund". Balanced Investment Strategy A portfolio allocation and management method aimed at balancing risk and return. Such portfolios are generally divided equally between equities and fixed-income securities. Balanced Scorecard A performance metric used in strategic management t o identify and improve various internal functions and their resulting external outcomes. Th e balanced scorecard attempts to measure and provide feedback to organizations in order to assis t in implementing strategies and objectives. Balloon Maturity 1. A repayment schedule for a bond issue where a la rge number of the bonds come due at a one time (normally at the final maturity date). 2. A final loan payment that is considerably higher than prior payments. This is also known as a "balloon payment Balloon Option An option whose notional payments increase signific antly after a set threshold is broken. Bancassurance A French term referring to the selling of insurance through a bank's established distribution channels. Bandwidth The data transfer capacity of a network. It is meas ured in bits per second. Bank A commercial institution licensed as a receiver of deposits. Banks are mainly concerned with making and receiving payments as well as supplying short-term loans to individuals.

Bank For International Settlements - BIS An international organization fostering the coopera tion of central banks and international monetary policy makers. Established in 1930, it is the oldes t international financial organization, and was created to administer the transaction of monies acc ording to the Treaty of Versailles. Among others, its main goals are to promote information sharing a nd to be a key center for economic research Bank Guarantee A guarantee from a lending institution ensuring tha t the liabilities of a debtor will be met. In other words, if the debtor fails to settle a debt, the ba nk will cover it. Bank Insurance A guarantee on a specified amount of deposits in a bank. Bank Investment Contract - BIC A security with an interest rate guaranteed by a ba nk. It provides a specific yield on a portfolio ove r a specified period. Bank Of Canada - BOC The central bank of Canada, that came into existenc e after the passing of the Bank of Canada Act in 1935, influences the country's economy and money su pply Bank of England - BoE The Bank of England is the central bank for the Uni ted Kingdom. It has a wide range of responsibilities, similar to those of most central banks around the world. For example, it acts as the government's bank and the lender of last resort, it issues currency and, most importantly, it oversees monetary policy. Bank Of Japan - BoJ Headquartered in the business district of Nihonbash i in Tokyo, the Bank of Japan is the Japanese central bank. The bank is responsible for issuing a nd handling currency and treasury securities, implementing monetary policy, maintaining the stabi lity of the Japanese financial system, and providing settling and clearing services. Like most central banks, the Bank of Japan also com piles and aggregates economic data and produces economic research and analysis Bank Rate The rate at which central banks lend funds to natio nal banks. Bank Reconciliation Statement A form that allows individuals to compare their per sonal bank account records to the bank's records of the individual's account balance in order to unc over any possible discrepancies. Bank Restriction Act of 1797 An act passed by the British government in 1797 to free the central Bank of England from converting bank notes and other financial claims into gold. Th e act was created in response to the flood of paper money issued by the British government that r esulted in an economic catastrophe Bank Run A situation in which numerous bank customers try to withdraw their bank deposits simultaneously and the bank's reserves are not sufficient to cover the withdrawals Banker's Acceptance A short-term credit investment created by a non-fin ancial firm and guaranteed by a bank. Bankmail An agreement made between a company planning a take over and a bank, which prevents the bank from financing any other potential acquirer's bid.

Bankruptcy The state of a person or firm unable to repay debts . Bankruptcy Financing Financing arranged by a company while under the cha pter 11 bankruptcy process. Clearly, such financing is extremely high risk and is done at a r elatively high interest rate. Bankruptcy Risk The risk that a company will be unable to meet its debt obligations. Often referred to as "default" or "insolvency risk". Banner Advertising A common form of advertising on the internet. The b anner is an advertisement of 460x68 pixels, usually placed at the top of the page Baptism of Fire A difficult situation that a company or individual experiences that will result in either success or failure. Examples include Initial Public Offerings (IPOs), a new CEO hired to manage a struggling company, and hostile takeover attempts. Bar A graphical representation of a stock's movement th at usually contains the open, high, low and closing prices for a set period of time. Bar Chart A style of chart used by some technical analysts, o n which, as illustrated below, the top of the vertical line indicates the highest price a securit y traded at during the day, and the bottom represents the lowest price. The closing price is d isplayed on the right side of the bar, and the opening price is shown on the left side of the bar. A single bar like the one below represents one day of trading. Barbell A bond investment strategy that concentrates holdin gs in both very short-term and extremely long-term maturities. This is also known as the "dumbbel l" or "barbelling." Barefoot Pilgrim Slang for an unsophisticated investor who loses all of his or her wealth from trading equities in the stock market. Barings Bank A British merchant bank that was started in 1762, a nd for centuries was considered the largest and most stable bank in the world. In 1995, Barings - t hen the oldest bank in Britain - collapsed after it was unable to meet its cash requirements following unauthorized speculative trading in derivatives at its Singapore office by then-trader Nick Leeson. Barometer An investment instrument whose movements forecast t rends Barometer Stock A security whose price pattern is regarded as an in dicator of the state of the overall market Barratry The act of a vessel's captain or crew knowingly end angering the vessel's cargo and/or the vessel itself.

Barrels Per Day - B/D A measure of oil output, represented by the number of barrels of oil produced in a single day. For example, you might hear "country ABC has the potent ial to produce five million barrels per day". The abbreviation "bbl/d" can also be used to repres ent this production measure. Barrier Option A type of option whose payoff depends on whether or not the underlying asset has reached or exceeded a predetermined price Barriers To Entry The existence of high start-up costs or other obsta cles that prevent new competitors from easily entering an industry or area of business. Barriers to entry benefit existing companies already operating in an industry because they protect an es tablished company's revenues and profits from being whittled away by new competitors Barron's Confidence Index A confidence indicator calculated by dividing the a verage yield on high-grade bonds by the average yield on intermediate-grade bonds. The discrepancy between the yields is indicative of investor confidence. A rising ratio indicates investors are demanding a lower premium in yield for increased risk and so are showing confidence in the economy. Barter The act of trading goods and services between two o r more parties without the use of money. Bartering benefits companies and countries that see a mutual benefit in exchanging goods and services rather than cash, and it also enables thos e who are lacking "hard currency" to obtain goods and services. Base (and base patterns, base-building, price conso lidation area, price pattern) A term used by technical analysts to refer to an ar ea of consolidation in a stock's chart pattern. It typically can be an indicator for future price adva nces. This price consolidation pattern generally lasts around seven weeks but can last as long as 12 months. (Also, see Cup with handle, Double bottom, and Flat base.) Base Currency The first currency quoted in a currency pair on for ex. It is also typically considered the domestic currency or accounting currency. For accounting pur poses, a firm may use the base currency to represent all profits and losses. It is sometimes referred to as the "primary currenc y Base Period A particular time period whose data is used for com parative purposes when measuring economic data of other periods. Basel Committee On Bank Supervision A committee established by the central bank governo rs of the Group of Ten countries in 1974 that seeks to improve the supervisory guidelines that ce ntral banks or similar authorities impose on both wholesale and retail banks. The committee makes ban king policy guidelines for both member and non-member countries and helps authorities to imple ment its suggestions. Baseline A benchmark used as a basis for comparison. Basing A period in which a stock price has very little or no trend. The resulting price pattern is a flat lin e. Basis 1. The variation between the spot price of a delive rable commodity and the relative price of the futures contract for the same actual that has the s hortest duration until maturity. 2. A security's basis is the purchase price after c ommissions or other expenses. Also known as

"cost basis" or "tax basis". 3. In the context of IRAs, basis is the after-tax b alance in the IRA, which originates from nondeductible IRA contributions and rollover of aft er-tax amounts. Earnings on these amounts are tax-deferred, similar to earnings on deductible con tributions and rollover of pretax amounts. Basis Grade The minimum accepted standard that a deliverable co mmodity must meet to be used as the actual of a futures contract. Also known as "par grade" or "c ontract grade." Basis Point - BPS A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly used for calculating change s in interest rates, equity indexes and the yield of a fixed-income security. Basis Price Price quotation for a security expressed in terms o f yield to maturity. This will usually only be quoted on fixed-income securities such as bonds. Basis Quote A method for simplifying and shortening the quoted price of a futures contract. Used in the futures markets, a basis quote gives the variation above or below the price of a futures contract. Basis Rate Swap A type of swap in which two parties swap variable i nterest rates based on different money markets. This is usually done to limit interest-rate risk th at a company faces as a result of having differing lending and borrowing rates. Basis Risk The risk that offsetting investments in a hedging s trategy will not experience price changes in entirely opposite directions from each other. This imperfect correlation between the two investments creates the potential for excess gains or losses in a hedging strategy, thus adding risk to the position Basket Option A type of option whose underlying asset is a basket of commodities, securities, or currencies. Basket Trade A single order to buy or sell a set of 15 or more s ecurities. Batch Trading A method of transacting different security orders t hat involves the accumulation of orders and their simultaneous execution. Bay Street 1.The street in Toronto where the Toronto Stock Exc hange (TSE) is located. 2. The collective name for the financial institutio ns in Toronto including stock exchanges, banks, commodity markets, money markets, etc BBD In currencies, this is the abbreviation for the Bar bados Dollar BCG Growth Share Matrix A graphical approach to resource allocation within a multi-segmented corporation. BDT In currencies, this is the abbreviation for the Ban gladesh Taka. Bear An investor who believes that a particular security or market is headed downward. Bears attempt to profit from a decline in prices. Bears are generall y pessimistic about the state of a given market.

Bear Call Spread A type of options strategy used when a decline in t he price of the underlying asset is expected. It is achieved by selling call options at a specific stri ke price while also buying the same number of calls , but at a higher strike price. The maximum profit to be gained using this strategy is equal to the difference between the price paid for the long opti on and the amount collected on the short option Bear CD A certificate of deposit whose interest rate fluctu ates in inverse correlation to the value of an underlying market index. In other words, the intere st rate paid on the CD increases as the underlying market index decreases in value. Bear Flattener A yield-rate environment in which short-term intere st rates are increasing at a faster rate than long-term interest rates. This causes the yield curve to flatten as short-term and long-term rates start to converge. Bear Hug An offer made by one company to buy the shares of a nother for a much higher per-share price than what that company is worth. A bear hug offer is usu ally made when there is doubt that the target company's management will be willing to sell. By of fering a price far in excess of the target company's current value, the offering party can usu ally obtain an agreement. The target company's management is essentially forced to accept such a g enerous offer because it is legally obligated to look out for the best interests of its shareholders . Bear Market A period when market indices (i.e., Dow Jones Indus trial Average, S&P 500, Nasdaq Composite) declines 15% to 25% and in some cases as much as 50 %. Bear Put Spread A type of options strategy used when an option trad er expects a decline in the price of the underlying asset. It is achieved by purchasing put options at a specific strike price while also selli ng the same number of puts at a lower strike price. Th e maximum profit to be gained using this strategy is equal to the difference between the two strike p rices, minus the net cost of the options Bear Raid The illegal practice of attempting to push the pric e of a stock lower by taking large short positions and spreading unfavorable rumors about the target f irm Bear Spread 1. An option strategy seeking maximum profit when t he price of the underlying security declines. The strategy involves the simultaneous purchase and sale of options puts or calls can be used. A higher strike price is purchased and a lower strike price is sold. The options should have the same expiration date. 2. A trading strategy used by futures traders who i ntend to profit from the decline in commodity prices while limiting potentially damaging losses Bear Steepener A widening of the yield curve caused by long-term r ates increasing at a faster rate then short-term rates. This causes a larger spread between the two rates as the long-term rate moves further away from the short-term rate. Bear Trap A false signal that the rising trend of a stock or index has reversed when it has not. Bearer Form A security not registered in the books of issuing c orporation but that is payable to its bearer (the person possessing it). Securities can be issued in two forms: registered or bearer. Registered form means the issuing firm keeps records of a security' s owner and mails out payments to him/her. Bearer form means the security is traded without an y record of ownership, so physical possession

of the security is the sole evidence of ownership. Most securities issued today are in registered form. Bearish Belt Hold A candlestick pattern that forms during an upward t rend. This is what happens in the pattern: following a stretch of bullish trades, a bearish or black candlestick occurs the opening price, which becomes the high for the day, is higher than the cl ose of the previous day the stock price declines throughout the day, resulting in a long black candl estick with a short lower shadow and no upper shadow. Bearish Engulfing Pattern A chart pattern that consists of a small white cand lestick with short shadows or tails followed by a large black candlestick that eclipses or "engulfs" the small white one. Bearish Harami A trend indicated by a large candlestick followed b y a much smaller candlestick whose body is located within the vertical range of the larger can dle's body. Such a pattern is an indication that th e previous upward trend is coming to an end. Beginning Inventory - BI The book value of goods, inputs, or materials avail able for use or sale at the beginning of an inventory accounting period Behavioral Economics A field of economics that studies how the actual de cision-making process influences the decisions that are reached. Behavioral Finance A field of finance that proposes psychology-based t heories to explain stock market anomalies. Within behavioral finance, it is assumed that the i nformation structure and the characteristics of market participants systematically influence indivi duals' investment decisions as well as market outcomes Behaviorist 1. One who accepts or assumes the theory of behavio rism (behavioral finance in investing.) 2. A psychologist who subscribes to behaviorism. Beige Book A commonly used name for the Fed report entitled "S ummary of Commentary on Current Economic Conditions by Federal Reserve District." It is publ ished just before the FOMC meeting on interest rates and is used to inform the members on changes in the economy since the last meeting. Beirut Stock Exchange - BSE The stock exchange headquartered in Beirut, Lebanon . Bell The ring that marks the open and close of each trad ing day on many organized financial exchanges, most notably the NYSE. Bellwether A leading indicator of trends. Below the Market An order to buy or sell a security at a price lower than the current market price. Ben Bernanke

The Chairman of the Board of Governors of the U.S. Federal Reserve who took over the helm from Alan Greenspan on February 1, 2006, ending 18 years of Greenspan's leadership at the Fed. A former Fed governor, Bernanke was Chairman of the U.S. Pre sident's Council of Economic Advisers prior to being nominated as Greenspan's successor in late 20 05 Benchmark A standard against which the performance of a secur ity, index or investor can be measured. Benchmark Bond A bond that provides a standard against which the p erformance of other bonds can be measured. Government bonds are almost always used as benchmar k bonds. Also referred to as "benchmark issue" or "bellwether issue". Beneficial Owner A person who enjoys the benefits of ownership even though title is in another name. Beneficiary A person or entity named in a will or a financial c ontract as the inheritor of property when the property owner dies. Benefit Cost Ratio - BCR A ratio attempting to identify the relationship bet ween the cost and benefits of a proposed project. Benefit Offset A reduction in the amount of benefit payments recei ved by a member of a retirement plan which may result when the member owes money to the plan. Benjamin Graham A scholar and financial analyst who is widely recog nized as the father of value investing. His famous book, "The Intelligent Investor", has gained recogn ition as one of the best and most important investment pieces written illustrating the fundamen tals of a value-investing strategy. Bequest The process of giving stocks, bonds, or any other a ssets to beneficiaries through the provisions of a will. Bermuda Option A type of option that can only be exercised on pred etermined dates, usually every month. Bermuda Stock Exchange - BSX The stock exchange headquartered in Hamilton, Bermu da Bermuda Swaption A swaption with predefined limitations on exercise. Berry Ratio The ratio of a company's gross profits to operating expenses. This ratio is used as an indicator of a company's profits in a given period of time. A rati o coefficient of 1 or more indicates that the company is making profit above all variable expense s, whereas a coefficient below 1 indicates that the firm is losing money. Best Ask The lowest quoted ask price for a particular stock among those offered from competing market makers. Best Bid

The highest quoted bid for a particular stock among all those offered by competing market makers. Best Efforts An agreement an underwriter makes to act as an agen t between an issuing company and investors Best Execution The responsibility of brokers to provide the most a dvantageous, or best price, order execution for customers. Best Return On Equity Tab An indicator of a company's financial performance. It measures how efficient a company is with its money. Presented as a percentage figure, it is deri ved by dividing annual income (before extraordinary items, discontinued operations, cumul ative accounting adjustments and non-recurring items) by an average of the latest fiscal year and the prior year's stockholders' equity. Best-Price Rule - Rule 14D-10 An SEC regulation that stipulates that a tender off er is open to all security holders of that class of security and the amount paid to the security holder is the highest paid to any other holder of the same security. Beta Measures a stock’s price volatility relative to p rice performance of the S&P 500 Index, over a 12-month period. BGN In currencies, this is the abbreviation for the Bul garian Lev. BHD In currencies, this is the abbreviation for the Bah raini Dinar. Bid 1. An offer made by an investor, a trader or a deal er to buy a security. The bid will stipulate both t he price at which the buyer is willing to purchase the security and the quantity to be purchased. 2. The price at which a market maker is willing to buy a security. The market maker will also display an ask price, or the amount and price at which it i s willing to sell. Bid Price The price a buyer is willing to pay for a security. This is one part of the bid with the other being t he bid size, which details the amount of shares the in vestor is willing to purchase at the bid price. The opposite of the bid is the ask price, which is the price a seller is looking to get for his or her sha res. Bid Size The number of shares a buyer is willing to purchase at the quoted bid price. Bid Tick An indication of whether the latest bid price is hi gher, lower, or the same as the previous bid. Bid-Ask Spread The amount by which the ask price exceeds the bid. This is essentially the difference in price between the highest price that a buyer is willing t o pay for an asset and the lowest price for which a seller is willing to sell it. Bid-to-Cover Ratio A ratio that compares the number of bids received i n a Treasury security auction to the number of bids accepted. BIF In currencies, this is the abbreviation for the Bur undi Franc.

Bifurcation A term used in finance that refers to a splitting o f something into two separate pieces

Bolsa Boliviana de Valores - BBV The stock exchange headquartered in La Paz, Bolivia . Bond A debt investment with which the investor loans mon ey to an entity (company or government) that borrows the funds for a defined period of time at a specified interest rate. Bond Anticipation Note - BAN A short-term interest-bearing security issued in th e anticipation of larger future bond issues. Bond Attorney A lawyer who represents the bondholders' interests during a bond offering and who prepares the legal opinion attesting that the issue is legal, va lid and binding. Bond Equivalent Yield - BEY A calculation for restating semi-annual, quarterly, or monthly discount-bond or note yields into an annual yield. For a fixed income security with a pa r value of $1000, the calculation is as follows: Bond Fund A mutual fund whose investment objective is to prov ide stable income while taking on minimal risk. Bond Ladder A strategy for managing fixed-income investments by which the investor builds a ladder by dividing his or her investment dollars evenly among bonds or CDs that mature at regular intervals simultaneously (for example, every six months, once a year or every two years). Bond Market The environment in which the issuance and trading o f debt securities occurs. The bond market primarily includes government-issued securities and corporate debt securities, and facilitates the transfer of capital from savers to the issuers or o rganizations requiring capital for government projects, business expansions and ongoing operation s. Bond Option An option contract in which the underlying asset is a bond. Other than the different characteristics of the underlying assets, there is no significant d ifference between stock and bond options. Just as with other options, a bond option allows investors the ability to hedge the risk of their bond portfolios or speculate on the direction of bond pr ices with limited risk Bond Quote The statement of a bond's price Bond Rating A specification of a bond issuer's probability of d efaulting based on an analysis of the issuer's financial condition and profit potential. Bond Swap A strategy in which an investor sells a bond and at the same time purchases a different bond with the proceeds from the sale. Bonus Issue An offer of free additional shares to existing shar eholders. A company may decide to distribute further shares as an alternative to increasing the dividend payout. Also known as a "scrip issue" or "capitalization issue".

Book Building The process by which an underwriter attempts to det ermine at what price to offer an IPO based on demand from institutional investors. Book Closure A company's announcement of a dividend or bonus to investors. Book Runner The managing or lead underwriter who maintains the books of securities sold for a new issue. Book Value 1. The value at which an asset is carried on a bala nce sheet. In other words, the cost of an asset minus accumulated depreciation. 2. The net asset value of a company, calculated by total assets minus intangible assets (patents, goodwill) and liabilities. 3. The initial outlay for an investment. This numbe r may be net or gross of expenses such as trading costs, sales taxes, service charges and so on. In the U.K., book value is known as "net asset valu e". Book Value Per Common Share A measure used by owners of common shares in a firm to determine the level of safety associated with each individual share after all debts are paid accordingly Book-Entry Securities Securities that are recorded in electronic records called book entries rather than as paper certificates. Also referred to as "book-entry receipt." Book-to-Bill Ratio The technology industry's demand-to-supply ratio fo r orders on a "firm's book" to number of orders filled Book-To-Market Ratio A ratio used to find the value of a company by comp aring the book value of a firm to its market value. Book value is calculated by looking at the f irm's historical cost, or accounting value. Market value is determined in the stock market through its market capitalization Booking the Basis An arrangement made between a buyer and seller givi ng either party the ability at some future date to determine the cash price of the forward sales ag reement. Also known as "deferred pricing." Bookout The process of closing out a position in a swap con tract or another OTC derivative agreement prior to maturity. Boom A period of time during which sales or business act ivity increases rapidly. Boomerang An American slang term that refers to an adult who has moved back in with his or her parents (who are part of the baby boomer generation) instead of living independently. The phrase, when applied to an individual, makes reference to the fact that the person lived independently for a period, but subsequently returned home due to the financial cos ts associated with maintaining a separate household. Boomernomics An investing strategy that involves buying equities directly related to the spending behavior of baby boomers (people born between 1946 and 1964).

Boon A general term that refers to a benefit or improvem ent for investors. This can include such things as increased dividends, a stock market rally and stock buybacks Booster Shot The name given to the first formal recommendation r eport issued by an underwriter for an IPO. It is presented in the process of the public offering. Boot Cash or other property added to an exchange or a tr ansaction in order to make the value of traded goods equal Bootstrap A situation in which an entrepreneur starts a compa ny with little capital. An individual is said to be boot strapping when he or she attempts to found and build a company from personal finances or from the operating revenues of the new company. Bootstrapping 1. A procedure used to calculate the zero coupon yi eld curve from market figures. 2. A situation in which an entrepreneur starts a co mpany with little capital. An individual is said to be boot strapping when he or she attempts to found and build a company from personal finances or from the operating revenues of the new company. Boston Snow Indicator A market theory stating that a white Christmas in B oston will result in rising stock prices for the following year. Bottleneck A point of congestion in a system that occurs when workloads arrive at a given point more quickly than that point can handle them. The inefficiencies brought about by the bottleneck often create a queue and a longer overall cycle time. Bottom The lowest point or price reached by a financial se curity, commodity, index or economic cycle in a given time period, which is followed by a steady in crease. Bottom Fisher An investor who looks for bargains among stocks who se prices have recently dropped dramatically. The investor believes that the recent price drop is temporary and a recovery is soon to follow. Bottom Line Slang for net income or profit. Bottom-Up Investing An investment approach that de-emphasizes the signi ficance of economic and market cycles. This approach focuses on the analysis of individual stoc ks. In bottom-up investing, therefore, the investor focuses his or her attention on a specific company rather than on the industry in which that company operates or on the economy as a whole. Bought Deal A new share issue that is bought entirely by one un derwriter to resell to investors Bounced Check A check that cannot be processed because the writer has insufficient funds. Also known as a "rubber check". Bourse Any European stock exchange. Boutique

A small investment firm specializing in offering sp ecific, but limited services to a select number of individuals Box Size In the context of Point & Figure Charts, the box si ze is the minimum price change that must occur for a given period before a mark (an X or an O) is added to the chart. Box Spread A dual option position involving a bull and bear sp read with identical expiry dates. This investment strategy provides for minimal risk. Additionally, i t can lead to an arbitrage position as an investor attempts to lock in a small return at expiry. Box-Top Order A buy or sell order made at the best market price. If the order cannot be completely filled, a limit order is placed for the remaining shares at the pri ce at which the filled portion was executed. Bracket Creep A situation where inflation pushes income into high er tax brackets. The result is an increase in income taxes but no increase in real purchasing pow er Bracketed Buy Order A buy order that is accompanied (or "bracketed") by a sell limit order above the buy order's price and a sell stop order below the buy order's price. These three component orders will all be set at a price determined by the investor entering the order . The bracketed buy order allows investors to lock in profits with an upside movement and prevent a downside loss, and does not require investors to constantly follow the position. Bracketed Sell Order A sell order on a short sale that is accompanied (o r "bracketed") by a buy stop order above the entry price of the sell order and a buy limit order below the entry price of the sell order. As the three component orders are based on set prices, this type of order protects the investor from the downside but also potentially locks in a gain witho ut the investor constantly monitoring price. Brady Bonds Bonds that are issued by the governments of develop ing countries. Brady Bonds are some of the most liquid emerging market securities. They are na med after former U.S. Treasury Secretary Nicholas Brady, who sponsored the effort to restruc ture emerging market debt instruments. Brand A distinguishing symbol, mark, logo, name, word, se ntence or a combination of these items that companies use to distinguish their product from oth ers in the market. Brand Awareness The likelihood that consumers recognize the existen ce and availability of a company's product or service. Creating brand awareness is one of the key steps in promoting a product. Brand Equity An intangible value-added aspect of particular good s that are otherwise not considered unique Brazil, Russia, India and China - BRIC An acronym for the economies of Brazil, Russia, Ind ia and China combined. The general consensus is that the term was first prominently used in a Go ldman Sachs report from 2003, which speculated that by 2050 these four economies would be wealthie r than most of the current major economic powers. Bre-X Minerals Ltd. A company involved in one of the largest stock swin dles in history. Its Indonesian gold property, which reportedly contained over 200 million ounces, was proven fraudulent in May of 1997.

Breadth Indicator A specific type of indicator that uses advancing an d declining issues to determine the amount of participation in the movement of the stock market. Breadth of Market Theory A technical analysis theory that predicts the stren gth of the market according to the number of stocks that advance or decline in a particular trad ing day Break A term used in futures markets to describe a rapid and sharp price decline. Break Fee 1. A fee paid by a target company to bidders (durin g an acquisition) if the pending deal is terminated . 2. A fee paid by one party of a contract to another in order to terminate or cancel legal obligations. Break-Even Point - BEP 1. In general, the point at which gains equal losse s. 2. In options, the market price that a stock must r each for option buyers to avoid a loss if they exercise. For a call, it is the strike price plus t he premium paid. For a put, it is the strike price minus the premium paid. Breakaway Gap A term used in technical analysis. A breakaway gap represents a gap in the movement of a stock price supported by levels of high volume. The image shows a gap at the beginning of a large u pward movement. Breakdown A price movement through an identified level of sup port, which is usually followed by heavy volume and sharp declines. Technical traders will short se ll the underlying asset when the price of the security breaks below a support level because it is a clear indication that the bears are in control and that additional selling pressure is likely to f ollow. Breakout The action by a stock when it surpasses its resista nce level: usually a price ceiling at which the stock has previously encountered selling. In many c ases, but not always, that resistance level is the highest point in a "handle" portion of a base patte rn. Breakout Trader A type of trader who uses technical analysis to fin d potential trading opportunities, identifying situations where the price of an asset is likely to experience a substantial movement over a short period of time. Breakout traders generally look for key levels of support and resistance and will place transactions when the asset's price passes th rough these levels. Long positions are taken when the price of an asset breaks through a level o f resistance, and short positions are taken when the price breaks below a level of support. Breakpoint A predetermined contribution amount in a mutual fun d making the investor eligible for a reduction in sales charges. Mutual Funds are required to give a description of these breakpoints and the eligibility requirements in their fund prospectus. It is prudent for investors to be aware of these. Breakpoint Sale The sale of a mutual fund at a set dollar amount th at allows for the fundholder to move into a lower sales charge bracket. If an investor is unable at t he time of investment to come up with the funds necessary to qualify for the lower fee they can sig n a letter of intent stating they will reach the to tal amount, or breakpoint, in a set time period. Any sales that occur just below a breakpoint are co nsidered unethical and in violation of NASD

rules. Brent Blend A type of sweet crude oil that is used as a benchma rk for the prices of other crude oils. Bretton Woods Agreement A 1944 agreement made in Bretton Woods, New Hampshi re, which helped to establish a fixed exchange rate in terms of gold for major currencies . The International Monetary Fund was also established at this time. Brick And Mortar A traditional "street-side" business that deals wit h its customers face to face in an office or store that the business owns or rents. Web-based business es usually have lower costs and greater flexibility than brick-and-mortar operations. Bridge Financing A method of financing, used by companies before the ir IPO, to obtain necessary cash for the maintenance of operations. Bridge Loan A short-term loan that is used until a person or co mpany secures permanent financing or removes an existing obligation. This type of financing allo ws the user to meet current obligations by providing immediate cash flow. The loans are short- term (up to one year) with relatively high interest rates and are backed by some form of collateral suc h as real estate or inventory. Also known as "interim financing", "gap financing o r a "swing loan". British Bankers Association - BBA The leading trade association that represents the v iews of those involved in the banking and financial services industry within the U.K. BRL In currencies, this is the abbreviation for the Bra zilian Real Broad Liquidity A category of the money supply which includes: all funds in M3, individual holdings in accounts, savings bonds, T-bills with maturity of less than o ne year, commercial papers, and banker's acceptances. Broad-Based Index An index designed to reflect the movement of the en tire market. The smallest broad-based index is the Dow Jones Industrial Average with 30 industrial stocks and the largest is the Wilshire 5000 Total Market Index. Other examples include the S&P 500, R ussell 3000 Index, AMEX Major Market Index and the Value Line Composite Index. Broad-Based Weighted Average An anti-dilution provision used for the benefit of existing preferred shareholders when additional offerings are made by the corporation. The broad-ba sed weighted average accounts for all equity previously issued and currently undergoing issue. Broadband A high-speed, high-capacity transmission medium tha t can carry signals from multiple independent network carriers. This is done on a single coaxial or fiber-optic cable by establishing different bandwidth channels. Broadband technology can suppor t a wide range of frequencies. It is used to transmit data, voice and video over long distances simultaneously Broadening Formation A pattern used in technical analysis to predict the likelihood of a reversal in the direction of the current trend. It is identified by finding divergin g trendlines that connect a series of widening peak s and troughs. The most common type of broadening for mation is found at the end of a prolonged uptrend and is used to predict a move lower

Brochure Rule Under the Investment Advisor's Act of 1940, the Bro chure Rule requires federally registered investment advisors provide a written disclosure st atement to their clients at specified times during the advisory process. Broker 1. An individual or firm that charges a fee or comm ission for executing buy and sell orders submitted by an investor. 2. The role of a firm when it acts as an agent for a customer and charges the customer a commission for its services. 3. A licensed real estate professional who typicall y represents the seller of a property. A broker's duties may include: determining market values, adve rtising properties for sale, showing properties to prospective buyers, and advising clients with re gard to offers and related matters. Broker Association A permitted association between exchange members wh o have shared responsibility for the execution of orders placed by their customers. Thes e members thereby gain access to a collective pool of un-transacted orders, and they share the pr ofits and losses associated with trading activities. Broker's Call The interest rate relative to which margin loans ar e quoted. Also known as the call loan rate. Broker-Dealer A person or firm in the business of buying and sell ing securities operating as both a broker and a dealer depending on the transaction. Broker-Reseller A type of broker that acts as an intermediary betwe en large brokerages and their clients. Broker-resellers typically take stock orders from clients and then use major brokerages to execute the trades Brokerage Account An arrangement between an investor and a licensed b rokerage firm that allows the investor to deposit funds with the firm and place investment or ders through the brokerage, which then carries out the transactions on the investor's behalf. The investor owns the assets contained in the brokerage account and must usually claim as income any capital gains he or she incurs from the account Brokered Deposit A large-denomination deposit similar to a certifica te of deposit. Brought Over The Wall The situation of an employee in the research depart ment of an investment bank - usually a research analyst - who has been brought over to work for the underwriting department with a focus on a particular company. The purpose of this transfer is to add a knowledgeable opinion to the underwriting process, thereby adding value to it. A lso known as "brought over the Chinese Wall Brown Field Investment When a company or government entity purchases or le ases existing production facilities to launch a new production activity. This is one strategy used in foreign-direct investment. BSD In currencies, this is the abbreviation for the Bah amanian Dollar BTN In currencies, this is the abbreviation for the Bhu tan Ngultrum

Bubble 1. An economic cycle characterized by rapid expansi on followed by a contraction. 2. A surge in equity prices, often more than warran ted by the fundamentals and usually in a particular sector, followed by a drastic drop in pr ices as a massive selloff occurs. 3. A theory that security prices rise above their t rue value and will continue to do so until prices g o into freefall and the bubble bursts Buck 1. Trader's slang for a million dollars. 2. Informal reference to one dollar. Buck the Trend When a security goes against the prevailing trend o f the overall market. Bucket Shop 1. A fraudulent brokerage firm that uses aggressive telephone sales tactics to sell securities that th e brokerage owns and wants to get rid of. The securit ies they sell are typically poor investment opportunities, and almost always penny stocks. 2. A brokerage that makes trades on a client's beha lf and promises a certain price. The brokerage, however, waits until a different price arises and t hen makes the trade, keeping the difference as profit. Bucketing A situation where, in an attempt to make a short-te rm profit, a broker confirms an order to a client without actually executing it. A brokerage which en gages in unscrupulous activities, such as bucketing, is often referred to as a bucket shop Budget An estimation of the revenue and expenses over a sp ecified future period of time. A budget can be made for a person, a family or a group of people, a business, government, country or multinational organization or just about anything else that makes and spends money. Budgets are a microeconomic concept that show the tradeoff made w hen one good is exchanged for another. BUGS Index - HUI An acronmy for "basket of un-hedged gold stocks," t he BUGS index is the AMEX's index measuring gold companies that do not hedge their gold product ion beyond a year and a half. Bulge A slang term used to describe a rapid advance in pr ices within the commodities market Bulge Bracket The group of firms in an underwriting syndicate who sold the largest amount of the issue Bulk Sales Escrow A type of escrow agreement placed on the sale of in ventory, business assets or an entire company. The escrow serves to protect the interests of unsec ured creditors: it eliminates the risk that the seller of the assets will use the proceeds from the sale for purposes other than paying debts or taxes owed. Bull An investor who thinks the market, a specific secur ity or an industry will rise. Bull Call Spread A type of options strategy used when a moderate ris e in the price of the underlying asset is expected. It is achieved by purchasing call options at a specific strike price while also selling the same number of calls of the same asset and expirati on date but at a higher strike. The maximum profit in this strategy is the difference between t he strike prices of the long and short options, les s the net cost of options. Most often, bull call spre ads are vertical spreads.

Bull CD A certificate of deposit whose interest rate fluctu ates in direct correlation to the value of an underlying market index. In other words, the intere st rate paid on the CD increases as the value of the market index increases during the life of the C D. Bull Flattener A yield-rate environment in which long-term rates a re decreasing at a rate faster than short-term rates. This causes the yield curve to flatten as th e short-term and long-term rates start to converge. Bull Market A financial market of a certain group of securities in which prices are rising or are expected to rise . The term "bull market" is most often used in respec t to the stock market, but really can be applied to anything that is traded, such as bonds, currencies, commodities, etc. Bull markets are characterized by optimism, investo r confidence and expectations that strong results will continue. Of course, no bull market ca n last forever, and sooner or later a bear market ( in which prices fall) will come. It's tough if not imp ossible to predict consistently when the trends in the market will change. Part of the difficulty is that psychological effects and speculation can sometimes play a large (if not dominant) role in the markets. The extreme on the high end is a stock-market bubble, and on the low end a crash. Bull Put Spread A type of options strategy that is used when the in vestor expects a moderate rise in the price of the underlying asset. This strategy is constructed by p urchasing one put option while simultaneously selling another put option with a higher strike pri ce. The goal of this strategy is realized when the price of the underlying stays above the higher stri ke price, which causes the short option to expire worthless, resulting in the trader keeping the prem ium. Bull Spread An option strategy in which maximum profit is attai ned if the underlying security rises in price. Either calls or puts can be used. The lower strike price is purchased and the higher strike price is sold. The options have the same expiration date. Bull Steepener A change in the yield curve caused by short-term ra tes falling faster than long-term rates, resulting in a higher spread between the two rates. Bull Trap A false signal indicating that a declining trend in a stock or index has reversed and heading upwards when, in fact, the security will continue to declin e Bull Vertical Spread An bullish strategy used by investors who feel that the market price of a commodity will appreciate but wish to limit the downside potential associated with an incorrect prediction. Bulldog Bond A sterling denominated bond that is issued in Londo n by a company that is not British. Bullet Bond A noncallable regular coupon paying debt instrument with a single repayment of principal on the maturity date. Bullet GIC A guaranteed investment contract (GIC) is purchased with a single premium and only one payout that is made at maturity. Bullet Loan

Any loan that requires a balloon payment at the end of the term and anticipates that the loan will be refinanced in order to meet the balloon payment obl igation. Bullet Repayment A single payment for an entire loan amount that is paid at maturity. Bullet Trade The act of purchasing an "in the money" put option so that the buyer can capitalize on a bear market by effectively shorting a stock without waiting for an uptick Bullion Gold and silver that is officially recognized as hi gh quality (at least 99.5% pure), and is in the for m of bars rather than coins. Bullish Belt Hold A trend in candlestick charting that occurs during a downward movement. After a stretch of bearish candlesticks, a bullish or white candlestick forms. The opening price, which becomes the low for the day, is significantly lower then the closing price. This results in a long white candlestick with a sh ort upper shadow and no lower shadow. Bullish Engulfing Pattern A chart pattern that forms when a small black candl estick is followed by a large white candlestick that completely eclipses or "engulfs" the previous day's candlestick. The shadows or tails of the small candlestick are short, which enables the body of the large candlestick to cover the entire candlestick from the previous day. Bullish Harami A candlestick chart pattern in which a large candle stick is followed by a smaller candlestick whose body is located within the vertical range of the la rger body. In terms of candlestick colors, the bull ish harami is a downtrend of negative-colored (black) c andlesticks engulfing a small positive (white) candlestick, giving a sign of a reversal of the dow nward trend. Bullish Homing Pigeon A trend indicated by a large candlestick followed b y a much smaller candlestick whose body is located within the vertical range of the larger can dle's body. In both candlesticks, the stock price h as to have closed down from the opening price. This pa ttern may indicate that there is a weakening of the current downward trend. Bullpen A slang term referring to the traditional seating a rrangement of younger investment advisors or brokers in a brokerage house Bunching The combining of odd-lot or round-lot orders for th e same security so that they may be executed at the same time. Bund The German government's federal bond. The bund is i ssued to the public as a way for the German government to finance its spending. Bundesbank Refers to the central bank of Germany. This is the U.S. equivalent of the Federal Reserve Bungalow A one-story house, cottage or cabin. Bungalows are generally small in terms of square footage, but it is not uncommon to see very large bungalows. Bun galows were originally designed to provide affordable, modern housing for the working class.

Bunny Bond A type of bond that offers investors the option to reinvest coupon payments into additional bonds with the same coupon and maturity. Also known as a "multiplier bond" or a "guaranteed coupon reinvestment bond Buoyant The term used to describe a commodities market wher e the prices generally rise with ease when there are considerable signals of strength. Bureau of Census A division of the federal government of the United States Bureau of Commerce that is responsible for conducting the national census at least once ev ery 10 years, in which the population of the United States is counted. The Bureau of Census is a lso responsible for collecting data on the people, economy and country of the United States. A lso known as the "United States Census Bureau Bureau of Economic Analysis - BEA A division of the U.S. federal government's Departm ent of Commerce that is responsible for the analysis and reporting of economic data used to con firm and predict economic trends and business cycles. Reports from the Bureau of Economic Analysi s are the foundation upon which many economic policy decisions are made by government, a nd many investment decisions are made in the private sector by companies and individual inve stors. Bureau Of Labor Statistics - BLS A government agency that produces economic data ref lecting the state of the U.S. economy, the most well-known being the Consumer Price Index, Une mployment Rate, and the Producer Price Index. Business 1. An organization or enterprising entity engaged i n commercial, industrial or professional activities . A business can be a for-profit entity, such as a pu blicly-traded corporation, or a non-profit organization engaged in business activities, such a s an agricultural cooperative. 2. Any commercial, industrial or professional activ ity undertaken by an individual or a group. 3. A reference to a specific area or type of econom ic activity. Business Cycle The recurring and fluctuating levels of economic ac tivity that an economy experiences over a long period of time. The five stages of the business cyc le are growth (expansion), peak, recession (contraction), trough and recovery. At one time, bu siness cycles were thought to be extremely regular, with predictable durations. But today busi ness cycles are widely known to be irregular - varying in frequency, magnitude and duration. Business Cycle Indicators - BCI Composite of leading, lagging and coincident indexe s created by the Conference Board and used to forecast changes in the direction of the overall ec onomy of a country. They can be used to confirm or predict the peaks and troughs of the business cy cle and are published for the U.S., Mexico, France, the U.K., South Korea, Japan, Germany, Aust ralia and Spain. Business Development Bank of Canada - BDC A financial institution that is wholly owned by the government of Canada providing financial and consulting services to small Canadian businesses. Business Logic The specific details and information flow of a part icular industry. Business Model The plan implemented by a company to generate reven ue and make a profit from operations. The

model includes the components and functions of the business, as well as the revenues it generates and the expenses it incurs. Business Risk The risk that a company will not have adequate cash flow to meet its operating expenses. Business To Business - B To B Business conducted between companies, rather than b etween a company and individual consumers. Business To Consumer - B To C Business conducted between companies and individual consumers, rather than between two companies Busted Convertible Security A convertible security that is trading well below i ts conversion value. The result is that the securit y is valued as regular debt because there is very lit tle chance that it will ever reach the convertible price before maturity. Busted Takeover A highly leveraged takeover that, to go through, re quires a selling off of some of the acquired company's assets. Butterfly Spread An option strategy combining a bull and bear spread . It uses three strike prices. The lower two strike prices are used in the bull spread, and the higher strike price in the bear spread. Both puts and call s can be used. Buttonwood Agreement The agreement between 24 of United States' first an d most prominent brokers. Rumored to have occurred under a "Buttonwood" tree, this marked the beginnings of the investment community of Wall Street. Buy 1. A recommendation to purchase a specific security . 2. To acquire an asset in exchange for currency. Buy And Hold A passive investment strategy in which an investor buys stocks and holds them for a long period of time, regardless of fluctuations in the market. An investor who employs a buy-and-hold strategy actively selects stocks, but once in a position, is not concerned with short-term price movements and technical indicators. Buy Minus A type of order where a client instructs the broker to purchase a stock at a price below the current market price. Buy Point Optimal buy point of a stock as it emerges from a s ound and proper basing area or chart pattern (the most common of which include the 'cup with handle,' 'flat base' and 'double bottom') and breaks out into a new high in price. This is the point of leas t resistance and has shown, through William J. O'Neil's research, to have the greatest chance of m oving substantially higher based on its current and historical price and volume activity. Buy Side The side of Wall Street comprising the investing in stitutions such as mutual funds, pension funds and insurance firms that tend to buy large portions of securities for money-management purposes.

The buy side is the opposite of the sell-side entit ies, which provide recommendations for upgrades, downgrades, target prices and opinions to the publi c market. Together, the buy side and sell side make up both sides of Wall Street. Buy Stop Order An order to buy a security which is entered at a pr ice above the current offering price. It is trigger ed when the market price touches or goes through the b uy stop price. Buy To Close A term used by many brokerages to represent the clo sing of a short position in option transactions. Buy To Cover An order placed to close out a short position in a particular stock. Buy To Open A term used by many brokerages to represent the ope ning of a long position in option transactions Buy Weakness A proactive trading strategy in which a trader take s profits by closing out of a short position or buying into a long position. This strategy is used when the price of the asset being traded is still falling but is expected to reverse and move against the trader. This is the opposite of "selling into strength Buy-In When an investor is forced to repurchase shares bec ause the seller did not deliver the securities in a timely fashion, or did not deliver them at all. Buyback The buying back of outstanding shares (repurchase) by a company in order to reduce the number of shares on the market. Companies will buyback shares either to increase the value of shares still available (reducing supply), or to eliminate any th reats by shareholders who may be looking for a controlling stake. Buydown A mortgage-financing technique with which the buyer attempts to obtain a lower interest rate for at least the first few years of the mortgage, but poss ibly its entire life. The builder or seller or the property usually provides payments to the mortgage- lending institution, which, in turn, lowers the buyer's monthly interest rate and therefore monthly payment. The home seller, however, increases the purchase price of the home to compensate for th e costs of the buydown agreement. Buyer's Call An agreement between a buyer and seller whereby a c ommodity purchase occurs at a specific price above a futures contract for an identical grade and quantity. Also known as a call sale, this agreement gives the buyer the option to fix the price of the commodity by either purchasing a future from the se ller or indicating to the seller a time in which th e price of the transaction will be set. A buyer's cal l is used instead of buying the commodity on the spot market because of the possibility that its pri ce will depreciate Buyer's Market A market condition characterized by an abundance of goods available for sale. Buying Hedge

A transaction that commodities investors undertake to hedge against possible increases in the prices of the actuals underlying the futures contra cts. Buying Power The money an investor has available to buy securiti es. In a margin account, the buying power is the total cash held in the brokerage account plus maxim um margin available. Also referred to as "Excess Equity." Buyout The purchase of a company or a controlling interest of a corporation's shares BWP In currencies, this is the abbreviation for the Bot swana Pula. BZD In currencies, this is the abbreviation for the Bel ize Dollar. C A Nasdaq stock symbol indicating the issuer has bee n granted a continuance in Nasdaq under an exception to the qualification standards f or a limited period. C-Share In a family of multi-class mutual funds, the class that has a constant load structure throughout the life of the fund. Cabinet Crowd Members of the NYSE that typically trade in inactiv e bonds. Also known as the inactive bond crowd or book crowd. Cabinet Security A stock or bond that is listed under a major financ ial exchange, but is not actively traded Cable In the context of the forex market, the exchange ra te between the U.S. dollar and the British pound sterling. Because it is the norm in f orex for most major currencies to be quoted against the U.S. dollar on a regular basis, "cable" is a commonly used term. "Cable" can also be used to refer simply to the Bri tish pound sterling. CAC 40 The French stock market index that tracks the 40 la rgest French stocks based on market capitalization on the Paris Bourse (stock exchange) . CAD In currencies, this is the abbreviation for the Can adian Dollar. Cafeteria Plan An employee benefit plan that allows staff to choos e from a variety of benefits to formulate a plan that best suits their needs. Also known as "cafeteria employee benefit plan" or "flexible benefit plan".

Cage A term used to describe the department of a brokera ge firm that receives and distributes physical securities. Caisse Populaire A cooperative, member-owned financial institution t hat fulfills traditional banking roles as well as diverse activities such as lending, insuran ce, investment dealing. Caisses Populaires are primarily found in the province of Q uebec in Canada, as caisses populaires are essentially the francophone equivalent of a cre dit union. Calculation Agent An individual who calculates the value of a derivat ive or the amount owing from each party in a swap agreement. Calendar Spread An options or futures spread established by simulta neously entering a long and short position on the same underlying asset but with diff erent delivery months. Sometimes referred to as an inter-delivery, time or horizonta l spread. Calendar Year The one-year period that begins on Jan 1 and ends o n Dec 31, based on the commonly used Gregorian calendar. For individual and corpora te taxation purposes, a calendar year will generally comprise all of the year's financial information used to calculate income tax payable. Call 1. The period of time between the opening and closi ng of some future markets wherein the prices are established through an auction process. 2. An option contract giving the owner the right (b ut not the obligation) to buy a specified amount of an underlying security at a specified pri ce within a specified time. Call Date The date on which a bond can be redeemed before mat urity. If the issuer feels there is a benefit to refinancing the issue, the bond may be r edeemed on the call date at par or at a small premium to par. Call Loan A loan provided to a brokerage firm and used to fin ance margin accounts. The interest rate on a call loan is calculated daily. The resulting i nterest rate is referred to as the call loan rate. Call Loan Rate The short term interest rate charged on a secured c all loan, usually in margin accounts. Also known as the broker's call. Call Option An agreement that gives an investor the right (but not the obligation) to buy a stock, bond,

commodity, or other instrument at a specified price within a specific time period Call Premium 1. The dollar amount over the par value of a callab le fixed-income debt security that is given to holders when the security is called by the issuer. 2. The amount the purchaser of a call option must p ay to the writer. Call Price The price at which a bond or a preferred stock can be redeemed by the issuer. This price is set at the time the security is issued. Also ref erred to as "redemption price". Call Protection A protective provision of a callable security prohi biting the issuer from calling back the security for a period early in its life. Call Ratio Backspread A very bullish investment strategy that combines op tions to create a spread with limited loss potential and mixed profit potential. It is ge nerally created by selling one call option and then using the collected premium to purchase a greater number of call options at a higher strike price. This strategy has potentially unlimited upside profit because the trader is holding more long call options than short ones. Call Risk The risk, faced by a holder of a callable bond, tha t a bond issuer will take advantage of the callable bond feature and redeem the issue prior to maturity. This means the bondholder will receive payment on the value of the bond and, in most cases, will be reinvesting in a less favorable environment (one with a lower intere st rate). Call Rule A exchange rule whereby the official bidding price for a cash commodity is competitively established at the end of each trading day and held until the opening of the exchange the following trading day Call Warrant A warrant that gives the holder the right to buy th e underlying share for an agreed price, on or before a specified date Callable Bond A bond that can be redeemed by the issuer prior to its maturity. Usually a premium is paid to the bond owner when the bond is called. Also known as a "redeemable bond". Callable Common Stock Common stock that allows the issuer to call back th e stock at a specific price. Callable Preferred Stock

A type of preferred stock that carries the provisio n that the issuer has the right to call in the stock at a certain price and retire it. Also kn own as "redeemable preferred stock". Called Away A term used to describe the elimination of a contra ct due to the obligation of delivery. This occurs if an option is exercised, if a redeemable b ond is called before maturity or if a short position held in a security requires delivery. Calmar Ratio A ratio used to determine return relative to drawdo wn (downside) risk in a hedge fund. Cambist An expert trader who rapidly buys and sells currenc y throughout the day. CAMELS Rating System An international bank-rating system with which bank supervisory authorities rate institutions according to six factors. The six area s examined are represented by the acronym "CAMELS." Camouflage Compensation Compensation that is granted to upper echelon emplo yees, directors, consultants and related parties that is not fully disclosed in mand atory company filings. In other cases, compensation is fully disclosed, but in such a way that it is very difficult for the average investor to decipher the true value of gross pay co mpensation. CAN SLIM® Acronym for William J. O'Neil's investment strategy . CAN SLIM® is based on the seven common characteristics found in his study of the gr eatest stock market winners of the last 45 years. A thorough discussion of CAN SLIM® can be found in William J. O'Neil's book, How to Make Money in Stocks. •C = Current Earnings Growth •A = Annual Earnings Growth •N = New Products, New Services, New Management, New Price Highs •S = Supply & Demand •L = Leader or Laggard •I = Institutional Sponsorship •M = Market Canada Education Savings Grant - CESG A grant from the Government of Canada paid directly into a beneficiary's Registered Education Savings Plan (RESP). It adds 20% to the f irst $2,000 in contributions made into an RESP on behalf of an eligible beneficiary each y ear. Canada Premium Bond - CPB A debt instrument issued by the Bank of Canada that offers a higher interest rate than a Canada Savings Bond (CSB) with the same issuance da te.

Canada Revenue Agency - CRA Formerly known as "Revenue Canada", this is Canada' s federal agency responsible for income tax and trade regulations. Canada Savings Bond - CSB A financial product issued by the Bank of Canada. I t offers a competitive rate of interest and guarantees a minimum interest rate. Canadian Dollars IBD's earnings section contains reports from Canadi an companies who report their quarterly results in Canadian dollars. Canadian Investor Protection Fund - CIPF A Canadian not-for-profit organization set up by th e investment industry designed to protect investors from the bankruptcy of an individ ual investment firm. Accounts are covered for up to $1 million in shortf all of securities, commodity and futures contracts, segregated insurance funds and cash. Sho rtfall is the difference between the market value of the account and what the insolvent company can return to the customer. Canadian Mortgage and Housing Corporation - CMHC A division of the Government of Canada that acts as Canada's national housing agency. The CMHC's mandate is to help Canadians access a va riety of affordable housing options. It also researches housing and real estate trends i n Canada and around the world, providing research to consumers, businesses and oth er government divisions. The major activity of the CMHC, and the one for which it is b est known, is mortgage loan insurance, which insures approved lenders (such as Canada's ch artered banks) against borrower default. Mortgage loan insurance provides approved borrowers access to low-cost mortgage rates. CMHC approved buyers may purchase p roperty with as little as 5% down payment. Canadian Orginated Preferred Securities - COPrS A long-term subordinated debt instrument, issued in Canada. Canadian Securities Course - CSC An entry-level program offered by the Canadian Secu rities Institute (CSI) that allows an individual to become a qualified mutual fund repres entative. Cancel Former Order - CFO An order given by an investor instructing his/her b roker to cancel a previously placed order. Cancellation A notice informing a customer of the cancellation o f an erroneous trade that has been credited to his or her account by the broker. Candlestick A price chart that displays the high, low, open, an d close for a security each day over a

specified period of time. Capital 1. Financial assets or the financial value of asset s such as cash. 2. The factories, machinery and equipment owned by a business. Capital Account The net result of public and private international investment flowing in and out of a country. Capital Adequacy Ratio - CAR A measure of a bank's capital. It is expressed as a percentage of a bank's risk weighted credit exposures. Capital Allocation Line - CAL A line created in a graph of all possible combinati ons of risky and risk-free assets. Also known as the "reward-to-variability ratio". Capital Appreciation A rise in the market price of an asset. Capital Appreciation Fund A mutual fund that attempts to increase asset value primarily through investments in growth stocks. The heavy investment in growth stock s increases the risk associated with these types of funds. Also called "aggressive growt h fund". Capital Asset A long-term asset that is not bought or sold in the regular course of business. Capital Asset Pricing Model - CAPM A model that describes the relationship between ris k and expected return and that is used in the pricing of risky securities. The general idea behind CAPM is that investors need to be compensated in two ways: time value of money and risk. The time value of money is represented by the risk-free (rf) rate in the formula and compensates the investors for placi ng money in any investment over a period of time. The other half of the formula repre sents risk and calculates the amount of compensation the investor needs for taking on addit ional risk. This is calculated by taking a risk measure (beta) that compares the returns of the asset to the market over a period of time and to the market premium (Rm-rf). Capital Base 1. The capital acquired during an IPO, or the addit ional offerings of a company, plus any retained earnings. 2. An initial investment plus subsequent investment s made by an investor into their portfolio. Capital Budgeting

The process of determining whether or not projects such as building a new plant or investing in a long-term venture are worthwhile. Also known as "investment appraisal". Capital Cost Allowance - CCA A rate of depreciation used for income tax purposes only. This term primarily relates to Canadian taxation. Capital Dividend Account - CDA A unique account where untaxed gains are deposited within a private company. Capital Employed 1. The total amount of capital used for the acquisi tion of profits. 2. The value of all the assets employed in a busine ss. 3. Fixed assets plus working capital. 4. Total assets less current liabilities. Capital Expenditure - CAPEX Funds used by a company to acquire or upgrade physi cal assets such as property, industrial buildings or equipment. This type of out lay is made by companies to maintain or increase the scope of their operation. These expend itures can include everything from repairing a roof to building a brand new factory. Capital Flight The action of investors moving their securities out of a particular country because of a fear of country-specific risks or political instabi lity, or because of the lure of higher returns in a different country. Capital Gain An increase in the value of a capital asset (invest ment or real estate) that gives it a higher worth than the purchase price. The gain is not real ized until the asset is sold. A capital gain may be short term (one year or less) or long t erm (more than one year) and must be claimed on income taxes. Capital Gains Distribution Distributions that are paid to an investment compan y's shareholders out of the capital gains of the company's investment portfolio. Capital Gains Exposure - CGE An assessment of the extent to which a stock fund o r other similar investment fund's assets have appreciated or depreciated, which may h ave tax implications for investors. Positive exposure would mean that the assets in the fund have appreciated and that shareholders will have to pay taxes on any realized gains on the appreciated assets. Negative exposure denotes that the fund has a loss carryforward that can cushion some of the capital gains. Capital Gains Treatment

Describes lump-sum distributions of qualified plan balances that accrued before 1974 may be eligible for capital gains treatment. Capital Goods Any goods used by an organization to produce other goods. Capital Goods Price Index - CGPI An economic index computed by the New Zealand gover nment that measures the change in fixed capital-asset prices in the New Zealand ec onomy from one period to another. The index helps indicate the change in costs for capita l assets, which are used by companies and the New Zealand government to produce other goo ds. The CGPI is produced every quarter. Capital Growth Strategy An asset allocation strategy that seeks to maximize capital appreciation, or the increase in value of a portfolio or asset over the long term. Capital Guaratee Fund An investment vehicle, offered by certain instituti ons, that guarantees the investor's initial capital investment from any losses. Capital Improvement The addition of a permanent structural improvement or the restoration of some aspect of a property that will either enhance the property's ov erall value or increases its useful life. Although the scale of the capital improvement can v ary, capital improvements can be made by both individual homeowners and large-scale property owners. Capital Intensive A process or industry that requires large sums of f inancial resources to produce a particular good. Capital Lease A lease considered to have the economic characteris tic of asset ownership. Capital Loss The loss incurred when a capital asset (investment or real estate) decreases in value. This loss is not realized until the asset is sold for a price that is lower than the original purchase price. Capital Market Line - CML A line used in the capital asset pricing model to i llustrate the rates of return for efficient portfolios depending on the risk-free rate of retur n and the level of risk (standard deviation) for a particular portfolio. Capital Markets Markets where capital, such as stocks and bonds, ar e traded.

Capital Note Fixed income products issued by companies as a sour ce of short term debt. Capital Rationing The act of placing restrictions on the amount of ne w investments or projects undertaken by a company. This is accomplished by imposing a hi gher cost of capital for investment consideration or by setting a ceiling on the specif ic sections of the budget. Capital Risk 1. The risk an investor faces that he or she may lo se all or part of the principal amount invested. 2. The risk a company faces that it may lose value on its capital. The capital of a company can include equipment, factories and liquid securit ies. Capital Share The class of shares offered by a dual-purpose fund that has opportunity for capital appreciation but does not offer the holder any port ion of the fixed income earned within the portfolio. Capital Stock The common and preferred stock a company is authori zed to issue, according to their corporate charter Capital Structure The means by which a firm is financed. Capital Surplus Equity which cannot otherwise be classified as capi tal stock or retained earnings. It's usually created from a stock issued at a premium ov er par value. Capitalism An economic system based on a free market, open com petition, profit motive and private ownership of the means of production. Capitalism en courages private investment and business, compared to a government-controlled econo my. Investors in these private companies (i.e. shareholders) also own the firms an d are known as capitalists. Capitalization 1. In accounting, it is where costs to acquire an a sset are included in the price of the asset. 2. The sum of a corporation's stock, long-term debt and retained earnings. Also known as "invested capital". 3. A company's outstanding shares multiplied by its share price, better known as "market capitalization". Capitalization Rate According to the Appraisal Institute, it is a metho d used to convert an estimate of a single

year's income expectancy into an indication of valu e in one direct step, by dividing the income estimate by an appropriate rate. Capitalize An accounting method used to delay the recognition of expenses by recording the expense as a long-term asset. Capitalized Interest The amount of accrued interest that is added to an original principal loan amount because the borrower either has not made large enough payme nts or has made no payments at all. In such a situation, the borrower is paying interes t on interest. Capitulation A military term. Capitulation refers to surrenderin g or giving up. In the stock market, capitulation is associated wit h "giving up" any previous gains in stock price as investors sell equities in an effort to ge t out of the market and into less risky investments. True capitulation involves extremely h igh volume and sharp declines. It usually is indicated by panic selling. Capped Option An option with a pre-established profit cap. A capp ed option is automatically exercised when the underlying security closes at or above (fo r a call) or at or below (for a put) the Option's cap price. Capping 1. The practice of selling large amounts of a commo dity or security close to the options expiry date in order to prevent a rise in market pr ice. 2. An attempt to keep a stock's price low or move i ts price lower by putting selling pressure on it. Captive Finance Company A subsidiary whose purpose is to provide financing to customers buying the parent company's product. Captive Fund A fund that provides investment services solely to the one firm holding ownership. Caput A type of exotic option that consists of a call opt ion on a put option. Essentially it gives the holder the right to purchase another option. Th is type of option is also known as a "compound option". Carbon Trade An idea presented in response to the Kyoto Protocol that involves the trading of greenhouse gas (GHG) emission rights between nation s. Cardboard Box Index An index used by some investors to gauge industrial production by using the output of

cardboard boxes to predict the purchases of non-dur able consumer goods. Carried Interest Used for resource companies that have a stake in a resource property. The owner of the property doesn't have to make a proportionate contr ibution to the expenses incurred for the project. Carrot Equity Equity which allows for the opportunity to purchase more equity if the company reaches certain financial goals Carrying Broker A term used to refer to a commodities exchange memb er who elects to clear trades on behalf of another party. Carrying Charge A cost associated with holding a financial instrume nt or storing a physical commodity over a defined period of time. Carrying Charge Market A futures market where contracts with maturities fu rther into the future have higher future prices. Carrying Cost Of Inventory The cost of maintaining inventory in a company's wa rehouse. Carrying Value An accounting measure of value, where the value of an asset or a company is based on the figures in the company's balance sheet. For ass ets, the value is based on the original cost of the asset less any depreciation, amortizati on or impairment costs made against the asset. For a company, carrying value is a company's total assets minus intangible assets and liabilities such as debt. Also known as "book value". Cartel A small group of producers of a good or service who agree to regulate supply in an effort to control or manipulate prices. Carve-out 1. Sometimes known as a partial spinoff, a carve ou t occurs when a parent company sells a minority (usually 20% or less) stake in a subsidi ary for an IPO or rights offering. 2. Where an established brick-and-mortar company ho oks up with venture investors and a new management team to launch an Internet spinoff. Cash Legal tender or coins that can be used in exchange goods, debt, or services. Sometimes

also including the value of assets that can be conv erted into cash immediately, as reported by a company Cash Account A regular broker account in which the customer is r equired by Regulation T to pay for securities within two days after a purchase is made . Cash Accounting An accounting method where receipts are recorded du ring the period they are received, and the expenses in the period in which they are ac tually paid. Cash Advance A loan taken out against a line of credit or credit card, typically imposing higher-than-normal interest charges. Cash and Carry Trade A trading strategy that involves the simultaneous t rading of two similar securities in order to recognize an arbitrage profit. Also known as "ba sis trading" or "buying the basis." Cash And Cash Equivalents - CCE An item on the balance sheet that reports the value of a company's assets that are cash or can be converted into cash immediately. Cash Balance Pension Plan A pension plan under which an employer credits a pa rticipant's account with a set percentage of his or her yearly compensation plus i nterest charges. A cash balance pension plan is a defined-benefit plan. As such, th e plan's funding limits, funding requirements and investment risk are based on defin ed-benefit requirements: as changes in the portfolio do not affect the final benefits t o be received by the participant upon retirement or termination, the company solely bears all ownership of profits and losses in the portfolio. Cash Basis A major accounting method that recognizes revenues and expenses at the time physical cash is actually received or paid out. This contras ts to the other major accounting method, accrual accounting, which requires income to be rec ognized in a company's books at the time the revenue is earned (but not necessarily rec eived) and records expenses when liabilities are incurred (but not necessarily paid for). Cash Budget An estimation of the cash inflows and outflows for a business. Cash Charge A charge off made by a company against earnings tha t requires an initial outlay of cash Cash Commodity The actual or physical commodity underlying a futur es contract.

Cash Conversion Cycle The duration between the purchase of a firm's inven tory and the collection of accounts receivable for the sale of that inventory. Also kno wn as cash cycle. Cash Cost A cash basis accounting cost recognition process th at classifies costs as they are paid for in cash, and is recognized in the general ledger at the point of sale. This method is contrary to the accrual cost recognition method, wh ich directly influences the operating cash flow figure. Cash Cow 1. One of the four categories (quadrants) in the BC G growth-share matrix that represents the division within a company that has a large mark et share within a mature industry. 2. A business, product or asset that, once acquired and paid off will produce consistent cash flow over its lifespan. Cash Delivery 1. The same-day settlement of a currency trade in t he forex market. This means that delivery and settlement of the transaction occur on the same date that the currency trade is made. In order for this to occur, the forex posi tion must be opened and closed within the same trading day. Also referred to as "same-day settlement". 2. In the context of futures contracts, a settlemen t term in a contract that stipulates that the underlying asset of the contract will not be de livered on the delivery date - rather, the net cash value of the position will be transferred to the applicable party instead. Cash Distribution Per Unit - CDPU A measure, used in Canada, that refers to the amoun t of cash payments made to individual unitholders of a specified income trust, as designa ted by the Canada Revenue Agency. The ratio is calculated by taking the total amount of cash distributions divided by the total amount of unit shares issued Cash Dividend Money paid to stockholders, normally out of the cor poration's current earnings or accumulated profits. All dividends must be declared by the board of directors and are taxable as income to the recipients. Cash Earnings Per Share - Cash EPS A measure of financial performance that looks at th e cash flow generated by a company on a per share basis. This differs from basic earni ngs per share (EPS), which looks at the net income of the company on a per share basis. The higher a company's cash EPS, the better it is considered to have performed over the period. A company's cash EPS can be used to draw comparisons to other companies or to t he company's own past results Cash Flow 1. A revenue or expense stream that changes a cash account over a given period. Cash in-flows usually arise from one of three activities - financing, operations or investing - though they also occur as a result of donations or gifts i n the case of personal finance. Cash out-

flows result from expenses or investments. This hol ds true for both business and personal finance. 2. An accounting statement - the statement of cash flows - that shows the amount of cash generated and used by a company in a given period, calculated by adding non-cash charges (such as depreciation) to net income after taxes. Cash flow can be attributed to a specific project, or to a business as a whole. Cash flow can be used as an indication of a company's financial strength. Cash Flow After Taxes - CFAT A measure of financial performance that looks at th e company's ability to generate cash flow through its operations. It is calculated by ad ding back non-cash accounts such as amortization, depreciation, restructuring costs and impairments to net income. Also known as "After-Tax Cash Flow". Cash Flow from Financing Activities A category in the cash flow statement that accounts for external activities such as issuing cash dividends, adding or changing loans, or issuin g and selling more stock. The formula for cash flow from financing activities is as follo ws: Cash Received from Issuing Stock or Debt - Cash Pai d as Dividends and for Re-Acquisition of Debt/Stock Cash Flow From Investing Activities An item on the cash flow statement that reports the aggregate change in a company's cash position resulting from any gains (or losses) from investments in the financial markets and operating subsidiaries, and changes res ulting from amounts spent on investments in capital assets such as plant and equ ipment. Cash Flow Loan Borrowing cash typically to meet day-to-day operati ons or acquisitions. Reasons for needing a cash flow loan could be seasonal-demand c hanges, business expansion or changes in the business cycle Cash Flow Per Share A measure of a firm's financial strength, calculate d as follows: Cash Flow Per Share From Operations Derived by adding depreciation, depletion and amort ization to the company's net income and dividing this figure by the shares outstanding. Brackets [ ] will surround the Cash Flow figure if the net income being used to derive the data is not from the most recently completed fiscal year and will indicate the year th e figure corresponds to. Cash Flow Return on Investment - CFROI A valuation model that assumes the stock market set s prices based on cash flow, not on corporate performance and earnings. Cash Flow Statement One of the quarterly financial reports any publicly traded company is required to disclose to the SEC and the public. The document provides ag gregate data regarding all cash

inflows a company receives from both its ongoing op erations and external investment sources, as well as all cash outflows that pay for business activities and investments during a given quarter. Cash Investment Short-term obligations, usually ninety days or less , that provide a return in the form of interest payments Cash Management Bill - CMB A short-term security sold by the U.S. Department o f the Treasury. The maturity on a CMB can range from a few days to six months. The money raised through these issues is used by the Treasury to meet any temporary shortfalls. Cash Market The market for a cash commodity or actual, as oppos ed to the market for its futures contract. Cash On Delivery - COD A type of transaction in which payment for a good i s made at the time of delivery. If the purchaser does not make payment when the good is de livered, then the good will be returned to the seller. Payment can be made by cash, certified check or mon ey order, depending on what is stipulated in the shipping contract. Cash Price The price of the purchase and delivery of cash comm odities. Cash Return on Gross Investment - CROGI A measure of financial performance calculated as gr oss cash flow after taxes divided by gross investment. Cash Settlement A settlement method used in certain future and opti on contracts whereby, upon expiry or exercise, the seller of the financial instrument do es not deliver the actual but transfers the associated cash position. Cash Surrender Value The sum of money an insurance company will pay to t he policyholder or annuity holder in the event his or her policy is voluntarily terminat ed before its maturity or the insured event occurs. This cash value is the savings component of most permanent life insurance policies, particularly whole life insurance policie s. Also known as "cash value", "surrender value" and "policyholder's equity". Cash Transaction A transaction that is settled with cash on the same day as the trade. Cash Value Added - CVA

A measure of the amount of cash generated by a comp any through its operations. It is computed by subtracting the 'operating cash flow de mand' from the 'operating cash flow' from the cash flow statement. Cash-on-Cash Return A rate of return often used in real-estate transact ions. The calculation determines the cash income on the cash invested: Cash-on-Cash Yield A comparative measure using the total amount of dis tributions paid upon an income trust divided by its market value. Cash-or-Nothing Call A type of option whose payoff is set to a specified fixed price if the final asset price is above the strike price if not, the payoff is set to zero. Cash-or-Nothing Put A type of option whose payoff is set to a specified fixed price if the final asset price is below the strike price if not, the payoff is set to zero. Cashier's Check A check written by a financial institution on its o wn funds. It is then signed by a representative of the financial institution and mad e payable to a third party. A customers who purchases a cashier's check pays for the full f ace value of the check and usually also pays a small premium for the service. These checks are secured by the funds of the issuer - usually Cashless Exercise A transaction that is used when exercising employee stock options (ESO). Essentially, what you do here is borrow enough money from your b roker to exercise the options. You then simultaneously sell enough shares to pay for t he purchase, taxes, and broker commissions. Casino Finance Any investment strategy that is classified as extre mely high risk. Casualty Insurance A broad category of coverage against loss of proper ty, damage or other liabilities, including such things as vehicle insurance, liabili ty insurance, theft insurance and elevator insurance. Catalyst Something that initiates or causes an important eve nt to happen. Originally a term used in chemistry for the volatile (active) chemical in a f ormula. Catastrophe Bond - CAT A high-yield debt instrument that is usually insura nce linked and meant to raise money in case of a catastrophe such as a hurricane or earthq uake. It has a special condition that

states that if the issuer (insurance or reinsurance company) suffers a loss from a particular pre-defined catastrophe, then the issuer 's obligation to pay interest and/or repay the principal is either deferred or completely forg iven Category Killer Large companies that put less efficient and highly specialized merchants out of business. Category killers can attain this status by being ch eaper, easier, bigger, or more popular than the competition. Cats and Dogs A slang term referring to speculative stocks that h ave short or suspicious histories for sales, earnings, dividends, etc. Caveat Emptor Another way to say, "let the buyer beware." CBOE Nasdaq Volatility Index - VXN A volatility index on the Chicago Board Options Exc hange, known by its ticker symbol VXN. The VXN is a measure of implied volatility for the Nasdaq 100 (NDX). Ceiling The highest level of allowance permitted for a cert ain good, rate, or transaction. Celtic Tiger A nickname for Ireland during its boom years of the late 1990s, when it enjoyed an average annual growth rate of over 6.5%. The first boom was in the late 1990s when investors (many of them tech firms) poured in, drawn by the c ountry's favorable tax rates - some as much as 20-50% lower than the rest of Europe. It en ded with the bursting of the internet bubble in 2001. The second boom in 2004 was largely the result of I reland opening its doors to workers from new EU member nations. Increases in house pric es, continued investment by multinationals, growth in jobs and tourism, a resur gence of the IT industry and the U.S. economic recovery have all been cited as contributi ng factors for the revival. Central Bank The entity responsible for overseeing the monetary system for a nation (or group of nations). Central banks have a wide range of respon sibilities - from overseeing monetary policy to implementing specific goals such as curre ncy stability, low inflation and full employment. Central banks also generally issue curr ency, function as the bank of the government, regulate the credit system, oversee com mercial banks, manage exchange reserves and act as a lender of last resort. CEO Confidence Survey A monthly survey of 100 CEOs from a variety of indu stries in the U.S. economy. The survey is conducted, analyzed and reported by the C onference Board, and it seeks to gauge the economic outlook of CEOs, determining the ir concerns for their businesses, and their view on where the economy is headed. A re ading above 50 indicates that the CEOs surveyed are more bullish than bearish on thei r economic outlook.

CEO, New The month and year in which a firm appointed a new Chief Executive Officer. Date shown is based on effective date of the appointment. This is based on changes made within the past two years. Item appears as "New CEO" on the Da tablock of Daily Graphs. Certainty Equivalent The return that would be accepted for the chance at a higher, but uncertain, amount. Certificate Of Deposit - CD A savings certificate entitling the bearer to recei ve interest. A CD bears a maturity date, a specified fixed interest rate and can be issued in any denomination. CDs are generally issued by commercial banks and are insured by the F DIC. The term of a CD generally ranges from one month to five years. Certificate of Government Receipts (COUGRs) U.S. Treasury fixed-income securities stripped of t heir coupon payments, providing payment of face value. These are synthetic securiti es offered by the firm A.G. Becker Paribas. Certificate of Indebtedness A short-term fixed income security issued by the Un ited States Treasury that has a coupon. Certificate of Participation - COP A type of financing where an investor purchases a s hare of the lease revenues of a program rather than the bond being secured by those revenues. Certificated Stock A stock of commodity that has been inspected by qua lified representatives and determined to be of basis grade. Certificates of Accrual on Treasury Securities - CA TS Issued by the U.S. Treasury and stripped by a finan cial intermediary, these products are sold at a significant discount from face value and pay no interest during their lifetime. However, they return full face value and cannot be called away. Certified Annuity Specialist - CAS A certification indicating expertise and commitment to fixed-rate and variable annuities. Individuals with the CAS designation offer clients expert advice in regards to investment opportunities in annuities. Certified Check A check certified by a bank to show sufficient fund s within the account meet the amount the check is drawn for.

Certified Financial Planner™ - CFP™ The CFP™ legal team has provided their official def inition, along with trademarks: CFP™, Certified Financial Planner™,and marks are certific ation marks owned by the Certified Financial Planner Board of Standards, Inc. These ma rks are awarded to individuals who successfully complete the CFP Board's initial and o ngoing certification requirements. Certified Fund Specialist - CFS A certification indicating an individual's expertis e in mutual funds and the mutual fund industry. These individuals advise clients on which mutual funds best suit their particular needs. The CFS designation does not license individ uals to buy or sell mutual funds however, in many cases Certified Fund Specialists d o have this license, which enables them to buy and sell the funds for their clients. Certified Investment Management Consultant - CIMC CIMC's have completed extensive course work and pas sed NASD proctored examinations for Levels I and II of the Institute for Certified Investment Management Consultants' course. CIMCs must also meet the Institute's requir ements concerning experience in consulting and managed accounts, and adhere to its Code of Ethics and continuing education requirements. Certified Investment Management Specialist - CIMS A designation by the Institute for Investment Manag ement Consultants to associate members who pass an exam and meet financial service s work-experience requirements Certified Management Accountant - CMA An accounting designation whose holder has formally demonstrated a mix of expertise in financial accounting and strategic management. This certification expands on financial accounting by adding management skills that help to make strategic business decisions based on financial information. Certified Public Accountant - CPA A designation given by the American Institute of Ce rtified Public Accountants to those who pass an exam and meet work-experience requireme nts. Certified Senior Consultant - CSC A certification indicating knowledge in key issues facing aging members of the population (individuals in their 50s, 60s and 70s) including S ocial Security, Medicare, Medicaid planning, housing and retirement. Ceteris Paribus Latin phrase that translates approximately to "hold ing other things constant" and is usually rendered in English as "all other things be ing equal". In economics and finance, the term is used as a shorthand for indicating the effect of one economic variable on another, holding constant all other variables that may affect the second variable. Chaikin Oscillator An oscillator created by subtracting a 10-day EMA f rom a 3-day EMA of the accumulation/distribution line.

Chameleon Option An option that has the ability to change its struct ure, should certain pre-determined terms of the contract be met. Chande Momentum Oscillator A technical momentum indicator invented by the tech nical analyst Tushar Chande. It is created by calculating the difference between the s um of all recent gains and the sum of all recent losses and then dividing the result by t he sum of all price movement over the period. This oscillator is similar to other momentu m indicators such as the Relative Strength Index and the Stochastic Oscillator becaus e it is range bounded (+100 and -100). Change 1. For an option or futures contract, the differenc e between the current price and the previous day's settlement price. 2. For an index or average, the difference between the current value and the previous day's market close. 3. For a stock or bond quote, the difference betwee n the current price and the last trade of the previous day. Changer The name given to a clearing member that is willing to assume the opposite position of a futures contract within a larger alternative exchan ge, of which it also is a clearing member. Channel 1. The system of intermediaries between the produce rs, suppliers, consumers, etcetera, for the movement of a good or service. 2. The technical range between support and resistan ce levels that a stock price has traded in for a specific period of time. Channel Check A method of independent stock analysis whereby comp any information is supplied by third parties. Channel lines (of a stock, upper and lower) On a stock chart, channel lines are determined by d rawing a straight line connecting three of the price peaks and a somewhat parallel line con necting three of the price lows during the same period, usually covering a couple of month s. Channel lines drawn over too short a period of time can be premature and incorrect. Channel Stuffing A deceptive business practice used by a company to inflate its sales and earnings figures by deliberately sending retailers along its distrib ution channel more products than they are able to sell to the public. Chaos Theory Also referred to as non-linear dynamics, chaos theo ry is a mathematical concept

explaining that it is possible to get random result s from normal equations. The main precept behind this theory is the underlying notion of small occurrences significantly affecting the outcomes of seemingly unrelated event s. Chapter 10 Named after the U.S. bankruptcy code 10, chapter 10 discusses how a company can file for court protection. Chapter 11 Named after the U.S. bankruptcy code 11, Chapter 11 is a form of bankruptcy that involves a reorganization of a debtor's business affairs and assets. It is generally filed by corporations which require time to restructure thei r debts. Chapter 11 gives the debtor a fresh start, subject to the debtor's fulfillment of its obligations under its plan of reorganization. Chapter 13 A U.S. bankruptcy proceeding in which the debtor un dertakes a reorganization of his/her finances under the supervision and approval of the courts. The reorganization must involve the debtor submitting and following through with a plan to repay outstanding creditors within three to five years. In most circu mstances, the repayment plan must provide a substantial payback to creditors - at lea st equal to what they would receive under other forms of bankruptcy - and it must, if n eeded, use 100% of the debtor's income for repayment. Chapter 7 A bankruptcy proceeding in which a company stops al l operations and goes completely out of business. A trustee is appointed to liquidat e (sell) the company's assets, and the money is used to pay off debt Charge Card A card that charges no interest but requires the us er to pay his/her balance in full upon receipt of the statement, usually on a monthly basi s. While it is similar to a credit card, the major benefit offered by a charge card is that it h as much higher, often unlimited, spending limits. Charge Off 1. A debt that is deemed uncollectable and written off. Also known as a bad debt. 2. A one time expense incurred by a company that ne gatively affects earnings. Chargeback The charge a credit card merchant pays to a custome r after the customer successfully disputes an item on his or her credit card statemen t. Charitable Donation A gift made by an individual or an organization to a nonprofit organization, charity or private foundation. Charitable donations are common ly in the form of cash, but can also take the form of real estate, motor vehicles, appre ciated securities, clothing and other

assets or services. Charitable Lead Trust A trust designed to reduce beneficiaries' taxable i ncome by first donating a portion of the trust's income to charities and then, after a speci fied period of time, transferring the remainder of the trust to the beneficiaries. Charitable Remainder Trust A tax-exempt irrevocable trust designed to reduce t he taxable income of individuals by first dispersing income to the beneficiaries of the trust for a specified period of time and then donating the remainder of the trust to the des ignated charity. Charter A legal document that provides for the creation of a corporate entity. A corporation's charter is issued by either a federal or a regional government and effectively creates a legal entity out of the business, which existed onl y as a partnership, sole proprietorship or similar business before incorporating. Also referred to as "articles of incorporation". Chartered Bank A financial institution whose primary roles are to accept and safeguard monetary deposits from individuals and organizations, and to lend mon ey out. The details vary from country to country, but usually a chartered bank in operati on has obtained government permission on some level to do business in the banking sector. Chartered Financial Analyst - CFA A professional designation given by the CFA Institu te (formerly AIMR) that measures the competence and integrity of financial analysts. Can didates are required to pass three levels of exams covering areas such as accounting, economics, ethics, money management and security analysis. Chartered Insurance Professional - CIP A professional designation granted by the the Insur ance Institute of Canada to insurance agents in the property and casual segments of the i ndustry. The designation was created to promote a standard in the field and gives agents professional standing in the field for the benefit of both employers and clients. Chartered Investment Councelor - CIC A designation by the Investment Counsel Association to those holding CFAs and currently working as investment counselors Chartered Market Technician - CMT A professional designation given by the Market Tech nicians Association (MTA) to financial professionals who prove their proficiency in techni cal analysis. Chartist Another name for a technical analyst. This is a per son who uses charts to identify patterns

that can suggest future activity. Chasing Nickels Around Dollar Bills A slang term describing what a company's management does when it decides to trim small, trivial costs instead of cutting larger, mor e serious costs. All too often, managers will cut the difficult costs as a last resort, when in fact the company would be much better off if the larger costs had been dealt with earlier . Chasing the Market Entering or exiting of a trend after the trend has already been well established. Investors are often unaware of the fact that they are chasing the market which can dent the value of a portfolio. This type of investing is often seen a s irrational as decisions are often based on emotion instead of careful analysis of the value of the investment. Chastity Bond A bond designed to prevent unwanted takeovers by ha ving a maturity that is activated once a takeover is complete. Chattel Mortgage A term used when describing a mobile or manufacture d home mortgage. Specifically when the home is not financed with the land. Cheap Stock The illegal practice of issuing stock options at ar tificially low prices shortly before an initial public offering. Often underwriters will require a company to have m ore qualified management before they can go public. They attract these qualified individ uals by giving options with a low exercise price. Cheapest to Deliver - CTD The least expensive underlying product that can be delivered upon expiry to satisfy the requirements of a derivative contract. Check A written, dated, and signed instrument that contai ns an unconditional order from the drawer that directs a bank to pay a definite sum of money to a payee. Check Representment A method whereby checks from accounts with insuffic ient funds are repeatedly deposited until funds are available. Checking Account A deposit account for funds intended for quick turn over. Checking accounts offer very low interest on unused cash balances. Cherry Picking 1. The act of investors choosing investments that h ave performed well within another

portfolio in anticipation that the trend will conti nue. 2. Relating to bankruptcy proceedings whereby the c ourts uphold contracts favorable to bankrupt companies, but annul those that are unfavo rable. CHF In currencies, this is the abbreviation for the Swi ss Franc. Chicago Board Of Trade - CBOT A commodity exchange established in 1848 that today trades in both agricultural and financial contracts. The CBOT originally traded onl y agricultural commodities such as wheat, corn and soybeans. Now, the CBOT offers opti ons and futures contracts on a wide range of products including gold, silver, U.S. Trea sury bonds and energy. Chicago Board Options Exchange - CBOE Founded in 1973, the CBOE is an exchange that focus es on options contracts for individual equities, indexes and interest rates. Th e CBOE is the world's largest options market. It captures a majority of the options trade d. It is also a market leader in developing new financial products and technological innovation , particularly with electronic trading. The CBOE is also referred to as the "See-bo". Chicago Mercantile Exchange - CME The world's second-largest exchange for futures and options on futures and the largest in the U.S. Trading involves mostly futures on interes t rates, currency, equities, stock indices and a small amount on agricultural products. Chief Executive Officer - CEO This is the senior manager who is responsible for o verseeing the activities of an entire company. Chief Financial Officer - CFO This is the senior manager who is responsible for o verseeing the financial activities of an entire company. This includes signing checks, monit oring cash flow, and financial planning Chief Information Officer - CIO A company executive who is responsible for the mana gement, implementation and usability of information and computer technologies. The CIO will analyze how these technologies can benefit the company or improve an existing business process and will then integrate a system to realize that benefit or improvement. Chief Operating Officer - COO The senior manager who is responsible for managing the company's day-to-day operations and reporting them to the chief executiv e officer (CEO). Chief Security Officer - CSO The company executive responsible for the security of personnel, physical assets and information in both physical and digital form. The importance of this position has increased in the age of information technology as i t has become easier to steal sensitive

company information. Child Tax Credit A credit given to taxpayers for each dependent chil d that is under the age of 17 at the end of the tax year. Chill Special restrictions that can be placed on a given security by the Depository Trust Company (DTC). Chill restrictions are intended to l imit the potential for problems within the financial marketplace, and they can be placed o n a security for various reasons. China Concepts Stock The stock of a company whose assets or earnings hav e significant activities in China. Chinese Wall The ethical (not physical) barrier between differen t divisions of a financial (or other) institution to avoid conflict of interest. A Chines e Wall is said to exist, for example, between the corporate-advisory area and the brokeri ng department to separate those giving corporate advice on takeovers from those adv ising clients about buying shares. The "wall" is thrown up to prevent leaks of corpora te inside information, which could influence the advice given to clients making invest ments, and allow staff to take advantage of facts that are not yet known to the ge neral public. Choice Market A market in which the spread between the bid and th e ask for a given financial instrument is zero - meaning that, at any point in time, the i nstrument can be bought for the same price as it can be sold in the market. This type of market only occurs when there is extreme liquidity and a limited number of intermedi aries. Choke Price An economic term used to describe the price at whic h the quantity demanded of a good is equal to zero. Chooser Option An option where the investor has the opportunity to choose whether the option is a put or call at a certain point in time during the life of the option. Choppy Market A stock market condition whereby prices swing up an d down considerably but with no resulting overall price movement in either directio n Christmas Club A type short-term savings account that usually pays out the full account balance to its account holders once each year - right before Chris tmas. These accounts pay depositors monthly interest on their account balances and ofte n punish early withdrawals by forfeiting interest earned if money is taken out be fore a given date. Christmas Tree

An options trading strategy that is generally achie ved by purchasing one call option and selling two other call options at different strike prices. When drawn structurally, the strike price of the long option is located below the two s uccessively higher written calls. Churn Rate The percentage of subscribers to a service that dis continue their subscription to that service in a given time period. In order for a company to expand its clientele, its growth rate (i.e. its number of new customers) must exceed its churn rate. Churning 1. An unethical practice employed by some brokers t o increase their commissions by excessively trading in a client's account. This pra ctice violates the NASD Fair Practice Rules. It is also referred to as "churn and burn", "twisting" and "overtrading". 2. A period of heavy trading with few sustained pri ce trends and little movement in stock market indexes CINS Number An acronym standing for the "CUSIP International Nu mbering System," which provides identification of international securities. Circuit Breaker Refers to any of the measures used by stock exchang es during large sell-offs to avert panic selling. Sometimes called a "collar." Circular Trading A fraudulent trading scheme where sell orders are e ntered by a broker who knows that offsetting buy orders, the same number of shares at the same time and at the same price, either have been or will be entered. Circus Swap A swap with the features of both a currency swap an d an interest rate swap. Civil Money Penalty - CMP A punitive fine imposed by a civil court on an enti ty that has profited from illegal or unethical activity. The Securities and Exchange Com mission imposes civil money penalties that are usually equal to the gains made from whatever activity it has deemed to be illegal or unethical. Class In the most general form, a class is a group of sec urities with similar features. Class A Shares A classification of common stock that may be accomp anied by more or less voting rights than Class B shares. Although Class A shares are of ten thought to carry more voting rights than Class B shares, this is not always the case. Companies will often try to

disguise the disadvantages associated with owning s hares with less voting rights by naming those shares "Class A", and those with more voting rights "Class B". Class Action An action where an individual represents a group in a court claim. The judgment from the suit is for all the members of the group (class). Class B Shares A classification of common stock that may be accomp anied by more or less voting rights than Class A shares. Although Class A shares are of ten thought to carry more voting rights than Class B shares, this is not always the case. Companies will often try to disguise the disadvantages associated with owning s hares with less voting rights by naming those shares "Class A", and those with more voting rights "Class B". Classical Economics Classical Economics refers to work done by a group of economists in the 18th and 19th centuries. They developed theories about the way ma rkets and market economies work. The study was primarily concerned with the dynamics of economic growth. It stressed economic freedom and promoted ideas such as laissez -faire and free competition. Classified Board A structure for a board of directors in which a por tion of the directors serve for different term lengths, depending on their particular classif ication. Under a classified system, directors serve terms usually lasting between one a nd eight years; longer terms are often awarded to more senior board positions (i.e. chairm an of the corporate governance committee). Classified boards are often referred to as "stagger ed boards", although staggered boards and classified boards have somewhat different struc tures. Staggered boards need not be classified, but classified boards are inherently st aggered. Classified Shares The separation of company equity into more than one class of common shares, usually called "Class A" and "Class B." Clawback 1. Previously given monies or benefits that are tak en back due to specially arising circumstances. 2. A retraction of stock prices or of the market in general. Clean Balance Sheet Refers to a company whose balance sheet has very li ttle or no debt. Clean Price The price quoted for a bond excluding accrued inter est. Clean Sheeting The fraudulent act of purchasing a life insurance p olicy without disclosing a pre-existing

terminal illness or disease. This type of fraud is often done with both the knowledge of the purchaser and the agent involved. Clearing The procedure by which an organization acts as an i ntermediary and assumes the role of a buyer and seller for transactions in order to recon cile orders between transacting parties. Clearing Corporation An organization associated with an exchange to hand le the confirmation, settlement and delivery of transactions, fulfilling the main oblig ation of ensuring transactions are made in a prompt and efficient manner. They are also referr ed to as "clearing firms" or "clearing houses". Clearing Fee A fee charged by clearing corporations for their se rvices provided to investment firms. Clearing House An agency or separate corporation of a futures exch ange responsible for settling trading accounts, clearing trades, collecting and maintaini ng margin monies, regulating delivery and reporting trading data. Clearing houses act as third parties to all futures and options contracts - as a buyer to every clearing member sel ler and a seller to every clearing member buyer. Clearing Member Trade Agreement - CMTA An agreement by which an investor may enter derivat ive trades with a limited number of different brokers and later consolidate these trade s with one brokerage house for clearing. Clearing Price The specified monetary value assigned to a security or asset. This price is determined by the bid and ask process of buyers and sellers inter ested in trading the security Clearstream International A European clearing corporation, this organization supports over 2500 different companies in 80 locations worldwide Cleave The occurrence of a gemstone breaking into two or m ore pieces during the cutting or polishing process. Naturally occurring impurities i n the stones increase the likelihood that a stone will break apart. Click Through Rates The percent of individuals viewing a Web page who c lick on a specific banner ad appearing on the page. Clientele Effect The theory that a company's stock price will move a ccording to the demands and goals of

investors in reaction to a tax, dividend or other p olicy change affecting the company. The clientele effect assumes that investors are attract ed to different company policies, and that when a company's policy changes, investors wil l adjust their stock holdings accordingly. As a result of this adjustment, the st ock price will move. Cliff Vesting A type of vesting that occurs entirely at a specifi ed time rather than gradually. Climax Following a protracted period of selling or buying, a point wherein market trends are retarded or discontinued. Climax Top When a stock suddenly advances at a much faster rat e for one or two weeks after an advance of many months. Generally occurs in the fin al “stages†� of a stock's price advance, indicating a leveling off or decrease in f uture price movements. Often accompanied by a gap up in price. Based on William J. O'Neil's research, many big market leaders top in this fashion. (Also, see Gap and Exh austion gap)

Clinton Bond A bond that is said to have no principal, no intere st and no maturity Cliquet An extended option that periodically settles and re sets its strike price at the level of the underlying during the time of settlement. Clone Fund A mutual fund that replicates the performance or st rategy of an existing mutual fund or index through the use of derivatives. Close 1. The end of a trading session. The closing price is quoted in the newspaper. 2. The final procedure in a home sale in which docu ments are signed and recorded. This is the time when the ownership of the property is tran sferred. Close Period The time period between the completion of a company 's balance sheet and the announcing of the results to the public Close Position The act of taking the opposite position of the curr ent position thereby getting out of a position in a particular stock or security. Also referred to as "Closing Transaction." Closed-End Funds Closed-end investment companies have a fixed number of shares to sell. Their shares are

traded on the major exchanges and fluctuate accordi ng to supply and demand in the market. You do not have a guarantee that you can se ll your shares at net asset value like you do in open-end mutual funds. Closed-end Indenture A term in a bond contract that guarantees that the collateral used to back the bond issue cannot be used again to back another bond issue. Th is is the opposite of an open-end indenture in which more than one bond can be backed by a single collateral. Closed-End Investment When an investment company issues a fixed number of shares in an actively managed portfolio of securities. The shares are traded in t he market just like common stock. Closed-End Lease A rental agreement that puts no obligation on the l essee (the person making periodic lease payments) to purchase the leased asset at the end o f the agreement. Also called a "true lease", "walkaway lease" or "net lease". Closed-End Management Company An investment-management company that sells a limit ed number of shares to investors on an exchange by way of an initial public offering. F or investors to sell the shares they purchased from the closed-end management company, t here must be buyers willing to buy the shares at a price determined by the market. The most common type of closed-end management company is a closed-end mutual fund. Closed-Market Transaction An order placed by a company's insider to buy or se ll restricted securities from within the company's own treasury. Appropriate documentation m ust be filed before the order can be placed. Closely Held Shares A term referring to shares held by individuals clos ely related to a company Closet Indexing A portfolio strategy used by some portfolio manager s to achieve returns similar to those of their benchmark index, without exactly replicati ng the index. Closing 1. The end of a trading session. The closing price is quoted in the newspaper. 2. The final procedure in a home sale in which docu ments are signed and recorded. This is the time when the ownership of the property is tran sferred. Closing Bell A bell that rings to signify the end of a trading s ession. Closing Costs The numerous expenses (over and above the price of the property) that buyers and sellers normally incur to complete a real estate transactio n. Costs incurred include loan

origination fee, discount points, appraisal fee, ti tle search, title insurance, survey, taxes, deed-recording fee and credit report charges. Also known as "settlement costs". Closing Statement A document commonly used in real estate transaction s, detailing the fees, commissions, insurance, etc. that must be transacted for a succe ssful transfer of ownership to take place. This document is prepared by a closing agent and is also known as a "settlement sheet". Closing Tick The number of stocks which closed higher than their previous trade minus the number of stocks whose closing prices were lower than their p revious trade. A positive closing tick means that there was buying at the close and indica tes strength, the opposite is true for a down closing tick. CLP In currencies, this is the abbreviation for the Chi li Peso. Club Deal A syndicated loan agreement in which the participan ts in the syndicate are specifically requested by the borrower CNN Effect The temporary shifting of consumer spending that oc curs as a result of gripping news. CNY In currencies, this is the abbreviation for the Chi na Yuan Renminbi. Co-pay A type of insurance policy where the insured pays a specified amount of out-of-pocket expenses for health-care services such as doctor vi sits and prescriptions drugs at the time the service is rendered, with the insurer payi ng the remaining costs. However, unlike coinsurance, where the insured is required to pay a certain percentage of the covered costs, co-pay plans require the insured to pay a sp ecified dollar amount. Coattail Investing An investment strategy where investors mimic the tr ades of well-known and historically successful investors. Cockroach Theory A market theory that states bad news tends to be re leased in bunches. Coefficient Of Variation - CV A statistical measure of the dispersion of data poi nts in a data series around the mean. It

is calculated as follows: The coefficient of variation represents the ratio o f the standard deviation to the mean, and it is a useful statistic for comparing the degree o f variation from one data series to another, even if the means are drastically differen t from each other Coincident Indicator An economic factor that varies directly and simulta neously with the business cycle, thus indicating the current state of the economy. Coinsurance A co-sharing agreement between the insured and the insurer under a health-insurance policy which provides that the insured will cover a set percentage of the covered costs after the deductible has been paid. Similar to co-p ay insurance plans except co-pays require the insured to pay a set dollar amount at t he time the service is rendered. Cold Calling A method used by brokers to obtain new business by making unsolicited calls to potential clients. Collaborative Commerce - C-commerce Optimization of supply and distribution channels in order to capitalize upon the global economy and use new technology efficiently. Collar 1. A protective options strategy that is implemente d after a long position in a stock has experienced substantial gains. It is created by pur chasing an out of the money put option while simultaneously writing an out of the money ca ll option. Collateral Properties or assets that are offered to secure a l oan or other credit. Collateral becomes subject to seizure on default. Collateral Trust Bond A bond that is secured by a financial asset - such as stock or other bonds - that is deposited and held by a trustee for the holders of the bond. Collateralized Bond Obligation - CBO An investment-grade bond backed by a pool of junk b onds. Junk bonds are typically not investment grade, but because they pool several typ es of credit quality bonds together, they offer enough diversification to be "investment grade." Collateralized Debt Obligation - CDO An investment-grade security backed by a pool of bo nds, loans and other assets. CDOs do not specialize in one type of debt but are often no n-mortgage loans or bonds. Collateralized Loan Obligation - CLO

A special purpose vehicle (SPV) with securitization payments in the form of different tranches. Financial institutions back this security with receivables from loans Collateralized Mortgage Obligation - CMO A type of mortgage backed security that creates sep arate pools of pass-through rates for different classes of bondholders with varying matur ities, called tranches. The repayments from the pool of pass-through securities are used t o retire the bonds in the order specified by the bonds prospectus. Collection Agency A company hired by lenders to recover funds that ar e past due or accounts that are in default. The lending company itself may also have a division or subsidiary that acts as its collection agency. A collection agency is hired aft er a company has made multiple attempts to collect what is owed to it Collective Fund An investment vehicle that combines tax exempt asse ts of various individuals and organizations in order to create a well diversified portfolio. Com-Dev Company Short form for "Commercial Development Company." Th ese companies build and sell/lease commercial real-estate, software, or app lications for wide-scale commercial use. Combat Zone An area designated as a war zone during a specified period. Members of the military do not need to claim taxable income they earn while wo rking in a combat zone. Combination When an investor holds a position in both call and put options on the same asset. Combined Loan To Value Ratio - CLTV Ratio A ratio used by lenders to determine the risk of de fault by prospective homebuyers when more than one loan is used. In general, lenders are willing to lend at CLTV ratios of 80% and above to borrowers with a high credit rating. Commerce The buying and selling of goods, especially on a la rge scale. Commercial A term used to refer to any party or organization i nvolved in producing, transporting, or merchandising a commodity. Commercial Bank A financial institution that provides services such as a accepting deposits and giving business loans.

Commercial Grain Stock A term used to describe any grain stored within U.S . Borders. Commercial Mortgage-Backed Securities - CMBS Similar to a mortgage-backed security, but secured by loans with commercial property instead of residential property. Commercial Paper An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories and m eeting short-term liabilities. Maturities on commercial paper rarely range any longer than 27 0 days. The debt is usually issued at a discount, reflecting prevailing market interest r ates. Commercial Real Estate Property that is solely used for business purposes. Commercial Trader A classification used by the Commodity Futures Trad ing Commission (CFTC) for traders that use the futures market primarily to hedge thei r business activities. Commingled Fund A type of mutual fund consisting of assets from sev eral accounts that are blended together. Sometimes called a "pooled fund." Commingling (Commingled) 1. In securities, it is the mixing of customer-owne d securities with brokerage-owned securities. 2. In trust banking, it is the pooling of individua l customer accounts into a fund, a share of which is owned by each contributing customer. This is similar to a mutual fund. 3. In real estate, it is the illegal act of a broke r combining clients' funds with personal funds because, by law, a broker is required to use a separate trust or escrow fund to temporarily hold a client's funds. Commission A service charge assessed by an agent in return for arranging the purchase or sale of a security or real estate. The commission must be fai r and reasonable, considering all the relevant factors of the transaction. Commissions va ry widely from broker to broker. Commission House A brokerage or merchant firm which buys and sells f utures contracts for customer accounts. Commitment Fee A fee lenders charge their borrowers for unused cre dit or credit that has been promised at a specified future date.

Commitments of Traders Report - COT A report published every Friday by the Commodity Fu tures Trading Commission (CFTC) that seeks to provide investors with up-to-date inf ormation on futures market operations and increase the transparency of these complex exch anges. Committed Facility A credit facility whereby terms and conditions are clearly defined by the lending institution and imposed upon the borrowing company. Commodities Exchange An entity, usually an incorporated non-profit assoc iation, that determines and enforces rules and procedures for the trading of commodities and related investments, such as commodity futures. Commodities exchange also refers to the physical center where trading takes place. Commoditization 1. A situation when illiquid financial contracts ar e changed or modified in a way that promotes trading and results in a more liquid marke t. 2. Making a product into a commodity. Commodity 1. A basic good used in commerce that is interchang eable with other commodities of the same type. Commodities are most often used as input s in the production of other goods or services. The quality of a given commodity may d iffer slightly, but it is essentially uniform across producers. When they are traded on a n exchange, commodities must also meet specified minimum standards, also known as a b asis grade. 2. Any good exchanged during commerce, which includ es goods traded on a commodity exchange. Commodity Block Currency A currency that belongs to a country whose economy is strongly correlated with the price fluctuations of a certain commodity. Commodity Channel Index - CCI An oscillator used in technical analysis to help de termine when an investment vehicle has been overbought and oversold. The Commodity Channel Index, first developed by Donald Lambert, quantifies the relationship between the as set's price, a moving average (MA) of the asset's price, and normal deviations (D) from t hat average. It is computed with the following formula: Commodity Exchange Act - CEA An act passed in 1936 by the U.S. Government that p rovides federal regulation of all futures trading activities. This act replaced the G rain Futures Act of 1922. Commodity Futures Contract An agreement to buy or sell a set amount of a commo dity at a predetermined price and date. Buyers use these to avoid the risks associate d with the price fluctuations of the product or raw material, while sellers try to lock in a price for their products. Like in all

financial markets, others use such contracts to gam ble on price movements. Commodity Futures Modernization Act - CFMA An act passed in 2000 by the U.S Government that re affirmed the authority of the Commodity Futures Trading Commission for five years as the regulatory body of the American futures markets. The most significant outc ome from this act was the allowance for the trading of single stock futures. Commodity Futures Trading Commission - CFTC A U.S. federal agency established by the Commodity Futures Trading Commission Act of 1974. It ensures the open and efficient operation o f the futures markets. There are five futures markets commissioners who are appointed by the president (subject to Senate approval). Commodity Index An index that tracks a basket of commodities to mea sure their performance. These indexes will often be traded on exchanges, allowing investors to gain easier access to commodities without having to enter the futures mar ket. The value of these indexes fluctuates based on the underlying commodities, and this value can be trade on the exchange much in the same way as stock-index future s. Commodity Pool A fund that collects investor contributions for use in future and commodity option trading. Commodity Pool Operator - CPO Persons or limited partnerships responsible for inv esting a commodity pool's assets in commodity-futures and options positions. Commodity Research Bureau Index - CRB An index that measures the overall direction of com modity sectors. The CRB was designed to isolate and reveal the directional move ment of prices in overall commodity trades. Commodity Selection Index - CSI A technical momentum indicator that attempts to ide ntify which commodities are the most suitable for short-term trading. The larger the CSI value, the stronger is the trend and volatility characteristics associated with the asse t. This indicator should only be used by traders who can handle large amounts of volatility as it indicates strong trending, but reversals are always possible. Commodity Swap A swap where exchanged cash flows are dependent on the price of an underlying commodity. This is usually used to hedge against th e price of a commodity. Commodity Trading Advisor - CTA An individual or a firm, registered with the Commod ity Futures Trading Commission, that receives compensation for giving people advice on o ptions, futures and the actual trading of managed futures accounts. Registration for CTAs is done through the National Futures

Association, a self-regulated organization responsi ble for reviewing and accepting registrations. Common Gap A price gap found on a price chart for an asset. Th ese gaps are brought about by normal market forces and, as the name implies, are very co mmon. They are represented graphically by a non-linear jump or drop from one p oint on the chart to another point. Common Size Balance Sheet A company balance sheet that displays all items as percentages of a common base figure. This type of financial statement can be used to all ow for easy analysis between companies or between time periods of a company. Common Size Financial Statement A company financial statement that displays all ite ms as percentages of a common base figure. This type of financial statement allows for easy analysis between companies or between time periods of a company. Common Size Income Statement An income statement in which each account is expres sed as a percentage of the value of sales. This type of financial statement can be used to allow for easy analysis between companies or between time periods of a company. Common Stock A security that represents ownership in a corporati on. Holders of common stock exercise control by electing a board of directors and voting on corporate policy. Common stockholders are on the bottom of the priority ladd er for ownership structure. In the event of liquidation, common shareholders have rights to a company's assets only after bondholders, preferred shareholders and other debth olders have been paid in full. In the U.K., these are called "ordinary shares Community Property A U.S. state-level legal distinction of a married i ndividual's assets. Property acquired by either spouse during the course of a marriage is co nsidered community property. For example, an IRA in the name of an individual with a spouse, accumulated during the course of the marriage, would be considered communi ty property. Company Description A brief description of the company's operations. Th is summarized item is based on the information provided in the company's annual report or 10K. It is updated annually or when major changes in company operations occur. Company Name The name a stock is registered with the Securities & Exchange Commission. The displayed name may not match its registered name du e to space limitations.

Company Owned Life Insurance - COLI A type of life insurance policy taken out by a comp any on the lives of employees that the company believes to be of vital importance to the o perations of the firm. Under these plans, the company pays the premium on the insuranc e but is also the plan's primary beneficiary. Comparables A valuation technique in which a recently sold asse t is used to determine the value of a similar asset. This technique is often used in real estate to determine the initial sale price of a property Comparative Advantage A situation in which a country, individual, company or region can produce a good at a lower opportunity cost than that of a competitor. Competitive Bid A process whereby an underwriter submits a sealed b id to the issuer. The issuer awards the contract to the underwriter with the best price and contract terms. Competitive Tender A method of distributing debt issues. Bids are subm itted by primary distributors and those who bid the highest receive the debt issue. Compliance Department The department within a brokerage firm that oversee s the trading and market-making activities of the firm. Composite A grouping of equities, indexes or other factors co mbined in a standardized way, providing a useful statistical measure of overall m arket or sector performance over time. Also known as a "composite index". Composite Index A grouping of equities, indexes or other factors co mbined in a standardized way, providing a useful statistical measure of overall m arket or sector performance over time. Also known simply as a "composite". Composite Index of Coincident Indicators An index published by the Conference Board that is a broad-based measurement of current economic conditions, helping economists and investors to determine which phase of the business cycle the economy is currently expe riencing.. The Composite Index of Coincident Indicators comprises four cyclical econo mic data sets: 1. the number of employees on non-agricultural payr olls (released by the Bureau of Labor Statistics) 2. the Index of Industrial Production 3. the level of manufacturing and trade sales 4. the aggregate amount of personal income excludin g transfer payments

Composite Index of Lagging Indicators An index published monthly by the Conference Board that is used to confirm the direction of the economy's movements in past months. The inde x is made up of the following seven economic components, whose changes tend to come aft er changes in the overall economy: 1. the value of outstanding commercial and industri al loans 2. the change in the consumer price index for servi ces from the previous month 3. the change in labor cost per unit of labor outpu t 4. the ratio of manufacturing and trade inventories to sales made 5. the ratio of consumer credit outstanding to pers onal income 6. the average prime rate charged by banks 7. the inverted average length of employment Composite Index of Leading Indicators An index published monthly by the Conference Board used to predict the direction of the economy's movements in the months to come. The inde x is made up of 10 economic components, whose changes tend to precede changes i n the overall economy. These 10 components include: 1. the average weekly hours worked by manufacturing workers 2. the average number of initial applications for u nemployment insurance 3. the amount of manufacturers' new orders for cons umer goods and materials 4. the speed of delivery of new merchandise to vend ors from suppliers 5. the amount of new orders for capital goods unrel ated to defense 6. the amount of new building permits for residenti al buildings 7. the S&P 500 stock index 8. the inflation-adjusted monetary supply (M2) 9. the spread between long and short interest rates 10. consumer sentiment Composite Rating, SmartSelect® The IBD SmartSelect Composite Rating combines all 5 SmartSelect Ratings into one easy-to-use rating. More weight is placed on EPS and RS Rating, and the stock's percent off its 52-week high is also included in the formula. Resul ts are then compared to all other companies, and each company is assigned a rating fr om 1-99 with 99 being the best. A 90 rating means that the stock has outperformed 90% of all other stocks in terms of its combined SmartSelect Ratings Compound The ability of an asset to generate earnings that a re then reinvested and generate their own earnings. Compound Annual Growth Rate - CAGR The year-over-year growth rate of an investment ove r a specified period of time. The compound annual growth rate is calculated by ta king the nth root of the total percentage growth rate, where n is the number of ye ars in the period being considered. Compound Option An option for which the underlying is another optio n. Therefore, there are two strike prices and two exercise dates. These are the four types of compound options: - Call on a call - Put on a put

- Call on a put - Put on a call Compounding The ability of an asset to generate earnings, which are then reinvested in order to generate their own earnings. In other words, compounding ref ers to generating earnings from previous earnings. Also known as "compound interest". Comprehensive Income Equals net income minus all recognized changes in e quity during a period. Comps Another term for "same store sales," which helps in vestors determine how well a company's brand is doing and how the stores are inc reasing revenue. Concentration Ratio In economics, a ratio that indicates the relative s ize of firms in relation to their industry as a whole. Concession A selling group's compensation in a stock or bond u nderwriting agreement. Concession Agreement A right granted by a government to a corporation. I t specifies rules under which the company can operate locally. Conditional Order A type of order that will be submitted or canceled if set criteria are met, which are defined by the trader/investor entering the order. This all ows for a greater customization of the order to meet the specific needs of the investor. Condominium A large property complex that is divided into indiv idual units and sold. Ownership usually includes a non-exclusive interest in certain "commo n properties" controlled by the condominium management. Condor Spread Similar to a butterfly spread, a condor is an optio ns strategy that also has a bear and a bull spread, except that the strike prices on the short call and short put are different. Conduit Financing A financing arrangement involving a government or o ther qualified agency using its name in an issuance of fixed income securities for a non -profit organization's large capital project.

Conduit IRA A traditional IRA that holds only assets that were distributed from a qualified plan. Conduit Theory A theory stating that an investment firm passing al l capital gains, interest, and dividends onto their customers/shareholders shouldn't be levi ed at the corporate level like most regular companies are. Conference Call An event during which investors can call in to a sp ecial phone number and hear company management report its quarterly results as well as forward, or projected, earnings. While the average investor can only listen to the call, t he reporting company will often field questions from analysts. Also known as "earnings co nference call", "analyst call" and "earnings call". Confirmation 1. The occurrence of two or more indicators corresp onding with one another and thereby corroborating the predicted trend. 2. The written acknowledgment provided by a broker indicating that a trade has been completed. This includes details such as the date, price, commission, fees and settlement terms of the trade. Conforming Loan A conventional mortgage under $203,150 that conform s to the loan amounts and mortgage guidelines used by Fannie Mae and/or Freddie Mac. Congestion 1. A market situation whereby the demand of contrac t holders wishing to exit their existing positions exceeds the supply of willing participant s wishing to enter into the offsetting position. 2. A period of time when a stock trades either belo w resistance or above support, or both. Conglomerate A corporation that is made up of a number of differ ent, seemingly unrelated businesses. In a conglomerate, one company owns a controlling stak e in a number of smaller companies, which conduct business separately. Each of a conglo merate's subsidiary businesses runs independently of the other business divisions, but the subsidiaries' management reports to senior management at the parent company. The largest conglomerates diversify business risk b y participating in a number of different markets, although some conglomerates elect to parti cipate in a single industry - for example, mining. Conglomerate Discount A reference to the tendency of the stock market to undervalue the stocks of conglomerate businesses. Conglomerate discount is calculated by adding an estimation of the intrinsic value of each of the subsidiary companies in a cong lomerate and subtracting the conglomerate's market capitalization from that valu e.

Conglomerate Merger A merger between firms that are involved in totally unrelated business activities. There are two types of conglomerate mergers: pure and mixed. Pure conglomerate mergers involve firms with nothing in common, while mixed conglomer ate mergers involve firms that are looking for product extensions or market extensions . Consensus Estimate A figure based on the combined estimates of the ana lysts covering a public company. Generally, analysts give a consensus for a company' s earnings per share and revenue these figures are most often made for the quarter, fiscal year and next fiscal year. The size of the company and the number of analysts covering it will dictate the size of the pool from which the estimate is derived. Consent Solicitation A solicitation by one party to the stakeholders of a particular security for the consent of a material change. Conservative Growth A method of allocating investments with the goal of growing invested capital over the long term. This investment strategy focuses on minimizin g risk by making long-term investments in companies that show consistent growt h over time. Conservative growth portfolios feature low asset turnover, or a high pe rcentage of fixed assets on their balance sheets, and should employ a buy-and-hold investment philosophy Conservative Investing An investing strategy that seeks to preserve an inv estment portfolio's value by investing in lower risk securities such as fixed-income and m oney market securities, and often blue-chip or large-cap equities. Conservatorship A circumstance in which the court declares an indiv idual unable to take care of legal matters and appoints another individual, known as a conservator, to do so. Consignment When goods are delivered to another company with th e understanding that payment for the goods is only made once the goods are sold. Consolidate To combine the assets, liabilities and other financ ial items of two or more entities into one. Consolidated Financial Statements The combined financial statements of a parent compa ny and its subsidiaries. Consolidated Omnibus Budget Reconciliation Act - CO BRA A COBRA health plan states that if you leave your j ob for any reason and were an active participant in the company's health plan prior to y our departure date, you have the right, if you wish, to continue the health insurance coverage you and your family received, for 18 months.

Consolidated Tape An electronic system that continuously reports data on the sales volume and price of exchange traded securities. Consolidation In technical analysis, the movement of an asset's p rice within a well-defined pattern or barrier of trading levels. Consolidation is general ly regarded as a period of indecision, which ends when the price of the asset breaks beyon d the restrictive barriers. Periods of consolidation can be found in charts covering any t ime interval (i.e. hours, days, etc.), and these periods can last for minutes, days, months or even years. Lengthy periods of consolidation are often known as a base. Consolidation Phase A stage in the life of a company or an industry in which components in the company or industry start to merge to form fewer components. T hese components can include product lines at the company level or companies themselves at the industry level. The consolidation of companies differs from mergers in that consolidations create new entities while mergers do not. Constant Currencies An exchange rate that eliminates the effects of exc hange rate fluctuations and that is used when calculating financial performance numbers. Com panies with major foreign operations often use constant currencies when calcu lating their yearly performance measures. Constant Dollar An adjusted value of currency used to compare dolla r values from one period to another. Due to inflation, the purchasing power of the dolla r changes over time, so in order to compare dollar values from one year to another they need to be converted to constant dollar values. Constant Maturity Used by the Federal Reserve Board to quote the yiel ds on various treasury securities, adjusted to an equivalent maturity. Constant Maturity Swap - CMS A variation of the regular interest rate swap. In a constant maturity swap, the floating interest portion is reset periodically according to a fixed maturity market rate of a product with a duration extending beyond that of the swap's reset period. Construction Loan Note - CLN A short-term obligation in the form of a note, used for the funding of construction projects such as housing developments. In most cases, the no te issuers will repay the note obligation by issuing a longer term bond and using the proceeds from the bond to pay back the note. Construction Spending An economic indicator that measures the amount of s pending towards new construction.

Released monthly by the U.S. Department of Commerce 's Census Bureau, it looks at residential and non-residential construction in the private sector, and state and federal at the public level. Constructive Sale Rule - Section 1259 A section of the Internal Revenue Code that expands the types of transactions that are considered to be sales and are subject to capital g ains tax. According to this rule, transactions that effectively take an offsetting po sition to an already owned position are considered to be constructive sales. The purpose of the constructive sale rule is to prevent investors from locking in investment gains without paying capital gains and to limit their ability to transfer gains from one tax period to another. This rule is Section 1259 of the Code. It is also r eferred to as "Constructive Sales Treatment for Appreciated Financial Positions". Consumer Confidence Index - CCI A survey by the Conference Board that measures how optimistic or pessimistic consumers are with respect to the economy in the ne ar future. Consumer Credit A debt that someone incurs for the purpose of purch asing a good or service. Consumer Internet Barometer A quarterly survey report produced by the Conferenc e Board and TNS NFO that records, analyzes and reports on the internet usage of 10,00 0 U.S. households. The survey seeks to measure: 1. the importance of the internet in the daily live s of households 2. overall satisfaction of internet users 3. online-purchase characteristics, times and dates 4. users' perceptions of security for online transa ctions and general internet usage Consumer Price Index - CPI A measure that examines the weighted average of pri ces of a basket of consumer goods and services, such as transportation, food and medi cal care. The CPI is calculated by taking price changes for each item in the predeterm ined basket of goods and averaging them the goods are weighted according to their impo rtance. Changes in CPI are used to assess price changes associated with the cost of li ving. Sometimes referred to as "headline inflation". Consumer Staples The industries that manufacture and sell food/bever ages, tobacco, prescription drugs and household products. Contagion The likelihood of significant economic changes in o ne country spreading to other countries. This can refer to either economic booms or economic crises. Contango When the futures price is above the expected future spot price. Consequently, the price

will decline to the spot price before the delivery date. Contestable Market Theory An economic concept that refers to a market in whic h there are only a few companies that, because of the threat of new entrants, behave in a competitive manner. Contingency An economic event, usually negative, that is in the process of occurring and, therefore, has not yet been resolved. Contingency Order An order that is executed only when certain conditi ons of the security being traded, or another security, have been fulfilled. Such prerequ isite conditions range in scope and depth. In a simple case, a contingency order may de pend on the potential purchaser's ability to sell a different security in his or her portfolio to free the funds to make the purchase. In a more complicated situation, an optio ns contingency order's execution may depend on the share price of the options' underlyin g stock Contingent Asset An asset in which the possibility of an economic be nefit depends solely upon future events that can't be controlled by the company. Due to the uncertainty of the future events, these assets are not placed on the balance sheet. However, they can be found in the company's financial statement notes. Contingent Convertibles - CoCos A security similar to a traditional convertible bon d in that there is a strike price (the cost of the stock when the bond converts into stock). What differs is that there is another price, even higher than the strike price, which the compan y's stock price must reach before an investor has the right to make that conversion (kno wn as the "upside contingency"). Contingent Deferred Sales Charge - CDSC In the context of mutual funds, it is a back-end lo ad charged only when a special circumstance occurs. Contingent Guarantee A guarantee of payment that is dependent on one or more future events. Contingent Immunization A method of fixed income portfolio management, wher eby managers are granted significant powers of control over the selection of products to be added and removed from the portfolio, as long as the products remain profi table. Should these products become unprofitable past a set threshold, the manager must then capitalize the security under immunization procedures. Contingent Liability 1. The possibility of an obligation to pay certain sums dependent on future events. 2. Defined obligations by a company that must be me t, but the probability of payment is minimal.

Contingent Order 1. An order involving the simultaneous execution of two or more transactions. 2. An order whose execution depends upon the execut ion and/or price of another security Continuation Pattern A technical analysis pattern that suggests a trend is exhibiting a temporary diversion in behavior and will eventually continue on its existi ng trend. The symmetrical triangle charts displayed below are both exhibiting a continuation pattern. Notice how the chart extends above (below) its existing pattern. Continuous Compounding The process of earning interest on top of interest. The interest is earned constantly, and immediately begins earning interest on itself. Continuous Net Settlement – CNS An automated book-entry accounting system. CNS cent ralizes the settlement of compared transactions and maintains an efficient flow of sec urity and money balances. Continuous Trading A method of transacting different securities orders . Continuous trading involves the immediate execution of orders upon their reception by market makers and specialists. Contra Account An account on the balance sheet of a corporation or entity that offsets the balance of a related and corresponding account Contra Broker A term used to describe the broker participating on the opposite side of a transaction. Contract For Differences - CFD An arrangement made in a futures contract whereby d ifferences in settlement are made through cash payments, rather than the delivery of physical goods or securities. Contract Holder An owner of a segregated fund contract. Contract Market Any board of trade designated to trade a specific o ptions or futures contract. Basically it's another word for "designated exchange". Contract Size The deliverable quantity of goods or commodities un derlying futures, forward, and option contracts. Contract Unit The actual amount of commodities represented by a s ingle futures contract.

Contraction A period of general economic decline. It is one of the four stages of the business cycle. Contraction Risk The risk of a security shortening in duration due t o the acceleration of prepayments. Contrarian An investment style that goes against prevailing ma rket trends by buying assets that are performing poorly and then selling when they perfor m well. Contrarian indicators Specific psychological indicators used by investors who subscribe to contrarian strategies. Historically, when these indicators rea ch one extreme or another, this foreshadows contrary market activity. For example, some Contrarian investors believe that when a large majority of market analysts are bullis h, it is likely that the market is about to top. Likewise, when most market analysts are bearis h, they believe that the market is preparing for another advance. (Also, see Psycholog ical market indicators). Contributed Surplus The amount of money a company earns from sources ot her than its main business operation. Contribution Margin A cost accounting concept that allows a company to determine the profitability of individual products. Contributory Value A real estate term that refers to the contribution a particular component has to the value of the whole property. Control Stock 1. Equity shares owned by major shareholders of a p ublicly traded corporation. These shareholders have either a majority of the shares o utstanding or a portion of the shares that is significant enough to allow them to exert a controlling influence on the firm's decisions. 2. In situations where companies have more than one class of common shares, shares with superior voting power or vote weighting are co nsidered to be "control stock", relative to the inferior class. Controller In most organizations the controller is the top man agerial and financial accountant. The controller supervises the accounting department and assists management in interpreting and utilizing managerial accounting information. Convenience Yield The benefit or premium associated with holding an u nderlying product or physical good, rather than the contract or derivative product.

Convention Expenses Any travel expenses incurred while at a business co nvention. These expenses are tax deductible if they are business or job related. Conventional Mortgage A mortgage that falls within Fannie Mae guidelines, and covers loans up to predetermined amount. Convergence A movement in the price of a futures contract towar d the price of the underlying cash commodity. At the start, the contract price is high er because of the time value. Conversion The exchange of a convertible type of asset into an other type of asset, usually at a predetermined price, on or before a predetermined d ate. The conversion feature is a financial derivative instrument that is valued sepa rately from the underlying security. Therefore, an embedded conversion feature adds to t he overall value of the security. Conversion Premium The amount by which the price of a convertible secu rity exceeds the current market value of the common stock into which it may be converted. Conversion Price The price per share at which a convertible security , such as corporate bonds or preferred shares, can be converted into common stock. Conversion Ratio The number of common shares received at the time of conversion for each convertible security. It is calculated by using this formula: Convertible Adjustable Preferred Stock - CAPS A preferred, floating rate issue, whose interest ra te is tied to Treasury security rates. They can be exchanged for common stock or cash after the next period's dividend rates are announced. The shares received upon conversion are equal in market value to the par value of the preferred. Convertible Arbitrage An investing strategy that involves the long positi on on a convertible security and a short position in its converting common stock. Convertible Bond A bond that can be converted into a predetermined a mount of the company's equity at certain times during its life, usually at the discr etion of the bondholder. Convertibles are sometimes called "CVs". Convertible Debenture Any type of debenture that can be converted into so me other security.

Convertible Preferred Stock Preferred stock that includes an option for the hol der to convert the preferred shares into a fixed number of common shares, usually anytime af ter a predetermined date. Also known as "convertible preferred shares". Convertible Subordinate Note A short-term debt security (note), that can be chan ged into common stock (convertible) and ranks below other loans (subordinate). Convertibles Securities, usually bonds or preferred shares, that can be converted into common stock. Convexity A measure of the curvature in the relationship betw een bond prices and bond yields Conveyance A written instrument, such as a deed or lease, that transfers some ownership interest in real property from one person to another Conveyance Tax A tax imposed on the transfer of real estate proper ty. Cook The Books A buzzword describing fraudulent activities perform ed by corporations in order to falsify their financial statements. Typically, cooking the books involves augmenting financial data to yield previously non-existent earnings. Examples of techniques used to cook the books invol ve accelerating revenues, delaying expenses, manipulating pension plans and implementi ng synthetic leases. Cookie Jar Accounting An accounting practice where a company uses generou s reserves from good years against losses that might be incurred in bad years. Cooling Degree Day - CDD The number of degrees that a day's average temperat ure is above 65 Cooling-Off Rule A term referring to law pertaining to newly-entered contracts that allows both sides of the party a period of time (after the contract has been signed) to release themselves from any obligations without penalty. COP In currencies, this is the abbreviation for the Col ombian Peso. Coppock Curve

A long-term price momentum indicator used primarily to recognize major bottoms in the stock market. It is calculated as a 10-month weight ed moving average of the sum of the 14-month rate of change and the 11-month rate of chang e for the index. Also known as the "Coppock Guide". Copula A statistical measure that represents a multivariat e uniform distribution, which examines the association or dependence between many variable s. Although, the statistical calculation of a copula was invented in 1957, its a pplication to financial markets and finance was not implemented until the late 1990s. Core Earnings The revenue derived from a company's main or princi pal business less all associated expenses. Core Holding An investment that you plan on keeping in your port folio for a very long period of time, sometimes permanent. Core Inflation A measure of inflation that excludes certain items which face volatile price movements. Core inflation eliminates products that can have te mporary price shocks because these shocks can diverge from the overall trend of inflat ion and give a false measure of inflation. Core Inflation is thought to be an indicator of und erlying long-term inflation. Core Plus A fixed-income style that permits managers to add i nstruments with greater risk and greater potential return, such as high yield, globa l, and emerging market debt, to their core portfolios of investment-grade bonds. Corner 1. The act of securing enough controlling interest or ownership within a single security so that manipulation of price can occur. 2. A rare situation occurring in commodity markets wherein the quantity of underlying securities and commodities available are exceeded b y the commitments of delivery quantities on future contracts. Corner A Market To acquire enough shares of a particular security i n order to manipulate its price. Corporate Action Any event that brings material change to a company and affects its stakeholders. This includes shareholders, both common and preferred, a s well as bondholders. These events are generally approved by the company's board of di rectors; shareholders are permitted to vote on some events as well. Corporate Bond

A debt security issued by a corporation, as opposed to those issued by the government. Corporate Cannibalism An act of self-infringement upon market share by co rporations through the issuance of new products. Also known as market cannibalization. Corporate Charter A written document filed with a U.S. state by the f ounders of a corporation detailing the major components of a company such as its objective s, its structure and its planned operations. If the charter is approved by the state government, the company becomes a legal corporation. Also referred to as "charter" and "articles of inco rporation". Corporate Citizenship The extent to which businesses are socially respons ible in meeting legal, ethical and economic responsibilities placed on them by shareho lders. The aim it to create higher standards of living and quality of life in the comm unity in which it operates, while preserving the profitability of the company for its stakeholders both within and outside the company. Corporate Event Abbreviation of a corporate action will appear near the price line with an arrow indicating the date it occurred. •ASE = Date stock switched to listed exchange •CO = Cash offer •IPO = Initial public offering •NEW = New issue and price •NYSE = Date stock switched to listed exchange •PM = Proposed merger •PO = Primary offer •PPO = Proposed primary offering •PSO = Proposed secondary offering •PSOF = Partial spin-off •REORG = Reorganization •SDIS = Stock distribution •SO = Secondary offer •SOF = Spin-off •TO = Tender offer •$DIS = Cash distribution Corporate Finance Any financial or monetary activity that deals with a company and its money. Corporate Governance The relationship between all the stakeholders in a company. This includes the shareholders, directors, and management of a compan y, as defined by the corporate charter, bylaws, formal policy, and rule of law.

Corporate Inflation-Linked Securities Corporate debt financing securities that offer thei r holders protection against fluctuations in the rate of inflation as measured by the consume r price index (CPI). The yields of these securities adjust monthly with respect to the curre nt rate of inflation. Corporate Inversion The act of a parent company, whose headquarters are located within U.S. borders, switching registration with their offshore subsidia ry in order to take advantage of foreign tax benefits. Corporate Kleptocracy Buzzword that describes the greed of corporate exec utives who use underhanded tactics to siphon off wealth at the expense of shareholders . This buzzword is attributed to how ex-Hollinger CEO, Conrad Black, and his fellow associa tes allegedly embezzled Hollinger for hundreds of millions of dollars over a seven-year p eriod. Corporate Pension Plan A formal arrangement between a company and its empl oyees - or the employees' union - that provides funding for the employees' retirement . This pool of funds can be financed in several ways and will eventually be used to make pe riodic payments to retired employees. In most cases, both employer and employees make reg ular contributions to the plan. In the past, employers were wholly responsible for con tributing to the plan based on an employee's work, length of employment and position held. Corporate Resolution A written statement made by the board of directors detailing which officers are authorized to act on behalf of the corporation. The corporate resolution will be found in the board minutes detailing decisions made by the board durin g the meeting. Corporate Tax A levy placed on the profit of a firm different rat es are used for different levels of profits Corporation A legal entity that is separate and distinct from i ts owners. Corporations enjoy most of the rights and responsibilities that an individual poss esses that is, a corporation has the right to enter into contracts, loan and borrow money, sue and be sued, hire employees, own assets and pay taxes. The most important aspect of a corporation is limit ed liability. That is, shareholders have the right to participate in the profits, through di vidends and/or the appreciation of stock, but are not held personally liable for the company' s debts. Corporations are often called "C Corporations". Correction A reverse movement, usually negative, of at least 1 0% in a stock, bond, commodity or index. Corrections are generally temporary price de clines, interrupting an uptrend in the market or asset Correlation In the world of finance, a statistical measure of h ow two securities move in relation to each other. Correlations are used in advanced portfolio management.

Correlation Coefficient A measure that determines the degree to which two v ariable's movements are associated. Correspondent The name given to a bank, broker, dealer, or financ ial institution that acts on behalf of another financial institution with limited or restr icted access to the financial markets where a transaction must occur. Cost and Freight - CFR A trade term requiring the seller to arrange for th e carriage of goods by sea to a port of destination, and provide the buyer with the documen ts necessary to obtain the goods from the carrier. Under CFR, the seller does not ha ve to procure marine insurance against the risk of loss or damage to the goods during tran sit. Cost Basis 1. The original value of an asset for tax purposes (usually the purchase price), adjusted for stock splits, dividends and return of capital distr ibutions. This value is used to determine the capital gain, which is equal to the difference between the asset's cost basis and the current market value. Also known as "tax basis". 2. The difference between the cash price and the fu tures price of a given commodity. Cost Of Capital The required return necessary to make a capital bud geting project - such as building a new factory - worthwhile. Cost of capital would inc lude the cost of debt and the cost of equity. Cost Of Carry Costs incurred as a result of an investment positio n. These costs can include financial costs, such as the interest costs on bonds, interes t expenses on margin accounts and interest on loans used to purchase a security, and economic costs, such as the opportunity costs associated with taking the initia l position. Cost Of Debt The effective rate that a company pays on its curre nt debt. This can be measured in either before- or after-tax returns however, because inter est expense is deductible, the after-tax cost is seen most often. This is one part of the co mpany's capital structure, which also includes the cost of equity. Cost Of Equity In financial theory, the return that stockholders r equire for a company. The traditional formula is the dividend capitalization model: A firm's cost of equity represents the compensation that the market demands in exchange for owning the asset and bearing the risk of owners hip. Cost Of Funds The interest rate paid on an outstanding loan

Cost Of Goods Sold - COGS A figure reflecting the cost of the product or good that a company sells to generate revenue, appearing on the income statement as an ex pense unto itself. Also referred to as "cost of sales". Cost Of Tender The total charges associated with the delivery and certification of commodities underlying a futures contract. Cost Per Click - CPC A web site which uses CPCs would bill by the number of times a visitor clicks on a banner, instead of by the number of impressions. Cost Per Thousand - CPM Web sites that sell advertising will guarantee an a dvertiser a certain number of impressions quoted at X dollars per CPM. Cost Synergy In the context of mergers, cost synergy is the savi ngs in operating costs expected after two companies, who compliment each other's strength s, join. Cost, Insurance and Freight - CIF A trade term requiring the seller to arrange for th e carriage of goods by sea to a port of destination, and provide the buyer with the documen ts necessary to obtain the goods from the carrier. Cost-Push Inflation A phenomenon where general level of prices rise (in flation) due to increases in the cost of wages and raw materials. Council of Petroleum Accountants Societies - COPAS A council created to discuss and solve the difficul ties inherent in accounting in the oil and gas industry. Count A trend analysis using point and figure charts to e stimate the vertical movement of prices Counter-Cyclical Stock A stock whose price will tend to move in the opposi te direction of the general economic trend. Counterparty Risk The risk to each party of a contract that the count erparty will not live up to its contractual obligations. Counterpurchase

An exchange of goods between two parties that, by m eans of two contracts, agree to act as purchaser and supplier to each other and to purc hase all goods in cash. Countertrade A trade between two countries by which goods are ex changed for other goods rather than for hard currency Countertrend Strategy A trading strategy where an investor attempts to ma ke small gains through a series of trades against the current trend. It is also known as "counter-trend trading". Country Basket A derivative security designed to mimic the major i ndex of an international exchange Country Risk The risk that a country will not be able to honor i ts financial commitments. Coupon The interest rate stated on a bond when it's issued . The coupon is typically paid semiannually. This is also referred to as the "coupon rate" or "c oupon percent rate". Coupon Bond A debt obligation with coupons attached that repres ent semiannual interest payments. Also known as a "bearer bond". Coupon Equivalent Rate - CER A alternative calculation of coupon rate used to co mpare zero-coupon and coupon fixed-income securities. Coupon Equivalent Yield - CEY A method of calculation used to calculate the yield on bonds with maturities of less than one year and which normally sell at a discount and do not pay coupons. Coupon Pass The purchase of treasury notes or bonds from dealer s, by the Federal Reserve. Covariance A measure of the degree to which returns on two ris ky assets move in tandem. A positive covariance means that asset returns move together. A negative covariance means returns vary inversely. One method of calculating covariance is by looking at return surprises (deviations from expected return) in each scenario. Another method i s to multiply correlation between the two variables by the standard deviation of each var iable.

Covenant A promise in an indenture, or any other formal debt agreement, that certain activities will or will not be carried out. Cover The act of completing a transaction in order to rem ove any obligations. Coverage Initiated When a brokerage or analyst issues his/her first ra ting on a particular stock. Coverage Ratio A type of accounting ratio that helps measure a com pany's ability to meet its obligations satisfactorily. Coverdell Education Savings Account - ESA A tax-deferred account created by the U.S. governme nt to assist families in funding educational expenses. Covered Call An options strategy whereby an investor holds a lon g position in an asset and writes (sells) call options on that same asset in an attem pt to generate increased income from the asset. This is often employed when an investor has a short-term neutral view on the asset and for this reason hold the asset long and simulta neously have a short position via the option to generate income from the option premium. This is also known as a "buy-write". Covered Security A class of securities, created by the NSIMA, that e njoys federally imposed exemptions from state restrictions and regulations. Most stock s trading in the US are covered securities Covered Warrant A type of warrant that allows the holder to buy or sell a specific amount of equities, currency or other financial instruments from the is suer, usually a bank or a similar financial institution, at a specific price and time . Crack A trading strategy used in energy futures to establ ish a refining margin. Crack Spread In commodity markets, the spread created by purchas ing oil futures and offsetting the position by selling gasoline and heating oil future s. This investment alignment allows the investor to hedge against risk due to the offsettin g nature of the securities. Crammed Down

1. A situation in which venture capitalists refuse to invest in a new project unless the preceding investors of the company lower the value of their original investment. 2. A bankruptcy procedure that allows a bankruptcy court to initiate a reorganization plan for a company despite objections from creditors. Th e creditors will still maintain collateral on the company as long as the firm offers repayment of the "secured portion" or fair market value of the collateral in their repayment p lan. Crash A major decline in a financial market. Crawling Peg A system of exchange rate adjustment in which a cur rency with a fixed exchange rate is allowed to fluctuate within a band of rates. The pa r value of the stated currency is also adjusted frequently due to market factors such as i nflation. This gradual shift of the currency's par value is done as an alternative to a sudden and significant devaluation of the currency. CRC In currencies, this is the abbreviation for the Cos ta Rican Colon Creation Unit A set of shares or securities that makes up one uni t of the fund held by the trust that underlies an exchange-traded fund (ETF). One creati on unit is the denomination of underlying assets that can be redeemed for a certai n number of ETF shares. Creative Destruction A term coined in 1942 by Joseph Schumpeter in his w ork, Capitalism, Socialism and Democracy, to denote a "process of industrial mutat ion that incessantly revolutionizes the economic structure from within, incessantly destroy ing the old one, incessantly creating a new one." Credit 1. A contractual agreement in which a borrower rece ives something of value now, with the agreement to repay the lender at some date in the f uture. Also, the borrowing capacity of an individual or company. 2. An accounting entry system that either decreases assets or increases liabilities. Credit Balance In a margin account, the amount of funds deposited in the customer's account following the successful execution of a short sale order. The credit balance amount includes both the proceeds of the short sale itself and the speci fied margin amount the customer is required to deposit under Regulation T. Credit Bureau An agency that researches and collects individual c redit information and sells it for a fee to creditors so they can make a decision on grantin g loans. Typical clients include banks, mortgage lenders, credit card companies and other f inancing companies. Also commonly referred to as consumer reporting agency or credit reporting agency.

Credit Card A card allowing someone to make a purchase on borro wed money. Credit cards are one of the most popular forms of payment for consumer good s and services in the United States. Credit Cliff A slang term referring to the compounding of a comp any's credit deterioration caused by provisions such as financial covenants, or events t hat trigger a change in the company's credit rating. These can put pressure on the compan y's liquidity or its business to a material extent. Credit Crunch An economic condition whereby investment capital is difficult to obtain. Banks and investors become weary of lending funds to corporat ions thereby driving up the price of debt products for borrowers. Credit Default Swap A swap designed to transfer the credit exposure of fixed income products between parties. Credit Derivative Privately held negotiable bilateral contracts that allow users to manage their exposure to credit risk. Credit derivatives are financial asset s like forward contracts, swaps, and options for which the price is driven by the credit risk of economic agents (private investors or governments). Credit Enhancement A method whereby a company attempts to improve its debt or credit worthiness. Credit Linked Note - CLN A security with an embedded credit default swap all owing the issuer to transfer a specific credit risk to credit investors. CLNs are created through a Special Purpose Company (SPC), or trust, which is collateralized with AAA-rated securities. Investors buy securities from a trust that pays a fixed or floating coupon during the life of the not e. At maturity, the investors receive par unless the referenced credit defaults or declares b ankruptcy, in which case they receive an amount equal to the recovery rate. The trust ent ers into a default swap with a deal arranger. In case of default, the trust pays the de aler par minus the recovery rate in exchange for an annual fee which is passed on to th e investors in the form of a higher yield on the notes. Credit Netting A system whereby the number of credit checks on fin ancial transactions is reduced by entering into agreements that simply net all transa ctions. These agreements are made between large banks and other financial institution s and place all current and future transactions into one agreement, removing the need for credit checks on each transaction. Credit Rating

An assessment of the credit worthiness of individua ls and corporations. It is based upon the history of borrowing and repayment, as well as the availability of assets and extent of liabilities Credit Report A detailed report of an individual's credit history prepared by a credit bureau and used by a lender to in determining a loan applicant's credi tworthiness, including: 1. Personal data (current and previous addresses, s ocial security number, employment history) 2. Summary of credit history (number and type of ac counts that are past-due or in good standing) 3. Detailed account information 4. Inquires into applicant's credit history (number and type of inquiries into applicant's credit report) 5. Details of any accounts turned over to credit ag ency (such as information about liens, wages garnishments via federal, state or county rec ords) 6. Information on how to dispute any of the above i nformation. Credit Risk The possibility of a loss occurring due to the fail ure to meet contractual debt obligations. Credit Shelter Trust - CST A type of trust that allows a married investor to a void estate taxes when passing assets on to heirs. The trust is structured so that, upon the death of the investor, the assets specified in the trust agreement (up to a specified maximum dollar value) are transferred to the beneficiaries named in the trust (normally t he couple's children). However, a key benefit to this type of trust is that the spouse ma intains rights to the trust assets and the income they generate during the remainder of his or her lifetime. This type of trust is also referred to as an "AB Tr ust". Credit Spread 1. The spread between Treasury securities and non-T reasury securities that are identical in all respects except for quality rating. 2. An options strategy where a high premium option is sold and a low premium option is bought on the same underlying security. Credit Union Member-owned financial co-operative. These institut ions are created and operated by its members and profits are shared amongst the owners Creditor An entity (person or institution) that extends cred it by giving another entity permission to borrow money if it is paid back at a later date. Cr editors can be classified as either "personal" or "real". Those people who loan money t o friends or family are personal creditors. Real creditors (i.e. a bank or finance c ompany) have legal contracts with the borrower granting the lender the right to claim any of the debtor's real assets (e.g. real estate or car) if he or she fails to pay back the l oan. Credo

A Latin word which means "a set of fundamental beli efs or a guiding principle.” For a company, a credo is like a mission statement.

Critical Mass A very important or crucial stage in a company's de velopment. Crop Year A time period for a agricultural commodity it is th e duration from one years harvest to the next. Cross When a broker receives a buy and sell order for the same stock at the same price, and subsequently makes a simultaneous trade between two separate customers. Cross Currency A pair of currencies traded in forex that does not include the U.S. dollar. One foreign currency is traded for another without having to fi rst exchange the currencies into American dollars. Cross Default A provisions in a bond indenture or loan agreement that puts the borrower in default if the borrower defaults on another obligation. Also known as "cross acceleration". Cross Hedge The act of hedging ones position by taking an offse tting position in another good with similar price movements. Cross Holding When listed corporations own securities issued by o ther listed corporations. Cross Margining An offsetting position where market participants ar e able to transfer excess margin from one account to another account whose margin is unde r the required maintenance margin. Cross Trade A practice outlawed on most major stock exchanges i n which buy and sell orders for the same stock are offset without recording the trade o n the exchange. Cross-Correlation A statistical measure timing the movements and prox imity of alignment between two different information sets of a series of informati on. Crossed Market A situation arising when the bid price of a securit y exceeds the ask price.

Crossover The point on a stock chart when a security and an i ndicator intersect. Crossovers are used by technical analysts to aid in forecasting the fut ure movements in the price of a stock. In most technical analysis models, a crossover is a si gnal to either buy or sell. Below we have a stock that falls below its 20-day m oving average - a bearish sign. Crossover Fund An investment fund that invests in both public and private equity. Crossover Investor An investor who invests prior to, during and follow ing a company's initial public offering. Crossover Refunded The revenue stream pledged to secure "securities be ing refunded" is being used to payoff debt on the refunded securities until they mature. Crowding Out Effect An economic theory explaining an increase in intere st rates due to rising government borrowing in the money market. Crown Corporation Any corporation that is established and regulated b y a country's government. Crown Jewels The most valuable unit of a corporation because of profitability, asset value, future prospects, etc. Crush Spread A trading strategy used in the soybean futures mark et to establish a processing margin. Crystallization The act of selling and buying stocks almost instant aneously in order to increase or decrease book value. This is a routine method used by many investors and companies to change book values without changing beneficial owne rship. Cum Dividend When a buyer of a security is entitled to receive a dividend that has been declared, but not paid. Cum Rights A situation in which the shares held by holders of record are qualified for a rights offering declared by a company

Cum Warrant A condition in which the buyer of a security is ent itled to a warrant that has been declared, but not distributed. Cumulative Dividend A limitation placed upon corporations ensuring the payment of preferred dividends before distributions are made to common shareholders. Cumulative Volume Index - CVI A momentum indicator that gauges the movement of fu nds into and out of the entire stock market by adding the difference between advancing a nd declining stocks to a running total. Cumulative Voting The procedure of voting for a company's directors e ach shareholder is entitled one vote per share times the number of directors to be elect ed. This is sometimes known as 'proportional voting'. CUP In currencies, this is the abbreviation for the Cub an Peso. Cup with handle Technical charting pattern coined by IBD founder Wi lliam J. O'Neil. It is one of three positive chart patterns to look for when doing tech nical analysis of a stock. It is named such because it resembles the outline of a coffee c up with a handle. The pattern can last from seven weeks to as long as a year, but most are three to six months. The decline is usually 12% to 35% from the stock's high. The handle area should slant lower as the last remaining sellers exit the stock. The buy point is 10 cents above the high point of the handle. Curb Trading Trading that occurs outside of general market regul ations, commonly through computers or telephones after the official exchanges have clo sed. Currency A generally accepted form of money, including coins and paper notes, which is issued by a government and circulated within an economy. Used as a medium of exchange for goods and services, currency is the basis for trade . Currency Basket A selected group of currencies whose weighted avera ge is used as a measure of the value or the amount of an obligation. A currency basket f unctions as a benchmark for regional currency movements - its composition and weighting depends on its purpose. Currency Carry Trade

A strategy in which an investor sells a certain cur rency with a relatively low interest rate and uses the funds to purchase a different currency yielding a higher interest rate. A trader using this strategy attempts to capture the difference between the rates - which can often be substantial, depending on the amount of le verage the investor chooses to use. Currency Convertibility The ease with which a country's currency can be con verted into gold or another currency. Convertibility is extremely important for internati onal commerce. When a currency in inconvertible, it poses a risk and barrier to trade with foreigners who have no need for the domestic currency. Currency Forward A forward contract in the forex market that locks i n the price at which an entity can buy or sell a currency on a future date. Also known as "ou tright forward currency transaction", "forward outright" or "FX forward". Currency Futures A transferable futures contract that specifies the price at which a specified currency can be bought or sold at a future date. Currency Option A contract that grants the holder the right, but no t the obligation, to buy or sell currency at a specified exchange rate during a specified period of time. For this right, a premium is paid to the broker, which will vary depending on th e number of contracts purchased. Currency options are one of the best ways for corpo rations or individuals to hedge against adverse movements in exchange rates Currency Overlay The outsourcing of currency risk management to a sp ecialist firm, known as the overlay manager. This is used in international investment p ortfolios to separate the management of currency risk from the asset allocation and secu rity selection decisions of the investor's money managers. Currency Pair The quotation and pricing structure of the currenci es traded in the forex market: the value of a currency is determined by its comparison to an other currency. The first currency of a currency pair is called the "base currency", and th e second currency is called the "quote currency". The currency pair shows how much of the quote currency is needed to purchase one unit of the base currency. Currency Risk A form of risk that arises from the change in price of one currency against another. Whenever investors or companies have assets or busi ness operations across national borders, they face currency risk if their positions are not hedged. Currency Swap A swap that involves the exchange of principal and interest in one currency for the same in another currency. It is considered to be a forei gn exchange transaction and is not

required by law to be shown on the balance sheet. Current Account The difference between a nation's total exports of goods, services and transfers, and its total imports of them. Current account balance calc ulations exclude transactions in financial assets and liabilities. Current Account Deficit Occurs when a country's total imports of goods, ser vices and transfers is greater than the country's total export of goods, services and trans fers. This situation makes a country a net debtor to the rest of the world Current Assets 1. A balance sheet account that represents the valu e of all assets that are reasonably expected to be converted into cash within one year in the normal course of business. Current assets include cash, accounts receivable, i nventory, marketable securities, prepaid expenses and other liquid assets that can b e readily converted to cash. 2. In personal finance, current assets are all asse ts that a person can readily convert to cash to pay outstanding debts and cover liabilities without having to sell fixed assets. In the United Kingdom, current assets are also know n as "current accounts". Current Cost of Supplies - CCS This refers to the net income of a company after ta king into account the increase (or decrease) in expenses over the reporting period. It is typically used by commodity reliant businesses. Current Delivery A type of futures contract that requires the delive ry of the underlying commodity in the current or following month before other futures con tracts of the same commodity with other delivery dates. Current Exposure Method A method of measuring the cost of default within a swap agreement. Current Income The investment objective for a portfolio of securit ies to achieve a steady income. Current Liabilities A company's debts or obligations that are due withi n one year. Current liabilities appear on the company's balance sheet and include short te rm debt, accounts payable, accrued liabilities and other debts. Current Market Value - CMV The resale valuation attached to a security held lo ng in an investor's margin account. The current market value is usually taken as the closin g price for listed securities or the bid price offered for over-the-counter (OTC) securities .

Current Maturity The interval between the present date and the matur ity date of a bond. Current Portion Of Long-Term Debt A portion of the balance sheet that represents the total amount of long-term debt that must be paid within the next year. The balance sheet has a liability section, which is broken down into long-term and current debt. When a debt p ayment is set to be made in longer than a year's time, it is recorded in the long-term debt section, and when that payment becomes due within a year, it moves to the "current portion of long-term debt" section Current Price The amount of money a security most recently traded for. Current Ratio A liquidity ratio that measures a company's ability to pay short-term obligations. Calculated as: Also known as "liquidity ratio", "cash asset ratio" and "cash ratio". Current Yield Annual income (interest or dividends) divided by th e current price of the security. This measure looks at the current price of a bond instea d of its face value and represents the return an investor would expect if he or she purcha sed the bond and held it for a year. This measure is not an accurate reflection of the a ctual return that an investor will receive in all cases because bond and stock prices are cons tantly changing due to market factors. Also referred to as "bond yield", or "dividend yiel d" for stocks. Curtailment The act of contracting or reducing operations of a company in the hope of bringing it financial or operational stability. This management technique is often used when a company has grown too fast and is unable to effecti vely manage its operations Cushion Bond A type of callable bond that sells at a premium bec ause the issued coupon payments are above market interest rates. CUSIP Number An identification number assigned to all stocks and registered bonds. The Committee on Uniform Securities Identification Procedures (CUSIP ) oversees the entire CUSIP system. Custodial Account 1. An account created at a bank, brokerage firm or mutual fund company that is managed by an adult for a minor that is under the age of 18 to 21 (depending on state legislation). 2. A retirement account managed for eligible employ ees by a custodian.

Custodial Care Non-medical care that helps individuals with his or her activities of daily living, preparation of special diets and self-administratio n of medication not requiring constant attention of medical personnel. Providers of custod ial care are not required to undergo medical training. Custodian A financial institution that has the legal responsi bility for a customer's securities. This implies management as well as safekeeping. Also known as "custody". Custody-Only Trading A system in which shares must be registered to the holder by name and can only be traded in physical form. Customer Type Indicator Codes - CTI A system that uses four different codes to indicate the types of transactions that, on futures exchanges, are made by brokers on behalf of different clients and themselves. Cutoff Point The point at which an investor decides whether or n ot a particular security is worth purchasing. The cutoff point is very subjective and will be based on the personal characteristics of the individual investor. Some ex amples of personal characteristics that may determine the cutoff point include the investor 's required rate of return and his or her risk aversion level. Cutting a Melon A declaration of a large stock or cash dividend tha t is in addition to the regular distribution. CVE In currencies, this is the abbreviation for the Cap e Verde Escudo. Cyber Monday An expression used in online retailing to describe the Monday following U.S. Thanksgiving weekend. Cyber Monday is generally thought of as th e start of the online holiday shopping season. Similar to Black Friday, (the unofficial st art of the holiday season for offline businesses), online retailers will usually offer sp ecial promotions on this day. Also known as "Black Monday". Cyclical Industry A term describing an industry that is sensitive to the business cycle and price changes. Many cyclical industries produce durable goods such as raw materials and heavy equipment. Cyclical Stock A stock that rises quickly when economic growth is strong and falls rapidly when growth

is slowing down Cyclical Unemployment Unemployment resulting from changes in the business cycle. Cylinder A term used to describe a transaction, involving tw o derivatives, where there is no initial cost bourne by the investor when entering into the position. CYP In currencies, this is the abbreviation for the Cyp rus Pound. CZK In currencies, this is the abbreviation for the Cze ch Koruna D A Nasdaq stock symbol specifying that the stock is a new issue. Daily Cut-Off In the forex market, a particular point in time spe cified by a forex dealer to stand as the end of the current trading day and the beginning of a new trading day. This is done for primarily administrative and logistical reasons, be cause although the forex market trades 24 hours a day, the market and its intermediaries r equire a specified beginning and end to each trading day in order to record trade dates and define settlement periods. Daily Graphs (and Daily Graphs Online) Print and online (www.dailygraphs.com) charting ser vices that provide extensive fundamental and technical indicators on thousands o f stocks for the individual investor. Daisy Chain A group of unscrupulous investors who, practicing a kind of fictitious trading or wash selling, artificially inflate the price of a securi ty so that they sell it at a profit. Dalal Street A term that refers to the Bombay Stock Exchange, th e major stock exchange in India. The street is home not only the Bombay Stock Exchange b ut also a large number of other financial institutions. Dark Cloud Cover In candlestick charting, a pattern where a black ca ndlestick follows a long white candlestick. It can be an indication of a future be arish trend. Data Mining A type of database application that looks for hidde n patterns in large groups of data. Date Certain A term identifying the date on/by which the specifi ed actions of a contract can be reasonably completed. This date is important, as it is generally considered legally binding. Date of Chart Date on chart reflects the most recent market activ iity. It is displayed in the lower right corner of the chart. Date Scale

Calendar information used to indicate the date of p rice and volume data on a chart. The vertical line to the immediate left of the month or day indicates its precise reference point on the chart grid. To determine an exact date on a chart, utilize the Track Price tool by clicking the right-hand mouse button while the cursor is over the poin t of interest Dawn Raid The action of a firm or investor buying a substanti al amount of shares in a company (making it a target firm) first thing in the mornin g when the stock markets open. This is done by a stock broker acting on behalf of a compan y. Because the bidding company builds a substantial stake in its target at the pre vailing stock market price, the takeover costs are likely to be significantly lower than the y would be had the acquiring company first made a formal takeover bid. DAX An index of 30 top German Stocks. Day Order Any order to buy or sell a security that automatica lly expires if not executed on the day the order is placed. Day Trader A stock trader who holds positions for a very short time (from minutes to hours) and makes numerous trades each day. Most trades are ent ered and closed out within the same day. Day-Count Convention A system used to determine the number of days betwe en two coupon dates, which is important in calculating accrued interest and prese nt value when the next coupon payment is less than a full coupon period away. Eac h bond market has its own day-count convention. Days Payable Outstanding - DPO A company's average payable period. Calculated as: Notice that the formula may also be written as: acc ounts payable / (cost of sales/number of days). Days Sales Of Inventory - DSI A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its raw materials into s ales. The lower (shorter) the DSI the better, but it is important to note that the typica l DSI will vary from one industry to another. Here is how the DSI is calculated: Days To Cover A measurement of a company's issued shares that are currently shorted, expressed as the number of days required to close out all of the sho rt positions. For example, if a company has 10 million shares outstanding and 2 million sha res are currently short sold, the shares have a days to cover rate of 2 (2M/10M). Also referred to as the "short-interest ratio". De-merger A corporate strategy to sell off subsidiaries or di visions of a company.

Dead Cat Bounce A temporary recovery from a prolonged decline or be ar market, after which the market continues to fall. Dead Hand Provision A stipulation on a defense mechanism or poison pill used by companies in order to protect against a merger or takeover by another com pany. The dead hand provision prevents the removal of the poison pill even if sha reholders of the target company favor the takeover. Deadweight Loss The costs to society created by an inefficiency in the market. Deal Flow The rate at which new proposals are flowing to the underwriters of an investment bank. Dealer 1. An individual or firm willing to buy or sell sec urities for their own account. 2. One who purchases goods or services for resale t o consumers. Dealer Market A market where dealers are assigned for specific se curities. The dealers create liquid markets by purchasing and selling against personal inventory. Dealer Option An option created upon physical commodities, outsid e of regular exchange regulations. Dear Money A situation in which money or loans are very diffic ult to obtain in a given country. If you do have the opportunity to secure a loan, then interes t rates are usually extremely high. Also known as "tight money". Death Benefit The amount on a life insurance policy or pension th at is payable to the beneficiary when the annuitant passes away. Also known as "survivor benefit". Death Cross A crossover resulting from a security's long-term m oving average breaking above its short-term moving average or support level. Death Put An optional redemption feature on a debt instrument allowing the beneficiary of the estate of the deceased to put (sell) the bond (back to the issuer) in the event of the beneficiary's death or legal incapacitation. Also known as a "sur vivor's option". Death Spiral A type of loan investors lend to a company in excha nge for convertible debt, which, like a convertible bond, typically has provisions that all ow the investors to convert the bonds into stock at below-market prices. This can lead to the original shareholders losing control of the company. Debasement 1. To lower the value, quality or status of somethi ng or someone.

2. To lower the value (of a coin) by adding metal o f inferior value. Debenture A type of debt instrument that is not secured by ph ysical asset or collateral. Debentures are backed only by the general creditworthiness and reputation of the issuer. Both corporations and governments frequently issue this type of bond in order to secure capital. Like other types of bonds, debentures are documented in an indenture. Debit An accounting entry which results in either an incr ease in assets or a decrease in liabilities on a company's balance sheet or in your bank account. Debit Balance In a margin account, money owed by the customer to the broker for funds advanced to purchase securities. The debit balance is the amoun t of funds the customer must put into his or her margin account, following the successful execution of a security purchase order, in order to properly settle the transaction. Debit Card An electronic card issued by a bank which allows ba nk clients access to their account to withdraw cash or pay for goods and services. This r emoves the need for bank clients to go to the bank to remove cash from their account as th ey can now just go to an ATM or pay electronically at merchant locations. This type of card, as a form of payment, also removes the need for checks as the debit card immediately t ransfers money from the client's account to the business account. Debt Expressed in percentage, this figure is based on fi scal year-end values of total debt to shareholder's equity. Debt Assignment A transfer of debt from a creditor to a third party . Debt Bomb This occurs when a major financial institution, suc h as a multinational bank, defaults on its obligations that causes disruption not only in the financial system of the institution's home country, but also in the global financial syst em as a whole. Debt Consolidation The action of combining several loans or liabilitie s into one loan. Put another way, debt consolidation is the process of taking out a new lo an to pay off a number of other debts. Most people who consolidate their debt are usually doing it to attain a lower interest rate, or the simplicity of a single loan. Also known as a "consolidation loan". Debt Deflation A situation in which the collateral used to secure a loan, or another form of debt, decreases in value. This can be detrimental to the borrower, as it may lead to a restructuring of the loan agreement or even a loan recall. Also known as "worst deflation" and "collateral def lation". Debt Exchangeable for Common Stock - DECS A debt instrument that provides the holder with cou pon payments in addition to an embedded short put option and a long call on the is suing company's stock.

Debt Financing When a firm raises money for working capital or cap ital expenditures by selling bonds, bills, or notes to individual and/or institutional investors. In return for lending the money, the individuals or institutions become creditors an d receive a promise that the principal and interest on the debt will be repaid. Debt Instrument A paper or electronic obligation that enables the i ssuing party to raise funds by promising to repay a lender in accordance with terms of a con tract. Types of debt instruments include notes, bonds, certificates, mortgages, leas es or other agreements between a lender and a borrower. Debt Overhang A situation where the debt stock of a country excee ds the country's future capacity to repay it. Debt Restructuring A method used by companies with outstanding debt ob ligations to alter the terms of the debt agreements in order to achieve some advantage. Debt Security A security representing a loan given by an investor to an issuer. In return for the loan, the issuer promises to pay interest and to repay the de bt on a specified date. Debt Service Cash required over a given period for the repayment of interest and principal on a debt. Debt-Service Coverage Ratio - DSCR 1. In corporate finance, it is the amount of cash f low available to meet annual interest and principal payments on debt, including sinking fund payments. 2. In government finance, it is the amount of expor t earnings needed to meet annual interest and principal payments on a country's exte rnal debts. 3. In personal finance, it is a ratio used by bank loan officers in determining income property loans. This ratio should ideally be over 1 . That would mean the property is generating enough income to pay its debt obligation s. In general, it is calculated by: Debt-To-Capital Ratio A measurement of a company's financial leverage, ca lculated as long-term debt divided by long-term capital. Total debt includes all short-te rm and long-term obligations. Total capital includes all common stock, preferred stock and long-term debt. Debt-To-Income Ratio - DTI A personal-finance measure that compares an individ ual's debt payments to the income he or she generates. This measure is important in t he lending industry as it gives lenders an idea of how likely they will receive payments fr om the borrower. Debt/Equity Ratio A measure of a company's financial leverage calcula ted by dividing long-term debt by stockholder equity. It indicates what proportion of equity and debt the company is using to finance its assets. Note: Sometimes only interest-bearing long-term deb t is used instead of total liabilities in the calculation.

Debt-To-GDP Ratio A measure of a country's federal debt in relation t o its gross domestic product (GDP). By comparing what a country owes and what it produces, the debt-to-GDP ratio indicates the country's ability to pay back its debt. The ratio i s a coverage ratio on a national level. Debt/Equity Swap A refinancing deal in which a debt holder gets an e quity position in exchange for cancellation of the debt. Debtor in Possession - DIP A company that continues to operate while under the Chapter 11 bankruptcy process. Debtor-in-Possession Financing - DIP Financing Financing arranged by a company while under the Cha pter 11 bankruptcy process. DIP financing is unique from other financing methods in that it usually has priority over existing debt, equity and other claims. Deceased Alert A notification on a person's credit report that ale rts credit agencies that the person is deceased and should not be issued credit in the fut ure. Upon a person's death, a family member or friend must request the credit reporting agencies to send out the deceased alert. The purpose of the deceased alert is to prev ent identity thieves from stealing and abusing the name of the deceased person. Decimalization The process of changing the prices that securities trade at from fractions to decimals. Deck A term used to refer to the open orders held by flo or brokers on futures exchanges. Declaration Date 1. The date on which the next dividend payment is a nnounced by the directors of a company. This statement includes the dividend's siz e, ex-dividend date and payment date. It is also referred to as the "announcement date". 2. The last day on which the holder of an option mu st indicate whether they will exercise the option. Also known as the "expiration date". Declining Balance Method A common depreciation-calculation system that invol ves applying the depreciation rate against the non-depreciated balance. Instead of spr eading the cost of the asset evenly over its life, this system expenses the asset at a constant rate, which results in declining depreciation charges each successive period. Declining Industry An industry where growth is either negative or is n ot growing at the broader rate of economic growth. There are many reasons for a decli ning industry: consumer demand may be steadily evaporating, the depletion of a nat ural resource may be occurring, or there may be the emergent substitutes because of te chnological innovation. Decoupling The occurrence of returns on asset classes divergin g from their normal pattern of correlation.

Dedicated Portfolio A passive form of portfolio management that involve s the matching of future cash flows with future liabilities. Dedicated Short Bias A hedge fund strategy with which the fund manager t akes more short positions than long positions. Deductible 1. The amount you have to pay out-of-pocket for exp enses before the insurance company will cover the remaining costs. 2. An amount subtracted from an individual's adjust ed gross income to reduce the amount of taxable income. Also known as "tax deductible". Deduction Any item or expenditure subtracted from gross incom e to reduce the amount of income subject to tax. Also referred to as "allowable deduction". Deed A legal document that grants the bearer a right or privilege, provided that he or she meets a number of conditions. In order to receive the pri vilege - usually ownership, the bearer must be able to do so without causing others undue hardship. A person who poses a risk to society as a result of holding a deed may be res tricted in his or her ability to use the property. Deeds are most known for being used to transfer the ownership of automobiles or land between two parties. Deep In The Money An option with an exercise price, or strike price, significantly below (for a call option) or above (for a put option) the market price of the un derlying asset. Significantly, below/above is considered one strike price below/ab ove the market price of the underlying asset. For example, if the current price of the und erlying stock was $10, a call option with a strike price of $5 would be considered deep in th e money. Deep-Discount Bond 1. A bond that sells at a significant discount from par value. 2. A bond that is selling at a discount from par va lue and has a coupon rate significantly less than the prevailing rates of fixed-income secu rities with a similar risk profile. Deer Market A flat market. Neither a bull or bear market, a dee r market is characterized by low activity, with timid investors waiting for a sign of which wa y the market is going to end up moving. Default 1. The failure to promptly pay interest or principa l when due. 2. The failure to perform on a futures contract as required by an exchange. Default Premium The additional amount a borrower must pay to compen sate the lender for assuming default risk. Default Risk The risk that companies or individuals will be unab le to pay the contractual interest or

principal on their debt obligations. Defeasance A provision that voids a bond or loan when the borr ower sets aside cash or bonds sufficient enough to service the borrower's debt. Also referred to as "defease." Debtor A company or individual who owes money. If the debt is in the form of a loan from a financial institution, the debtor is referred to as a borrower. If the debt is in the form of securities, such as bonds, the debtor is referred t o as an issuer. Defensive Buy An investment that is an attractive buy because it is low risk, not because of its return potential. Defensive Company A company whose sales and earnings remain relativel y stable during both economic upturns and downturns. Defensive Investment Strategy A method of portfolio allocation and management aim ed at minimizing the risk of losing principal. Defensive investors place a high percent age of their investable assets in bonds, cash equivalents, and stocks that are less volatile than average. Defensive Stock A stock that provides a constant dividend and stabl e earnings regardless of the state of the overall stock market. This is not to be confused with a "defense stock", which refers to stock in companies which manufacture things like weapons, ammunition a nd fighter jets. Defensive Stocks/Industry Groups/Sectors Usually considered more stable and relatively safer by most investors. They include utilities, tobacco, food, soap, soft drinks, superm arkets, etc. They represent industries of staple goods and repeat purchase items. Deferment Period The period after the issue of callable security dur ing which it cannot be called by the issuer. Defensive Acquisition The act of firms acquiring other firms and assets a s a defense against market downturns or possible takeovers. A defensive acquisition cont rasts with the normal impetus for an acquisition, which is usually increased market shar e or revenue. Deferred Account An account that postpones tax liabilities until a l ater date. Deferred accounts are usually retirement accounts Deferred Acquisition Costs - DAC Typically used in the insurance industry, this is w hen a company defers the sales costs that are associated with acquiring a new customer over the t erm of the insurance contract. Deferred Annuity A type of annuity contract that delays payments of income, installments or a lump sum until the investor elects to receive them. This type of annui ty has two main phases, the savings phase in which you invest money into the account, and the in come phase in which the plan is converted into

an annuity and payments are received. A deferred annuity can be either variable or fixed. Deferred Charge A prepaid expense that is recognized on the balance sheet as an asset until it is used. Deferred Income Tax A liability that results from income already earned , is recognized for accounting but not tax purposes and is recorded on the balance sheet. Deferred Interest Bond A debt instrument that pays no interest until a dat e specified in the future. Deferred Payment Option An option with all the characteristics of an Americ an vanilla option, with one exception: payment is deferred until the original expiration date. Deferred Profit Sharing Plan - DPSP An employer-sponsored Canadian profit sharing plan that is registered with the Canadian Revenue Agency. On a periodic basis, the employer shares th e profits made from the business with all employees or a designated group of employees. Emplo yees receiving a share of the profits paid out by the employer do not have to pay federal taxes on the money received from the DPSP until it is withdrawn. Deferred Revenue A liability account used to collect deposits and ot her cash receipts prior to the completion of the sale. Deferred Share 1. A share that does not have any rights to the ass ets of a company undergoing bankruptcy until all common and preferred shareholders are paid. 2. A method of stock payment to directors and execu tives of a company through the deposit of shares into a locked account. The value of these sh ares fluctuate with the market and cannot be accessed by the beneficiary for the purpose of liqu idation until they are no longer employees of the company. 3. A share generally issued to company founders tha t restricts their receipt of dividends until dividends have been distributed to all other classe s of shareholders Deficit A situation in which liabilities exceed assets, exp enditures exceed income, imports exceed exports, or losses exceed profits. Defined-Benefit Plan An employer-sponsored retirement plan for which ret irement benefits are based on a formula indicating the exact benefit that one can expect up on retiring. Investment risk and portfolio management are entirely under the control of the co mpany. There are restrictions on when and how you can withdraw these funds without penalties. Defined-Contribution Plan A retirement plan wherein a certain amount or perce ntage of money is set aside each year for the benefit of the employee. There are restrictions as to when and how you can withdraw these funds without penalties. Deflation A general decline in prices, often caused by a redu ction in the supply of money or credit. Deflation can be caused also by a decrease in government, per sonal or investment spending. The opposite of inflation, deflation has the side effect of increas ed unemployment since there is a lower level of demand in the economy, which can lead to an economi c depression. Defunct

The condition of a company, whether publicly traded or private, that has gone bankrupt and ceased to exist. If the company was publicly traded, it wi ll be delisted from the exchange where it was liste d, and its stock will be worth nothing. This term also applies to currencies that are no lo nger in circulation Degearing The action of a company altering its capital struct ure by replacing long-term debt with equity, thereby easing the burden of interest payments and also increasing management's flexibility Deleted A security that is no longer included on a specifie d market. Sometimes referred to as "delisted Deleverage The reduction of financial instruments or borrowed capital previously used to increase the potential return of an investment. It is the opposite of leve rage. Deleveraged Floater A fixed-income investment with a floating rate tied to a specific index with less than a one for one payback ratio. Delinquent A term describing the failure to meet required obli gations according to schedule. Delisting The removal of a listed security from the exchange on which it trades. Stock is removed from an exchange because the company for which the stock is issued, whether voluntarily or involuntarily, is not in compliance with the listing requirements of the exchange. Delivered Ex Ship - DES A trade term requiring the seller to deliver goods to a buyer at an agreed port of arrival. The seller remains responsible for the goods until they are de livered. Delivery The action by which an underlying commodity, securi ty, cash value, or delivery instrument covering a contract is tendered and received by the contract holder. Delivery Date 1. The final date by which the underlying commodity for a futures contract must be delivered in order for the terms of the contract to be fulfilled . 2. The maturity date of a currency forward contract . Delivery Instrument A document that, during the delivery of the futures contract, stands in lieu of the physical asset underlying the contract. Delivery Month The month in which a contract expires and delivery of the underlying asset or cash is required. Delivery Notice A notice written by the holder of the short positio n in a futures contract informing the clearing hous e of the intent and details of delivering a commodity for settlement. Delivery Option A feature added to some futures contracts permittin g the short position to determine the combination of timing, location, quantity, and qual ity of the underlying commodity stated in the delivery notice. Delivery Price The price for the delivery of underlying commoditie s occurring upon the expiration of a futures contract.

Delivery Versus Payment - DVP A securities industry procedure in which the buyer' s payment for securities is due at the time of delivery. Security delivery and payment are simulta neous. Delta The ratio comparing the change in the price of the underlying asset to the corresponding change in the price of a derivative. Sometimes referred to as the "hedge ratio". Delta Hedging An options strategy that aims to reduce (hedge) the risk associated with price movements in the underlying asset by offsetting long and short posit ions. For example, a long call position may be delta hedged by shorting the underlying stock. This strategy is based on the change in premium (price of option) caused by a change in the price o f the underlying security. The change in premium for each basis-point change in price of the underly ing is the delta and the relationship between the two movements is the hedge ratio. Delta Neutral A portfolio consisting of positions with offsetting positive and negative deltas. The deltas balance out to bring the net change of the position to zero . Demand A consumer's desire and willingness to pay for a go od or service. Demand Deposit An account from which deposited funds can be withdr awn at any time without any notice to the depository institution. Demand Note A loan with no fixed term or set duration of repaym ent. It can be recalled upon the lenders request, assuming the notice required by the provisions of t he loan are met. Demand Shock A sudden surprise event that temporarily increases or decreases demand for goods or services. A positive demand shock increases demand, while a neg ative demand shock decreases demand. Both positive and negative demand shock have an effect o n the prices of goods and services. Demand-Pull Inflation A situation in which inflation increases because of a continual increase in consumer demand. Demarker Indicator An indicator used in technical analysis that compar es the most recent price action to the previous period's price in an attempt to measure the demand of the underlying asset. This indicator is generally used to identify price exhaustion and can also be used to identify market tops and bottoms. This oscillator is bounded between -100 an d +100 and, unlike many other oscillators, it does not use smoothed data. Dematerialization - DEMAT The move from physical certificates to electronic b ook keeping. Actual stock certificates are slowly being removed and retired from circulation in excha nge for electronic recording. Demutualization The process of changing corporate structure from a mutual fund company to some other form, such as a limited liability or corporation. Denomination The stated value found on financial instruments. Department of Labor - DOL

A U.S Government cabinet body responsible for stand ards in occupational safety, wages and number of hours worked, unemployment insurance bene fits, re-employment services and a portion of the country's economic statistics. Dependency Ratio A measure showing the number of dependents (aged 0- 14 and over the age of 65) to the total population (aged 15-64). Also referred to as the "t otal dependency ratio". Dependent A person who relies on someone else for financial s upport. The taxpayer supporting the dependent is allowed to claim dependency exemptions. Depletion An accounting term describing the amortization of a ssets that can be physically reduced. Deposit 1. A transaction involving a transfer of funds to a nother party for safekeeping. 2. A portion of funds that is used as security or c ollateral for the delivery of a good. Deposit/Withdrawal at Custodian - DWAC The automated system for deposits and withdrawals o f securities from the Depository Trust Company (DTC). Depositary Receipt A negotiable financial instrument issued by a bank to represent a foreign company's publicly traded securities. The depositary receipt trades on a loca l stock exchange Depository Trust & Clearing Corporation - DTCC Established in 1999, the DTCC is a holding company consisting of 5 clearing corporations and 1 depository, making it the world's largest financial services corporation dealing in post trade transactions. Depository Trust Company - DTC One of the world's largest securities depositories, it holds in excess of US$10 trillion worth of securities in custody. The DTC acts like a clearing house to settle trades in corporate and municipal securities Depository Trust Company Tracking - DTCT A service, used by underwriting firms, that provide s a method of tracking the exact path of purchases and sales of newly issued securities. Depreciated Cost Calculated by subtracting the amount of depreciatio n claimed from the original cost of an asset. Depreciation 1. In accounting, an expense recorded to allocate a tangible asset's cost over its useful life. Since it is a non-cash expense, it increases free cash flow while decreasing reported earnings. 2. A decrease in the value of a particular currency relative to other currencies. Depressed A description of a market, security, or product tha t is experiencing weak demand and lowering prices. Depression A severe and prolonged recession characterized by i nefficient economic productivity, high unemployment, and falling price levels. Depth The ability of a security to absorb buy and sell or ders without the stock price dramatically moving in either direction.

Deregulation The reduction or elimination of government power in a particular industry, usually enacted to create more competition within the industry. Derivative In finance, a security whose price is dependent upo n or derived from one or more underlying assets. The derivative itself is merely a contract between two or more parties. Its value is determined by fluctuations in the underlying asset. The most comm on underlying assets include stocks, bonds, commodities, currencies, interest rates and market indexes. Most derivatives are characterized by high leverage. Descending Channel A downward moving channel formed by two parallel, d ownward sloping trendlines. The upper trendline connects a stock's highs over a period of time, with each subsequent high price lower than the previous. Conversely, the lower trendline conne cts the stock's lows, with each subsequent low price lower than the previous. Descending Tops A pattern in charts where each peak in price is low er then the previous peak in price. The pattern signals a bearish trend in the security. The above is an example of descending tops. Descending Triangle A bearish chart pattern used in technical analysis that is created by drawing one trendline that connects a series of lower highs and a second trend line that has historically proven to be a strong level of support. Traders watch for a move below su pport, as it suggests that downward momentum is building. Once the breakdown occurs, traders ent er into short positions and aggressively push the price of the asset lower. The chart below is an example of a descending triangle: Designated Order Turnaround - DOT (SuperDOT) An electronic system that increases order efficienc y by routing orders for listed securities directly to a specialist on the trading floor, instead of throu gh a broker. Desk Trader A trader who is restricted to instituting trades fo r a firm's clients and who is unable to trade with his/her firm's own accounts. Detrend In forecasting models, the process of removing the effects of accumulating data sets from a trend to show only the absolute changes in values and to all ow potential cyclical patterns to be identified. This is done using regression and other statistical techniques. Devaluation A deliberate downward adjustment to a country's off icial exchange rate relative to other currencies. In a fixed exchange rate regime, only a decision by a country's government (i.e central bank) can alter the official value of the currency. Contrast to "revaluation". Development Stage A company that is focusing a majority of its attent ion on research & development. Dhaka Stock Exchange - DSE The stock exchange headquartered in Dhaka, Banglade sh.

Diagonal Spread An options strategy established by simultaneously e ntering into a long and short position in two options of the same type (two call options or two p ut options) but with different strike prices and expiration dates. Diamond Top Formation

A technical analysis reversal pattern that is used to signal the end of an uptrend. This relatively uncommon pattern is found by identifying a period i n which the price trend of an asset starts to widen and then starts to narrow. This pattern is ca lled a diamond because of the shape it creates on a chart. Dialing and Smiling A slang term for the practice of cold calling. Diamonds 1. An extremely hard gemstone used mainly for jewel ry and tools. 2. An exchange traded security, issued by the Ameri can Stock Exchange, that replicates the movements in the Dow Jones Industrial Average Differential The amount of adjustment of the delivery location a nd grade of deliverables that a futures contract permits. Also known as "allowance. " Diffusion Index 1. A measure of the percentage of stocks that have advanced in price or are showing a positive momentum over a defined period. It is used in the t echnical analysis of stocks. 2. A measure of the breadth of a move in any of the Conference Boards Business Cycle Indicators (BCI), showing how many of an indicators components are moving together with the overall indicator index. Digital Option An option whose payout is fixed after the underlyin g stock exceeds the predetermined threshold or strike price. Also referred to as "binary" or "all-or-nothing opt ion." Diluted Earnings Per Share - Diluted EPS A performance metric used to gauge the quality of a company's earnings per share (EPS) if all convertible securities were exercised. Convertible securities refers to all outstanding convertible preferred shares, convertible debentures, stock opt ions (primarily employee based) and warrants. Unless the company has no additional potential shar es outstanding (a relatively rare circumstance) the diluted EPS will always be lower than the simpl e EPS. Diluted Founders A slang term often used by venture capitalists to d escribe the process by which the founders of a startup gradually lose ownership of the company the y founded. As a startup that is using venture capital for funding progresses through multiple rou nds of financing, the venture capitalists providing the financing will often want more and mo re ownership of the company. In other words, the founders dilute their ownership in the company in exchange for capital to grow their business. Dilution A reduction in earnings per share of common stock t hat occurs through the issuance of additional shares or the conversion of convertible securities Dilutive Acquisition An acquisition that will decrease the acquiring com pany's EPS. Direct Access Trading - DAT A system that allows a client to trade directly wit h another client, a market maker on Nasdaq, or a specialist on the floor of an exchange without brok er interference Direct Cost A cost that can be directly traced to producing spe cific goods or services.

Direct Deposit 1. When the tax authorities deposit your tax refund directly into your bank account rather than mailing you a check. 2. When your employer deposits your paycheck direct ly into your bank account rather than issuing you a physical check. Direct Participation Program - DPP A business venture designed to let investors partic ipate directly in the cash flow and tax benefits of the underlying investment. DPPs are generally passi ve investments that invest in real estate or energy-related ventures. Also known as a "direct participation plan". Direct Public Offering - DPO Where a company raises capital by marketing its sha res directly to its own customers, employees, suppliers, distributors and friends in the communit y. DPOs are an alternative to underwritten public offerings by securities broker-dealer firms where a company's shares are sold to the broker's customers and prospects Direct Quote A foreign exchange rate quoted as the domestic curr ency per unit of the foreign currency. In other words, it involves quoting in fixed units of foreig n currency against variable amounts of the domestic currency. Direct Repurchase A company's plan to buy back its own shares from th e marketplace, thereby reducing the number of outstanding shares. Direct Rollover A distribution of eligible rollover assets from a q ualified plan, 403(b) plan, or a governmental 457 plan to a Traditional IRA, qualified plan, 403(b) p lan, or a governmental 457 plan or a distribution from an IRA to a qualified plan, 403(b) plan or a g overnmental 457 plan Direct Stock Purchase Plan A plan in which shares are sold directly to investo rs, instead of through a broker. Direct Tax A tax that cannot be shifted onto others. Direct-Access Broker A stockbroker that concentrates on speed and order execution - unlike a full-service broker that focuses on research and advice. Direct-access broke rs usually use complicated computer software that allows clients to trade directly with an excha nge or with other individuals via electronic communication networks (ECN). Directed Order A customer order where the customer gives specific instructions to the broker concerning the orders routing destination Directional Movement Index - DMI An indicator developed by J. Welles Wilder for iden tifying when a definable trend is present in an instrument. That is, the DMI tells whether an instr ument is trending or not. Directional Trading A general term referring to the strategy used by in vestors that open positions, either long or short, on the belief that they are able to correctly predi ct the movement of price in a security. Dirty Float

A system of floating exchange rates in which the go vernment or the country's central bank occasionally intervenes to change the direction of the value of the country's currency. In most instances, the intervention aspect of a dirty float system is meant to act as a buffer against an external economic shock before its effects become t ruly disruptive to the domestic economy. Dirty Price A bond price that includes accrued interest Disability-Income (DI) Insurance An insurance product that provides supplementary in come in the event of an illness or accident resulting in a disability that prevents the insured from working at their regular employment. Benefits are usually provided on a monthly basis so that the individual can maintain their standard of living and continue to pay their regular expenses. Discharge in Bankruptcy When a bankrupt person or company is legally free a nd clear of any obligation to repay certain debts. Disclaim To renounce an interest or obligation by way of a l egal instrument - usually a written disclaimer, or a disclaiming trust. Property may be disclaimed for s everal reasons: because it is unwanted, because it carries heavy liabilities, because of tax reason s, or because the intended beneficiary wants to pas s the property to another beneficiary. Liabilities, o bligations, beneficial ownership, or rights may als o be disclaimed. Disclaimer Trust A trust that has embedded provisions (usually conta ined in a will) which allow a surviving spouse to put specific assets under the trust by disclaiming ownership of a portion of the estate. Disclaimed property interests are transferred to the trust, wi thout being taxed. Provisions can be written into the trust that provi de for regular payouts from the trust to support survivors. Surviving minor children can also be pro vided for, as long as the surviving spouse elects to disclaim inherited assets, passing them on to th e trust. Disclosure The act of releasing all relevant information perta ining to a company that may influence an investment decision. In order to be listed on major U.S. stock exchanges, companies must follow all of the Securities and Exchange Commission's disclos ure requirements and regulations. Disclosure Statement 1. A document explaining the rules of an IRA in pla in, nontechnical language. This must be provided to the IRA owner at least seven days before the IRA is established, or it can be provided to the IRA owner at the time the IRA is being established prov iding the IRA owner is given seven days within which he/she may revoke the IRA. 2. A document outlining the specific terms and cond itions of a loan, including the interest rate of th e loan, any loan fees, the amount borrowed, insurance , prepayment rights and the responsibilities of the borrower. Discount The condition of the price of a bond that is lower than par. The discount equals the difference between the price paid for a security and the secur ity's par value. Discount Bond A bond that is valued at less than its face amount

Discount Broker A stockbroker who carries out buy and sell orders a t a reduced commission, compared to a full-service broker, but provides no investment advice. Discount Margin - DM The return earned in addition to the index underlyi ng the floating rate security. Discount Note An unsecured corporate debt that is issued at a dis count and matures at par. It is similar to a zero coupon bond or T-bill. Discount notes give institut ional and retail investors convenient choices with respect to the investment size and maturity date fo r a short-term investment. Discount Rate 1. The interest rate that an eligible depository in stitution is charged to borrow short-term funds directly from a Federal Reserve Bank. 2. The interest rate used in determining the presen t value of future cash flows. Discount Window The location at the Federal Reserve where financial institutions go to borrow money at the discount rate. Discounted Cash Flow - DCF A valuation method used to estimate the attractiven ess of an investment opportunity. Discounted cash flow (DCF) analysis uses future free cash flow projections and discounts them (most often using the weighted average cost of capital) to arri ve at a present value, which is used to evaluate th e potential for investment. If the value arrived at t hrough DCF analysis is higher than the current cost of the investment, the opportunity may be a good on e. Discretionary Account An account that allows a broker to buy and sell sec urities without the client's consent. Sometimes referred to as a managed account. The client must s ign a discretionary disclosure with the broker as documentation of the clients consent. Discretionary Income The amount of an individual's income that is left f or spending after the essentials have been taken care of. Discretionary Order An order giving a broker the ability to decide when to buy/sell securities at the best possible price for the customer. Some discretionary orders place r estrictive terms to limit the amount of discretion the broker has. Diseconomies of Scale An economic concept referring to a situation in whi ch economies of scale no longer function for a firm. Rather than experiencing continued decreasing costs per increase in output, firms see an increase in marginal cost when output is increased. Disgorgement A repayment of ill-gotten gains that is imposed on wrongdoers by the courts. Funds that were received through illegal or unethical business tran sactions are disgorged, or paid back, with interest to those affected by the action. Disgorgement is a remedial civil action, rather than a punitive civil action. Disinflation A slowing of the rate at which prices increase. Typ ically, this occurs during a recession as sales drop and retailers are not able to pass on higher p rices to customers.

Disintermediation 1. In finance, withdrawal of funds from intermediar y financial institutions, such as banks and savings and loan associations, in order to invest t hem directly. 2. Generally, removing the middleman or intermediar y. Disinvestment 1. The action of an organization or government sell ing or liquidating an asset or subsidiary. Also known as "divestiture". 2. A reduction in capital expenditure, or the decis ion of a company not to replenish depleted capital goods. Dismal Science A slang term used to describe the discipline of eco nomics. It was given this description by Thomas Carlyle, who was inspired to coin the phrase by T. R. Malthus's gloomy prediction that population would always grow faster than food, dooming mankind to unending poverty and hardship. Disparity Index A technical indicator that measures the relative po sition of the most recent closing price to a selected moving average and reports the value as a percentage. A value greater than zero suggests that the asset is gaining upward momentum, while a value less than zero can be interpreted as a sign that selling pressure is increasing. Dispersion A term used in statistics that refers to the locati on of a set of values relative to a mean or average level. Displaced Moving Average A moving average that has been adjusted forward or back in time in order to forecast trends. Displaced moving averages are constructed by taking the moving average and shifting it by a number of intervals, either positive or negative. I f the number is negative, the displaced moving average will lag the original moving average, and i f the number is positive the displaced moving average will lead the original moving average. Disposable Income The amount of after-tax income that is available to divide between spending and personal savings. Disposition Getting rid of an asset or security through a direc t sale or some other method. Distressed Sale An urgent sale of assets because of negative condit ions. Distressed Securities A financial instrument in a company that is near or is currently going through bankruptcy. This usually results from a company's inability to meet its financial obligations. As a result, these financial instruments have suffered a substantial r eduction in value. Distressed securities can include common and preferred shares, bank debt, tra de claims (goods owed) and corporate bonds. Distributable Net Income - DNI An amount that is transferable to unitholders, in t he case of an income trust, or the amount to be distributed to a beneficiary, in the case of an est ate trust. Distributable net income is the maximum amount a unitholder or beneficiary will receive tha t is taxable any amount above this figure will be tax free. Distribution 1. An occurrence where trading volume is, without a ny price appreciation, higher than that of the previous day. 2. A removal of assets from a retirement account th at is paid to the retirement account owner or

beneficiary. 3. A company's payment of cash, stock or physical p roducts to their shareholders. Distribution In Kind A distribution made in the form of stock rather tha n cash. Also referred to as a "distribution in specie Divergence A situation in which the price of an asset and an i ndicator, index or other related asset move in opposite directions. In technical analysis traders make transaction decisions by identifying situations of divergence, where the price of a stoc k and a set of relevant indicators, such as the MACD, are moving in opposite directions. Diversification A risk-management technique that mixes a wide varie ty of investments within a portfolio. The rationale behind this technique contends that a por tfolio of different kinds of investments will, on average, yield higher returns and pose a lower risk than any individual investment found within the portfolio. Diversification strives to smooth out unsystematic risk events in a portfolio so that the positive performance of some investments will neutralize the negative performance of others. Therefore, the benefits of diversification will hold only if the s ecurities in the portfolio are not perfectly correl ated. Diversified Common Stock Fund A mutual fund that invests its assets in a wide ran ge of common stocks. The fund's objectives can be growth, income, or a combination of both. Diversified Fund A type of investment fund that contains a wide arra y of securities and is adequately diversified. A mutual fund classified as a "diversified fund" will actively maintain a high level of diversification in its holdings, thus reducing the amount of risk in t he fund, since events that affect one sector won't have the same effect on other sectors. For example, the fund may restrict its purchases so it is not dominated by companies from one industry or represe nting one market capitalization size. Diversity Score A measure, created by Moody's Investors Service, to estimate the diversification in a portfolio, specifically in the context of a collateralized deb t obligation (CDO). The calculation methodology for a diversification score takes into account the exte nt to which a portfolio is diversified by industry. Divestiture The partial or full disposal of an investment or as set through sale, exchange, closure or bankruptcy. Divestiture can be done slowly and systematically o ver a long period of time, or in large lots over a short time period. Divestment The process of selling an asset. Also known as dive stiture, it is made for either financial or social goals. Divestment is the opposite of investment Dividend Distribution of a portion of a company's earnings, decided by the board of directors, to a class of it s shareholders. The dividend is most often quoted in terms of the dollar amount each share receives (i.e. dividends per share or DPS). It can also be q uoted in terms of a percent of the current market price, referred to as dividend yield. Dividend Clawback An arrangement under which those financing a projec t agree to contribute, as equity, any prior dividends received from the project to cover any ca sh shortages. Dividend Discount Model - DDM A procedure for valuing the price of a stock by usi ng predicted dividends and discounting them

back to present value. The idea is that if the valu e obtained from the DDM is higher than what the shares are currently trading at, then the stock is undervalued.

Dividend Enhanced Convertible Stock - DECS Preferred stock that provides the holder with premi um dividends in addition to an embedded short put option and a long call on the issuing company's stock. Dividend Imputation An arrangement in Australia that eliminates the dou ble taxation of dividends. Dividend Irrelevance Theory A theory that investors are not concerned with a co mpany's dividend policy since they can sell a portion of their portfolio of equities if they want cash Dividend Modification An abbreviation will appear on a chart when the com pany announces a change (increase or decrease) or omission in a quarterly dividend pay-o ut: •Div Incr = Dividend increase •Div Decr = Dividend decrease •Div Initl = Dividend initialized •Div Rsum = Dividend resume •Div Omit = Omission of payment •Div Spec = Special dividend •Div Extra = Extra dividend Dividend Payout Ratio The percentage of earnings paid to shareholders in dividends. Dividend Policy The policy a company uses to decide how much it wil l pay out to shareholders in dividends. Dividend Reinvestment Plan - DRIP A plan offered by a corporation allowing investors to reinvest their cash dividends by purchasing additional shares or fractional shares on the divid end payment date. Dividend Tax Credit The amount a Canadian resident applies against thei r tax owing on the grossed up portion of dividends received from Canadian corporations. Dividend Yield A financial ratio that shows how much a company pay s out in dividends each year relative to its share price. In the absence of any capital gains, t he dividend yield is the return on investment for a stock. Dividend yield is calculated as follows: Dividend, Quarterly Distribution Amount distributed for each share of company stock. Dividends Received Deduction - DRD A tax deduction received by a corporation on the di vidends paid to it by companies in which it has an ownership stake. The purpose of this deduction i s to soften the consequences of triple taxation. Triple taxation occurs because the company paying t he dividend does so with after-tax money and the receiving company is subject to income tax on t he dividends. Therefore, if the company that receives the dividends decides to pay out its share holders, the money will have been taxed three times. Diworsification The process of adding to one's portfolio in such a way that the risk/return tradeoff is worsened. DJF In currencies, this is the abbreviation for the Dji bourti Franc. DKK In currencies, this is the abbreviation for the Dan ish Krone.

Do Not Increase - DNI Instructions on a good-till-cancelled buy-limit or stop order that tell a broker not to increase the number of shares bought or sold in the event of a s tock dividend or stock split. Do Not Reduce - DNR A trade type used on an buy or sell order. It tells the broker not to decrease the limit price on buy-limit and sell-stop orders on the record date of a cash dividend. Dog One of the four categories (quadrants) of the BCG g rowth-share matrix that represents the division within a company that has a small market share in a mature industry. Dog And Pony Show A slang term referring to a financial seminar that presents new products or issues of securities to potential buyers. Dog Eat Dog When the market for a good or service is ruthlessly competitive. Dogs Of The Dow An investing strategy that consists of buying the 1 0 DJIA stocks with the highest dividend yield at the beginning of the year. The portfolio should be adjusted at the beginning of each year to include the 10 highest yielding stocks Doing the Reverse Desk A slang phrase referring to a tactic a hedge fund w ould use to try to mislead other funds that attempt to mimic its trades. Doji A name for candlesticks that provide information on their own and also feature in a number of important patterns. Dojis form when a security's op en and close are virtually equal. Dollar Drain A situation that occurs when a country imports more goods and services from another country than it exports back to the same country. The net effect of spending more money importing than is received from exporting causes a net reduction in t he importing country's reserves of the exporting country's currency. Dollar Price Percentage of par, or face value, that a bond is qu oted at. The other way bonds are often quoted is in terms of their yield. Dollar Roll A special type of repurchase agreement in which the security, transferred to the investor as collateral, is a mortgage-backed security. The inve stor who sells the security gives up the cash flows during the roll period, but has use of the pr oceeds. Dollar-Cost Averaging - DCA The technique of buying a fixed dollar amount of a particular investment on a regular schedule, regardless of the share price. More shares are purc hased when prices are low, and fewer shares are bought when prices are high. Also referred to as "constant dollar plan". Domicile The location where an individual, partnership, or c orporation establishes permanent residence as per legal obligations. Don't Know - DK

A slang expression for an out trade that is used wh en there is a discrepancy in the details of a trade . Also known as a "DK'd trade." Donchian Channels A moving average indicator developed by Richard Don chian. It plots the highest high and lowest low over the last period time intervals. Donor Advised Fund A private fund administered by a third party and cr eated for the purpose of managing charitable donations on behalf of an organization, family, or individual. Doomsday Call A call provision added to fixed income securities t hat allows for early redemption by the issuer if certain conditions are favorable. DOP In currencies, this is the abbreviation for the Dom inican Republic Peso. Dotcom A company that embraces the internet as the key com ponent in its business. Double Barreled Bonds secured by the pledge of two or more sources of repayment. Double Barrier Option An option with two distinct triggers that define th e allowable range for the price fluctuation of the underlying asset. In order for the investor to rece ive a payout, one of two situations must occur the price must reach the range limits (for a knock-in) or the price must avoid touching either limit (for a knock-out). Double Bottom A William J. O'Neil chart pattern resembling a 'W.' One of the three positive chart patterns to look f or when doing technical analysis of a stock. Double Dip Recession When the gross domestic product (GDP) growth slides back to negative after a quarter or two of brief positive growth. In other words, a recession followed by a short-lived recovery, followed by another recession. Double Dipping For brokerage firms, when a broker puts commissione d products into a fee-based account. The broker makes money from both the client and the com mission. Double Gearing Used to describe situations where multiple companie s are using shared capital to buffer against risk occurring in separate entities without the proper d ocumentation of exposure. Double No-Touch Option A type of exotic option that gives an investor an a greed upon payout if the price of the underlying asset does Double Top A term used in technical analysis to describe the r ise of a stock, a drop, another rise to the same level as the original rise, and finally another dro p. Double Witching Similar to triple witching, but instead of three cl asses of options or futures expiring on the same da y, double witching is when only two classes (any two) are expiring. The three classes are stock options, index options, and index futures.

Dove An economic policy advisor who promotes monetary po licies that involve the maintenance of low interest rates, believing that inflation and its ne gative effects will have minimal impact on society. This term is derived from the docile and placid nat ure of the bird of the same name. Dow Divisor A number used in the calculation of the Dow Jones I ndustrial Average that accounts for stock splits and stock dividends Dow Jones AIG Commodity Index - DJ-AIGCI A rolling commodities index composed of futures con tracts on 19 physical commodities traded on U.S. exchanges. The index serves as a liquid and di versified benchmark for the commodities' asset class. Dow Jones CDX Indexes A series of indices that track North American and e merging market credit derivative indexes. The purpose of the combined indexes is to track the per formance of the various segments of credit derivatives so that the overall return can be bench marked against funds that invest in similar products. Dow Jones Industrial Average - DJIA The Dow Jones Industrial Average is a price-weighte d average of 30 significant stocks traded on the New York Stock Exchange and the Nasdaq. The DJIA wa s invented by Charles Dow back in 1896. Dow Jones Transportation Average - DJTA The Dow Jones Transportation Average is a price-wei ghted average of 20 transportation stocks traded in the United States. The average was starte d back in 1884. Dow Jones Utility Average - DJUA The Dow Jones Utility Average is a price-weighted a verage of 15 utility stocks traded in the United States. The DJUA was started back in 1929. Dow Theory A theory which says the market is in an upward tren d if one of its averages (industrial or transportation) advances above a previous important high, it is accompanied or followed by a similar advance in the other. Down Round A round of financing where investors purchase stock from a company at a lower valuation than the valuation placed upon the company by earlier invest ors. Down Volume A stock volume that closes at a price lower than th e previous day's close. Down-and-In Option A form of a knock-in option whose payoff is determi ned by the price of the underlying asset sinking to the barrier price level. Down-and-Out Option A type of knock-out barrier option that ceases to e xist when the price of the underlying security hits a specific barrier price level. If the price of the underlying does not reach the barrier level, the investor has the right to exercise their European c all or put option at the exercise price specified i n the contract. Downgrade A negative change in the rating of a security. Downside The dollar amount by which the market or a stock ha s the potential to fall.

Downside Risk An estimation of a security's potential to suffer a decline in price if the market conditions turn bad . Downsize Reducing the size of a company by eliminating worke rs and/or divisions within the company. Downstream The oil and gas operations that take place after th e production phase through to the point of sale. Downtick A transaction on an exchange that occurs at a price below the previous transaction. In order for a downtick to occur, a transaction pri ce must be followed by a decreased transaction price. This is commonly used in reference to stocks , but it can also be extended to commodities and other forms of securities. Downtick Volume The share volume of a security that trades at a pri ce lower than its previous price. Drag-Along Rights A right that enables a majority shareholder to forc e a minority shareholder to join in the sale of a company. The majority owner doing the dragging must give the minority shareholder the same price, terms, and conditions as any other Dragon Bond A bond that is issued in Asia but denominated in U. S. dollars. Drawdown The peak-to-trough decline during a specific record period of an investment or fund. It is usually quoted as the percentage between the peak and the t rough. Dread Disease Rider A special addition to a life insurance policy that gives a percentage of the death benefit to the poli cy holder if he or she is diagnosed with a serious dis ease (such as cancer or heart disease). Drill-Bit Stock A term used to describe shares that trade for price s less than one dollar. The fractional prices are comparable to the diameter measures of drill-bits f ound in a hardware store. Drip Feed 1) The process of investing on an ongoing basis in a small but growing firm over a period of time. Essentially, a drip feed results in a startup compa ny receiving capital contributions as the need for capital arises, rather than getting a lump sum capi tal contribution at the company's inception. 2) The process of retail investors contributing sma ll amounts of their savings to their investment pool on a periodic basis, such as $200/month, for e xample. Drive-By Deal Slang referring to a deal in which a venture capita list invests in a startup with the goal of a quick exit strategy. The VC takes little to no role in the man agement and monitoring of the startup. Drop Lock An arrangement whereby the interest rate on a float ing rate note or preferred stock becomes fixed if it falls to a specified level. Drought Sale When a farmer is forced to sell more animals than i n a typical year because of poor weather conditions. The profits from the livestock sales ca n be deferred to the following year, even if the proceeds exceed the losses.

Dry Powder A slang term for cash reserves kept on hand to cove r future obligations. Du Pont Analysis A method of performance measurement that was starte d by the DuPont Corporation in the 1920s, and has been used by them ever since. With this met hod, assets are measured at their gross book value rather than at net book value in order to pro duce a higher ROI. Du Pont Identity An expression breaking down return on equity (ROE) into three parts: profit margin, total asset turnover and financial leverage. The Du Pont identity tells us that ROE is affected by three things: -Operating efficiency (as measured by profit margin ) -Asset use efficiency (as measured by total asset t urnover) -Financial leverage (as measured by the equity mult iplier) Dual Class Stock Dual stock issued for a single company with varying classes indicating the different voting rights and dividend payments Dual Currency Deposit A fixed deposit with variable terms for the currenc y of payment. Deposits are made in one currency, but withdrawals at maturity occur either in the cur rency of the initial deposit or in another agreed upon currency. Dual Currency Issue A bond that pays interest in one currency but pays the principal in a different currency. The amount of the principal repayment is set at initiation and paid at maturity. This principal amount usually allows for some appreciation in the exchange rate o f the stronger currency. These issues are common in the Eurobond market and are a useful sour ce of capital for multinational companies. Dual Exchange Rate A situation in which there is a fixed official exch ange rate and an illegal market-determined parallel exchange rate. The different exchange rates are use d in different situations, either in exchanges or evaluations, as mandated by the government. Dual Income, No Kids - DINKS A household in which there are two incomes and no c hildren (either both partners are working or one has two incomes). DINKS are often the target of marketing efforts for luxury items such as expensive cars and vacations. Dual Listing A company's securities are listed on more than one exchange for the purpose of adding liquidity to the shares and allow investors greater choice in wh ere they can trade their shares. Dual Purpose Fund A fund created by a closed-ended investment company that offers two classes of stock. Each class offers entitlements to either income or capital app reciation. Dual Trading When a broker simultaneously executes customer orde rs and places trades in his or her own account, or one in which he or she has a beneficial interest, on the same trading day. This is also known as acting as both an agent and a dealer at th e same time. Dual trading is prevalent in the futures market. Dually Employed With Kids - DEWKS A household in which there are children and both pa rtners earn an income. Due Bill A financial instrument used to document and identif y the seller's obligation to deliver securities sol d

to the buyer. Due Bill Period In the context of corporate actions (such as divide nds, issuance of rights and warrants, splits, etc.) , the period during which remittances to investors ar e due - once stockholders of record are checked on the record date. In the case of a common stock d ividend, for example, the due bill period is the time between the record date for a security and a d ate four days after the ex-date. Due Diligence - DD 1. An investigation or audit of a potential investm ent. Due diligence serves to confirm all material facts in regards to a sale. 2. Generally, due diligence refers to the care a re asonable person should take before entering into an agreement or a transaction with another party. Dumbbell An investment strategy, used mainly for bonds, wher e holdings are heavily concentrated in both very short and long term maturities. Due Diligence Meeting The process of careful investigation by an underwri ter to ensure that all material information pertinent to a security issue has been disclosed to prospective investors Dummy Director A person on a company's board of directors who vote s and acts on the wishes of a non board member. Dummy Shareholder A person who holds shares in his or her name, but t he shares are really owned by someone else. Dumping 1. In international trade, this occurs when one cou ntry exports a significant amount of goods to another country at prices much lower than in the do mestic market. 2. A slang term for selling a stock with little reg ard for price. Dunning The process of communicating with customers to ensu re the collection of accounts receivable. Duopoly A situation in which two companies own all or nearl y all of the market for a given type of product or service. Durables A category of consumer goods, durables are products that do not have to be purchased frequently. Some examples of durables are appliances, home and office furnishings, lawn and garden equipment, consumer electronics, toy makers, small tool manufacturers, sporting goods, photographic equipment, and jewelry. Duration The measure of the price sensitivity of a fixed-inc ome security to an interest rate change of 100 basis points. Calculation is based on the weighted average of the present values for all cash flows. Dutch Auction An auction where the price on an item is lowered un til it gets its first bid, and then the item is sol d at that price. Dutch Disease An economic condition that, in its broadest sense, refers to negative consequences arising from large increases to a country's income. Dutch diseas e is primarily associated with a natural resource discovery, but it can result from any large increas e in foreign currency, including foreign direct

investment, foreign aid or a substantial increase i n natural resource prices. This condition arises when foreign currency inflows cause an increase in the affected country's currency. This has two main effects for the country with Dutch disease: 1. A decrease in the price competitiveness, and thu s the exports, of its manufactured goods 2. An increase in imports In the long run, both these factors can contribute to manufacturing jobs being moved to lower-cost countries. The end result is that non-resource indu stries are hurt by the increase in wealth generated by the resource-based industries. Dwarf A name given to a pool of mortgage-backed securitie s, issued by Fannie Mae, with a maturity of 15 years Dynamic Momentum Index An indicator used in technical analysis that determ ines overbought and oversold conditions of a particular asset. This indicator is very similar to the relative strength index (RSI). The main difference between the two is that the RSI uses a f ixed number of time periods (usually 14), while the dynamic momentum index uses different time periods as volatility changes. A Nasdaq stock symbol specifying that the stock has been delinquent in required filings with the SEC. E-mini (Stock Index Futures) An electronically traded futures contract on the Ch icago Mercantile Exchange that represents a portion of the normal futures contract s. E-mini contracts are available on a wide range of indices such as the Nasdaq 100, S&P 5 00, S&P MidCap 400 and Russell 2000. Early Exercise When an option or other security is exercised prior to its maturity date. Early Withdrawal The removal of funds from a fixed-term investment b efore the maturity date, or the removal of funds from a tax-deferred investment acc ount or retirement savings account (such as an IRA) before a prescribed time, such as the account owner's attainment of a minimum age requirement. Earned Income Income derived from active participation in a trade or business, including wages, salary, tips, commissions and bonuses. This is the opposite of unearned income. Earned Income Credit - EIC A tax credit for low-income workers. Even workers w hose incomes are too small to have paid taxes can get EIC Earning Assets Any income-earning asset owned by a company. Earnings (and Earnings Growth) Analyzed on both a quarterly and annual basis. Earn ings are a basic measurement of a company's ability to make a net profit and grow. Earnings Before Interest & Tax - EBIT An indicator of a company's profitability, calculat ed as revenue minus expenses, excluding tax and interest. EBIT is also referred t o as "operating earnings", "operating profit" and "operating income", as you can re-arran ge the formula to be calculated as follows: Earnings Before Interest After Taxes - EBIAT

An indicator of a company's financial performance c alculated as: = Revenue - COGS - Expenses (including taxes and ex cluding interest) Earnings Before Interest, Tax, and Depreciation - E BITD An indicator of a company's financial performance c alculated as: = Revenue - Expenses (excluding tax, interest, and depreciation) Earnings Before Interest, Taxes, Depreciation and A mortization - EBITDA An indicator of a company's financial performance w hich is calculated as follows: EBITDA can be used to analyze and compare profitabi lity between companies and industries because it eliminates the effects of fin ancing and accounting decisions. However, this is a non-GAAP measure that allows a g reater amount of discretion as to what is (and is not) included in the calculation. T his also means that companies often change the items included in their EBITDA calculati on from one reporting period to the next. Earnings Estimate An analyst's estimate for a company's future quarte rly or annual earnings. Earnings Estimate Percentage Change Percentage increase/decrease in earnings estimates compared to William O'Neil + Co Research Department's prior year annual EPS data. Earnings Multiplier The estimated price-earnings ratio adjusted for the current level of interest rates. Effective Tax Rate The rate a taxpayer would be taxed at if taxing was done at a constant rate, instead of progressively. Calculated as total tax paid divided by taxable inc ome. Earnings Per Share Calculated by dividing a company's total after-tax profits by the company's number of common shares outstanding. Can be used as an indica tor of growth and profitability. Earnings Per Share (EPS) Rating Exclusive rating found in Investor's Business Daily 's SmartSelect® Corporate Ratings. Stocks are rated on a 1 to 99 scale (with 99 being best) comparing a company's earnings per share growth on both a current and annual basis with all other publicly traded companies in the William O'Neil + Co database. Stoc ks with EPS Ratings of 80 or above have outperformed 80% of all publicly traded compan ies in earnings. The EPS Rating combines each company's most recent two quarters of earnings-per-share growth with its three- to five-year annual growth rate. Earnings Per Share - EPS The portion of a company's profit allocated to each outstanding share of common stock. EPS serves as an indicator of a company's profitabi lity. Calculated as: (Net Income - Dividends on Preferred Stock) / Avera ge Outstanding Shares In the EPS calculation, it is more accurate to use a weighted-average number of shares outstanding over the reporting term, because the nu mber of shares outstanding can

change over time.However, data sources sometimes si mplify the calculation by using the number of shares outstanding at the end of the peri od. Diluted EPS expands on the basic EPS by including t he shares of convertibles or warrants outstanding in the outstanding shares number. Earnings Per Share, Annual Results When available, up to seven years of annual earning s per share results will be displayed. Results are adjusted for stock splits, restatement of earnings, and/or related items in order to provide truly comparable data. A blue triangle t o the right of the figure denotes pre-tax, non-recurring items were included. Earnings Per Share Percentage Change Percentage change in earnings per share compared to the same quarter of the previous year. Figures in blue represents an increase in ear nings from prior year quarter, whereas figures in red indicate a decrease in earnings per share. A "#" (pound sign) signifies that the comparison qu arter was negative and the calculation is based on a change in absolute numbers. Earnings Per Share, Quarterly Comparison Quarterly earnings per share compared to earnings i n the same quarter of the previous year. Amount is based on continuing operations. A b lue triangle to the right of the figure indicates pre-tax, non-recurring items were include d (where possible, such items are normally removed to provide data better suited for comparison). Certain utilities use running four-quarters' value, and publicly traded investment companies report net asset value (NAV) instead of e arnings. Real Estate Invest Trusts report a similar item referred to as funds from ope rations. While it incorporates the same financial concept, it is not directly comparable to an EPS figure. Earnings Report Due Date Anticipated date a company will release its next ea rnings report. A red asterisk - * to the right of this date indicates earnings are e xpected to be reported within the next four weeks. This data item is based on the date a company repor ted the same quarter earnings in prior year. While most companies report earnings on the s ame date each year, latest information should be available from firm's web sit e in the form of a news release. EPS Due will not display a date under one of the fo llowing conditions: Historical earnings/sales data is gathered from a p rospectus (i.e. company recently started trading publicly); or A firm has not reported its earnings information mo re than 21 calendar days after the expected reporting date. Earnings Season The months in which a majority of quarterly corpora te earnings are released to the public. Earnings Stability Indicates in percentage from one standard deviation of the variability around the trend line fitted through 3 to 5 years of earnings' history wi th a scale ranging from 1 to 99. Lower numbers represent more stable company earnings hist ory. Earnings Surprise When the earnings reported in a company's quarterly or annual report are above or below analysts' earnings estimates.

Earnings Yield The earnings per share for the most recent 12 month s divided by market price per share. Earnout A contractual provision stating that the seller of a business is to obtain additional future compensation based on the business achieving certai n future financial goals. Ease Of Movement A technical momentum indicator that is used to illu strate the relationship between the rate of an asset's price change and its volume. This ind icator attempts to identify the amount of volume required to move prices. Generally a valu e greater than zero is an indication that the stock is being accumulated (bought) and negativ e values are used to signal increased selling pressure. A high positive value appears when prices move upwa rd on low volume. Strong negative numbers indicate that price is moving downward on l ow volume. Easy-To-Borrow List A list of securities deemed to be available for bor rowing in short selling transactions because their delivery is assured. Availability is usually due to their accessible nature and/or high number of outstanding shares Eat Well, Sleep Well An adage that, referring to the risk/return trade-o ff, says that the type of security an investor chooses depends on whether he or she wants to eat well or sleep well. Eat Your Own Dog Food An expression describing the act of a company using its own products for day-to-day operations. Eating Someone's Lunch Aggressive competition that results in one company taking portions of another company's market share. Eating Stock Purchasing stock not because you desire it but beca use you are forced to do so. EBITDA-To-Interest Coverage Ratio A ratio that is used to assess a company's financia l durability by examining whether it is at least profitably enough to pay off its interest exp enses. A ratio greater than 1 indicates that the company has more than enough interest cove rage to pay off its interest expenses. The ratio is calculated as follows: Echo Bubble A post-bubble rally that becomes another, smaller b ubble. Eclectic Paradigm A theory that provides a three-tiered framework for a company to follow when determining if it is beneficial to pursue direct foreign invest ment Econometrics The application of statistical theories to economic ones for the purpose of forecasting future trends.

Economic Exposure An exposure to fluctuating exchange rates, which af fects a company's earnings, cash flow and foreign investments. The extent to which a comp any is affected by economic exposure depends on the specific characteristics of the company and its industry. Economic Growth An increase in the capacity of an economy to produc e goods and services, compared from one period of time to another. Economic growth can be measured in nominal terms, which include inflation, or in real terms, which are adju sted for inflation. For comparing one country's economic growth to anot her, GDP or GNP per capita should be used as these take into account population diffe rences between countries. Economic Growth And Tax Relief Reconciliation Act o f 2001 - EGTRRA A U.S. tax law, effective for tax years beginning 2 002, that made some of the most important changes to retirement plans, including in creased contributions and deductibility limits for IRA and employer-sponsored plans, and ex panded the portability rules for retirement plans in general. EGTRRA also increased the estate-tax exclusion and increased the generation-skipping transfer-tax exem ption amounts. Economic Growth Rate A measure of economic growth from one period to ano ther in percentage terms. This measure does not adjust for inflation, it is expres sed in nominal terms. In practice, it is a measure of the rate of change that a nation's gross domestic product goes through from one year to another. Gross nation al product can also be used if a nation's economy is heavily dependent on foreign ea rnings. Economic Moat The competitive advantage that one company has over other companies in the same industry. This term was coined by renowned investor Warren Buffett. Economic Profit (or Loss) The difference between the revenue received from th e sale of an output and the opportunity cost of the inputs used. This can be us ed as another name for "economic value added" (EVA). Economic Refugee A person seeking refugee status in another country for purely economic reasons. Economic Spread 1. A performance metric that is equal to the differ ence between a company's weighted average cost of capital (WACC) and its return on in vested capital (ROIC). 2. The difference between the real rate of return o n an investment and the rate of inflation in the economy Economic Spread 1. A performance metric that is equal to the differ ence between a company's weighted average cost of capital (WACC) and its return on in vested capital (ROIC). 2. The difference between the real rate of return o n an investment and the rate of inflation in the economy Economies Of Scale

The increase in efficiency of production as the num ber of goods being produced increases. Typically, a company that achieves econo mies of scale lowers the average cost per unit through increased production since fixed c osts are shared over an increased number of goods. There are two types of economies of scale: External economies - the cost per unit depends on t he size of the industry, not the firm. Internal economies - the cost per unit depends on s ize of the individual firm. Economy The large set of inter-related economic production and consumption activities which aid in determining how scarce resources are allocated. Economies of Scope An economic theory stating that the average total c ost of production decreases as a result of increasing the number of different goods produce d. Edge Act Corporation A federally-chartered U.S. corporation that is only allowed to engage in international banking or other financial transactions related to international business. Effective Annual Interest Rate An investment's annual rate of interest when compou nding occurs more often than once a year. Calculated as the following: Effective Duration A duration calculation for bonds with embedded opti ons. Effective duration takes into account that expected cash flows will fluctuate as interest rates change . Effective Date The date, declared by the Securities & Exchange Com mission (SEC), on which shares can start trading. This usually refers to the date when shares become available for sale in an initial public offering. Effective Yield The yield of a bond, assuming that you reinvest the coupon (interest payments) once you have received payment. Effective Tax Rate The rate a taxpayer would be taxed at if taxing was done at a constant rate, instead of progressively. Calculated as total tax paid divided by taxable inc ome. EEK In currencies, this is the abbreviation for the Est onian Kroon. Efficient Frontier A line created from the risk-reward graph, comprise d of optimal portfolios. Efficiency Ratio A ratio used to calculate a bank's efficiency. Not all banks calculate the efficiency ratio the same way. We've seen the ratio calculated as all of the following: 1. Non-interest expense divided by total revenue le ss interest expense 2. Non-interest expense divided by net interest inc ome before provision for loan losses

3. Non-interest expense divided into revenue 4. Operating expenses divided by fee income plus ta x equivalent net interest income. For all versions of the ratio, an increase means th e company is losing a larger percentage of its income to expenses. If it is getting lower, it is good for the bank and its shareholders. Efficient Market Hypothesis - EMH An investment theory that states that it is impossi ble to "beat the market" because stock market efficiency causes existing share prices to a lways incorporate and reflect all relevant information. According to the EMH, this me ans that stocks always trade at their fair value on stock exchanges, and thus it is impos sible for investors to either purchase undervalued stocks or sell stocks for inflated pric es. Thus, the crux of the EMH is that it should be impossible to outperform the overall mark et through expert stock selection or market timing, and that the only way an investor ca n possibly obtain higher returns is by purchasing riskier investments. EGP In currencies, this is the abbreviation for the Egy ptian Pound. Elasticity A measure of sensitivity of one variable to another . More specifically, the degree to which consumers respond to price changes. Elder-Ray Index A technical indicator developed by Alexander Elder that measures the amount of buying and selling pressure in the market. This indicator consists of two separate indicators known as "bull power" and "bear power". These figur es allow a trader to determine the position of the price relative to a certain exponen tial moving average (EMA). Bull Power = Daily High - n-period EMA Bear Power = Daily Low - n-period EMA Electronic Commerce - eCommerce When a person or business uses the Internet as part of their business model. Electronic Data Gathering, Analysis and Retrieval - EDGAR The electronic filing system created by the Securit ies and Exchange Commission for the purpose of increasing efficiency and accessibility to corporate filings. This system is used by all publicly traded companies when submitting re quired documents to the SEC. Corporate documents are time sensitive, and the cre ation of EDGAR has greatly decreased the time it takes for corporate documents to become publicly available. Electronic Communication Network - ECN An electronic system that attempts to eliminate the role of a third party in the execution of orders entered by an exchange market maker or an ov er-the-counter market maker, and permits such orders to be entirely or partly execut ed. Electronic Filing - e-File The process of submitting your tax forms over the I nternet, using computers and tax preparation software. Elective-Deferral Contribution A contribution arrangement of an employer-sponsored retirement plan under which participants can choose to set aside part of their pre-tax compensation as a contribution to the plan. Also known as "salary-deferral" or "sa lary-reduction contributions". Elephants Slang for large institutions that make trades in ve ry high volumes.

Elevator Pitch A slang term referring to the 20-60 seconds an entr epreneur has to interest a venture capitalist (VC) in his or her business idea. Eligible Rollover Distribution A distribution from an IRA, qualified plan, 403(b) plan or 457 plan that is eligible to be rolled over to another eligible retirement plan. Election Period The period of time during which an investor who own s an extendable or retractable bond must indicate to the issuer whether or not he or sh e will exercise his or her option. Elliott Wave Theory Theory named after Ralph Nelson Elliott, who conclu ded that the movement of the stock market could be predicted by observing and identify ing a repetitive pattern of waves. Elves A slang term for guests appearing on the PBS televi sion show "Wall Street Week." Embedded Option An option that is an inseparable part of another in strument. Compare this to a normal (or bare) option, which trades separately from the unde rlying security. Embedded Value A common valuation measure used outside North Ameri ca, particularly in the insurance industry. It is calculated by adding the adjusted n et asset value and the present value of future profits of a firm. The present value of futu re profits considers the potential profits that shareholders will receive in the future, while adjusted net asset value considers the funds belonging to shareholders that have been accu mulated in the past. Elimination Period The length of time between when an injury or illnes s begins and receiving benefit payments from an insurer. Also known as the "waitin g" or "qualifying" period, policyholders must in the interim pay for these ser vices and can be thought of as a deductible. Emergency Banking Act of 1933 A bill passed during the administration of former U .S. President Franklin D. Roosevelt in reaction to the financially adverse conditions of t he Great Depression. The measure, which called for a four-day mandatory shutdown of U.S. ba nks for inspections before they could be reopened, sought to re-instill investor confiden ce in the banking system and thus, stability. Emerging Industry An industry, usually formed by a new product or ide a, that is in the early stages of development. Emerging Issues Task Force - EITF An organization formed in 1984 by the Financial Acc ounting Standards Board (FASB) to provide assistance with timely financial reporting. The EITF holds public meetings in order to identify and resolve accounting issues occurring in the financial world.

Emerging Market Fund A mutual fund investing a majority of its assets in the financial markets of a developing country, typically a small market with a short oper ating history. Emirates Interbank Offered Rate - EIBOR The interest rate charged by banks in the United Ar ab Emirates for interbank transactions. In most cases, EIBOR is the reference rate most com monly used by borrowers and lenders to conduct financial transactions in Dubai and the surrounding Emirates. Empire Building The act of attempting to increase the size and scop e of an individual or organization's power and influence. In the corporate world, this i s seen when managers or executives are more concerned with expanding their business units, their staffing levels and the dollar value of assets under their control than they are w ith developing and implementing ways to benefit shareholders. Employee Benefits Security Administration - EBSA A division of the Department of Labor (DOL) charged with enforcing the rules governing the conduct of plan managers, the investment of pla n assets, the reporting and disclosure of plan information, the fiduciary provisions of th e law, and workers' benefit rights. Employee Contribution Plan A company-sponsored retirement plan where employees make deposits (contributions) to an account. Contributions are deducted from employe e's pay some companies match those payments. Employee Retirement Income Security Act - ERISA The Employee Retirement Income Security Act of 1974 (ERISA) protects the retirement assets of Americans, by implementing rules that qua lified plans must follow to ensure that plan fiduciaries do not misuse plan assets. Employee Share Ownership Trust - ESOT A program that facilitates the acquisition and dist ribution of a company's shares to its employees. Employee Stock Option - ESO A stock option granted to specified employees of a company. ESOs carry the right, but not the obligation, to buy a certain amount of shares i n the company at a predetermined price. An employee stock option is slightly different from a regular exchange-traded option because it is not generally traded on an exchange, and there is no put component. Furthermore, employees typically must wait a specif ied vesting period before being allowed to exercise the option. Emerging Market Economy Countries that are starting to participate globally by implementing reform programs and undergoing economic improvement. Employee Stock Purchase Plan - ESPP A company-run program in which participating employ ees can purchase company shares at a discounted price. Employees contribute to the plan through payroll deductions, which build up between the offering date and the purchase date. At the purchase date, the company uses the accumulated funds to purchase shar es in the company on behalf of the participating employees. The amount of the discount depends on the specific plan but can

be as much as 15% lower than the market price. Employment Cost Index - ECI A quarterly report from the U.S. Department of Labo r that measures the growth of employees' compensation (wages and benefits). The i ndex is based on a survey of employer payrolls in the final month of each quarte r. The ECI tracks movement in the cost of labor, including wages, fringe benefits and bonu ses for employees at all levels of a company. Encumbered Securities Securities that are owned by one entity, but subjec t to a legal claim by another. When an entity borrows from another, legal claim on the securities owned by the borrower can be taken as security by the lender should the b orrower default on its obligation. The securities' owner still has title to the securities , but the claim or lien remains on record. In the event that the securities are sold, the party w ith the legal claim on them must be given first opportunity to be paid back. In some cases, e ncumbered securities cannot be sold until any outstanding debts belonging to the owner of the securities are paid to the lender who holds claim against the securities. Encumbrance A claim against a property by another party. Encumb rance usually impacts the transferability of the property. Ending Inventory A book value of goods, inputs, or materials availab le for use or sale at the end of an inventory accounting period. Employee Stock Ownership Plan - ESOP A qualified, defined contribution, employee benefit (ERISA) plan designed to invest primarily in the stock of the sponsoring employer. ESOPs are "qualified" in the sense that the ESOP's sponsoring company, the selling sharehol der and participants receive various tax benefits. ESOPs are often used as a corporate f inance strategy and are also used to align the interests of a company's employees with t hose of the company's shareholders. Endorsement 1. A legal term that refers to the signing of a doc ument which allows for the legal transfer of a negotiable from one party to another. 2. An attachment to a document that amends or adds to it. Typically, it is an added provision to an insurance policy. Also referred to as a "rider". Endowment Assets, funds, or property donated to an institutio n, individual, or group as a source of income. Enduring Purpose Similar to a corporate mission statement, enduring purpose is a combination of a company's goals, attitudes, and beliefs. Enron A U.S. energy-trading and utilities company that ho used one of the biggest accounting frauds in history. Enron's executives employed acco unting practices that falsely inflated the company's revenues, which, at the height of the scandal, made the firm become the seventh largest corporation in the United States. O nce the fraud came to light, the company quickly unraveled and filed for Chapter 11 bankruptcy on Dec. 2, 2001.

Enronomics A fraudulent accounting technique that involves a p arent company making artificial paper-only transactions with its subsidiaries to hide los ses the parent company has incurred through business activities. By transferring losses to off-book entities or whol ly-owned subsidiaries, the now-bankrupt energy corporation Enron created one of the largest accounting scandals and securities frauds in history. Enterprise Multiple A ratio used to determine the value of a company. T he enterprise multiple looks at a firm as a potential acquirer would, because it takes deb t into account - an item which other multiples like the P/E ratio do not include. Enterp rise multiple is calculated as: Enterprise Resource Planning - ERP A process by which a company (often a manufacturer) manages and integrates the important parts of its business. An ERP management information system integrates areas such as planning, purchasing, inventory, sales, mar keting, finance, human resources, etc. Enterprise Value - EV A measure of a company's value, often used as an al ternative to straightforward market capitalization. EV is calculated as market cap plus debt, minority interest and preferred shares, minus total cash and cash equivalents. Enterprise-Value-To-Sales - EV/Sales A valuation measure that compares the enterprise va lue of a company to the company's sales. EV/sales gives investors an idea of how much it costs to buy the company's sales. This measure is an expansion of the price-to-sales valuation, which uses market capitalization instead of enterprise value. EV/sale s is seen as more accurate because market capitalization does not take into account as well as enterprise value the amount of debt a company has, which needs to be paid back at some point. Generally the lower the EV/sales the more attractive or undervalued the com pany is believed to be. Entrepôt A seaport or warehouse where goods are stored until they are shipped. The goods do not face any import or export duties upon shipment from the port or warehouse. Entrepreneur An individual who, rather than working as an employ ee, runs a small business and assumes all the risk and reward of a given business venture, idea, or good or service offered for sale. The entrepreneur is commonly seen as a business leader and innovator of new ideas and business processes. Envelope A trading band composed of two moving averages, one of which is shifting upwards and the other shifting downwards. EPS Growth Rate, 3 Year The compound 3-year growth rate calculated using th e least squares fit over the latest two to three years’ earnings per share on a running 1 2-month basis. Growth rate will be calculated only if there is a minimum of eight trai ling 4-quarter periods of positive earnings (uses a minimum of 11 quarters of data). EPS Rating Exclusive rating found in Investor’s Business Daily 's SmartSelect® Corporate Ratings.

Stocks are rated on a 1 to 99 scale (with 99 being best) comparing a company’s earnings per share growth on both a current and annual basis with all other publicly traded companies in the William O’Neil + Co database. Stoc ks with EPS Ratings of 80 or above have outperformed 80% of all publicly traded compan ies in earnings. The EPS Rating combines each company’s most recent two quarters of earnings-per-share growth with its three- to five-year annual growth rate. Equalization Reserve A long-term reserve that an insurance company keeps for the purpose of preventing cash-flow depletion in the event of a significant unfore seen catastrophe. Equalizing Dividend An additional dividend paid to eligible stockholder s when their divided income is reduced due to a change the board of directors makes to the dividend payment schedule. Equilibrium The state in which market supply and demand balance each other and, as a result, prices become stable. Equipment Trust Certificate A debt instrument that allows a company to take pos session of an asset and pay for it over time. The debt issue is secured by the equipme nt or physical assets, as the title for the equipment is held in trust for the holders of t he issue. When the debt is paid off, the equipment becomes the property of the issuer, as th e title is transfered to the company. Equity 1. Stock or any other security representing an owne rship interest. 2. On the balance sheet, the amount of the funds co ntributed by the owners (the stockholders) plus the retained earnings (or losses ). Also referred to as "shareholder's equity". 3. In the context of margin trading, the value of s ecurities in a margin account minus what has been borrowed from the brokerage. 4. In the context of real estate, the difference be tween the current market value of the property and the amount the owner still owes on the mortgage. Thus, it is the amount, if any, the owner would receive after selling a proper ty and paying off the mortgage. Equity Accounting A method of accounting whereby a corporation will d ocument a portion of the undistributed profits for an affiliated company in which they own a position Equity Financing The act of raising money for company activities by selling common or preferred stock to individual or institutional investors. In return fo r the money paid, shareholders receive ownership interests in the corporation. Equity Fund A mutual fund that invests in a broad, well-diversi fied group of stocks. Equity Income 1. Income that is earned through an investment in e quity. 2. A type of mutual fund whose portfolio is investe d in companies that are determined to be of high quality and have a strong history of div idend growth. Equity Linked Foreign Exchange Option - ELF-X A put or call option that protects an investor from foreign-exchange risk for a future sale

or purchase of a specified foreign-equity portfolio . Equity Linked Note - ELN An instrument whose return is determined by the per formance of a single equity security, a basket of equity securities, or an equity index. Equity Market The market in which shares are issued and traded, e ither through exchanges or over-the-counter markets. Also known as the stock market, it is one of the most vital areas of a market economy because it gives companies access to capital and investors a slice of ownership in a company with the potential to realiz e gains based on its future performance. Equity Market Capitalization A measure of the total market value of an equity ma rket. The measure is calculated by taking the market capitalization of all companies i n the equity market and adding them together to arrive at the capitalization for the ma rket as a whole. Equity Market Neutral A hedge fund strategy that seeks to exploit differe nces in stock prices by being long and short in stocks within the same sector, industry, m arket capitalization, country, etc. This strategy creates a hedge against market factors. Equity Method An accounting technique used by firms to assess the profits earned by their investments in other companies. The firm reports the income ear ned on the investment on its income statement and the reported value is based on the fi rm's share of the company assets. The reported profit is proportional to the size of the equity investment. This is the standard technique used when one company has significant inf luence over another. Equity Multiplier A measure of financial leverage. Calculated as: Total Assets / Total Stockholders' Equity Like all debt management ratios, the equity multipl ier is a way of examining how a company uses debt to finance its assets. Also known as the financial leverage ratio or leverage ratio. Equity Risk Premium The excess return that an individual stock or the o verall stock market provides over a risk-free rate. This excess return compensates investors for taking on the relatively higher risk of the equity market. The size of the premium will vary as the risk in a particular stock, or in the stock market as a whole, changes high-risk i nvestments are compensated with a higher premium. Also referred to as "equity premium". Equity Unit Investment Trust A registered trust in which investors purchase unit s from a fixed portfolio of equities, which are chosen and managed by a professional mone y manager. Securities in the trust remain there for the life of the trust, which is mo st often one year. At that point they can either be liquidated at market value or rolled over into a newer, current version of the trust. Equivalent Annual Cost - EAC The annual cost of owning an asset over the its ent ire life. Calculated as:

Equivolume A chart that compares price and volume and plots th em together as one piece of data. The height of each bar represents the high and low for each period, and the width represents the volume relative to the total shares traded over the time period being viewed Erasure Guarantee A guarantee made by accredited institutions assurin g the legitimacy and accuracy of changes made to bonds and securities. Escheat When property and/or an estate is transferred to th e government because a person has died without a will or an heir to his or her estate . Escrow A financial instrument held by a third party on beh alf of the other two parties in a transaction. The funds are held by the escrow servi ce until it receives the appropriate written or oral instructions or until obligations h ave been fulfilled. Securities, funds and other assets can be held in escrow. Escrow Agreement A certificate provided by an approved bank that gua rantees the indicated securities are deposited at that particular bank. Escrow Receipt A bank guarantee that an option writer has the unde rlying security on deposit and that the underlying security is readily available for delive ry if the option is exercised. Escrowed Shares Shares held in an escrow account and in most cases cannot be traded or transfered until certain circumstances like time horizon have been r eached. The use of escrow for holding shares is often done during acquisitions and for pe rformance-based executive incentives. Escrowed To Maturity The condition of a bond that has been repaid in adv ance by means of an escrow account, which holds the funds needed to pay the periodic co upon payments and the principal. Estate All of the valuable things an individual owns, such as real estate, art collections, collectibles, antiques, jewelry, investments and li fe insurance. Estate Planning The overall planning of a person's wealth, includin g the preparation of a will and the planning of taxes after the individual's death Estate Tax A tax levied on an heir's inherited portion of an e state if the value of the estate exceeds an exclusion limit set by law. The estate tax is mostl y imposed on assets left to heirs, but it does not apply to the transfer of assets to a survi ving spouse. The right of spouses to leave any amount to one another is known as the "un limited marital deduction". ETB In currencies, this is the abbreviation for the Eth iopian Birr.

EUR In currencies, this is the abbreviation for the eur o. EUREX The largest futures and options market in the world , dealing primarily with European-based derivatives. The products that trade on this exchange range from German and Swiss debt instruments to European stocks and STOXX indexes. Along with facilitating trade, EUREX also provides settlement of the contra cts. Euro Interbank Offer Rate - EURIBOR The rate of interest at which panel banks borrow fu nds from other panel banks, in marketable size, in the EU interbank market. Euro LIBOR London Interbank Offer Rate denominated in euros. T his is the interest rate that banks offer each other for large short-term loans in euro s. The rate is fixed once a day by a small group of large London banks but fluctuates througho ut the day. This market makes it easier for banks to maintain liquidity requirements because they are able to quickly borrow from other banks that have surpluses Euro Medium Term Note - EMTN A flexible medium-term debt instrument that is issu ed and traded outside of Canada and the United States and requires fixed dollar payment s. EMTNs are issued directly to the market with maturities of less than five years and are offered continuously rather than all at once like a bond issue. Exchange of Futures for Cash A method by which opposite parties of a futures con tract that has underlying cash commodities aim to close out their positions simult aneously. Also know as exchange for physicals (EFP). Euro Overnight Index Average - EONIA The weighted average of overnight Euro Interbank Of fer Rates for inter-bank loans. Eurobank A financial institution that readily accepts foreig n currency denominated deposits and makes foreign currency loans. Eurobond A bond issued in a currency other than the currency of the country or market in which it is issued. Eurocheck A check from a European bank that can be cashed at over 200,000 banks around the world displaying the "European Union" crest. Euroclear One of two principal clearing houses for securities traded in the Euromarket. Euroclear specializes in verifying information supplied by tw o brokers in a securities transaction and the settlement of securities. Euroclear is market o wned and governed and was recently renamed Euroclear Belgium. Eurocommercial Paper An unsecured, short-term loan issued by a bank or c orporation in the international money market, denominated in a currency that differs from the corporation's domestic currency.

Eurocredit A type of loan whose denominated currency is not th e lending bank's national currency. Eurocurrency Currency deposited by national governments or corpo rations in banks outside their home market. This applies to any currency and to banks i n any country. For example, South Korean won deposited at a bank in South Africa, is considered eurocurrency. Also known as "euromoney". Eurocurrency Market The money market in which Eurocurrency, currency he ld in banks outside of the country where it is legal tender, is borrowed and lent by b anks in Europe. The Eurocurrency market allows for more convenient borrowing, which improves the international flow of capital for trade between cou ntries and companies. Eurodollar U.S.-dollar denominated deposits at foreign banks o r foreign branches of American banks. By locating outside of the United States, eurodolla rs escape regulation by the Federal Reserve Board. Eurodollar Bond A U.S.-dollar denominated bond issued by an oversea s company and held in a foreign institution outside both the U.S. and the issuer's home nation. Eurodollar bonds are an important source of capital for multinational compa nies and foreign governments. A eurodollar bond is a type of Eurobond. Euroequity A term used to describe an IPO occurring simultaneo usly on more than one national market. Euromarket The market that includes all of the European Union member countries - many of which use the same currency, the euro. All tariffs between Eu romarket member countries have been abolished, and import duties from all non-member co untries have been fixed for all of the member countries. The Euromarket also has one centr al bank for all of the member countries, the European Central Bank (ECB). Also known as "the Common Market". Euronext A cross-border European stock exchange, originally created in 2000 from the merger of the Amsterdam, Brussels and Paris stock exchanges. In 2001 and 2002, respectively, Euronext acquired the London International Financia l Futures and Options Exchange (LIFFE) and the Portuguese stock exchange, Bolsa de Valores de Lisboa e Porto (BVLP), in order to become the world's fifth-largest exchange. In addition to being an equities market, Euronext is also a derivatives market and a provide r of clearing and information services. Europe, Middle East and Africa - EMEA The region classification for a division of an inte rnational company that operates in Europe, the Middle East and Africa. The division th at operates in the EMEA will often be run by a separate executive and focus the internati onal brand towards the needs of the EMEA region. European Callable Bond A bond that can be redeemed by the issuer at a pred etermined date prior to maturity.

European Central Bank - ECB The central bank responsible for the monetary syste m of the European Union (EU) and the euro currency. The bank was formed in Germany in Ju ne 1998 and works with the other national banks of each of the EU members to formula te monetary policy that helps maintain price stability in the European Union. European Currency Quotation An indirect quotation in the foreign exchange marke ts whereby the value of a foreign currency is stated as a per-unit measure of the U.S . dollar. This type of quotation shows how much foreign currency it takes to purchase one U.S. dollar. European Monetary System - EMS A 1979 arrangement between several European countri es to link their currencies in an attempt to stabilize the exchange rate. This system was succeeded by the European Monetary Union (EMU), an institution of the Europea n Union (EU), which established a common currency called the euro. European Union - EU A group of European countries that participates in the world economy as one economic unit and operates under one official currency, the euro. The EU's goal is to create a barrier-free trade zone and to enhance economic wea lth by creating more efficiency within its marketplace. European Option An option that can only be exercised at the end of its life. Euroyen Japanese yen-denominated deposits held in banks out side Japan. Also a term that refers to yen traded in the Eurocurrency market. Euroyen Bond A Eurobond that is denominated in Japanese yen and issued by a non-Japanese company outside of Japan. Despite what the name suggests, E uroyen bonds can be found in bond markets around the world, not just in European mark ets. Eurozone A geographic and economic region that consists of a ll the European Union countries that have fully incorporated the euro as their national currency. Also referred to as "Euroland". Even Lot Quantities established by futures exchanges as benc hmarks for quoting commodity prices Evening Star A bearish candlestick pattern consisting of three c andles that have demonstrated the following characteristics: 1. The first bar is a large white candlestick locat ed within an uptrend. 2. The middle bar is a small-bodied candle (red or white) that closes above the first white bar. 3. The last bar is a large red candle that opens be low the middle candle and closes near the center of the first bar's body. As shown by the chart below, this pattern is used b y traders as an early indication that the uptrend is about to reverse.

Event Driven Strategy A hedge fund strategy in which the manager takes si gnificant positions in a certain number of companies with "special situations." Event Risk 1. The risk due to unforeseen events partaken by or associated with a company. 2. The risk associated with a changing portfolio va lue due to large swings in market prices. Also referred to as "jump risk" or "fat-tai ls". Evergreen Funding 1. A British term that describes a revolving credit arrangement in which the borrower periodically renews the debt financing rather than having the debt reach maturity. 2. The gradual infusion of capital into a new or re capitalized enterprise. This type of funding differs from the situation in which the agg regate capital required for a business venture is supplied up-front, in which case the com pany invests in short-term, low-risk securities until it is ready to use the money for b usiness operations. Evergreen Option An employee option plan that grants additional shar es to the plan every year. Also known as an "evergreen plan". Ex Works - EXW A trade term requiring the seller to deliver goods at his or her own place of business. All other transportation costs and risks are assumed by the buyer. Ex-Ante A term that refers to future events, such as future returns or prospects of a company. Using ex-ante analysis helps to give an idea of fut ure movements in price or the future impact of a newly implemented policy. Ex-Date The date on or after which a security is traded wit hout a previously declared dividend or distribution. After the ex-date, a stock is said to trade ex-dividend. Ex-Dividend The trading of shares when a declared dividend belo ngs to the seller rather than the buyer. Ex-Legal Municipal bonds that are delivered without a legal opinion from a bond law firm. Ex-Post Another term for actual returns. Ex-post translated from Latin means "after the fact". The use of historical returns has traditionally been th e most common way to predict the probability of incurring a loss on any given day. E x-post is the opposite of ex-ante, which means "before the event". Ex-Post Risk A type of risk measurement technique that uses hist oric returns to predict the riskiness of a certain investment in the future. This type of ri sk measure is the equivalent of the statistical variance of an asset's returns relative to its mean. Ex-Warrant The trading of shares when a warrant has been decla red but not distributed.

Exceptional Item Charges incurred that must be noted on a company's balance sheet, in accordance with GAAP principles. Even though they are considered to be part of ordinary business charges, exceptional items must be disclosed due to their sheer size or frequency. Excess Capacity A situation in which actual production is less than what is achievable or optimal for a firm. This often means that the demand in the market for the product is below what the firm could potentially supply to the market. Excess Returns Returns in excess of the risk-free rate or in exces s of a market measure (such as an index fund). Excess Spread Remaining net interest payments from the underlying assets of an asset-backed security, after all payables and expenses are covered. Excess-Accumulation Penalty The penalty a retirement account owner or the benef iciary of a retirement account must pay when he or she fails to distribute a minimum am ount due for a year from the retirement account. Exchange A market in which securities, commodities, options or futures are traded. Exchange Control Types of controls that governments put in place to ban or restrict the amount of foreign currency or local currency that is allowed to be tr aded or purchased. Common exchange controls include banning the use of foreign currenc y and restricting the amount of domestic currency that can be exchanged within the country. Exchange Rate The price of one country's currency expressed in an other country's currency. In other words, the rate at which one currency can be exchan ged for another. For example, the higher the exchange rate for one euro in terms of o ne yen, the lower the relative value of the yen. Exchange Stabilization Fund - ESF Money available to the U.S. Treasury Department pri marily used for participating in the foreign-exchange market in an attempt to maintain c urrency stability. It holds U.S. dollars, foreign currencies and special drawing rights. Exchange-Traded Fund - ETF A security that tracks an index, a commodity or a b asket of assets like an index fund, but trades like a stock on an exchange, thus experienci ng price changes throughout the day as it is bought and sold. Exchange-Traded Option An option traded on a regulated exchange where the terms of each option are standardized by the exchange. The contract is stand ardized so that underlying asset, quantity, expiration date and strike price are know n in advance. Over-the-counter options are not traded on exchanges and allow for the custo mization of the terms of the option contract.

Exchange-traded options are also known as "listed o ptions". Exchangeable Debt Similar to convertibles, except this type of debt c an be converted into the shares of a company other than the issuing company (usually a s ubsidiary). Exchangeable Security A security that grants its holder the right to exch ange it for the common stock of a firm other than the issuer. Excise Tax 1. An indirect tax charged on the sale of a particu lar good. 2. A penalty tax applied to ineligible transactions in retirement accounts. This penalty is assessed by and paid to the IRS. Exclusion Ratio The portion of the return on investments that is in come tax exempt. It represents a payback of initial investments rather than capital gains. Execution The completion of a buy or sell order for a securit y. Executor An individual appointed to administrate the estate of a deceased person. The executor's main duty is to carry out the instructions and wish es of the deceased. The executor is appointed either by the testator of the will (the i ndividual who makes the will) or by a court, in cases where there was no prior appointment. Exempt Income Certain types of income that are not subject to inc ome tax. Exemption A deduction allowed by law to reduce the amount of income that would otherwise be taxed. An exemption is based on a status or circums tance rather than economic standing. Exemption Trust A trust whose purpose is to drastically reduce or e liminate federal estate taxes for a married couple's estate. This type of estate plan s ets up an irrevocable trust that will hold the assets of the first spouse to die. Exercise An action by a stockholder taking advantage of a pr ivilege offered by a company or other financial institution. This includes warrants, opti ons and other exotic financial instruments. Exercise Limit A restriction on the amount of option contracts of a single class that any one person or company can exercise within a fixed time period (us ually a period of five business days). This limit is in place so that no one person or com pany can corner or greatly impact the option market. Exercise Price The price at which the underlying security can be p urchased (call option) or sold (put option). The exercise price is determined at the ti me the option contract is formed.

Also known as the "strike price". Exhaustion Situation in which a majority of participants tradi ng in the same asset are either long or short, leaving few investors to take the other side of the transaction when participants wish to close their positions. Exhaustion signals t he reversal of the current trend because it illustrates excess levels of supply or demand. Exhaustion Gap A technical term describing that the stock's price opens up on a gap from the prior day's high close. Existing Home Sales An economic indicator of both the number and prices of existing single family houses, condos and co-op sales over a one-month period. Rel eased monthly by the U.S. National Association of Realtors, it is a lagging indicator as it tends to react after a change in mortgage rates. Exit Strategy 1. The method by which a venture capitalist or busi ness owner intends to get out of an investment that he or she has made in the past. In other words, the exit strategy is a way of "cashing out" an investment. Examples include an initial public offering (IPO) or being bought out by a larger player in the industry. Also referred to as a "harvest strategy" or "liquidity event". 2. In the context of an active trader, a plan as to when a trade will be closed out. Exordium Clause A clause most often at the opening of a will that d eclares that the document is a will and effectively lays out to the readers a few basic pre mises upon which the rest of the document is based. Contents of an exordium clause a re likely to include: 1. Identity of the person who has left the will. 2. The name of the place of residence of that perso n. 3. A revocation of all previous wills made by that person existing before the date that the current will was produced. 4. Declaration that the current document is the wil l belonging to the named person. Exotic Option A type of option that differs from common American or European options in terms of the underlying asset or the calculation of how or when the investor receives a certain payoff. These options are more complex than options that tr ade on an exchange, and generally trade over the counter. Expansion The phase of the business cycle when the economy mo ves from a trough to a peak. It is a period when business activity surges and gross dome stic product expands until it reaches a peak. Also known as an "economic recovery". Expectations Index A sub-index that measures overall consumer sentimen ts toward the short-term (6-month) future economic situation, and is used to derive (a bout 60% of) the Consumer Confidence Index, a widely used economic indicator. The sub-in dex is compiled from data gathered from a survey of 5,000 households on questions rega rding expected business and employment conditions as well as expected income in the near term.

Expectations Theory A theory proposing that long-term interest rates ca n act as a predictor of future short-term interest rates. Expected Return The average of a probability distribution of possib le returns, calculated by using the following formula: Expense Ratio The percentage of total fund assets that is used to cover expenses associated with the operation of a mutual fund. This amount is taken ou t of the fund's assets and lowers the return that fund holders achieve. These expenses in clude management fees and operating expenses. The management fee is the fee that is cha rged to the fund by the portfolio manager, and it is often a fixed percentage. The op erating expenses are the expenses that the fund incurs through operation and this can incl ude brokerage fees, taxes, investor services and interest expenses. Also known as the "management expense ratio" (MER). Expenses 1. Money spent by a firm to continue its ongoing op erations. 2. Money spent or costs incurred that are deductibl e and reduce your taxable income. Expiration Date The day on which an options or futures contract is no longer valid and, therefore, ceases to exist. Exponential Moving Average - EMA A type of moving average that is similar to a simpl e moving average, except that more weight is given to the latest data. Also known as " exponentially weighted moving average". Export In international trade, goods that are shipped from one country to another. Expropriation The act of removing property from an owner. Extendable Bond A bond issue with a maturity that can be extended t o a longer period at the option of the issuer. Extended (in price) A technical term used to describe the point at whic h a stock is up in price over its 'pivot' or buy point and is considered riskier to buy. Extended IRA An IRA that allows a second-generation beneficiary to continue to distribute the assets over the life expectancy used by the first-generati on beneficiary, thereby extending the IRA. Extension Risk The risk of a security lengthening in duration due to the deceleration of prepayments. Externality A consequence of an economic activity that is exper ienced by unrelated third parties. An externality can be either positive or negative.

Extra Dividend A non-recurring distribution of company assets, usu ally in the form of cash, to shareholders which is of unusually large size or di fferent date of issue compared to normal dividends paid out by the given company. Als o referred to as a "special dividend". Extraordinary General Meeting - EGM A meeting other than the annual general meeting bet ween a company's shareholders, executives and any other members. An EGM is usually called on short notice and deals with an urgent matter. Extraordinary Item Gains or losses included in a company's financial s tatements, which are infrequent and unusual in nature. These are usually explained furt her in the "notes to the financial statements." Extraordinary Redemption A provision which gives a bond issuer the right to call the bonds due to a one-time occurrence, as specified in the offering statement. The circumstances could range from natural disasters and cancelled projects to almost anything else. Also known as an "extraordinary call" or "extraordi nary redemption provision". Extrinsic Value The difference between an option's price and the in trinsic value. F A Nasdaq stock symbol specifying that the stock is a foreign company. Fabless Company The Fabless Semiconductor Association (FSA) defines fabless as follows: Fabless (without fab) refers to the business method ology of outsourcing the manufacturing of silicon wafers, which hundreds of semiconductor com panies have adopted. Fabless companies focus on the design, development and marketing of t heir products and form alliances with silicon wafer manufacturers, or foundries. Face Value The nominal value or dollar value of a security sta ted by the issuer. For stocks, it is the original c ost of the stock shown on the certificate. For bonds, i t is the amount paid to the holder at maturity (generally $1,000). Also known as "par value" or si mply "par". Face-Amount Certificate Company A type of investment firm that issues debt securiti es to its investors. These securities are called face-amount certificates and are backed by security interest on assets such as real property or other securities. This is similar in nature to mortgage b ond debt financing. Facility A term used to describe financial assistance progra ms offered by lending institutions to help companies requiring capital Factor 1. A financial intermediary that purchases receivab les from companies. 2. In terms of mortgages, the ratio of principal ou tstanding to the original balance. Fade 1. A contrarian investment strategy used to trade a gainst the prevailing trend. "Fading the market" is typically very high risk, requiring the trader to h ave a high risk tolerance. A fade trader would sell when a price is rising and buy when it's falling. A lso known as "fading".

2. In a dealer market, it is the failure of a deale r to honor a quote when a customer or another deale r wants to trade. Fail A transaction that has not been settled before a de adline. Failed Break A price movement through an identified level of sup port or resistance that does not have enough momentum to maintain its direction. Since the valid ity of the breakout (or breakdown) is compromised, many traders close their positions and the price fails to make the sharp move that many were expecting. A failed break is also commonly referred to as a "f alse breakout". Fair Funds for Investors Provision introduced in 2002, under Section 308(a) of the Sarbanes-Oxley Act. Fair Funds for Investors was put into place to benefit those inves tors who have lost money because of the illegal or unethical activities of individuals or companies th at violate securities regulations. Essentially, thi s provision enabled the Securities and Exchange Commi ssion (SEC) to add civil money penalties to disgorgement funds for the relief of the victims of stock swindles. Fair Market Value The price that a given property or asset would fetc h in the marketplace, subject to the following conditions: 1. Prospective buyers and sellers are reasonably kn owledgeable about the asset they are behaving in their own best interests and are free of undue p ressure to trade. 2. A reasonable time period is given for the transa ction to be completed. Given these conditions, an asset's fair market valu e should represent an accurate valuation or assessment of its worth. Fair Value 1. The estimated value of all assets and liabilitie s of an acquired company used to consolidate the financial statements of both companies. 2. In the futures market, fair value is the equilib rium price for a futures contract. This is equal to the spot price after taking into account compounded int erest (and dividends lost because the investor owns the futures contract rather than the physical stocks) over a certain period of time. Fair Weather Fund A mutual fund that tends to perform well during fav orable economic conditions. Fairness Opinion A report put together by qualified analysts or advi sors providing to key decision makers an evaluation of and facts about a merger or acquisiti on. Fairway Bond A type of bond that accrues interest if the embedde d index or interest-rate option underlying the bond remains within a specified range. Fakeout A term used in technical analysis that refers to a situation in which a trader enters into a position in anticipation of a future transaction signal or pric e movement, but the signal or movement never develops and the asset moves in the opposite direct ion. Fallen Angel 1. A bond that was once investment grade but has si nce been reduced to junk bond status. 2. A stock that has fallen substantially from its a ll time highs. Falling Knife A stock whose price has fallen significantly in a s hort period of time.

False Market A market where prices are manipulated and impacted by erroneous information, preventing the efficient negotiation of prices. These types of mar kets will often be marred by volatile swings because the true value of the market is clouded by the misinformation. Fama and French Three Factor Model An asset pricing model (actually a modification of CAPM) designed by Gene Fama and Ken French. This model considers the fact that two particular t ypes of stocks outperform markets on a regular basis: value and small-caps. Fama and French Three Factor Model An asset pricing model (actually a modification of CAPM) designed by Gene Fama and Ken French. This model considers the fact that two particular t ypes of stocks outperform markets on a regular basis: value and small-caps. Family Limited Partnership - FLP A type of partnership designed to centralize family business or investment accounts. FLPs pool together a family's assets into one single family-o wned business partnership that family members own shares of. FLPs are frequently used as an estat e tax minimization strategy, as shares in the FLP can be transferred between generations, at lower ta xation rates than would be applied to the partnership's holdings Family of Funds A group of mutual funds offered by one investment o r fund company. Each mutual fund has different characteristics and can range depending on investme nt objective. Also referred to as a "Mutual Fund Family" or simpl y a "Fund Family". Fannie Mae - Federal National Mortgage Association - FNMA A publicly traded company working to assure that mo rtgage money is readily available for existing and potential homeowners in the United States. Fast Market A financial market that has a combination of high v olatility and heavy trading Fast Market Rule In the United Kingdom, the exchange may determine t hat a market movement is so sharp that quotes cannot practically be kept current. Under the Fast Market Rule, market makers may be permitted to trade outside quoted ranges where updating quotes i s deemed impractical. Fast Tape A type of futures market that occurs when a single traded price is unavailable because of the rapid and large number of transactions occurring in the p it or ring. Fastest Growing EPS Tab (Best 3 Year Fundamental Ra ting) Calculated by dividing a company's total after-tax profits by the company's number of common shares outstanding. Can be used as an indicator of growth and profitability. This tab in IBD's "Top Rated Stocks Under $10" product screens stocks for Annual EPS Growth Rate of 30% or higher, over the last 3 years. Featherbedding Term used to describe the practice of a labor union requiring an employer to hire more workers than necessary for a particular task. Fed Model A model thought to be used by the Federal Reserve t hat hypothesizes a relationship between long-term treasury notes and the market return of equiti es.

Federal Covered Advisor An investment advisor that manages over $25 million in assets for other investors. Federal Debt The total amount of money that the United States fe deral government owes to creditors. The government's creditors include all individuals, bus inesses, governments and other organizations that own U.S. government debt securities. The feder al debt exists as a result of federal government shortfalls, or deficit budgets in which the governm ent's expenses exceed its revenues. The federal debt does not include any debts in the name of indi viduals, corporations, and state or municipal governments. Federal Deposit Insurance Corporation - FDIC The U.S. corporation insuring deposits in the U.S. against bank failure. The FDIC was created in 1933 to maintain public confidence and encourage stabili ty in the financial system through the promotion of sound banking practices. Federal Farm Credit System - FFCS In the United States, a network of federally charte red financial institutions designed to provide credit-related services to the agricultural and far ming sectors of the economy. In total, this government-sponsored enterprise comprises approxima tely 100 financial institutions that serve all 50 states and Puerto Rico. Federal Funds Funds deposited to regional Federal Reserve Banks b y commercial banks, including funds in excess of reserve requirements. Federal Funds Funds deposited to regional Federal Reserve Banks b y commercial banks, including funds in excess of reserve requirements. Federal Funds Rate The interest rate at which a depository institution lends immediately available funds (balances at the Federal Reserve) to another depository institution overnight. Federal Home Loan Bank System (FHLB) Created by the Federal Home Loan Bank Act of 1932 i n response to the depressive economic conditions of the era which had impaired the U.S. b anking system. Its primary purpose was to increase the amount of funds available for lending institutions who provide mortgages and similar loan agreements to individuals. Also referred to as the "FHL Bank System". Federal Insurance Contributions Act - FICA A law in the U.S. requiring a deduction from payche cks and income that goes toward the Social Security program and Medicare. Both employees and e mployers are responsible for sharing the FICA payments. The act stipulates that there is a m aximum that can be allocated to Social Security, while there is no maximum on what can go toward Med icare. Once the maximum to Social Security is achieved, the contributor's FICA payment will no t increase the Social Security portion but will continue to increase the contribution to Medicare. The amount of the FICA payment depends on the income of the contributor, so the higher the income , the higher the FICA payment. Federal Open Market Committee - FOMC The branch of the Federal Reserve Board that determ ines the direction of monetary policy. The FOMC is composed of the Board of Governors, which h as seven members, and five reserve-bank presidents. The president of the Federal Reserve Ba nk of New York serves continuously, while the presidents of the other reserve banks rotate in the ir service of one-year terms.

Federal Poverty Level - FPL The set minimum amount of income that a family need s for food, clothing, transportation, shelter and other necessities. In the United States, this l evel is determined by the Department of Health and Human Services. FPL varies according to family size . The number is adjusted for inflation and reported annually in the form of poverty guidelines . Public assistance programs, such as Medicaid in the U.S., define eligibility income limits as so me percentage of FPL. Federal Reserve Bank The banks that carry out Fed operations, including controlling the money supply and regulating member banks. There are 12 District Feds, headquart ered in Boston, New York, Philadelphia, Cleveland, St. Louis, San Francisco, Richmond, Atla nta, Chicago, Minneapolis, Kansas City and Dallas. They are also known as "district Feds". Federal Reserve Board - FRB The governing body of the Federal Reserve System. T he seven members of the Board of Governors are appointed by the president, subject to confirma tion by the Senate. Federal Reserve Board's Discount Rate An important market variable representing what it c osts member banks to borrow money from the Fed. A cut in the rate encourages borrowing and inc reases money supply; whereas a hike in the rate does the opposite. Federal Reserve System The central bank of the United States. The Fed, as it is commonly called, regulates the U.S. monetary and financial system. The Federal Reserve System is composed of a central governmental agency in Washington, D.C. (the Board of Governors) and twelv e regional Federal Reserve Banks in major cities throughout the United States. Federal Trade Commission - FTC An independent federal agency whose main goals are to protect consumers and to ensure a strong competitive market by enforcing a variety of consum er protection and antitrust laws. These laws guard against harmful business practices and protec t the market from anti-competitive practices such as large mergers and price-fixing conspiracies Fee-Based Investment An investment account in which the advisor's compen sation is based on a set percentage of the client's assets instead of on commissions. Contrast this to commission-based investment, in which the advisor makes money based on the amount of trad es made or the amount of assets sold to the client. Feed Ratio A ratio used in futures markets to express the prof it margin associated with the feeding and selling of animals. Feeder Fund A fund that conducts virtually all of its investing through another fund (called the master fund). Fiat Money Money that a government has declared to be legal te nder, despite the fact that it has no intrinsic value and is not backed by reserves. Fibonacci Arc A charting technique consisting of three curved lin es that are drawn for the purpose of anticipating key support and resistance levels, and areas of ran ging. Fibonacci Channel A variation of the Fibonacci retracement pattern in which the trendlines run diagonally rather than

horizontally. These channels are used to estimate a reas of support and resistance in the same way as the horizontal Fibonacci retracement levels. Fibonacci Clusters A tool used in technical analysis that combines var ious numbers of Fibonacci retracements, all of which are drawn from different highs and lows. Fibo nacci clusters are indicators which are usually found on the side of a price chart and look like a series of horizontal bars with various degrees of shading. Each retracement level that overlaps with another makes the horizontal bar on the side darker at that price level. The most significant le vels of support and resistance are found where the Fibonacci cluster is the darkest. Fibonacci Extensions Levels used in Fibonacci retracement to forecast ar eas of support or resistance. Extensions consist of all levels drawn beyond the standard 100% level and are used by many traders to determine areas where they will wish to take profits. The most popu lar extension levels are 161.8%, 261.8% and 423.6%. Fibonacci Fan A charting technique consisting of three diagonal l ines that use Fibonacci ratios to help identify key levels of support and resistance. Fibonacci Numbers/Lines Leonardo Fibonacci was an Italian mathematician bor n in the 12th century. He is known to have discovered the "Fibonacci numbers," which are a seq uence of numbers where each successive number is the sum of the two previous numbers. e.g. 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, etc . These numbers possess a number of interrelationship s, such as the fact that any given number is approximately 1.618 times the preceding number. Fibonacci Retracement A term used in technical analysis that refers to th e likelihood that a financial asset's price will re trace a large portion of an original move and find suppor t or resistance at the key Fibonacci levels before it continues in the original direction. These level s are created by drawing a trendline between two extreme points and then dividing the vertical dista nce by the key Fibonacci ratios of 23.6%, 38.2%, 50%, 61.8% and 100%. Fibonacci Time Zones An indicator used by technical traders to identify periods in which the price of an asset will experience a significant amount of movement. This c harting technique consists of a series of vertical lines that correspond to the sequence of n umbers known as Fibonacci numbers (1, 2, 3, 5, 8, 13, 21, 34, etc.). Once a trader chooses a starting position (most commonly following a major move) on the chart, a vertical line is placed on every su bsequent day that corresponds to the position in the Fibonacci number sequence. FICO Score A standard credit score which makes up a substantia l portion of a credit report that credit bureaus sell to lenders so they can asses an applicant's cr edit risk and whether to extend them credit. It is an acronym for the creators of the FICO score , Fair Isaac Credit Organization. Fiduciary 1. A person legally appointed and authorized to hol d assets in trust for another person. The fiduciary manages the assets for the benefit of the other per son rather than for his or her own profit. 2. A loan made on trust rather than against some se curity or asset. Fifty Percent Principle A principle that predicts that, before the observed trend continues forward, a price correction of approximately 1/2 to 2/3 of the change in price wil l occur. Fifty Percent Principle

A principle that predicts that, before the observed trend continues forward, a price correction of approximately 1/2 to 2/3 of the change in price wil l occur. Fighting the Tape The action of placing a trade or trades that go aga inst the ticker tape.

Filing Status The category defining the type of tax-return form a n individual will use. The filing status is closely tied to marital status. These are five filing statu ses: 1. Single individual. 2. Married persons filing jointly or surviving spou se. 3. Married persons filing separately. 4. Head of households. 5. Qualifying window(er) with dependent child. Fill The action of completing or satisfying an order for a security or commodity. It is the basic act in transacting stocks, bonds or any other type of secu rity. Fill Or Kill - FOK An order to fill a transaction immediately and comp letely or not at all. Filter A set of criteria used to help an investor narrow d own which financial instruments or conditions of financial instruments are the most profitable. Filter Rule Rules that attempt to guide investors towards buyin g and selling patterns that will be the most profitable. Final Dividend The final dividend declared at a company's Annual G eneral Meeting (AGM) for any given year. This amount is calculated after all financial statements are recorded and the directors are aware of the company's profitability and financial health. Final Prospectus A legal document stating the price of a newly issue d security, the delivery date and other facts that are important for investors. Finance The science that describes the management of money, banking, credit, investments, and assets. Financial Accounting Reporting of the financial position and performance of a firm through financial statements issued to external users on a periodic basis. Financial Accounting Standards Board - FASB A seven-member independent board consisting of acco unting professionals who establish and communicate standards of financial accounting and r eporting in the United States. FASB standards, known as generally accepted accounting principles ( GAAP), govern the preparation of corporate financial reports and are recognized as authoritati ve by the Securities and Exchange Commission. Financial Asset An asset that derives value because of a contractua l claim. Stocks, bonds, bank deposits, and the like are all examples of financial assets.

Financial Crimes Enforcement Network - FinCEN A network administered by the United States Departm ent of the Treasury whose goal it is to prevent and punish criminals and criminal networks that par ticipate in money laundering. FinCEN operates domestically and internationally, and it consists o f three major players: law-enforcement agencies, the regulatory community and the financial-services community. Financial Engineering The creation of new and improved financial products through innovative design or repackaging of existing financial instruments. Financial Instrument A real or virtual document representing a legal agr eement involving some sort of monetary value. In today's financial marketplace, financial instrument s can be classified generally as equity based, representing ownership of the asset, or debt based, representing a loan made by an investor to the owner of the asset. Foreign exchange instruments co mprise a third, unique type of instrument. Different subcategories of each instrument type exi st, such as preferred share equity and common share equity, for example. Financial Intermediary An institution that acts as the middleman between i nvestors and firms raising funds. Often referred to as financial institutions. Financial Performance A company's ability to generate new resources, from day-to-day operations, over a given period of time. Financial Planner A qualified investment professional who assists ind ividuals and corporations meet their long-term financial objectives by analyzing the client's stat us and setting a program to achieve these goals. They are specialized in tax planning, asset allocat ion, risk management, retirement and/or estate planning. Also referred to as a "Registered Financial Planner ," when the financial planner is registered with the Registered Financial Planner Institute (RFPI). Financial Porn A slang term used to describe sensationalist report s of financial news and products causing irrational buying that can be detrimental to invest ors' financial health. Short-term focus by the medi a on a financial topic can create excitement that doe s little to help investors make smart, long-term financial decisions, and in many cases clouds inves tors' decision-making ability. Financial Portal A website that provides a variety of financial data and information, acting as an information hub for clients who are individual investors requiring time ly financial news and data to make their investment decisions. Financial Risk The risk that a company will not have adequate cash flow to meet financial obligations. Financial Supermarket A company offering a wide range of financial servic es (e.g. stock, insurance and real-estate brokerage). Financing The act of providing funds for business activities, making purchases or investing. Financial institutions and banks are in the business of finan cing as they provide capital to businesses, consumers and investors to help them achieve their goals. Financing

The act of providing funds for business activities, making purchases or investing. Financial institutions and banks are in the business of finan cing as they provide capital to businesses, consumers and investors to help them achieve their goals. Financing The act of providing funds for business activities, making purchases or investing. Financial institutions and banks are in the business of finan cing as they provide capital to businesses, consumers and investors to help them achieve their goals. Fine Print Non-standard terms included in a contract, often in a small font. Finite Reinsurance A type of reinsurance that transfers over only a fi nite or limited amount of risk. Risk is reduced through accounting or financial methods, along with the actual transfer of economic risk. By transferring less risk to the reinsurer, the insure r receives coverage on its potential claims at a lo wer cost than traditional reinsurance. Finmins A term used to refer to the financial ministers tha t head the federal banks of major economic powers. Depending on the country, a financial minis ter is responsible for implementing the monetary policy of a country, mainly through the ad justment of borrowing rates. Fire Sale A situation in which the prices of securities in th e financial markets are considered to be very low. Firewall Legal barriers that prevent both the transference o f inside information and the performance of financial transactions between commercial and inves tment banks. Firm Commitment 1. A lending institution's promise to enter into a loan agreement with a specific entity, within a certain period of time. 2. An underwriter's agreement to assume all invento ry risk and purchase all securities directly from the issuer for sale to the public at the price spec ified. Firm Quote A price quote on a security, made by a dealer or ma rket maker, that guarantees a bid or ask price up to the amount quoted. This differs from a nominal q uote wherein the price and quantity of a bid or ask quote are not firmly posted. First Call A company that gathers research notes and earnings estimates from brokerage analysts. The estimate is compared to the actual reported earning s, and then the difference between the two is the earnings surprise. First In, First Out - FIFO An asset-management and valuation method in which t he assets produced or acquired first are sold, used or disposed of first. FIFO may be used by a in dividual or a corporation First In, Still Here - FISH An accounting buzzword that describe when companies still have inventory on hand that is not being sold due to inattention or obsolescence. Whil e not an official type of accounting treatment, the term is named after the LIFO and FIFO accounting me thods.

First Notice Day The first day that a notice of intent to deliver a commodity can be made by a clearinghouse to a buyer in fulfillment of a given month's futures con tract. First-Time Homebuyer An IRA owner who is exempt from the early-distribut ion penalty (which applies to IRA distributions that occur before the IRA owner reaches age 59.5) f or distributing funds from his or her IRA to buy, build, or rebuild a home when having had no interes t in a main home during the two-year period ending on the date of acquisition of the home for w hich the distribution is being made. Fiscal Agent An organization, such as a bank or trust company, t hat takes responsibility for the fiscal duties of a n unrelated party. Fiscal Capacity In economics, the ability of groups, institutions, etc. to generate revenue. The fiscal capacity of governments depends on a variety of factors includi ng industrial capacity, natural resource wealth and personal incomes. Fiscal Deficit When a government's total expenditures exceed the r evenue that it generates (excluding money from borrowings). Deficit differs from debt, which is an accumulation of yearly deficits. Fiscal Policy Government spending policies that influence macroec onomic conditions. These policies affect tax rates, interest rates and government spending, in a n effort to control the economy. Fiscal Policy Government spending policies that influence macroec onomic conditions. These policies affect tax rates, interest rates and government spending, in a n effort to control the economy. Fiscal Quarter End The date in which a company's fiscal quarter ends. On a Daily Graph, this is noted by month, day and year. The fiscal quarter that marks the company 's fiscal year end is presented with its date in blue. To determine the fiscal quarter number of a p articular item, use the fiscal year end quarter and count backward (right to left). * Indicates quarterly earnings were reported within the last 14 days. Fiscal Year - FY Any 12-month period that a company uses for account ing purposes. Fiscal Year-End The completion of a one-year, or 12-month, accounti ng period. Fisher Effect A theory describing the long-run relationship betwe en inflation and interest rates. Fisher Effect A theory describing the long-run relationship betwe en inflation and interest rates. Fisher's Separation Theorem A theory stating that: 1. A firm's choice of investments are separate from its owner's attitudes towards the investments. 2. It is possible to separate a firm's investment d ecisions from the firm's financial decisions.

Five Against Bond Spread - FAB A spread in the futures markets created by taking o ffsetting positions in futures contracts for five-year treasury bonds and long-term (15-30 year) trea sury bonds. Five Against Note Spread - FAN A spread in the futures markets created by taking o ffsetting positions in futures contracts for five-year treasury notes and ten-year treasury bonds. Five-Year Rule If a retirement account owner dies before the requi red beginning date for receiving distributions, the beneficiary may distribute the inherited assets ove r his/her (the beneficiary's) life expectancy or distribute the assets under the five-year rule. Und er the five-year rule, the assets must be distribut ed by December 31 of the fifth year since the retireme nt account owner's death. Fixed Annuity An insurance contract in which the insurance compan y makes fixed dollar payments to the annuitant for the term of the contract, usually unt il the annuitant dies. The insurance company guarantees both earnings and principal. Fixed Asset A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be consumed or converted into ca sh any sooner than at least one year's time. Fixed Asset A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be consumed or converted into ca sh any sooner than at least one year's time. Fixed Cost A cost that remains constant, regardless of any cha nge in a company's activity. Fixed Exchange Rate A country's exchange rate regime under which the go vernment or central bank ties the official exchange rate to another country's currency (or the price of gold). The purpose of a fixed exchange rate system is to maintain a country's currency val ue within a very narrow band. Also known as pegged exchange rate. Fixed Income A type of investing or budgeting style for which re al return rates or periodic income is received in regular intervals at reasonably predictable levels. Fixed-income budgeters and investors are often one and the same - typically, retired individuals w ho rely on their investments to provide a regular, stable income stream. This demographic tends to inv est heavily in fixed-income investments because of the reliable returns they offer. Fixed Income Clearing Corporation - FICC An agency that deals with the confirmation, settlem ent and delivery of fixed-income assets in the U.S. The agency ensures the systematic and efficien t settlement of U.S. Government securities and mortgage-backed security transactions in the market . Fixed Interest Rate A loan or mortgage with an interest rate that will remain at a predetermined rate for the entire term of the loan. Fixed Term Describes an investment vehicle, usually some kind of debt instrument, that has a fixed time period of investment. With a fixed-term investment, the in vestor parts with his or her money for a specified period of time and is repaid his or her principal i nvestment only at the end of the investment period.

Fixed-Charge Coverage Ratio A ratio that indicates a firm's ability to satisfy fixed financing expenses, such as interest and leas es. It is calculated as the following: Fixed-For-Fixed Swaps An arrangement between two parties (known as counte rparties) in which both parties pay a fixed interest rate that they could not otherwise obtain outside of a swap arrangement. Fixed-For-Fixed Swaps An arrangement between two parties (known as counte rparties) in which both parties pay a fixed interest rate that they could not otherwise obtain outside of a swap arrangement. Fixed-For-Floating Swap An advantageous arrangement between two parties (co unterparties), in which one party pays a fixed rate, while the other pays a floating rate. Fixed-Income Arbitrage An investment strategy that attempts to profit from arbitrage opportunities in interest rate securitie s. When using a fixed-income arbitrage strategy, the i nvestor assumes opposing positions in the market to take advantage of small price discrepanci es while limiting interest rate risk. Fixed-Income Security An investment that provides a return in the form of fixed periodic payments and eventual return of principal at maturity. Unlike a variable-income sec urity, where payments change based on some underlying measure such as short-term interest rate s, the payments of a fixed-income security are known in advance. Fixed-Income Style Box A nine-box matrix that displays the characteristics of international and domestic fixed-income investment funds. On the horizontal axis, funds are separated into one of three categories - either short term, intermediate term, or long term, depend ing upon the average effective duration of the bonds contained in the fund. On the vertical axis, funds are separated into one of three categories depending upon the average investment grade of the bonds in the fund. Bond funds with average ratings from 'AAA' to 'AA' are considered high qual ity. Funds with average ratings from 'A' to 'BBB' are considered medium quality. Those with average r atings below 'BB' are considered low quality. Fixed-Rate Capital Securities A security issued by a corporation that has a $25 p ar value (although some are issued with a $1,000 par value) and offers investors a combination of th e features of corporate bonds and preferred stock. These securities provide the benefits of att ractive yields, fixed monthly, quarterly or semiannual income, investment time frames that are generally predictable (20-49 years, although some are perpetual), liquidity and investment-grade credit quality (in most cases). FJD In currencies, this is the abbreviation for the Fij i Dollar. FKP In currencies, this is the abbreviation for the Fal kland Islands Pound. Flag A technical charting pattern that looks like a flag with a mast on either side. Flags result from pric e fluctuations within a narrow range and mark a conso lidation before the previous move resumes. Likewise, "pennant" formations are usually treated like flag formations because they are very similar in appearance, tend to show up at the same place in an existing trend, and have the same volume and measuring criteria.

Flash Price Ticker tape display designation used when volume on an exchange is so heavy that the tape runs more than five minutes behind. The "flash price" in terrupts the delayed prices to show the current price of a heavily traded stock.

Flat 1. A price that is neither rising nor declining. 2. In forex, the condition of being neither long no r short in a particular currency. Also referred to as 'being square'. 3. A bond that is trading without accrued interest. Flat base One of three positive chart patterns to look for wh en doing technical analysis. It usually occurs afte r a stock has advanced off of a 'cup with handle' or 'double bottom' pattern. The 'flat base' moves straight sideways in a fairly tight price range for at least five weeks and does not correct more than 8% to 12%. Flat base One of three positive chart patterns to look for wh en doing technical analysis. It usually occurs afte r a stock has advanced off of a 'cup with handle' or 'double bottom' pattern. The 'flat base' moves straight sideways in a fairly tight price range for at least five weeks and does not correct more than 8% to 12%. Flat Benefit Formula A method of calculating an employer's contribution to an employee's defined benefit plan whereby the employer multiplies an employee's months of ser vice by a predetermined flat monthly rate. Flat Benefit Formula A method of calculating an employer's contribution to an employee's defined benefit plan whereby the employer multiplies an employee's months of ser vice by a predetermined flat monthly rate. Flat Benefit Formula A method of calculating an employer's contribution to an employee's defined benefit plan whereby the employer multiplies an employee's months of ser vice by a predetermined flat monthly rate. Flat Tax A system that taxes everyone at the same rate, rega rdless of their income bracket. Flat Yield Curve A yield curve in which there is little difference b etween short-term and long-term rates for bonds of the same credit quality. This type of yield curve i s often seen during transitions between normal and inverted curves. Flat Yield Curve A yield curve in which there is little difference b etween short-term and long-term rates for bonds of the same credit quality. This type of yield curve i s often seen during transitions between normal and inverted curves. Flexible Exchange Option - FLEX An option, generally written by a clearing house, w hose expiration date, strike price, and exercising style can be modified.

Flight to Quality The action of investors moving their capital away f rom riskier investments to the safest possible investment vehicles. This flight is usually caused by uncertainty in the financial or international markets. However, at other times, this move may be an instance of investors cutting back on the more volatile investments for the conservative ones (i.e. diversifying) without much consideration of the international markets. Flight to Quality The action of investors moving their capital away f rom riskier investments to the safest possible investment vehicles. This flight is usually caused by uncertainty in the financial or international markets. However, at other times, this move may be an instance of investors cutting back on the more volatile investments for the conservative ones (i.e. diversifying) without much consideration of the international markets Flight to Quality The action of investors moving their capital away f rom riskier investments to the safest possible investment vehicles. This flight is usually caused by uncertainty in the financial or international markets. However, at other times, this move may be an instance of investors cutting back on the more volatile investments for the conservative ones (i.e. diversifying) without much consideration of the international markets. Flip A point when traders shift from having more long po sitions to having more short positions. Flipper A short-term investor or day trader who buys pre-IP O shares, swiftly spinning them out into public markets for a quick profit. Float The total number of shares publicly owned and avail able for trading. The float is calculated by subtracting restricted shares from outstanding shar es. Also known as "free float". Floater A bond or other type of debt whose coupon rate chan ges with market conditions (short-term interest rates). Also known as "floating-rate debt". Floater Insurance A type of insurance policy that covers property tha t is easily movable and provides additional coverage over what normal insurance policies do not . This can cover anything from jewelery to expensive stereo equipment. Floating Exchange Rate A country's exchange rate regime where its currency is set by the foreign-exchange market through supply and demand for that particular currency rela tive to other currencies. Thus, floating exchange rates change freely and are determined by trading i n the forex market. This is in contrast to a "fixed exchange rate" regime. Floating-Rate Note - FRN A note with a variable interest rate. The adjustmen ts to the interest rate are usually made every six months and are tied to a certain money-market index . Also known as a "floater". Floor The lowest acceptable limit as restricted by contro lling parties. Floor Broker - FB An employee of a member firm who executes trades on the exchange floor on behalf of the firm's clients

Floor Trader - FT An exchange member who executes transactions from t he floor of the exchange exclusively for their own account. Floortion A type of option that gives the holder the right, b ut not the obligation, to purchase or sell an inter est rate floor at a specific price during a predetermin ed period of time. The only upfront cost to the holder is the premium the holder has to pay to purc hase the option. Floortion A type of option that gives the holder the right, b ut not the obligation, to purchase or sell an inter est rate floor at a specific price during a predetermin ed period of time. The only upfront cost to the holder is the premium the holder has to pay to purc hase the option. Flotation The process of changing a private company into a pu blic company by issuing shares and soliciting the public to purchase them. Flotation The process of changing a private company into a pu blic company by issuing shares and soliciting the public to purchase them. Flotation Cost The costs associated with the issuance of new secur ities. Flower Bond Fixed income products that were originally purchase d by investors at a discount for the purpose of paying federal estate taxes upon their maturity. FMAN An acronym representing the months February, May, A ugust, and November. Focus List A list of recommended stocks published by an invest ment firm's research department. Focus lists generally consist of a small number of stocks that the firm believes are the most attractive opportunities at the time. Focused Fund Funds that contain a large holding of a small amoun t of stocks. Follow-On Offering An offering of additional shares after a company ha s had an initial public offering. Follow-Through Day Concept System developed by William J. O'Neil to identify a n important change in general market direction from a definite downtrend to a new uptrend. From th e beginning of any attempted rally during a definite downtrend, a 'follow-through' day is ident ified when the index closes up 1.7% or more for the day on a significant increase in volume from the da y before. The first two or three days of a rally ar e normally disregarded as it has not yet proven it wi ll succeed and 'follow-through' with power and conviction. 'Follow-through' days therefore general ly occur the fourth through seventh day of the attempted rally. They serve as a confirmation that the market has really changed direction and is in a new uptrend. Fool's Gold Also known as Iron Pyrite, fool's gold is a gold co lored mineral that is often mistaken for real gold. Footnote

Additional information provided in a company's fina ncial statements. Footnotes report the details and additional information that are left out of the main reporting documents, such as the balance sheet and income statement. This is done mainly for the sake of clarity because footnotes can be quite long, and if they were included, they would c loud the data reported in the financial statements. Footsie A slang term for the FTSE 100 index. Forbearance A postponement of loan payments, granted by a lende r or creditor, for a temporary period of time. This is done to give the borrower time to make up f or overdue payments. Force Majeure A French term literally translated as "greater forc e", this clause is included in contracts to remove liability for natural and unavoidable catastrophes that interrupt the expected course of events and restrict participants from fulfilling obligations. Forced Conversion The occurrence of an issuer of a convertible securi ty exercising the right to call the issue, forcing investors to convert their securities into the pred etermined number of shares. Forced Liquidation An action taken by brokerage houses that offsets an d closes all positions within delinquent customer accounts in order to reduce exposure. Forecasting The process of analyzing current and historical dat a to determine future trends Foreclosure A situation in which a homeowner is unable to make principal and/or interest payments on his or her mortgage, so the lender, be it a bank or building s ociety, can seize and sell the property as stipulated in the terms of the mortgage contract. Foreign 1. A non-U.S. company with securities trading on th e North American market. 2. In general, any corporation organized under the laws of another country. Foreign Bond A bond that is issued in a domestic market by a for eign entity, in the domestic market's currency. Foreign Branch Bank A type of foreign bank that is obligated to follow the regulations of both the home and host countries. Because the foreign branch banks' loan l imits are based on the parent bank's capital, foreign banks can provide more loans than subsidiar y banks. Foreign Currency Convertible Bond - FCCB A type of convertible bond issued in a currency dif ferent than the issuer's domestic currency. In other words, the money being raised by the issuing company is in the form of a foreign currency. A convertible bond is a mix between a debt and equity instrument. It acts like a bond by making regular coupon and principal payments, but these bo nds also give the bondholder the option to convert the bond into stock. Foreign Currency Effects The gain or loss on foreign investments due to chan ges in the relative value of assets denominated in a currency other than the principal currency wit h which a company normally conducts business. A rising domestic currency means foreign investment s will result in lower returns when converted back to the domestic currency. The opposite is true for a declining domestic currency.

Foreign Direct Investment - FDI An investment abroad, usually where the company bei ng invested in is controlled by the foreign corporation. Foreign Institutional Investor - FII An investor or investment fund that is from or regi stered in a country outside of the one in which it is currently investing. Institutional investors inc lude hedge funds, insurance companies, pension funds and mutual funds. Foreign Institutional Investor - FII An investor or investment fund that is from or regi stered in a country outside of the one in which it is currently investing. Institutional investors inc lude hedge funds, insurance companies, pension funds and mutual funds. Foreign Official Dollar Reserves - FRODOR A term coined by economist Ed Yardeni relating inte rnational liquidity to the effect of foreign centra l banks on U.S. monetary policy. It is measured as th e sum of U.S. Treasury and U.S. agency securities held by foreign banks. Foreign Plan A retirement savings plan created by a person or a company to benefit individuals who are not Canadian residents. These beneficiaries may or may not be Canadian citizens, but the plan applies to income they earn for services they perform outsi de of Canada. Foreign-Exchange Risk 1. The risk of an investment's value changing due t o changes in currency exchange rates. 2. The risk that an investor will have to close out a long or short position in a foreign currency at a loss due to an adverse movement in exchange rates. Also known as "currency risk" or "exchange-rate risk". Forensic Accounting Forensic Accounting utilizes accounting, auditing, and investigative skills to conduct an examination into a company's financial statements. Thus, providing an accounting analysis that is suitable for court. Forex - FX The foreign exchange (also known as "forex" or "FX" ) market is the place where currencies are traded. The overall forex market is the largest, mo st liquid market in the world with an average traded value that exceeds $1.9 trillion per day and includes all of the currencies in the world. Forex Futures An exchange-traded contract to buy or sell a specif ied amount of a given currency at a predetermined price on a set date in the future. Al l forex futures are written with a specific termination date, at which point delivery of the cu rrency must occur unless an offsetting trade is made on the initial position. Forfaiting The purchasing of an exporter's receivables (the am ount importers owe the exporter) at a discount by paying cash. The forfaiter, the purchaser of the receivables, becomes the entity to whom the importer is obliged to pay its debt. Forfeiture The loss of an asset, or rights to an asset, as a r esult of defaulting on contractual obligations or conditions. Form 1099-DIV

A form sent to investors by investment fund compani es. The form is a record of all taxable capital gains and dividends paid to an investor, including those that have been re-invested in a given taxation year. The amounts stated on the form repre sent the amounts that fund companies are attributing to each investor's investment return fo r the year and reporting to the IRS. Investors use Form 1099-DIV to help report income received from i nvestments on their tax return each year. Form 1099-R An Internal Revenue Service (IRS) form with which a n individual reports his or her distributions from annuities, profit-sharing plans, retirement plans, IRAs, insurance contracts and/or pensions. The following are some of the items included on the for m: the gross distribution paid during the given tax year, the amount of the distribution that is ta xable, the federal income tax that has been withhel d, the contributions made to the investment or premium s paid, and a code that represents the type of distributions made to the holder of the plan. Form 13F An SEC reporting form filed by institutional invest ment managers in accordance with the provisions of section 13(f) of the Securities and Exchange Act of 1934, which states that all institutional investment managers who are managing over $100 mill ion on the last trading day of any month of the calendar year must disclose their holdings on a quarterly basis. Form 144 A form that must be filed with the SEC when an exec utive officer, director, or affiliate of a company places an order to sell that company's stock. Also known as Rule 144. Form 3 A document that must be filed with the Securities a nd Exchange Commission (SEC) by an insider affiliated with a public company's operation or by any investor owning 10% or more of the company's outstanding shares. Form 4 A document that must be filed with the Securities a nd Exchange Commission (SEC) whenever there is a material change in the holdings of company ins iders (including shareholders owning 10% or more of the company's outstanding stock). Form 5 A document that must be filed with the Securities a nd Exchange Commission (SEC) by an insider who has conducted insider transactions during the y ear which were not previously reported via a Form 4 submission. Form S-4 A form that must be submitted to the Securities and Exchange Commission in the event of a merger or acquisition between two companies. The form must also be submitted for exchange offers. Form T A form required by the NASD for reporting an equity trade executed after normal market hours. Formal Tax Legislation The steps required to propose a new tax law or a ch ange to an existing one. The process involves the President and Congress. Fortune 500 An annual list of the 500 largest companies in the United States. The list is compiled using the most recent figures for revenue Forward Averaging Treating lump-sum retirement-plan distributions as if they occurred over a five- or ten-year period. Forward averaging is available only to qualified pl an participants who were born before 1936 and meet certain requirements. Forward Averaging

Treating lump-sum retirement-plan distributions as if they occurred over a five- or ten-year period. Forward averaging is available only to qualified pl an participants who were born before 1936 and meet certain requirements. Forward Contract A cash market transaction in which delivery of the commodity is deferred until after the contract has been made. Although the delivery is made in the fut ure, the price is determined on the initial trade date. Forward Earnings A company's forecasted, or estimated, earnings made by analysts or by the company itself. Forward earnings differ from trailing earnings (which is th e figure that is quoted more often) in that they ar e a projection and not a fact. There is are many method s used to calculate forward earnings and no single established way. Forward Integration A business strategy that involves a form of vertica l integration whereby activities are expanded to include control of the direct distribution of its p roducts. Forward Market The over-the-counter trading of forward contracts. Forward Points The number of basis points added to or subtracted f rom the current spot rate to determine the forward rate. When points are added to the spot rat e, there is a forward points premium when points are subtracted from the spot rate, there is a point s discount. Forward Price To Earnings - Forward P/E A measure of the price-to-earnings ratio (P/E) usin g forecasted earnings for the P/E calculation. While the earnings used are just an estimate and ar e not as reliable as current earnings data, there i s still benefit in estimated P/E analysis. The foreca sted earnings used in the formula can either be for the next 12 months or for the next full-year fiscal period. Also referred to as "estimated price to earnings". Forward Pricing A Securities and Exchange Commission regulation tha t requires that investment companies price all of their buy and sell orders of fund shares accordi ng to the next net asset value (NAV). This valuation process is for open-end mutual fund trans actions in which the mutual fund itself is constantly issuing and redeeming mutual fund shares at the most recent NAV per share. Forward Rate The amount that it will cost to deliver a currency, commodity, or some other asset some time in the future. Forward Rate Agreement - FRA An over-the-counter contract that determines the ra te of interest, or the currency exchange rate, to be paid or received on an obligation beginning at s ome future start date. Agreements pertaining to interest rates are normally done using LIBOR. Also known as a "future rate agreement". Forward Swap A swap agreement created through the synthesis of t wo swaps differing in duration for the purpose of fulfilling the specific time-frame needs of an i nvestor. Also referred to as a "forward start swap" , "delayed start swap", and a "deferred start swap." Forward Triangular Merger A type of merger that occurs when the subsidiary of the acquiring corporation merges with the target firm.

Foul Weather Fund A mutual fund that tends to perform well during poo r economic conditions. Found Money Money or funds that an investor possesses but just discovers. Four Cs Short for carat, cut, clarity and color. These four characteristics are the main determinants of a diamond's value. Fourier Analysis A type of mathematical analysis that attempts to id entify patterns or cycles in a time series data set which has already been normalized. By first removin g any effects of trends or other complicating factors from the data set, the effects of periodic cycles or patterns can be identified more accuratel y, leaving the analyst with a good estimate of the dir ection that the data under analysis will take in th e future. Named after the nineteenth-century French m athematician and physicist Joseph Fourier. Fourth Market The trading of exchange-listed securities between i nstitutions on a private over-the-counter computer network, rather than over a recognized exc hange such as the New York Stock Exchange (NYSE) or Nasdaq. Trades between institutions will often be made in large blocks and without a broker, allowing the institutions to avoid brokerag e fees. Fox-Trot Economy A term coined by investment strategist Jeffery Saut that describes a period in which "fast-fast" growth economic figures are expected to be followed by periods of "slow-slow" figures. Fractal A type of pattern used in technical analysis to pre dict a reversal in the current trend. A fractal pattern consists of five bars and is identified whe n the price meets the following characteristics: 1. A shift from a downtrend to an uptrend occurs wh en the lowest bar is located in the middle of the pattern and two bars with successively higher lows are positioned around it. 2. A shift from an uptrend to a downtrend occurs wh en the highest bar is located in the middle of the pattern and two bars with successively lower highs are positioned around it. Fractional Share A share of equity that is less than one full share. Fractional shares usually come about from stock splits, dividend reinvestment plans (DRIPs) and sim ilar corporate actions. Normally, fractional shares cannot be acquired from the market.

Fractional Share A share of equity that is less than one full share. Fractional shares usually come about from stock splits, dividend reinvestment plans (DRIPs) and sim ilar corporate actions. Normally, fractional shares cannot be acquired from the market. Franked Dividend An arrangement in Australia that elimintates the do uble taxation of dividends. Dividends are dispersed with tax imputations attached to them. Th e shareholder is able to reduce the tax paid on the dividend by an amount equal to the tax imputati on credits. Basically taxation of dividends has been partially paid by the company issuing the divi dend. Franked Income After-tax investment income that is distributed by one U.K. company to another. This income is often distributed in the form of dividends. The idea behi nd franked income is to prevent double taxation. Fraption A type of option that gives the option holder the o pportunity to enter into a forward rate agreement

at a specific strike price during a predetermined a mount of time. Buyers use fraptions to protect against falls in interest rates at the cost of a sl ight premium. Also known as an "interest rate guarantee". Fraudulent Conveyance The illegal transfer of property to another party i n order to defer, hinder or defraud creditors. Freddie Mac - Federal Home Loan Mortgage Corp - FHL MC A congressionally chartered institution that buys m ortgages from lenders and resells them as securities on the secondary mortgage market. Free Alongside - FAS A trade term requiring the seller to deliver goods to a named port alongside a vessel designated by the buyer. "Alongside" means that the goods are wit hin reach of a ship's lifting tackle. When used in trade terms, the word "free" means the seller has an obligation to deliver goods to a named place for transfer to a carrier. Free and Clear A slang phrase describing the situation of someone when he or she gains outright ownership of an asset, such as when it is completely paid off and n o creditor has a claim on the property. Free Asset Ratio - FAR The market value of an insurance company's assets i n excess of its policy liabilities Free Carrier - FCA A trade term requiring the seller to deliver goods to a named airport, terminal, or other place where the carrier operates. Costs for transportation and risk of loss transfer to the buyer after delivery t o the carrier. When used in trade terms, the word "free" means the seller has an obligation to deliver goods to a named place for transfer to a carrier. Free Cash Flow To Equity - FCFE This is a measure of how much cash can be paid to t he equity shareholders of the company after all expenses, reinvestment and debt repayment. Free Credit Balance The cash held by a broker in a customer's margin ac count that can be withdrawn by the customer at any time without restriction. This balance is calcu lated as the total remaining money in a margin account after margin requirements, short sale proce eds and special miscellaneous accounts are taken into consideration. Free Market A market economy based on supply and demand with li ttle or no government control. A completely free market is an idealized form of a market econom y where buyers and sells are allowed to transact freely (i.e. buy/sell/trade) based on a mutual agre ement on price without state intervention in the form of taxes, subsidies or regulation. In financial markets, free market stocks are securi ties that are widely traded and whose prices are not affected by availability. In foreign-exchange markets, it is a market where e xchange rates are not pegged (by government) and thus rise and fall freely though supply and dem and for currency. Free Market A market economy based on supply and demand with li ttle or no government control. A completely free market is an idealized form of a market econom y where buyers and sells are allowed to transact freely (i.e. buy/sell/trade) based on a mutual agre ement on price without state intervention in the

form of taxes, subsidies or regulation. In financial markets, free market stocks are securi ties that are widely traded and whose prices are not affected by availability. In foreign-exchange markets, it is a market where e xchange rates are not pegged (by government) and thus rise and fall freely though supply and dem and for currency. Free On Board - FOB A trade term requiring the seller to deliver goods on board a vessel designated by the buyer. The seller fulfills its obligations to deliver when the goods have passed over the ship's rail. When used in trade terms, the word "free" means the seller has an obligation to deliver goods to a named place for transfer to a carrier. Free-Crowd System A system of commodity trading in which floor member s can make bids and offers simultaneously for personal or customer accounts, which is common in t he U.S. Free-Crowd System A system of commodity trading in which floor member s can make bids and offers simultaneously for personal or customer accounts, which is common in t he U.S. Freeriding 1. An illegal practice in which an underwriting syn dicate member withholds part of a new securities issue and later sells it at a higher price. 2. The illegal activity of buying a stock and selli ng it before paying for the purchase. Friction Cost The implicit and explicit costs associated with mar ket transactions. Frictional Unemployment Unemployment that is always present in the economy, resulting from temporary transitions made by workers and employers or from workers and employers having inconsistent or incomplete information. Frictionless Market A theoretical trading environment where all costs a nd restraints associated with transactions are non-existent. Friendly Hands A nickname for investors in an IPO who will likely hold onto the security for a long time. Friends and Family Shares When a company gives pre-IPO shares to friends and family members. Front Fee The premium charged upon the initial purchase of a compound option. Front Office The sales personnel and corporate finance employees in a financial services company. It's in the front office where revenues are generated. Front Running The unethical practice of a broker trading an equit y based on information from the analyst department before his or her clients have been give n the information. Front-End Load A commission or sales fee charged at the time of th e initial purchase for an investment, usually mutual funds and insurance policies. It is deducted from the investment amount and thus, lowers

the size of the investment. For mutual funds, the u se of loads is suggested to prevent frequent trading of the fund, which can hurt a fund if it ha s to hold large cash reserves to meet payouts. Front-End Ratio A ratio that indicates what portion of an individua l's income is used to make mortgage payments. It is calculated as an individual's monthly housing ex penses divided by his or her monthly gross income and is expressed as a percentage. Monthly gr oss income is simply annual income divided by 12 (months). Lenders use the front-end ratio in con junction with the back-end ratio to approve mortgages. Calculated as: Front-End Ratio = Monthly Housing Expenses / Monthl y Income Frontspread A type of options spread in which a trader holds mo re short positions than long positions. This type of spread has unlimited risk of loss while also lim iting profit potential. This type of trade is often implemented by professional traders who believe tha t the price of an underlying asset will make a calculated move higher or that volatility will decr ease. Also known as a "ratio vertical spread". Frozen Account An account to which no withdrawals or purchases can be charged. This usually occurs when the account holder fails to pay promptly for purchases charged to the account. For example, cash accounts are frozen for 90 days until the full purc hase price of the intended order is paid in full. FTSE A company that specializes in index calculation. Al though not part of a stock exchange, co-owners include the London Stock Exchange and the Fulcrum Fee An additional, performance-based fee an advisor cha rges a client. The advisor charges the fee when he or she achieves a return above a specified bench mark. Fulcrum Point A point of inflection (POI) on a graph where the pa ttern of the financial instrument's payout changes direction. Full Carry A futures market in which the price difference betw een contracts with two different delivery months equals the full cost of carrying the commodity from the delivery month of the first contract to the next. Carrying costs include interest, insurance an d storage. Also known as "full carry market" or "full carrying charge market". Full Charge The event in which the price of a futures contract covers all of the carrying charges of the underlyin g asset, such as storage and insurance. Also referred to as a "full carry". Full Ratchet An anti-dilution provision that, for any shares of common stock sold by a company after the issuing of an option (or convertible security), applies the lowest sale price as being the adjusted option pri ce or conversion ratio for existing shareholders. Full Stock A stock with a par value of $100 per share. This ca n be either a preferred or common share. Full-Service Broker A broker that provides a large variety of services to its clients, including research and advice, retirement planning, tax tips, and much more. Of co urse, this all comes at a price, as commissions at full-service brokerages are much higher than those at discount brokers.

Full-Time Student A status that is important for determining dependen cy exemptions. An individual enrolled in a post-secondary institution may be eligible for certain t ax breaks. Fully Diluted Shares The total number of shares that would be outstandin g if all possible sources of conversion (such as convertible bonds and stock options) were exercised . Companies often release specific financial figures in terms of fully diluted shares outstandin g (such as the company's profits reported on a fully diluted per share basis) to allow investors t he ability to properly assess the company's financi al situation. Fully Subscribed A situation in which an underwriting firm has succe ssfully sold to investors all of its available issu es of a public offering of securities. When the issue is fully subscribed, the underwriter's risk of bein g undersubscribed (being unable to sell its allotment of the issue) is completely removed. Also referred to in slang terms as "pot is clean". Fully Valued A stock whose price analysts believe reflects the m arket's recognition of the company's underlying fundamental earnings power and therefore is unlikel y to rise further in price. If the stock goes up from that price, it is called overvalued. If the st ock goes down, it is termed undervalued. Fund of Funds A mutual fund that invests in other mutual funds Fundamental Analysis A method of evaluating a stock by attempting to mea sure its intrinsic value. Fundamental analysts study everything from the overall economy and indus try conditions, to the financial condition and management of companies. Fundamental Rank This compares a stock's Fundamental Rating to the o ther stocks in its industry group. For example, 5th out of 100 indicates a stock's Fundamental Rati ng is better than 95% of its group. If 2 or more stocks within a group have the same 1-99 rating, th ey will receive the same Fundamental Rank. For example, if 3 stocks have a 99 Fundamental Rating, they will all three be ranked best in group. The stock with the next best rating will be ranked 4th in group. Fundamental Rating This rating examines vital fundamental data for eac h company and compares it to over 10,000 stocks. Ratings are on a 1 to 99 scale, with 99, fo r example, representing companies outperforming 99% of all other stocks based on key fundamental fa ctors. These factors include: ••••Annual and quarterly sales and earnings growth rate s ••••Sales and earnings acceleration ••••Earnings stability ••••Profit margins and return on equity (ROE) Components are not equally weighted. This rating should not be considered a sole indicat or to buy or sell a stock but should be used along with the other Stock Checkup Ratings, as well as price and volume charts. Fundamentals Information relating to the economic well-being of a company such as revenue, earnings, assets, liabilities and growth. These factors are used to d etermine the worth of an investment in fundamental analysis.

Funded Debt Long-term debt that matures after more than one yea r. Funding Agreement Illiquid insurance contracts that provide guarantee d principal repayment and interest payments for a predetermined period of time. Funds From Operations - FFO A figure used by real estate investment trusts (REI TS) to define the cash flow from their operations. It is calculated by adding depreciation and amortiz ation expenses to earnings, and sometimes quoted on a per share basis. Fungibility The interchangeability of listed options, futures c ontracts, and other instruments dependent upon identical terms. Fungibles Goods, securities or instruments that are equivalen t and, therefore, interchangeable. In other words, they are goods that consist of many identical parts which can be easily replaced by other, identical goods. If the goods are sold by weight or number, t his is a good sign that they are fungible Furniture, Fixtures & Equipment - FF&E Movable furniture, fixtures or other equipment that are have no permanent connection to the structure of a building or utilities. These items d epreciate substantially but definitely are importan t costs to consider when valuing a company, especiall y in liquidation. Furthest Out Mainly pertaining to options and futures, this is t he options or futures contract that has the most distant deliverly month or expiration. Future Income Tax Income tax that is deferred because of discrepancie s between a company's tax return and the tax calculated on the company's financial statements. F uture income tax occurs when there is a greater amount of deductions on taxable income than on the net income that is calculated on a company's income statement. Future Value - FV The value of an asset or cash at a specified date i n the future that is equivalent in value to a specified sum today. There are two ways to calculat e FV: 1) For an asset with simple annual interest: = Orig inal Investment x (1+(interest rate*number of years)) 2) For an asset with interest compounded annually: = Original Investment x ((1+interest rate)^number of years) Futures A financial contract obligating the buyer to purcha se an asset (or the seller to sell an asset), such as a physical commodity or a financial instrument, at a predetermined future date and price. Futures contracts detail the quality and quantity of the un derlying asset they are standardized to facilitate trading on a futures exchange. Some futures contrac ts may call for physical delivery of the asset, while others are settled in cash. The futures marke ts are characterized by the ability to use very hig h leverage relative to stock markets. Futures can be used either to hedge or to speculate on the price movement of the underlying asset. For example, a producer of corn could use futures t o lock in a certain price and reduce risk (hedge). On the other hand, anybody could speculate on the p rice movement of corn by going long or short using futures. Futures Bundle A type of futures order that enables an investor to purchase a predefined number of futures contracts in each consecutive quarterly delivery mo nth for a period of two or more years.

Futures Commission Merchant - FCM A merchant involved in the solicitation or acceptan ce of commodity orders for future delivery of commodities related to the futures contract market. Futures Contract A contractual agreement, generally made on the trad ing floor of a futures exchange, to buy or sell a particular commodity or financial instrument at a p re-determined price in the future. Futures contracts detail the quality and quantity of the un derlying asset they are standardized to facilitate trading on a futures exchange. Some futures contrac ts may call for physical delivery of the asset, while others are settled in cash. Futures Equivalent The number of futures contracts needed to be associ ated with a speculative option position. Futures Exchange Traditionally, a term referring to a central market place where futures contracts and options on futures contracts are traded. More recently, with t he growth in electronic trading, it is also used to describe the activity of futures trading itself. Futures Market An auction market in which participants buy and sel l commodity/future contracts for delivery on a specified future date. Trading is carried on throug h open yelling and hand signals in a trading pit. Futures Pack A type of futures order enabling purchase of a pred efined number of futures contracts in four consecutive delivery months. Futures Spread An arbitrage technique whereby you buy one commodit y and sell another contract of the same commodity to capitalize on a discrepancy in prices. A Nasdaq stock symbol specifying that it is the fir st preferred bond of the company. Gain An increase in the value of an asset or property. A gain is measured as the amount of capital realized from selling a good at a price higher than the original purchase price. Gambling Income Any income that is the result of games of chance or wagers upon events with uncertain outcomes (gambling). This income is subject to taxation. Gambling Loss A loss resulting from games of chance or wagers upo n events with uncertain outcomes (gambling). These losses can only be claimed against gambling i ncome. Game Theory A model of optimality taking into consideration not only benefits less costs, but also the interaction between participants. Gamma The rate of change for delta with respect to the un derlying asset's price Gamma Neutral

An asset portfolio whose delta rate of change is ze ro. Gann Angles Created by W.D. Gann, a method of predicting price movements through the relation of geometric angles in charts depicting time and price. Gap A break between prices on a chart that occurs when the price of a stock makes a sharp move up or down with no trading occurring in between. Gaps can be created by factors such as regular buying or selling pressure, earnings announcements, a chan ge in an analyst's outlook or any other type of news release. Gap (in Price) It denotes a day where the stock opens and trades s everal points above or below the previous day's trading range. It can be identified on a daily char t of a stock's price changes. There are two kinds o f gaps: a break away that occurs just after a stock b reaks out of a base, and an exhaustion gap that occurs after a stock has advanced for many weeks an d is very extended from its most recent base and is close to topping in price. (Also, see Exhaus tion gap) Gap Risk The risk that an investment's price will change fro m one level to another with no trading in between. Usually such movements occur when there are adverse news announcements, which can cause a stock price to drop substantially from the previous day's closing price. Garbatrage An increase in price and trading volume in a partic ular sector of the economy that results from a recent takeover creating a change in sentiment towa rds the sector. Also known as rumortrage. Garnishment Money withheld from an individual's paycheck and re mitted to another party, usually a creditor. Gartley Pattern In technical analysis, it is a complex price patter n based on Fibonacci numbers/ratios. It is used to determine buy and sell signals by measuring price r etracements of a stock's up and down movement in stock price. Gas Guzzler Tax An additional tax on the sale of vehicles that have poor fuel economy. Gatekeeper Requirements that must be met before an individual can qualify for a long-term care plan. A person must qualify for the plan's benefits before he or s he can be paid out. Gather In The Stops A trading strategy of driving down a stock's price by selling large amounts of stock in order to trigger preset stop-loss orders, which in turn enha nces the decline of the stock. Gazelle Company A company growing at an annual rate of 20% or more. Gazump A situation in which the price for real estate or l and is raised to a higher price than what was previously verbally agreed upon.

Gazunder When a buyer reduces his or her bid for a property before the transaction has been signed and finalized GBP In the currency market, this is the abbreviation fo r the British pound. GDP Gap The forfeited output of a country's economy resulti ng from the failure to create sufficient jobs for a ll those willing to work. GDP Price Deflator An economic metric that accounts for inflation by c onverting output measured at current prices into constant-dollar GDP. The GDP deflator shows how muc h a change in the base year's GDP relies upon changes in the price level. Also known as the "GDP implicit price deflator". Gearing A fundamental analysis ratio of a company's level o f long-term debt to its equity capital and is expressed in percentage form. A company with a high gearing - more long-term liab ilities than shareholder equity - are considered speculative. Gearing Ratio A general term describing a financial ratio that co mpares some form of owner's equity (or capital) to borrowed funds. Gearing is a measure of financial l everage, demonstrating the degree to which a firm's activities are funded by owner's funds versu s creditor's funds. Gemology The combined art and science of studying, cutting, valuing, buying and selling precious stones. Some of the most precious stones that gemologists d eal in include diamonds, rubies, sapphires and emeralds. Gemology is spelled gemmology outside of North Amer ica. General Agreement On Tariffs And Trade - GATT An agreement signed in 1947 whose purpose was to pr omote global trade between members through a reduction in tariffs. General Collateral Financing Trades - GCF General collateral repurchase agreements executed o n a blind broker basis through the Government Securities Clearing Corporation. General Depreciation System - GDS The most commonly used modified accelerated cost re covery system (MACRS) for calculating depreciation. A general depreciation system uses th e declining-balance method to depreciate personal property. General Ledger A company's accounting records. This formal ledger contains all the financial accounts and statements of a business. General Market & Sectors Page Found exclusively in Investor's Business Daily, thi s page includes large graphs of each of the major market indices, stacked on top of each other so you can easily identify trends and market divergences. Also included on this page are 'The Bi g Picture,' sector charts, and the IBD Mutual Fund Index.

General Market (and General Market Averages, Genera l Market Indices) Indices that represent the overall picture of the s tock market's health. The most commonly known general market indices are the Dow Jones Industrial Average, the Nasdaq Composite, and the S&P 500. General Market (and General Market Averages, Genera l Market Indices) Indices that represent the overall picture of the s tock market's health. The most commonly known general market indices are the Dow Jones Industrial Average, the Nasdaq Composite, and the S&P 500. General Obligation Bond - GO A municipal bond backed by the credit and "taxing p ower" of the issuing jurisdiction rather than the revenue from a given project. General Partner A partner in a business who has unlimited liability . General Partnership A arrangement by which partners conducting a busine ss jointly have unlimited liability, which means their personal assets are liable to the partn ership's obligations. General Public Distribution A type of primary market offering in which the secu rities being issued are available to anyone who has the ability to purchase them. This differs from conventional public distributions of securities in which underwriting investment banks sell large bloc ks of the issued securities to large investors. Generally Accepted Accounting Principles - GAAP The common set of accounting principles, standards and procedures that companies use to compile their financial statements. GAAP are a combination of authoritative standards (set by policy boards) and simply the commonly accepted ways of recording and reporting accounting information. Generally Accepted Auditing Standards - GAAS A set of systematic guidelines used by auditors whe n conducting audits on companies' finances, ensuring the accuracy, consistency and verifiabilit y of auditors' actions and reports. Generation-Skipping Trust A type of legally binding trust agreement in which the contributed assets are passed down to the grantor's grandchildren, not the grantor's children . The generation to which the grantor's children belong skips the opportunity to receive the assets in order to avoid the estate taxes that would apply if the assets were transferred to them. Gentleman's Agreement An unwritten agreement or transaction backed only b y the integrity of the counterparty to actually abide by the terms of the agreement. An agreement l ike this is not legally binding and could have a negative effect on business relationships if one pa rty decides to default on their promise. George Soros Born in Budapest, Hungary, in 1930, George Soros is considered by many to be one of the world's greatest investors. A famous hedge fund manager, So ros managed the Quantum Fund, a fund that achieved an average annual return of 30% from 1970- 2000. Besides his investing prowess, Soros is also known for his vast philanthropic activities, d onating billions of dollars to various causes through the Soros Foundation. GHC

In currencies, this is the abbreviation for the Gha nian Cedi. Ghosting An illegal practice whereby two or more market make rs collectively attempt to influence and change the price of a stock. Ghosting is used by corrupt c ompanies to affect stock prices so they can profit from the price movement. Gibson's Paradox An economic observation made by J. M. Keynes during the period of the gold standard that there is a correlation between interest rates and the genera l price level. Keynes' finding, which he discusses in "A Treatise on Money" (1930), is a paradox becau se it is contrary to the view generally held by economists at the time, which was that interest rat es are correlated to the rate of inflation. Gift Property, money or asset that one person transfers to another while receiving nothing in return. Gift Tax A federal tax applied to an individual giving anyth ing of value to another person. For something to be considered a gift, the receiving party cannot pa y the giver full value for the gift, but may pay an amount less than its full value. It is the giver of the gift who is required to pay the gift tax. The receiver of the gift may pay the gift tax, or a per centage of it, on the giver's behalf in the event t hat the giver has exceeded his/her annual personal gift tax deduction limit. Gifting Phase The stage in an investor's life where he or she see ks to use his or her accumulated wealth to provide for the current and future needs of family and frie nds, as well as to leave a mark on the world by funding charities of his or her choice through phil anthropy. The investor's concerns during this phase shift from matters of capital accumulation to estate planning and tax minimization. Gilt Edged Bond A bond that is issued by a blue chip company. These bonds are considered to be high grade, with little risk of interest payment interruption or def ault. Gilt Fund A mutual fund that invests in several different typ es of medium and long-term government securities in addition to top quality corporate debt. Gilts or iginated in Britain. Gilts Risk-free bonds issued by the British government. T hey are the equivalent of U.S. Treasury securities. Ginnie Mae - Government National Mortgage Associati on - GNMA A wholly-owned U.S. government corporation within t he U.S. Department of Housing and Urban Development (HUD). The main focus of Ginnie Mae is to ensure liquidity for U.S. government-insured mortgages including those insured by the Federal Ho using Administration (FHA), the Veterans Administration (VA) and the Rural Housing Administr ation (RHA). The majority of mortgages securitized as Ginnie Mae mortgage-backed securitie s are those guaranteed by FHA, which are typically mortgages for first-time home buyers and low-income borrowers. Ginzy Trading An illegal trading practice used by floor brokers. It is considered to be non-competitive, as it involves the execution of large trades at different prices. GIP In currencies, this is the abbreviation for the Gib raltar Pound.

Give Up A procedure in securities or commodities trading wh ere the executing broker places a trade on behalf of another broker as if he/she actually exec uted the trade. This is usually done because a broker is too busy to place a trade for a client an d asks another broker to place the trade for him/he r. On the record books, the trade will not show the ex ecuting broker's information, but the broker to whom the client belongs. Thus, the broker of the cl ient and the broker on the other side of the trade will receive the commission, while the executing tr ader will get nothing. This is a grey area of law governing reimbursement of brokers for services (e. g. research). Glass-Steagall Act An Act passed by Congress in 1933, that prohibited commercial banks from collaborating with full-service brokerage firms or participating in investm ent banking activities. Global Bond Bonds that can be offered within the euromarket and several other markets simultaneously. Global Crossing A communication services company that filed for ban kruptcy protection amid an accounting scandal where it had allegedly inflated earnings by using c apacity swaps, among other things. Capacity swaps are the exchange of telecommunications capaci ty between carriers that is booked as revenue without money ever being exchanged. Global Depositary Receipt - GDR 1. A bank certificate issued in more than one count ry for shares in a foreign company. The shares are held by a foreign branch of an international ba nk. The shares trade as domestic shares, but are offered for sale globally through the various bank branches. 2. A financial instrument used by private markets t o raise capital denominated in either U.S. dollars or euros. Global Fund A mutual fund that can invest in companies located anywhere in the world, including your own country. Global Investment Performance Standards - GIPS Ethical standards to be used by investment managers for creating performance presentations that ensure fair representation and full disclosure of i nvestment performance results. Global Macro Strategy A hedge fund strategy that bases its holdings--such as long and short positions in various equity, fixed income, currency, and futures markets--primar ily on overall economic and political views of various countries (macroeconomic principles). Global Registered Share A share issued and registered in multiple markets a round the world. Global registered shares represent the same class of shares. Also known as a "global share". Globalization The tendency of investment funds and businesses to move beyond domestic and national markets to other markets around the globe, thereby increasi ng the interconnectedness of different markets. Globalization has had the effect of markedly increa sing not only international trade, but also cultura l exchange. Globex An electronic trading platform used for derivative, futures, and commodity contracts. Globex runs

continuously, so it is not restricted by borders or time zones. GMD In currencies, this is the abbreviation for the Gam bian Dalasi. GNF In currencies, this is the abbreviation for the Gui nea Franc. GNF In currencies, this is the abbreviation for the Gui nea Franc. Gnomes of Zurich A term used by British labor ministers during the 1 964 Sterling Crisis to refer to Swiss banks. Gnomes of Zurich A term used by British labor ministers during the 1 964 Sterling Crisis to refer to Swiss banks. Going Concern A term for a company that has the resources needed in order to continue to operate. If a company is not a going concern, it means the company has gone bankrupt. Going Public The process of selling shares that were formerly pr ivately held to new investors for the first time. Otherwise known as an initial public offering (IPO) . Going-Concern Value The value of a company as an ongoing entity. This v alue differs from the value of a company's assets if they were to be liquidated in that an ong oing operation has the ability to continue to earn profit, while a liquidated company does not. Gold Bug A person who is bullish on gold. Gold bugs believe that gold is still a stable source of wealth like i t was during the years of the gold standard internati onal currency system. A gold bug invests in gold for (what they perceive) as financial security in t he event of a currency devaluation, and often also believe that the price of gold will continue to ris e in the future. The term also refers to analysts w ho consistently recommend gold buys. Gold Certificate A certificate of ownership that gold investors hold instead of storing the actual gold bullion. Gold Fix The setting of gold prices, twice a day, by the fiv e members of the London gold pool. This rate is used as a benchmark for pricing the majority of glo bal gold products and derivatives. Gold Standard A monetary system in which a country's government a llows its currency unit to be freely converted into fixed amounts of gold and vice versa. The exch ange rate under the gold standard monetary system is determined by the economic difference for an ounce of gold between two currencies. The gold standard was mainly used from 1875 to 1914 and also during the interwar years. Goldbrick Shares A stock that bears the surface appearance of qualit y and worth, but is in fact worth very little. Golden Boot

An inducement, using maximum incentives and financi al benefits, for an older worker to take "voluntary" early retirement. Golden Cross A crossover involving a security's short-term movin g average (such as 15-day moving average) breaking above its long-term moving average (such a s 50-day moving average) or resistance level. Golden Handcuffs An incentive given to existing employees in hopes t hat they will decide to stay with the company. Golden Hello A signing bonus offered by a securities firm to a k ey executive from a competing firm. Golden Life Jacket An exceptional compensation package offered by the acquiring company to the top executives of the company being bought. The offer is meant to kee p those executives interested in retaining their positions. Golden Parachute Lucrative benefits given to top executives in the e vent that a company is taken over by another firm, resulting in the loss of their job. Benefits includ e items such as stock options, bonuses, severance pay, etc Golden Share A type of share that gives its shareholder veto pow er over changes to the company's charter. Goldilocks Economy An economy that is not so hot that it causes inflat ion, and not so cold that it causes a recession. This term is used to describe the U.S. economy of t he mid- to late-1990s - it was "not too hot, not to o cold, but just right." Goldman Sachs Commodity Index - GSCI A composite index of commodity sector returns which represents a broadly diversified, unleveraged, long-only position in commodity futures Good 'Till Canceled - GTC An order to buy or sell a security at a set price t hat is active until the investor decides to cancel it or the trade is executed. If an order does not have a good 'till canceled instruction then the order will expire at the end of the trading day the order was placed. Good Delivery The status of a security traded on an exchange when it meets a set of requirements for being in proper form for transfer of title to the buyer. Good Faith Money The deposit of money into an account by a buyer to show that they have the intention of completing the deal. In most cases, the deposit amount will be a percent of the amount owed. The money in an account can also be known as "margi n" or a "performance bond", depending on the type of transaction. Good This Month - GTM A limit order placed with a broker that will last u ntil the end of the current month. Good This Month - GTM A limit order placed with a broker that will last u ntil the end of the current month. Goodwill

The excess of the purchase price over the fair mark et value of an asset. Accountants record this as a 'write off' in the financial report.

Gordon Growth Model A model for determining the intrinsic value of a st ock, based on a future series of dividends that grow at a constant rate. Given a dividend per share that is payable in one year, and the assumption that the dividend grows at a constant rate forever (in perpetuity), the model solves for the present value of the infinite series of future dividends. Where: D = Expected dividend per share one year from now. k = Required rate of return for equity investor. G = Growth rate in dividends (in perpetuity). Gorilla A company that dominates an industry without having a complete monopoly. Government Purchases Expenditures made in the private sector by all leve ls of government, such as when a government entity contracts a construction company to build of fice space or pave highways. Government Security A government debt obligation (local or national) ba cked by the credit and taxing power of a country with very little risk of default. Government-Sponsored Enterprise - GSE Privately held corporations with public purposes cr eated by the U.S. Congress to reduce the cost of capital for certain borrowing sectors of the econom y. Members of these sectors include students, farmers and homeowners. Government-Sponsored Retirement Arrangement - GSRA A Canadian retirement plan for individuals who are not employees of a local, provincial or federal government body, but who are paid for their service s from public funds. This type of retirement plan is not registered with the Canadian Revenue Agency and therefore does not qualify for tax-deferred status. Grading Certificate A document, issued by inspectors or approved grader s, that formally signifies the quality of a commodity. Graduated Lease A lease (usually long-term) that is periodically ad justed to reflect the appraised value of the asset being leased. Grain Futures Act of 1922 A federal statute passed in 1922 by the U.S Governm ent that established the restriction that all grain futures need to be traded on regulated futures exch anges. The act also required exchanges to make more information public and limit the amount of mar ket manipulation. Grandfather Clause An exemption that allows persons or entities to con tinue with an activity they were engaging in before it became illegal through a change in regula tion. Grantor 1. A seller of either call or put options who profi ts from the premium for which the options are sold. Synonymous with option writer. 2. The creator of a trust, meaning the individual w hose assets are put into the trust.

Graveyard Market The period near the end of a prolonged bear market. In a graveyard market, long-time investors have taken large losses, while new investors prefer to s tay liquid by sitting on the sidelines and keeping their money in cash or cash-equivalent securities u ntil market conditions improve. Gray Knight A second, unsolicited bidder in a corporate takeove r. A gray knight enters the scene in order to take advantage of any problems between the first bidder and the target company Gray Market 1. An unofficial market where new issues of shares are bought and sold before they become officially available for trading on the stock excha nge. 2. The sale or import of goods by unauthorized deal ers. Greater Fool Theory A theory that it is possible to make money by buyin g securities, whether overvalued or not, and later selling them at a profit because there will always be someone (a bigger fool) who is willing to pay th e higher price. Greeks Refers to the Greek letters used in options trading . Green Field Investment A financial investment by a company or a government to construct a project in basic components. Greenback A slang term for U.S. paper dollars. Greenmail A situation in which a large block of stock is held by an unfriendly company. This forces the target company to repurchase the stock at a substantial pr emium to prevent a takeover. It is also known as a "Bon Voyage Bonus" or a "Goodbye Kiss". Greensheet An information circular prepared by an underwriter that summarizes the main components of a new issue's prospectus. Greenshoe Option Legally referred to as an over-allotment option, a provision contained in an underwriting agreement which gives the underwriter the right to sell inves tors more shares than originally planned by the issuer. This would normally be done if the demand f or a security issue proves higher than expected. A greenshoe option can provide additional price sta bility to a security issue, since the underwriter has the ability to increase supply and smooth out p rice fluctuations if demand surges too high. Greenspan Put A description of the perceived attempt of then-chai rman of the Federal Reserve Board, Alan Greenspan, of propping up the securities markets by lowering interest rates and thereby helping money flow into the markets. Investors assumed that they would be able to liquid ate their stocks at a set price at or before a future date as if there was a built-in put option. They believed that Greenspan would manipulate monetary policy and continue to maintain market sta bility. While the former Fed chair's actions did have an effect on the markets, it was not necessari ly his objective. Grey Market 1. A market where a product is bought and sold outs ide of the manufacturer's authorized trading

channels. 2. The unofficial trading of a company's shares, us ually before they are issued in an initial public offering (IPO). Gridlock A government, business or institution's inability t o function at a normal level due either to complex or conflicting procedures within the administrative framework or to impending change in the business. Grinder A slang term for a person who works in the investme nt industry and makes small amounts of money at a time on small investments, over and over again . Gross Debt Service Ratio - GDS A debt service measure that financial lenders use a s a rule of thumb to give a preliminary assessment about whether a potential borrower is al ready in too much debt. Receiving a ratio of less than 30% means that the potential borrower has an a cceptable level of debt. Gross Domestic Product - GDP The monetary value of all the finished goods and se rvices produced within a country's borders in a specific time period, though GDP is usually calcula ted on an annual basis. It includes all of private and public consumption, government outlays, investm ents and exports less imports that occur within a defined territory. GDP = C + G + I + NX where: "C" is equal to all private consumption, or consume r spending, in a nation's economy "G" is the sum of government spending "I" is the sum of all the country's businesses spen ding on capital "NX" is the nation's total net exports, calculated as total exports minus total imports. (NX = Exports - Imports) Gross Estate The total dollar value of all property and assets i n which an individual had an interest at the time o f his or her death. Gross Income 1. An individual's total personal income before tak ing taxes or deductions into account. 2. A company's revenue minus cost of goods sold. Al so called "gross margin" and "gross profit". Gross Margin 1) A company's total sales revenue minus its cost o f goods sold. 2) A company's total sales revenue minus cost of go ods sold, divided by the total sales revenue, expressed as a percentage. 3) In the case of an adjustable-rate mortgage, the interest rate (expressed as a percentage) that is added on to the base index rate in order to establi sh the actual interest rate the borrower will pay o n the loan. Gross Margin Return On Investment - GMROI An inventory profitability evaluation ratio that an alyzes a firm's ability to turn inventory into cash above the cost of the inventory. It is calculated b y dividing the gross margin by the average inventory cost and is used often in the retail indu stry. To illustrate: Gross margin return on investment is also know as t he "gross margin return on inventory investment" (GMROII). Gross National Product - GNP An economic statistic that includes GDP, plus any i ncome earned by residents from overseas investments, minus income earned within the domesti c economy by overseas residents.

Gross Processing Margin - GPM The difference between the cost of a raw commodity and the income it generates once sold as a finished product. Gross Production Tax A state tax imposed primarily on mining companies f or each unit mined Gross Revenue Pledge A stipulation in a municipal bond indenture that re quires the issuer (the municipality selling the bonds to fund a given development project) first to use revenues to pay down the issue's debt-servicing costs, delegating operating costs as seco nd priority and likely funding them from other revenue sources. These bonds are most often tax fre e at the federal level. Gross Sales A measure of overall sales that isn't adjusted for customer discounts or returns, calculated simply by adding all sales invoices, and not including ope rating expenses, cost of goods sold, payment of taxes, or any other charge. Gross Spread The difference between the underwriting price recei ved by the issuing company and the actual price offered to the public. Group Fundamental Rating This rating compares the overall fundamental qualit y of a stock’s industry group to the other 196 industry groups tracked by Investor’s Business Dail y. This rating is on a 1 to 99 scale, 99 being best . A Group Fundamental Rating of 90, for example, indi cates a stock’s industry group has stronger fundamentals than 90% of all other groups. This rat ing measures key fundamental data affecting a group’s overall move. These measurements include: ••••Two and three year earnings growth rates ••••Average stability of profit margins ••••Average trend of return on equity ••••Average Earnings Per Share Rating Components are not equally weighted. This rating should not be considered a sole indicator to buy or sell a stock but should be used along with the other Stock Checkup Ratings, as well as price and volume charts. Group of Eight - G-8 Eight of the world's economically leading countries that in a cooperative effort meet periodically to address international economic and monetary issues. Group of Five - G-5 Name given to the five industrialized nations that meet periodically to achieve a cooperative effort o n international economic and monetary issues. Group Of Seven - G-7 Seven of the world's leading countries that meet pe riodically to achieve a cooperative effort on international economic and monetary issues. Group of Ten - G10 Eleven industrialized nations that meet on an annua l basis to consult each other, debate and cooperate on international financial matters. The m ember countries are: France, Germany, Belgium, Italy, Japan, the Netherlands, Sweden, the United K ingdom, the United States and Canada, with Switzerland playing a minor role. Group Performance vs. Index This performance data compares your stock’s industr y group’s price performance to the performance of four major market indexes: the Dow J ones Industrial Average, Nasdaq 100, S & P 500

and Russell 2000. See how your stock’s group as a w hole has compared to the general market indexes over the last four weeks, twelve months and year to date. For example, -10% indicates the stock’s industry group has underperformed the marke t index by 10% during the specified time period. Group Technical Rating This rating compares an industry group’s technical strength to the other 196 industry groups tracked by Investor’s Business Daily. It is rated o n a scale of 1 to 99, 99 being best. A company with a Group Technical Rating of 95, for example, is in an industry that is technically outperforming 95% of the other industry groups, based on several key measurements. Factors evaluated include: ••••The industry group’s price performance rank for the last 26 weeks ••••The group’s percent off its 52-week high ••••Percentage of stocks in the group making recent new 52-week highs ••••Moving averages and other price trends ••••Accumulation/Distribution Ratings ••••Relative Price Strength Ratings Components are not equally weighted. Group-Home Care Care given to a group of people with similar disabi lities within a residence. Those in a group home receive both custodial care and care that is provid ed by skilled and medically trained professionals. A common disability of people in group homes is Alz heimer's disease. Groups With the Greatest % of Stocks Making New Hig hs List Found on the 'Industry Groups' page of Investor's B usiness Daily, it is a quick way to recognize the top four or five sectors that are the real leaders in the overall market. Growth Accounting A method whereby a set of economic techniques or th eories are used to determine what specific factor, or factors, contributed to an economy's gro wth. Growth At A Reasonable Price - GARP An approach to investing that combines the two popu lar strategies of value and growth investing. It seeks stock that has both growth potential and a re asonable price. Growth Company Any firm whose business generates significant posit ive cash flows or earnings, which increase at significantly faster rates than the overall economy . A growth company tends to have very profitable reinvestment opportunities for its own retained ear nings. Thus, it typically pays little to no dividen ds to stockholders, opting instead to plow most or all of its profits back into its expanding business. Growth Fund A diversified portfolio of stocks that has capital appreciation as its primary goal, and thereby inves ts in companies that reinvest their earnings into expa nsion, acquisitions, and/or research and development. Growth Industry A sector of the economy experiencing a higher-than- average growth rate. Growth Investing A strategy whereby an investor seeks out stocks wit h what they deem good growth potential. In most cases a growth stock is defined as a company w hose earnings are expected to grow at an above-average rate than its industry or the overall market.

Growth Rates The compounded annualized rate of growth of a compa ny's revenues, earnings, dividends, or other figures Growth Stock Shares in a company whose earnings are expected to grow at an above average rate relative to the market. Also known as a "glamor stock". GTQ In currencies, this is the abbreviation for the Gua temala Quetzal. Guaranteed Bond A type of bond in which the interest and principal on the bond are guaranteed to be paid by a firm other than the issuer of the bond. Guaranteed Death Benefit A benefit term that guarantees that the beneficiary , as named in the contract, will receive a death benefit if the annuitant dies before the annuity be gins paying benefits. The benefit received differs among companies and contracts, but the beneficiary is guaranteed an amount equal to what was invested or the value of the contract on the most r ecent policy anniversary statement, whichever is higher. Guaranteed Investment (Interest) Certificate - GIC A deposit investment security sold by Canadian bank s and trust companies. They are often bought for retirement plans because they provide a low-ris k fixed rate of return. The principal is at risk on ly if the bank defaults. Guaranteed Investment Contract - GIC Insurance contracts that guarantee the owner princi pal repayment and a fixed or floating interest rate for a predetermined period of time. Guaranteed Lifetime Withdrawal Benefit - GLWB A rider on a variable annuity that allows minimum w ithdrawals from the invested amount without having to annuitize the investment. The amount that can be withdrawn is based on a percentage of the total amount invested in the annuity. Guaranteed Stock Common or preferred stock whose dividends are guara nteed. Guarantor A person who guarantees to pay for someone else's d ebt if he or she should default on a loan obligation. Guardian An individual who has been given the legal responsi bility to care for a child or adult who is incapable of taking care of themselves due to age o r lack of capacity. The appointed individual is often responsible for both the care of the ward (th e child or incapable adult) and their affairs. Also referred to as a "conservator" when referring to an adult in need of care. Guardian IRA An IRA held in the name of a legal guardian or pare nt on behalf of either a child under the age of 18-21 (depending on state legislation) or an individua l who is incapable of handling finances due to physical or mental disability.

Guidance Information that a company provides as an indicatio n or estimate of their future earnings. Also known as "earnings guidance." Guide to Markets (See Investor's Business Daily Guide to the Markets ) Guilder Share - New York Share Shares representing Dutch companies that are not pe rmitted to trade outside of national borders. Also known as a "New York share". Guilt-Edged Investment A transaction that makes money by unethical means. Culprits supposedly feel guilty having made money in such an unscrupulous way. H A Nasdaq stock symbol specifying that it is the sec ond preferred bond of the company H-Shares A share of a Chinese company listed on the Hong Kon g Stock Exchange. Haircut 1. The difference between prices at which a market maker can buy and sell a security. 2. The percentage by which an asset's market value is reduced for the purpose of calculating capital requirement, margin and collateral levels. Half Stock A stock with a par value of $50. Hammer A price pattern in candlestick charting that occurs when a security trades significantly lower than it s opening, but rallies later in the day to close eith er above or close to its opening price. This patter n forms a hammer-shaped candlestick. Hammering The rapid and concentrated sale of a stock thought to be overvalued by the market. It performed by investors and speculators who beleive that prices a re inflated and that a period of liquidation is imminent. Handle Component of William J. O'Neil's 'cup with handle' chart pattern. Hands-Off Investor An investor who accepts a passive management role i n a company, even while holding a large portion of the company's stock. Hands-On Investor An investor who holds a large portion of a company' s shares and takes an active management role. Hang Seng An index of the leading stocks on the Hong Kong sto ck market.

Hang Seng Index A market-cap weighted index of the stock prices of the 33 largest companies in Hong Kong. Hanging Man A bearish candlestick pattern that forms at the end of an uptrend. It is created when there is a significant sell-off near the market open, but buye rs are able to push this stock back up so that it closes at or near the opening price. Generally the large sell-off is seen as an early indication that the bulls (buyers) are losing control and demand for th e asset is waning. Harami Cross A trend indicated by a large candlestick followed b y a doji that is located within the top and bottom of the candlestick's body. This indicates that the previous trend is about to reverse. Harami Cross A trend indicated by a large candlestick followed b y a doji that is located within the top and bottom of the candlestick's body. This indicates that the previous trend is about to reverse. Hard Currency A currency, usually from a highly industrialized co untry, that is widely accepted around the world as a form of payment for goods and services. A hard cu rrency is expected to remain relatively stable through a short period of time, and to be highly li quid in the forex market. Hard Dollars Fees or payments paid to brokerage firms in return for their services. Hard Landing A term used to describe an economy going into reces sion as the government attempts to slow down inflation. Hard Loan A foreign loan that must be paid in the currency of a nation that has stability and a reputation abroa d for economic strength (a hard currency). Hard Money 1. Funding by a government or organization that is repetitive, rather than a one-time grant. Examples include ongoing government daycare subsidies or fir ms that pay annual scholarships to post-secondary students. 2. Describes gold/silver/platinum (bullion) coins. A government that uses a hard money policy backs the value of the currency it uses with a hard, tang ible and lasting material that will retain its rela tive value over time. Hard-To-Borrow List A list used by brokerages to indicate securities co nsidered difficult or unavailable to borrow for short selling transactions. Hardening 1. A term used to describe a price of commodity or futures contracts that is gradually stabilizing. 2. A futures market that is slowly advancing in pri ces. Harmonic Average The mean of a set of positive variables. Calculated by dividing the number of observations by the reciprocal of each number in the series. Also known as 'harmonic mean'. Harmonized Index of Consumer Prices - HICP An inflation indicator used by the European Central Bank.

Harry Markowitz A Nobel prize winning economist who devised the mod ern portfolio theory in 1952. Markowitz's theories emphasized the importance of portfolios, r isk, the correlations between securities and diversification. His work changed the way that peop le invested. Haurlan Index A technical analysis indicator, developed by P.N. H aurlan, that is used to detect market breadth. There are three components of the Haurlan index: Short Term: a 3-day exponential moving average is t aken of the net NYSE advances over declines. Intermediate Term: same, using a 20-day exponential moving average. Long Term:same, using a 200-day exponential moving average. Hawk An economic policy advisor who has a negative view toward inflation and its effects on society. Also known as "inflation hawk". Hazard Insurance Insurance protecting a property owner against damag es caused by fires or severe storms. If the owner lives in an area that is prone to natural dis asters, like earthquakes and floods, he or she may need a separate policy. Head and Shoulders Pattern A technical analysis term used to describe a chart formation in which a stock's price: 1. Rises to a peak and subsequently declines. 2. Then, the price rises above the former peak and again declines. 3. And finally, rises again, but not to the second peak, and declines once more. The first and third peaks are shoulders, and the se cond peak forms the head. Head Of Household Someone who is unmarried and resides with a depende nt. Headline Earnings A basis for measuring earnings per share implemente d by the Institute of Investment Management and Research. This method accounts for all the prof its and losses from operational, trading, and interest activities, that have been discontinued or acquired at any point during the year. Excluded from this figure are profits or losses associated w ith the sale or termination of discontinued operations, fixed assets or related businesses, or from any permanent devaluation or write off of their values Headline Effect The effect that negative news in the popular press has on a corporation or an economy. Whether it is justified or not, the investing public's reaction t o various headlines can be very dramatic. Many economists believe that negative news headlines mak e consumers more reluctant to spend money. Headquarters The location of a company's main offices, presented as “city, state” when based in the United States. International listings will also display re levant headquarter information. Heads of Agreement A non-binding document outlining the main issues re levant to a tentative partnership agreement.

Health Savings Account - HSA An account created for individuals who are covered under high-deductible health plans (HDHPs) to save for medical expenses that HDHPs do not cover. Contributions are made into the account by the individual or the individual's employer and are lim ited to a maximum amount each year. The contributions are invested over time and can be use d to pay for qualified medical expenses, which include most medical care such as dental, vision an d over-the-counter drugs. Heath-Jarrow-Morton Model - HJM Model A model that applies forward rates to an existing t erm structure of interest rates to determine appropriate prices for securities that are sensitiv e to changes in interest rates. Heating Degree Day - HDD The number of degrees that a day's average temperat ure is below 65 Heavy A term used to describe a futures market showing di fficulty in advancing or a tendency to decline. Hedge Making an investment to reduce the risk of adverse price movements in an asset. Normally, a hedge consists of taking an offsetting position in a rela ted security, such as a futures contract. Hedge Fund An aggressively managed portfolio of investments th at uses advanced investment strategies such as leverage, long, short and derivative positions i n both domestic and international markets with the goal of generating high returns (either in an absol ute sense or over a specified market benchmark). Legally, hedge funds are most often set up as priva te investment partnerships that are open to a limited number of investors and require a very larg e initial minimum investment. Investments in hedge funds are illiquid as they often require inve stors keep their money in the fund for a minimum period of at least one year. Hedge Ratio 1. A ratio comparing the value of a position protec ted via a hedge with the size of the entire positio n itself. 2. A ratio comparing the value of futures contracts purchased or sold to the value of the cash commodity being hedged. Hedged Tender A strategy in a tender offer where an investor shor t sells a portion of the shares they own. This is t o protect against the risk of loss in the event that the tender offer does not go through. Hedgelet A simplified derivative instrument that allows inve stors to hedge or speculate on economic events such as housing prices, commodity prices, interest rates, currencies and economic indicators. The price for a hedgelet contract is based on the p revailing market price determined by participants in the market. Every contract has the same defined payout scheme: $10 for a correct contract and $0 for an incorrect one. Each hedgelet contract is set so that investors must make a decision on whether an economic event will occur or not occur. Hedonic Pricing A model identifying price factors according to the premise that price is determined both by internal characteristics of the good and external factors af fecting it. Heikin-Ashi Technique A type of candlestick chart that shares many charac teristics with standard candlestick charts, but differs because of the values used to create each b ar. Instead of using the open-high-low-close (OHLC) bars like standard candlestick charts, the H eikin-Ashi technique uses a modified formula: Close = (Open+High+Low+Close)/4

Open = [Open (previous bar) + Close (previous bar)] /2 High = Max (High,Open,Close) Low = Min (Low,Open, Close) Heir A person who inherits some or all of the estate of a recently deceased person. The legal successor is usually selected because they are rela ted to the deceased by a direct bloodline or have been designated in a will or by a legal authority. A Nasdaq stock symbol specifying that it is the thi rd preferred bond of the company. IBD® 100 Index The IBD 100, which runs every Monday in the IBD new spaper, is a computer-generated ranking of leading companies trading in the U.S. Rankings are based on a combination of each company's recent profit growth record; IBD's Composite Rating , which includes key measures such as return on equity, sales growth and profit margins; and rel ative price performance in the last 12 months. "Quarters of rising sponsorship" counts quarters in a row in which more mutual funds have purchased a company's shares than have sold shares. A company's inclusion in the list should not be viewed as a recommendation. Many are newer, smal ler and highly volatile companies that require further research due to their speculative nature. IBD® 85-85 Index The 85-85 Index is a computer-generated stock list published in the IBD paper every Friday. The stock list is generated based on the following crit eria: 1) price above $15; 2) stock price within 15% of its 52-week high; 3) EPS and relative strength r ating of 85 or greater; 4) average daily trading volume of 10,000 shares or more. Thus the number of stocks in the list varies week-to-week according to the number of stocks that meet the lis t's criteria. IBD® Big Cap 20 The IBD Big Cap 20 is a computer-generated ranking of the leading large-capitalization companies trading in the U.S. The list is featured in the IBD paper every Tuesday. Rankings are based on a combination of each company's profit growth; IBD's Composite Rating, which includes key measures such as return on equity, sales growth and profit margins; and relative price strength in the past 12 months. Some of the companies also appe ar on the IBD 100, which features a blend of small- mid- and large-cap names. For investors who prefer less volatile investments with greater liquidity, the Big Cap 20 offers more mature yet st ill vibrant enterprises. Companies must have a minimum market value of $15 billion and trade more than 300,000 shares a day. IBD Charts These price and volume charts are in color to help you more easily identify current base patterns and trends. Just right click on a chart to receive the daily price track box, which provides day’s hig h, low, last price and volume. IBD® New America Index The IBD New America Index tracks the stocks of all companies covered in "The New America" for six months. The stocks that comprise this index will ch ange slightly each day, as we add to the index any new stocks covered in the current day's "The Ne w America" section, and delete any stocks that we featured exactly six months ago. IBD SmartSelect® Ratings Six proprietary and exclusive research ratings desi gned to screen out deficient stocks, identity potential market leaders, save time, and significan tly improve stock selection. They include: • • • • Earnings Per Share (EPS) Rating • • • • Relative Price Strength (RS) Rating • • • • Industry Group Relative Strength Rating • • • • Sales+Profit Margins+ROE (SMR) Rating • • • • Accumulation/Distribution Rating • • • • Composite Rating

IBD Stock Checkup® IBD’s Stock Doctor diagnoses the overall strength o f your stock after an expert examination of its technical and fundamental characteristics. Your dia gnosis is based on fact of what works in the market. Stock Checkup also identifies how strong yo ur company’s industry group is. You’ll also find out whether there are better stocks in the group yo u might want to consider. This is one Doctor’s appointment you can’t afford to miss. Iceberg Order A large single order that has been divided into sma ller lots, usually by the use of an automated program, for the purpose of hiding the actual order quantity. Ichimoku Chart A chart that provides a glance at equilibrium price s for specified securities. Identity Theft The crime of obtaining the personal or financial in formation of another person for the purpose of assuming that person's name to make transactions or purchases. Idiosyncratic Risk Risk that affects a very small number of assets, an d can be almost eliminated with diversification. Similar to unsystematic risk. Idle Funds Money that is not invested and, therefore, earning no income. For example, funds in a checking account. Idle Time Unproductive time spent by employees due to factors beyond their control. IDR In currencies, this is the abbreviation for the Ind onesian Rupiah. Illiquid An asset or security that cannot be converted into cash very quickly (or near prevailing market prices). ILS In currencies, this is the abbreviation for the Isr aeli New Shekel. Imbalance of Orders A situation when too many orders of a particular ty pe - either buy, sell or limit - for listed securit ies and not enough of the other, matching orders are re ceived by an exchange. Also referred to as "order imbalance". ImClone - IMCL A publicly-traded biotechnology company marketing p roducts in the field of oncology. The company made international headlines in 2002 after ImClone' s founder and CEO Sam Waksal was indicted for attempting an insider trade of the company's stock. Shortly after Waksal's indictment, "domestic diva" Martha Stewart was also indicted for insider trading of the same stock. Stewart received information from Waksal and her own broker that Wak sal had been trying to dump $5 million worth of his shares in the company on insider information , and she sold her shares on the knowledge that Waksal had tried to sell his. Immediate Or Cancel Order - IOC

An order requiring that all or part of the order be executed immediately after it has been brought to the market. Any portions not executed immediately a re automatically cancelled. Immediate Payment Annuity An annuity contract that is purchased with one paym ent and has a specified payment plan which starts immediately. Immunization A strategy that matches the durations of assets and liabilities, thereby minimizing the impact of interest rates on the net worth. Impact Day The day that a corporation has a secondary offering of shares to the public. Impaired Asset An asset with a market value that is worth less tha n its book value. Impaired Credit The deterioration of a borrower's credit rating. Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par valu e of the company's capital stock. Implicit Cost A cost that is represented by lost opportunity in t he use of a company's own resources, excluding cash. Implied Rate An interest rate that is determined by the differen ce between the spot rate and the forward/futures rate. The degree of relative costliness of a future rate can be assessed by comparing the implied rate with the spot rate. Calculated as: Implied Volatility - IV The estimated volatility of a security's price. Import In reference to international trade, these are good s brought into one country from another. Impression An advertisement's (usually a banner ad) appearance on a web page. Ad space is often sold on a CPM basis. Impulse Wave Pattern In technical analysis, it is a term used in the Ell iott Wave Theory to describe the strong move in a stock's price coinciding with the main direction of the underlying trend. These impulse waves are shown in the illustration below as wave 1, wave 3 a nd wave 5. Impulse waves also refer to the strong downward movements in a down trend. Imputed Interest A term used to describe interest considered to be p aid, even through no interest payment has been made. In And Out The purchase and sale of a security within a short period of time, usually on the same day.

In Sight A term describing deliverable grades of commodities underlying futures contracts that are held in approved delivery facilities near terminals, centra lized locations or production areas. In Street Name A brokerage account where the customer's securities and assets are held in the name of the brokerage firm, rather than you holding the stock c ertificate yourself. The customer is still listed a s the real or beneficial owner. In The Money 1. For a call option, when the option's strike pric e is below the market price of the underlying asset . 2. For a put option, when the strike price is above the market price of the underlying asset. In the Penalty Box When a company's stock price is in the doldrums and has yet to rebound because of poor earnings, government regulation, or some other reason. In the Pink An informal expression used to describe a situation in which an investor or an economy is in a good financial position. More generally, it refers to be ing in the best of health or condition. In-Service Withdrawal A withdrawal made from a plan account before the ho lder experiences a triggering event. In-Service Withdrawal A withdrawal made from a plan account before the ho lder experiences a triggering event. Inactivity Fee A fee charged to investors whose trading activity m eets their brokerages' criteria for an inactive account. Incentive Stock Option - ISO A type of employee stock option with a tax benefit, when you exercise, of not having to pay ordinary income tax. Instead, the options are taxed at a cap ital gains rate. Incentive Trust A legally binding fiduciary relationship in which t he trustee holds and manages the assets contributed to the trust by the grantor. In an ince ntive trust arrangement, the trustee must adhere to specific requirements set out by the grantor regard ing what conditions the trust's beneficiaries must meet in order to receive funds from the trust. Incidents Of Ownership Any interests or rights that an individual maintain s on an asset, including property and insurance, that allow the person to change, modify, use or ben efit from the asset. This is important for determining estate taxes. An individual can reduce the size of his or her estate by gifting assets to beneficiaries but, to avoid estate tax on the gift, the original owner must not retain any incidents o f ownership in the gifted assets. Income Money received by a person or organization because of effort (work) or from return on investments. Income Bond A type of debt security in which only the face valu e of the bond is promised to be paid to the investor, with any coupon payments being paid only if the issuing company has enough earnings to

pay for the coupon payment. Income Deposit Security - IDS A security that combines common stock and notes of the issuer to provide regular income payments to the holder of the security. The holder of the in come deposit security receives dividends from the common stock, and fixed income from the debt instru ment in the IDS. Income Elasticity Of Demand A measure of the relationship between a change in i ncome and a change in quantity of a good demanded: Income From Operations - IFO The profit realized from a business' own operations . Income Fund A mutual fund that seeks to provide stable current income by investing in securities that pay interest or dividends. Income Share A class of shares offered by a dual purpose fund th at has little room for capital appreciation but gives the holder a portion of all income earned in the portfolio. Income Shifting A strategy of moving a person's income from a high income bracket or tax rate to a lower one. Income Splitting A tax reduction strategy employed by families livin g in areas that are subject to bracketed tax regulations. The goal of using an income-splitting strategy is to reduce the family's gross tax level, at the expense of some family members paying higher taxes than they otherwise would. Income Spreading A tax reduction strategy that is typically used by people with highly volatile incomes to reduce the overall marginal tax rate paid on a large sum of in come. This strategy involves taking the particularl y large source of income and dividing the amount real ized over a period of years in order to reduce the overall amount of taxes paid. Income Statement A financial report that - by summarizing revenues a nd expenses, and showing the net profit or loss in a specified accounting period - depicts a busine ss entity's financial performance due to operations as well as other activities rendering ga ins or losses. Also known as the "profit and loss statement" or "statement of revenue and expense". Income Stock A stock with a history of regular dividend payments that constitute the largest portion of the stock's overall return. Income Tax A tax on any money earned during a fiscal year, usu ally filed on a yearly basis. All businesses except partnerships must file an annual income tax return. Partnerships file an information return. Income Trust An investment trust that holds assets which are inc ome producing. The income is passed on to the unit holders. Incoterms

Trade terms, published by the International Chamber of Commerce (ICC), that are commonly used in international contracts. Incremental Cash Flow The additional operating cash flow that an organiza tion receives from taking on a new project. A positive incremental cash flow means that the compa ny's cash flow will increase with the acceptance of the project. Incremental Cost The encompassing change that a company experiences within its balance sheet due to one additional unit of production. Also referred to as "marginal cost". Incumbency Certificate An official document that lists the names of incumb ent individuals and their respective corporate office within an organization. Incumbent An individual that is responsible for a specific of fice within a corporation. Indemnity A contractual agreement made between different part ies to compensate for any damages or losses. Indenture A contract between an issuer of bonds and the bondh older stating the time period before repayment, amount of interest paid, if the bond is convertible (and if so, at what price or what ratio), if the b ond is callable and the amount of money that is to be r epaid. Independent Auditor An external auditor with a certified public account ing designation that qualifies him or her to provid e an auditor's report. Index A statistical measure of change in an economy or a securities market. In the case of financial markets, an index is essentially an imaginary portf olio of securities representing a particular market or a portion of it. Each index has its own calculat ion methodology and is usually expressed in terms of a change from a base value. Thus, the percentage change is more important than the actual numeric value. For example, knowing that a stock ex change is at, say, 5,000 doesn't tell you much. However, knowing that the index has risen 30% over the last year to 5,000 gives a much better demonstration of performance. The plural of index can be either "indexes" or "ind ices". Index Amortizing Note - IAN A type of structured note whose payment schedule is determined by the behavior of interest rates. Index Amortizing Swap A swap whereby the notional principal amount of the agreement is amortized according to the movement of an underlying rate.

Index Arbitrage An investment strategy that attempts to profit from the differences between actual and theoretical futures prices of the same stock index. This is don e by simultaneously buying (or selling) a stock index future while selling (or buying) the stocks i n that index.

Index Fund A portfolio of investments that is weighted the sam e as a stock-exchange index in order to mirror its performance. This process is also referred to as "indexing". Index Futures A futures contract on a stock or financial index. F or each index there may be a different multiple for determining the price of the futures contract. Index Hugger A mutual fund that tends to perform very similar to a benchmark index like the S&P 500. Index Option A call or put option on a financial index. Index Percentage The weight an individual stock holds in an index, e xpressed as a percentage. Index-Linked Bond A bond in which payment of income on the principal is related to a specific price index, often the Consumer Price Index. This feature provides protect ion to investors by shielding them from changes in the underlying index. The bond's cash flows are adjusted to ensure that the holder of the bond receives a known real rate of return. In Canada, they also referred to as "real return bo nds". Indexing 1. The adjustment of the weights of assets in an in vestment portfolio so that its performance matches that of an index. 2. Linking movements of rates to the performance of an index. Indicated Dividend The total dividends that would be paid on a share o f stock throughout the next year if each dividend is the same amount as the previous payment. Indicated Yield The yield that a share of stock would return based on its current indicated dividend. It is calculated by dividing the indicated dividend by the current s hare price. It is usually quoted as a percentage. Indication of Interest - IOI An underwriting expression showing a conditional, n on-binding interest in buying a security that is currently in registration (awaiting effectiveness b y the SEC). The investor's broker is required to provide the investor with a preliminary prospectus. Indicative Quote In forex trading, a currency quote that is provided by a market maker to a trading party but that is not firm. In other words, when a market maker provi des an indicative quote to a trader, the market maker is not obligated to trade the given currency pair at the price or the quantity stated in the quote. Contrast this to a firm quote, in which a ma rket maker guarantees a specified bid or ask price to a trader up to the maximum quantity specified in the quote. Indicator Statistics used to measure current conditions as we ll as to forecast financial or economic trends. Indicators are use extensively in technical analysi s to predict changes in stock trends or price patterns. In fundamental analysis, economic indicat ors that quantify current economic and industry conditions are used to provide insight into the fut ure profitability potential of public companies.

Indifference Curve A diagram depicting equal levels of utility (satisf action) for a consumer faced with various combinations of goods Indirect Quote A foreign exchange rate quoted as the foreign curre ncy per unit of the domestic currency. In an indirect quote, the foreign currency is a variable amount and the domestic currency is fixed at one unit. Indirect Tax A tax that increases the price of a good so that co nsumers are actually paying the tax by paying more for the products. Individual Development Account - IDA A savings account for lower income individuals. An IDA is used for a specific purpose such as education, purchasing a first home, or starting a b usiness. Savings are matched by private or public funds. Individual Retirement Account - IRA An IRA is a retirement investing tool that can be e ither an "individual retirement account" or an "individual retirement annuity". There are several types of IRAs: Traditional IRAs, Roth IRAs, SIMPLE IRAs and SEP IRAs. Traditional and Roth IRAs are established by indivi dual taxpayers, who are allowed to contribute 100% of compensation (self-employment income for so le proprietors and partners) up to a set maximum dollar amount. Contributions to the Traditi onal IRA may be tax-deductible depending on the taxpayer's income, tax-filing status, and cover age by an employer-sponsored retirement plan. Roth IRA contributions are not tax-deductible. SEPs and SIMPLEs are retirement plans established b y employers. Individual participant's contributions are made to SEP IRAs and SIMPLE IRAs. Industrial Development Revenue Bonds - IDRBs Municipal debt securities issued by a government ag ency on behalf of a private sector company and intended to build or acquire factories or other hea vy equipment and tools. Industry A category used to describe a company's primary bus iness activity, usually determined by the largest source of a company's revenues. Industry Bet When an investor or portfolio manager increases (or decreases) holdings in a particular industry. Industry Group A William O’Neil + Company Inc. proprietary classif ication of stocks into 197 groups, based on a company's major source of revenue, competitors, pro ducts, markets served, etc. Industry Group and Ticker Symbol Index Published by Investor's Business Daily, this book l ists the stocks in each of the 197 industry groups*, sorted three ways (by company name, ticker symbol, and industry group). *The William O'Neil + Co. 197 Industry Groups is a Trademark owned by William O'Neil + Co., Inc. and is used by IBD under license agreement. Industry Group Performance This measures your stock’s industry group’s percent age change over the last four weeks, twelve

months and year to date. 50%, for example, indicate s the industry group as a whole has increased 50% in value within that time period. Industry Group Rank A proprietary number obtained by calculating the le ast-squares curve fit of summed prices on certain stocks within that industry. Another calcul ation is then done using all companies in the group. Separate weightings are used for different t ime periods. Groups are ranked from 1 (best) to 197. Industry Group Relative Strength Letter Rating (Gro up RS) A measurement of a stock's industry group performan ce over the past six months utilizing an A+ to E scale. All 197 groups are compared and distribute d into 13 rating groupings: 12 of near equal size and one comprised of industry groups with "E" ratin gs. An "A+" rating indicates the best performing group; an "E" rating indicates the poorest price pe rforming group. Industry Group Relative Strength Numeric Rating (Gr oup RS) A percentile-based version of Industry Group Rank, a proprietary number obtained by calculating the least-squares curve fit of summed prices on cer tain stocks within that industry. Another calculation is then done using all companies in the group. Separate weightings are used for different time periods. Industry groups are ranked in value f rom 99 (highest) to 1 (lowest). Inefficient Market A theory which asserts that the market prices of co mmon stocks and similar securities are not always accurately priced and tend to deviate from t he true discounted value of their future cash flows. This theory opposes the efficient market hyp othesis. The phrase is also used to refer to a market which is not operating efficiently for example, it could be argued that the low-volume stocks traded over the c ounter comprise an inefficient market compared to blue chip stocks. Inelastic An economic term used to describe the situation in which the supply and demand for a good are unaffected when the price of that good or service c hanges. Infant-Industry Theory A school of thought that believes emerging domestic industries should be protected until they become stable and mature. Inflation The rate at which the general level of prices for g oods and services is rising, and, subsequently, purchasing power is falling. Inflation-Indexed Security A security that guarantees a return higher than the rate of inflation if it is held to maturity. Inflation-Linked Certificates of Deposit Federally insured debt securities that are similar to regular certificates of deposit (CDs), but provi de investors with inflationary protection via annually variable interest rates that increase or decrease with changes in the consumer price index, a measure of inflation. Inflation-Linked Savings Bonds (I Bonds) U.S. government-issued debt securities similar to r egular savings bonds, except they offer an investor inflationary protection, as their yields a re tied to the inflation rate. Inflation-Protected Annuity - IPA

An annuity investment that guarantees a real rate o f return at or above inflation. The real rate of return is the nominal return, less the inflation ra te, thus protecting annuitants and beneficiary investors from inflation. Inflation-Protected Security - IPS A type of fixed-income investment that guarantees a real rate of return. The real rate of return is th e nominal return, less the inflation rate, thus prote cting investors from inflation. Inflationary Psychology The relationship between inflation and individuals' behavior. Inflationary Risk The uncertainty over the future real value (after i nflation) of your investment. Inflection Point An event that changes the way we think and act. -Andy Grove, Founder of Intel. Information Circular A document sent to shareholders outlining important matters to be discussed at the annual shareholders' meeting. Information Ratio A measure of portfolio management's performance aga inst risk and return relative to a benchmark or alternative measure. Infrastructure The basic physical systems of a business or nation Ingot Gold in bar form. Inheritance All or part of a person's estate/assets that is giv en to an heir once the person is deceased. Inheritance Tax In some states in the U.S. (and in the United Kingd om), a tax imposed on those who inherit assets from a deceased person. The tax rate for inheritanc e taxes depends on the value of the property received by the heir or beneficiary and his/her rel ationship to the decedent. Inheritance tax is known in some countries as a "de ath duty" and is occasionally called "the last twist of the taxman's knife". Initial Claims A measurement of the number of jobless claims filed by individuals seeking to receive state jobless benefits. This number is watched closely by financi al analysts because it provides insight into the direction of the economy. Higher initial claims pos itively correlate with a weakening economy, and vice versa for lower initial claims. Initial Margin The percentage of the purchase price of securities (that can be purchased on margin) that the investor must pay for with his or her own cash or m arginable securities. Also called the "initital margin requirement". Initial Public Offering - IPO The first sale of stock by a private company to the public. IPOs are often issued by smaller, younger companies seeking capital to expand, but can also b e done by large privately-owned companies

looking to become publicly traded. In an IPO, the issuer obtains the assistance of an underwriting firm, which helps it determine what type of security to issue (common or preferred), be st offering price and time to bring it to market. Also referred to as a "public offering". INR In currencies, this is the abbreviation for the Ind ian Rupee. Inside Market The highest quoted bid and the lowest offer price a mong competing market makers in a security trading on the Nasdaq market. Inside Quote The highest bid and lowest offer price for a securi ty quoted among all of the market makers competing in a security. Insider Any person who has knowledge of, or access to, valu able nonpublic information about a corporation. Insider Information Material information about a company's activities t hat has not been disclosed to the public. Insider Trading The buying or selling of a security by someone who has access to material, nonpublic information about the security. Insolvency When a company can no longer meet its debt obligati ons with another firm or institution. Inspectorial Powers A state administrator's or other regulatory entity' s power to initiate investigations to determine whether provisions of the Uniform Securities Act ha ve been violated or are about to be violated. Installment Debt Debt issued with the condition of regularly occurri ng intervals for payment by the debtor, until the principal and interest are paid in full. Installment Receipt A debt or equity issuance in which the purchaser do es not pay the full value of the issue up front. In the purchase of an installment receipt, an initial payment is made to the issuer at the time the issue closes the remaining balance must be paid in instal lments, usually within a two-year period . Although the purchaser has not paid the full value of the issue, he or she is still entitled to full v oting rights and dividends. Instinet An electronic securities order-matching (trading) a nd information system that allows members (primarily professional traders and investors) to d isplay bid and offer quotes for stocks, and to transact between themselves using brokers. As a glo bal securities broker, Instinet enables over 1,500 institutional customers to trade securities i n over 40 global markets. Institutional Brokers' Estimate System - IBES A system that gathers and compiles the different es timates made by stock analysts on the future earnings for the majority of U.S. publicly traded c ompanies. Institutional Fund A mutual fund targeting high value investors with l ow fees, but high minimum requirements. Institutional Investor

A non-bank person or organization that trades secur ities in large enough share quantities or dollar amounts that they qualify for preferential treatmen t and lower commissions. Institutional investors face less protective regulations because it is assu med that they are more knowledgeable and better able to protect themselves. Institutional Investors Mutual funds, banks, pension funds, insurance compa nies, etc. engaged in investing. They are responsible for most of the trading that occurs in the market, and their impact on both an individual stock's price movement as well as the movement of t he general market is tremendous Institutional Sponsorship (or Sponsorship) Refers to the shares of a company owned by an insti tution. The largest sources of demand for stocks are mutual funds and other institutional buy ers; Insurance A contract (policy) in which an individual or entit y receives financial protection or reimbursement against losses from an insurance company. The compa ny pools clients' risks to make payments more affordable for the insured. Insurance Score A rating computed and used by insurance companies t hat represents the probability of a client filing an insurance claim during his or her coverage. The score is based on the client's credit rating and will impact the premiums he or she pays for the ins urance coverage - a higher score will result in lower premiums, and vice versa. Intangible Asset An asset that is not physical in nature. Corporate intellectual property (items such as patents, trademarks, copyrights, business methodologies), go odwill and brand recognition are all common intangible assets in today's marketplace. An intang ible asset can be classified as either indefinite o r definite depending on the specifics of that asset. A company brand name is considered to be an indefinite asset, as it stays with the company as l ong as the company continues operations. However, if a company enters a legal agreement to o perate under another company's patent, with no plans of extending the agreement, it would have a l imited life and would be classified as a definite asset. Inter-dealer Broker 1. A brokerage firm operating in the bond or OTC de rivatives market that acts as an intermediary between major dealers to facilitate inter-dealer tr ades. 2. A member of the London Stock Exchange who is onl y permitted to deal with market makers, rather than the public. Inter-Vivos Trust A trust created during the lifetime of the trustor. Interbank Market The financial system and trading of currencies amon g banks and financial institutions, excluding retail investors and smaller trading parties. While some interbank trading is performed by banks on behalf of large customers, most interbank trading t akes place from the banks' own accounts. Interbank Rate The rate of interest charged on short-term loans ma de between banks. Banks borrow and lend money in the interbank market in order to manage li quidity and meet the requirements placed on them. The interest rate charged depends on the avai lability of money in the market, on prevailing rates and on the specific terms of the contract, su ch as term length.

Intercommodity Spread Going long on one futures market in a given deliver y month and simultaneously going short on the same commodity and delivery month but a different f utures market but with similar underlying asset. Interdealer Quotation System The exchange system comprised of the Nasdaq (Nation al Association of Securities Dealers Automatic Quotation), Nasdaq small-cap market and t he Over-the-Counter Bulletin Board (OTCBB) exchange platforms. Interdelivery Spread Simultaneously entering a long and short on the sam e futures contract but with different delivery months in the hopes that the price difference betwe en the two months widens or narrows, depending on the underlying investment. Interest 1. The charge for the privilege of borrowing money, typically expressed as an annual percentage rate. 2. The amount of ownership a stockholder has in a c ompany, usually expressed as a percentage. Interest Coverage Ratio A ratio used to determine how easily a company can pay interest on outstanding debt. The ratio is calculated by dividing a company's earnings before interest and taxes (EBIT) of one period by the company's interest expenses of the same period: Interest Expense The amount reported by a company or individual as a n expense for borrowed money. Interest Only (IO) Strips A security based solely on interest payments from a bond. Interest Rate The monthly effective rate paid (or received, if yo u are a creditor) on borrowed money. Expressed as a percentage of the sum borrowed. Interest Rate Ceiling The absolute maximum rate of interest that a financ ial institution can charge for an adjustable rate mortgage or loan. Interest Rate Floor An over-the-counter investment instrument that prot ects the floor buyer from losses resulting from a decrease in interest rates. The floor seller compen sates the buyer with a payoff when the reference interest rate falls below the floor's strike rate. Interest Rate Options An investment tool whose payoff depends on the futu re level of interest rates. Interest rate options are both exchange traded and over-the-counter instr uments. Interest Rate Options An investment tool whose payoff depends on the futu re level of interest rates. Interest rate options are both exchange traded and over-the-counter instr uments. Interest Rate Parity A theory that the interest rate differential betwee n two countries is equal to the differential betwee n the forward exchange rate and the spot exchange rat e. Interest rate parity plays an essential role in foreign exchange markets, connecting interest rates , spot exchange rates and foreign exchange rates. Interest Rate Risk The risk that an investment's value will change due to a change in the absolute level of interest

rates, in the spread between two rates, in the shap e of the yield curve or in any other interest rate relationship. Such changes usually affect securitie s inversely and can be reduced by diversifying (investing in fixed-income securities with differen t durations) or hedging (e.g. through an interest rate swap). Interest Rate Swap An agreement between two parties (known as counterp arties) where one stream of future interest payments is exchanged for another based on a specif ied principal amount. Interest rate swaps often exchange a fixed payment for a floating payment tha t is linked to an interest rate (most often the LIBOR). A company will typically use interest rate swaps to limit, or manage, its exposure to fluctuations in interest rates, or to obtain a marg inally lower interest rate than it would have been able to get without the swap. Interest Sensitive Stock Any stock whose price is extremely sensitive to cha nges in interest rates. Interested Shareholder A shareholder or association with beneficial owners hip, whether direct or indirect, of enough voting stock to affect company decisions Interim Dividend A dividend payment made before a company's AGM and final financial statements. This declared dividend usually accompanies the company's interim financial statements. Intermarket Sector Spread The yield spread between two fixed-income securitie s in different sectors with the same maturity. Intermarket Spread The simultaneous purchase of a given delivery month of a futures contract on one exchange, and the simultaneous sale of the same delivery month of the same futures contract on another exchange in the hope the sale price is greater than the purc hase price. Intermarket Spread Swap A swap transaction meant to capitalize on a yield d iscrepancy between bond market sectors. Internal Audit An audit performed by a person (or persons) employe d by the firm being audited. Internal Growth Rate The highest level of growth achievable for a busine ss without obtaining outside financing. Internal Rate Of Return - IRR Often used in capital budgeting, it's the interest rate that makes net present value of all cash flow equal zero. Internal Revenue Service - IRS A United States government agency established in 18 62 by President Lincoln. The IRS is responsible for the collection and enforcement of tax collectio n and operates under the authority of the United States Department of the Treasury. It is primarily engaged in the collection of individual income taxes and employment taxes, but also handles corpor ate, gift, excise and estate taxes. The IRS is sometimes referred to as the "taxman". Internalization A decision by a brokerage to fill an order with the firm's own inventory of stock.

International Accounting Standards - IAS An older set of standards stating how particular ty pes of transactions and other events should be reflected in financial statements. In the past, int ernational accounting standards (IAS) were issued by the Board of the International Accounting Standa rds Committee (IASC). Since 2001, the new set of standards has been known as the international financial reporting standards (IFRS) and has been issued by the Interna tional Accounting Standards Board (IASB). International Association of Financial Engineers - IAFE An organization comprised of scholars and specialis ts from various areas of financial concern. International Bank Account Number - IBAN A standard numbering system developed to identify b ank accounts from around the world. It was originally developed by banks in Europe to simplify transactions involving bank accounts from other countries. International Banking Facility - IBF Facilities that accept deposits and offer loans to foreign customers and businesses. International Bond Bonds that are issued in a country by a non-domesti c entity. International Depository Receipt - IDR A negotiable, bank-issued certificate representing ownership of stock securities by an investor outside the country of origin. International Equity Style Box A nine-box matrix that displays the characteristics of international stock funds. On the horizontal axis, funds are separated into one of three categor ies - either value, blend or growth. On the vertica l axis, funds are separated into one of three categor ies - small, medium or large market capitalization. International Financial Reporting Standards - IFRS A set of international accounting standards stating how particular types of transactions and other events should be reported in financial statements. IFRS are issued by the International Accounting Standards Board. IFRS are sometimes confused with International Acco unting Standards (IAS), which are the older standards that IFRS replaced. (IAS were issued from 1973 to 2000.) International Fisher Effect - IFE An economic theory that states that an expected cha nge in the current exchange rate between any two currencies is approximately equivalent to the d ifference between the two countries' nominal interest rates for that time. Calculated as: Where: "E" represents the % change in the exchange rate "i International Fund A mutual fund that can invest in companies located anywhere outside of your own country. International Fund A mutual fund that can invest in companies located anywhere outside of your own country. International Monetary Fund - IMF

An international organization created for the purpo se of: 1. Promoting global monetary and exchange stability . 2. Facilitating the expansion and balanced growth o f international trade. 3. Assisting in the establishment of a multilateral system of payments for current transactions. International Monetary Market - IMM A division of the Chicago Mercantile Exchange (CME) that deals with the trading of currency and interest rate futures and options. Trading on the I MM started in May 1972 when the CME and the IMM merged. International Securities Identification Number - IS IN A code that uniquely identifies a specific securiti es issue. The organization that allocates ISINs in any particular country is the National Numbering Ag ency (NNA) International Swaps and Derivatives Association - I SDA An association created by the private negotiated de rivatives market that represents participating parties. This association helps to improve the priv ate negotiated derivatives market by identifying and reducing risks in the market. Internet Service Provider - ISP A company that furnishes corporations and individua l consumers with various services, mainly access to the internet. Interpolation A method of estimating an unknown price or yield of a security. This is achieved by using other related known values that are located in sequence w ith the unknown value. Interpositioning An illegal action of a specialist or broker-dealer unnecessarily inserting him/herself into a natural transaction between a buyer and seller in order to pocket an improper profit. Intertemporal Choice An economic term describing how an individual's cur rent decisions affect what options become available in the future. Theoretically, by not cons uming today, consumption levels could increases significantly in the future, and vice versa. Interval Fund (Scheme) A fund that combines the features of open-ended and closed-ended schemes, making the fund open for sale or redemption during pre-determined interv als. Intestacy The act of dying without a legal will. Intestate The act of dying without a legal will. Determining the distribution of the deceased's assets then becomes the responsibility of a probate court. Intraday Another way of saying "within the day". Intraday pr ice movements are particularly important to short-term traders looking to make many trades over the course of a single trading session. The term intraday is occasionally used to describe secu rities that trade on the markets during regular business hours, such as stocks and ETFs, as opposed to mutual funds, which must be bought from a dealer.

Intraday High and Low Price This represents a day's price action in terms of th ree variables. The top of the bar signifies the highest price the stock traded for the day: this is the intra-day high price. The bottom of the bar marks the low price of the day: this is the intra-d ay low price. The horizontal intersecting slash shows where the stock closed for the day. Intraday Intensity Index A volume based indicator that depicts the flow of f unds for a security according to where it closes in its high and low range. Calculated as: Intramarket Sector Spread The yield spread between two fixed-income securitie s with the same maturity within the same sector. Intrastate Offering In the United States, a securities offering that ca n only be purchased in the state in which it is bei ng issued. Because the offering does not include more than one state, it does not fall under the jurisdiction of the Securities and Exchange Commiss ion and therefore does not need to be registered with the SEC. The offering does, however , fall under the jurisdiction of state regulators. Intrinsic Value 1. The value of a company or an asset based on an u nderlying perception of the value. 2. For call options, this is the difference between the underlying stock's price and the strike price. For put options, it is the difference between the s trike price and the underlying stock's price. In th e case of both puts and calls, if the difference betw een the underlying stock's price and the strike price is negative, the value is given as zero. Introducing Broker - IB A futures broker who has a direct relationship with a client, but delegates the work of the floor operation and trade execution to another futures me rchant. The merchant firm is usually a close partner of the IB. Inventory Inventory can be either raw materials, finished ite ms already available for sale, or goods in the process of being manufactured. Inventory is recorde d as an asset on a company's balance sheet. Inventory Accounting The body of accounting that deals with valuing and accounting for changes in inventoried assets. Changes in value can occur for a number of reasons including depreciation, deterioration, obsolescence, change in customer taste, increased d emand, decreased market supply and so on. Inventory Reserve An accounting entry that represents a deduction fro m earnings for the purpose of fairly and reasonably representing the value of inventoried as sets on a balance sheet. The inventory reserve is used to make up for the fact that all inventory wil l not be sold at the cost to the firm. Inventory Turnover A ratio showing how many times a company's inventor y is sold and replaced over a period. Inverse Floater A bond or other type of debt whose coupon rate has an inverse relationship to short-term interest rates. Inverse Saucer A technical chart formation that indicates the stoc k's price has reached its high and that the upward

trend has come to an end. An inverse saucer is char acterized by a steady flattening of the uptrend to such a degree that the market at one moment enters a sideways range, but then slowly starts to fall slowly and finally accelerates downward. This rare formation provides no clear price target but usually implies quite a lot of potential since 50% or more retracement of the preceding uptrend can be expected. Also known as "rounded top". Inverted Market In the context of options and futures, this is when the current (or short-term) contract prices are higher than the long-term contracts. Inverted Spread A situation in which the yield difference between a longer term financial instrument and a shorter term instrument is negative. This is calculated by subtracting the longer term by the shorter term. In effect, the shorter term instrument is yielding a h igher rate of return than the longer term instrumen t. This is in contrast to what is considered a normal market, where longer term instruments should yield higher returns to compensate for time. Inverted Yield Curve An interest rate environment in which long-term deb t instruments have a lower yield than short-term debt instruments of the same credit quality. This t ype of yield curve is the rarest of the three main curve types and is considered to be a predictor of economic recession. Partial inversion occurs when only some of the shor t-term Treasuries (five or 10 years) have higher yields than the 30-year Treasuries do. An inverted yield curve is sometimes referred to as a "negative yield curve". Invest, then Investigate An investment strategy where investors immediately purchase a stock and then do research and due diligence afterwards. Investability Quotient - IQ A term used by Standard and Poor's to describe how good a company's medium to long-term return potential is. While medium to long-term return pote ntial is the major contributor to IQ, other factors are also considered. The scale ranges from a minimu m of 0 to a maximum of 250. Investing The act of committing money or capital to an endeav or (a business, project, real estate, etc.) with th e expectation of obtaining an additional income or pr ofit. Investing Sage An investor who is seen to be extremely knowledgeab le about the markets, and to have much experience at making successful investments. These investors are widely known to the investing public and generate double-digit returns. Investment An asset or item that is purchased with the hope th at it will generate income or appreciate in the future. In an economic sense, an investment is the purchase of goods that are not consumed today but are used in the future to create wealth. In fin ance, an investment is a monetary asset purchased with the idea that the asset will provide income in the future or appreciate and be sold at a higher price. Investment Advisor 1. A person making investment recommendations in re turn for a flat fee or percentage of assets managed, known as a commission. 2. For mutual fund companies, it is the individual who has the day-to-day responsibility of investing and monitoring the cash and securities within the f und's portfolio in order to achieve the fund's objectives. Also referred to as a "financial advisor".

Investment Advisor's Act of 1940 The federal law enforced and interpreted by the Sec urities and Exchange Commission (SEC) that governs investment advisors. Investment Bank - IB A financial intermediary that performs a variety of services. This includes underwriting, acting as an intermediary between an issuer of securities and th e investing public, facilitating mergers and other corporate reorganizations, and also acting as a bro ker for institutional clients. Investment Banker A person representing a financial institution that is in the business of raising capital for corporati ons and municipalities. Investment Climate The general economic conditions affecting the finan cial markets. Investment Club A group of people who pool their money to make inve stments. Usually, investment clubs are organized as partnerships and after the members stu dy different investments, the group decides to buy or sell based on a majority vote of the members . Club meetings may be educational and each member may actively participate in investment decis ions. Investment Company A corporation or trust engaged in the business of i nvesting the pooled capital of shareholders in the financial instruments of other companies. This is m ost often done either through a closed-end fund or an open-end fund (also referred to as a "mutual fund"). In the U.S., most investment companies are registered with and regulated by the Securities & Exchange Commission under the Investment Company Act of 1940. Investment Company Act of 1940 Created in 1940 through an act of Congress, this pi ece of legislation clearly defines the responsibilities and limitations placed upon fund c ompanies that offer investment products to the public. Investment Consultant An advisor who helps investors with their long-term investment planning. An investment consultant, unlike a broker, does more in-depth work on formula ting clients' investment strategies, helping them fulfill their needs and goals. Investment Consultant An advisor who helps investors with their long-term investment planning. An investment consultant, unlike a broker, does more in-depth work on formula ting clients' investment strategies, helping them fulfill their needs and goals. Investment Farm A farm owned solely for investment purposes. Investment Grade 1. In the case of a stock, a firm that has a strong balance sheet, considerable capitalization, and is recognized as a leader in its industry. 2. In the case of fixed income, a bond with a ratin g of BBB or higher. Investment Income Income coming from interest payments, dividends, ca pital gains collected upon the sale of a security or other assets, and any other profit that is made through an investment vehicle of any kind.

Investment Policy Statement - IPS A document drafted between a portfolio manager and a client that outlines general rules for the manager. This statement provides the general investment goal s and objectives of a client and describes the strategies that the manager should employ to meet t hese objectives. Specific information on matters such as asset allocation, risk tolerance, and liqui dity requirements would also be included in an IPS. Investment Pyramid A portfolio strategy that allocates assets accordin g to the relative safety and soundness of investments. The bottom of the pyramid is comprised of low-risk investments, the mid-portion is composed of growth investments and the top is specu lative investments. Investment Real Estate Real estate that generates income or is otherwise i ntended for investment purposes rather than as a primary residence. It is common for investors to ow n multiple pieces of real estate, one of which serves as a primary residence, while the others are used to generate rental income and profits through price appreciation. The tax implications fo r investment real estate are often different than those for residential real estate. Investment Strategy An investor's plan of attack to guide their investm ent decisions based on individual goals, risk tolerance and future needs for capital. The compone nts of most investment strategies include asset allocation, buy and sell guidelines, and risk guide lines. Investment Vehicle In general, any method by which to invest. Investor Relations - IR A department, present in most medium to large publi c companies, that provides investors with an accurate account of the company's affairs. This hel ps investors to make informed buy or sell decisions. Investor's Business Daily A time-saving research tool utilizing computerized data to help people make smarter investing decisions. The proprietary information is the resul t of a comprehensive '45-Year Study of the Greatest Stock Market Winners.' Investor's Business Daily also provides educational and motivational features to help individuals in their career and personal life. Investor's Business Daily Guide To the Markets Five proprietary and exclusive research ratings des igned to screen out deficient stocks, identity potential market leaders, save time, and significan tly improve stock selection. They include: 1.Earnings Per Share (EPS) Rating 2.Relative Price Strength (RS) Rating 3.Industry Group Relative Strength Rating 4.Sales+Profit Margins+ROE (SMR) Rating 5.Accumulation/Distribution Rating Invisible Hand A term coined by economist Adam Smith in his 1776 b ook "An Inquiry into the Nature and Causes of the Wealth of Nations". In his book he states: "Every individual necessarily labours to render the annual revenue of the society as great as he can. He generally neither intends to promote the public interest, nor knows how much he is promoting it... He intends only his own gain, and he is in th is, as in many other cases, led by an invisible han d to promote an end which was no part of his intentio n. Nor is it always the worse for society that it was no part of his intention. By pursuing his own i nterest he frequently promotes that of the society more effectually than when he really intends to pro mote it. I have never known much good done by

those who affected to trade for the public good." Thus, the invisible hand is essentially a natural p henomenon that guides free markets and capitalism through competition for scarce resources. Invisible Supply Physical stocks of a commodity that are available f or delivery upon futures contracts, but whose quantities cannot be accurately identified. Involuntary Cash-Out Distributing the balance of a participant's retirem ent account under a qualified plan without the written consent of the participant, the participant 's spouse or beneficiary. IOU An abbreviation of the phrase "I owe you." IPO Date The Initial Public Offering date is the day a stock first traded shares on the AMEX, NASDAQ or NYSE exchange. It is presented in the format of Month/Da y/Year. The IPO Date is available for stocks whose initial public offering was held in 1971 or later. This dat a item is not presented for stocks that traded before 1971, were spin-offs from another publicly traded stock, switched to a major exchange from the Bullet in Board or Over-the-Counter exchanges, or for stocks that traded in foreign markets prior to thei r listing with the U.S. exchanges. IPO Lock-Up A legally binding contract between the underwriters and insiders of the company undergoing an initial public offering (IPO). The contract prevent s them from selling any shares of stock for a specified period of time. IQD In currencies, this is the abbreviation for the Ira qi Dinar. IRA Adoption Agreement and Plan Document A contract between the IRA holder and the financial institution, the IRA plan document explains the provisions of the IRA. Iridium A corrosive resistant element that is sometimes use d to harden platinum. Iron Butterfly An options strategy that is created with four optio ns at three consecutively higher strike prices. The two options located at the middle strike create a l ong or short straddle (one call and one put with th e same strike price and expiration date) depending on whether the options are being bought or sold. The "wings" (options at the higher and lower strike prices) of the strategy are created by the purchase or sale of a strangle (one call and one pu t at different strike prices but the same expiratio n date). This strategy differs from the butterfly spr ead because it uses both calls and puts, as opposed to all calls or all puts. Iron Condor An advanced options strategy that involves buying a nd holding four different options with different strike prices. The iron condor is constructed by ho lding a long and short position in two different strangle strategies. A strangle is created by buyin g or selling a call option and a put option with different strike prices, but the same expiration da te. The potential for profit or loss is limited in this strategy because an offsetting strangle is position ed around the two options that make up the strangle at the middle strike prices.

IRR In currencies, this is the abbreviation for the Ira nian Rial. Irrational Exuberance An infamous phrase uttered by Alan Greenspan in 199 6 to describe the overvalued market at the time. Irrelevant Cost A managerial accounting term that represents a cost , either positive or negative, that does not relate to a situation requiring management's decision. Irrevocable Beneficiary A beneficiary in a life insurance policy or segrega ted fund contract whose compensation cannot be changed without his or her consent. Irrevocable Letter Of Credit - ILOC A letter of credit that can't be canceled. This gua rantees that a buyer's payment to a seller will be received on time and for the correct amount. Irrevocable Trust A trust that can't be modified or terminated withou t the permission of the beneficiary. The grantor, having transferred assets into the trust, effective ly removes all of his or her rights of ownership to the assets and the trust. This is the opposite of a "revocable trust", which allows the grantor to modify the trust. iShares Index funds that trade like stocks on stock markets . Each share represents a proportion of ownership in each stock that makes up an index. ISK In currencies, this is the abbreviation for the Ice land Krona. Islamic Banking A banking system that is based on the principles of Islamic law (also known as Sharia, or Shariah) and guided by Islamic economics. Two basic principl es behind Islamic banking are the sharing of profit and loss and, significantly, the prohibition of the collection and payment of interest. Collect ing interest is not permitted under Islamic law. Island Reversal An occurrence in technical analysis where a stock p rice will gap up/down, trade higher than this price, and then gap down/up below the initial price . ISO Currency Code The internationally standardized three-letter abbre viation for a country's currency. Isoquant Curve A graph of all possible combinations of inputs that result in the production of a given level of outpu t. Used in the study of microeconomics to measure the influence of inputs on the level of production or output that can be achieved. Issued Shares The amount of authorized shares that are sold to an d held by the shareholders of a company.Also known as "issued stock". Issuer A legal entity that develops, registers and sells s ecurities for the purpose of financing its operatio ns. Issuers may be domestic or foreign governments, cor porations or investment trusts. Issuers are

legally responsible for the obligations of the issu e and for reporting financial conditions, material developments and any other operational activities a s required by the regulations of their jurisdictions. The most common types of securities issued are common and preferred stocks, bonds, notes, debentures, bills and derivatives. Itayose A clearing method used by Japanese commodity exchan ges to set prices. It is a form of auction market in which the time of order entry is not dist inguished, and an opening price is derived on the principle of price priority requiring that the foll owing occurs: 1. All market orders are executed first. 2. Next, all limit orders are executed to sell/buy at prices lower/higher than the execution price. 3. Finally, the following amounts of limit orders t o sell or buy are at the execution price: - the entire amount of all either sell or buy order s, and - at least one trading unit from the opposite side of the order book. Itemized Deduction A deduction from a taxpayer's taxable adjusted gros s income that is made up of deductions for money spent on certain goods and services throughou t the year. The specific deductions that are allowed are outlined by the IRS and include such ex penses as mortgage interest, state and local taxes, gifts, and medical expenses. J A Nasdaq stock symbol specifying that the stock has voting rights. J Curve A theory stating that a country's trade deficit wil l worsen initially after the depreciation of its currency because higher prices on foreign imports w ill be greater than the reduced volume of imports. JAJO An acronym representing the months January, April, July, and October. Just In Time - JIT An inventory strategy companies employ to increase efficiency and decrease waste by receiving goods only as they are needed in the production pro cess, thereby reducing inventory costs. This method requires that producers are able to acc urately forecast demand. Japan Inc. A nickname for the corporate world of Japan that ca me about during the 1980s boom, when Western business people saw how closely the Japanese govern ment worked with its nation's business sector. January Effect A general increase in stock prices during the month of January. This rally is generally attributed to investors buying stocks that have dropped in price following a sell-off at the end of December by investors seeking to create tax losses to offset an y capital gains. Jarrow Turnbull Model A credit pricing model that utilizes multi-factor a nd dynamic analysis of interest rates Java A programming language developed by Sun Microsystem s to support widespread software distribution, in particular over the Web. It is a s maller and more secure version of the C++ programming language. Jekyll and Hyde 1. A slang term referring to the strengths and weak nesses of a company's financial statements.

2. An asset that suddenly increases or decreases in value. 3. A senior manager's good and bad qualities, or th e polarized views between two key officers within a corporation. Jennifer Lopez - J.Lo A slang technical analysis term referring to a roun ding bottom in a stock's price pattern. Just In Time - JIT An inventory strategy companies employ to increase efficiency and decrease waste by receiving goods only as they are needed in the production pro cess, thereby reducing inventory costs. This method requires that producers are able to acc urately forecast demand. Jensen's Measure A risk-adjusted performance measure that represents the average return on a portfolio over and above that predicted by the capital asset pricing m odel (CAPM), given the portfolio's beta and the average market return. This is the portfolio's alph a. In fact, the concept is sometimes referred to as "Jensen's alpha." Jitney 1. A situation in which one broker who has direct a ccess to a stock exchange performs trades for a broker who does not have access. 2. A fraudulent activity in the penny stock market involving two brokers trading a stock back and forth to rack up commissions and give the impressio n of trading volume Jumbo CD A certificate of deposit (CD) with a minimum denomi nation of $100,000. Just In Case - JIC An inventory strategy in which companies keep large inventories on hand. This type of inventory management strategy aims to minimize the probabilit y that a product will sell out of stock. A company practicing this strategy essentially incurs higher inventory holding costs in return for a reduction in the number of sales lost due to sold o ut inventory. Junior Security A security that ranks lower than other securities i n regards to the owner's claims on assets and income in the event of the issuer becoming insolven t. Junior Capital Pool - JCP A corporate structure whereby companies can issue s hares to the public before actually establishing a line of business. The purpose of suc h a capital structure was to provide an easy way for early-stage companies to raise capital. With a minimum investment from founders of $100,000, the junior capital pool company could get a listing and exposure to public markets. Junior (Issue) Generally speaking, any issue that ranks lower in c laim to another issue in terms of dividends, interest, principal, etc. Jumbo Loan Any residential or commercial mortgage with a loan amount exceeding the guidelines of Fannie Mae and Freddie Mac. Judgment A court order to pay a party a certain amount of mo ney. JPY In currencies, this is the abbreviation for the Jap anese Yen. Joseph Effect The idea that movements in a time series tend to be part of larger trends and cycles more often than they are completely random. The Joseph Effect is qu antified by the Hurst component, where

movements fall between a Hurst range of 0 to 1. The term was coined by Benoit Mandelbrot. Jonestown Defense A defensive strategy by which the target company en gages in an activity that might actually ruin the company rather than prevent the hostile takeover. A lso known as a "suicide pill." Jointly and Severally 1. A legal term describing a partnership in which i ndividual decisions are bound to all parties involved and thus undivided. 2. A term used in underwriting syndicates to refer to the distinct responsibility of individual companies to sell a certain portion of unsold new i ssue. Joint Venture - JV The cooperation of two or more individuals or busin esses--each agreeing to share profit, loss and control--in a specific enterprise. Joint Tenants with Right of Survivorship - JTWROS A type of brokerage account which is owned by at le ast two people, where all tenants have an equal right to the account's assets and are afforded surv ivorship rights in the event of the death of anothe r account holder. Joint Tenants in Common - JTIC A type of brokerage account which is owned by at le ast two people with no rights of survivorship afforded to any of the account holders. Joint Stock Company An organization that falls between the definitions of a partnership and corporation. This type of company issues stock and allows for secondary marke t trading however, stockholders are liable for company debts. Joint Return A tax return filed on behalf of both the husband an d wife, resulting in a combined tax liability Joint Owned Property Any property held in the name of two or more partie s. Joint Life With Last Survivor Annuity An insurance product that, when annuitized, makes p ayments to the annuitant, the annuitant and his/her spouse, or the annuitant and another benefi cial party until both the annuitant and his/her spouse have passed away. These annuities are not te rm certain, so they continue paying out to the annuitant, and whoever he or she designates to rece ive payments, until the death of the annuitant and the designated third party. The annuitant may a lso designate a beneficiary, who can, but doesn't have to be the same person as the designated third party Joint Bond A bond that is guaranteed by a party other than the issuer. Also called a "joint-and-several bond." Joint and Survivor Annuity A type of annuity that makes payments for the lifet ime of two or more beneficiaries. Joint Account A brokerage or bank account that is owned together (jointly) by two or more people. Joint In general, a legal term describing a transaction i n which two or more parties act together. JOD In currencies, this is the abbreviation for the Jor danian Dina. Jobs And Growth Tax Relief Reconciliation Act of 20 03 - JGTRRA

A U.S. tax law, passed by Congress on May 23, 2003, that lowered the maximum individual income tax rate on corporate dividends to 15%. The act als o reduced the long-term individual income tax rate on capital gains to 15%. The act was signed by President George W. Bush on May 28, 2003, and was intended to amplify the effects of the Jobs And Growth Tax Relief Reconciliation Act of 20 03 An act passed by congress that was intended to impr ove the economy of the United States by reducing the taxes collected, giving the population more money to spend. The act was passed in May 2003 and signed into law shortly after. Jobber A slang term for a market maker on the London stock exchange. Job Openings and Labor Turnover Survey - JOLTS A survey done by the United States Bureau of Labor Statistics to help measure job vacancies. It collects data from employers including retailers, m anufacturers and different offices each month. Respondents to the survey answer quantitative and q ualitative questions about their businesses' employment, job openings, recruitment, hires and se parations. The JOLTS data is published monthly and by region and industry. Job Lot A futures contract with a minimum trading unit smal ler than the levels required in regular contracts. Job Hunting Expenses Deductible expenses incurred while searching for a job in the same or similar line of work. These expenses are deductible regardless of whether you f ind a new job. JMD In currencies, this is the abbreviation for the Jam aican Dollar. January Barometer A theory stating that the movement of the S&P 500 d uring the month of January sets the stock market's direction for the year (as measured by the S&P 500). In other words, if the S&P 500 was up at the end of January compared to the beginning of the month, proponents would expect the stock market to rise during the rest of the year. K A Nasdaq stock symbol specifying that the stock has no voting rights Kagi Chart A type of chart developed by the Japanese in the 18 70s that uses a series of vertical lines to illustrate general levels of supply and demand for certain assets. Thick lines are drawn when the price of the underlying asset breaks above the prev ious high price and is interpreted as an increase in demand for the asset. Thin lines are used to rep resent increased supply when the price falls below the previous low. Kaizen A philosophy that recognizes improvement in product ivity as a gradual and methodical process. Kaizen is a Japanese term that literally means "cha nge for the better". The concept of Kaizen encompasses a wide scope of ideas it involves makin g the work environment more efficient and effective by creating a team atmosphere, improving everyday procedures, ensuring employee satisfaction and making a job more fulfilling, less tiring and safer. Kangaroos Slang term for Australian stocks, it refers mostly to the stocks on the All Ordinaries index, which is composed of 280 of the most active Australian compa nies. Kappa Used in regression analysis, Kappa represents the r atio of the dollar price change in the price of an option to a 1% change in the expected price volatil ity.

Katie Couric Clause A slang term for a proposed new Securities and Exch ange Commission rule, formally known as the Executive Compensation and Related Party Disclosure , that would require publicly traded companies to disclose not only the salaries of thei r top five executives, but also those of top earnin g non-executives, including actors, directors and TV news anchors. The term refers to former "Today Show" host Katie C ouric, who became CBS's highest paid newscaster in April 2006, with a reported salary of US$15 million over five years. As of April 2006, this proposed rule has not been approved by the SEC . Keepwell Agreement A contract between a parent company and its subsidi ary to maintain solvency and financial backing throughout the term set in the agreement. Keiretsu A Japanese term describing a loose conglomeration o f firms sharing one or more common denominators. The companies don't necessarily need to own equity in each other. Keltner Channel A volatility based 'envelope' indicator that measur es the movement of stocks in relation to an upper and lower moving-average band. Keogh Plan A defined-benefit plan or defined-contribution plan established by a self-employed individual for him/herself and his/her employees. KES In currencies, this is the abbreviation for the Ken yan Shilling. Key Performance Indicators - KPI A set of quantifiable measures that a company or in dustry uses to gauge or compare performance in terms of meeting their strategic and operational go als. KPIs vary between companies and industries, depending on their priorities or performance criter ia. Also referred to as "key success indicators (KSI)" Key Person Insurance A type of life insurance policy that a company purc hases on the life of the company's key executive. Key Rate Duration Holding all other maturities constant, this measure s the sensitivity of a security or value of a portfolio to a 1% change in yield for a given matur ity. The calculation is as follows: Keynesian Economics An economic theory stating that active government i ntervention in the marketplace and monetary policy is the best method of ensuring economic grow th and stability. KHR In currencies, this is the abbreviation for the Cam bodian Riel. Kickback A slang term used to describe the payment of someth ing of value to another individual with the goal of persuading or influencing their decision or perf ormance in certain situations. Kicker A right, warrant, or some other feature added to a debt instrument to make it more desirable to potential investors.

Kicker Pattern A two-bar candlestick pattern that is used to predi ct a change in the direction of the trend for an asset's price. This pattern is characterized by a v ery sharp reversal in price over the span of two candlesticks traders use it to determine which grou p of market participants is in control of the direction. Kicking the Tires Slang for doing the grassroots research of a prospe ctive investment. Kiddie Tax A tax on children under 14 years old who earn incom e over $1,200. The extra income is taxed at the guardian's rate. Kids In Parents' Pockets Eroding Retirement Savings - KIPPERS A slang term referring to the predicament of indivi duals whose adult children are out of school and in their working years, but still living at home wi th the folks. These older parents face the challeng e of managing their own finances and planning for ret irement while dealing with the added expense of adult offspring living at home. Kill To cancel a trade or order that has been placed, bu t not filled. Killer Application Killer application or "killer app" is a buzzword th at describes a software application that surpasses all of its competitors. Killer Bees Those who help a company fend off a takeover attemp t with the use of defensive strategies. Kiting 1. The act of misrepresenting the value of a financ ial instrument for the purpose of extending credit obligations or increasing financial leverage. 2. A fraudulent act involving the alteration or iss uance of a check or draft with insufficient funds. Kiwi A slang term for the New Zealand dollar (NZD). It d erives its name from New Zealand's national icon - a flightless bird called a kiwi - which is pictured on one side of the country's $1 coin. Klinger Oscillator A technical indicator developed by Stephen Klinger that is used to determine long-term trends of money flow while remaining sensitive enough to shor t-term fluctuations to enable a trader to predict short-term reversals. This indicator compares the v olume flowing in and out of a security to price movement, and it is then turned into an oscillator KMF In currencies, this is the abbreviation for the Com oros Franc. Knock-In Option A latent option contract that begins to function as a normal option ("knocks in") only once a certain price level is reached before expiration. Knock-Out Option An option with a built in mechanism to expire worth less should a specified price level be exceeded. Know Your Client - KYC A standard form in the investment industry that ens ures investment advisors know detailed

information about their clients' risk tolerance, in vestment knowledge and financial position. Kondratiev Wave An economic theory created by Soviet economist Niko lai Kondratiev that states that Western capitalist economies are susceptible to high perfor mance volatility. Korean Composite Stock Price Indexes - KOSPI A series of indexes that track the overall Korean S tock Exchange and its components. These indexes use a weighted average based on market calc ulation to calculate the value of the indexes. KPW In currencies, this is the abbreviation for the Nor th Korean Won. KRW In currencies, this is the abbreviation for the Kor ean Won. Kurtosis A statistical measure used to describe the distribu tion of observed data around the mean KWD In currencies, this is the abbreviation for the Kuw aiti Dinar. KYD In currencies, this is the abbreviation for the Cay man Islands Dollar KZT In currencies, this is the abbreviation for the Kaz akhstan Tenge L A Nasdaq stock symbol specifying that it is a misce llaneous situation such as a depositary receipt, stub, additional warrant or unit. Labor Intensive A process or industry that requires large amounts o f human effort to produce goods. Lessee The person who rents land or property from a lessor . Leprechaun Leader A corporate manager or an executive who, like the f abled Irish elf, is a mischievous and elusive creature said to possess buried treasures of money and gold. Lemming The act of following the crowd into an investment t hat will inevitably head for disaster. Leasehold Improvement Improvements on a leased asset that increase the va lue of the asset. Labour-Sponsored Venture Capital Corporations - LSV CC A type of Canadian corporation created by a labor u nion that deals exclusively with providing venture capital. Unlike other venture capital corpo rations, LSVCCs are subject to tight regulations. The investment funds from LSVCCs are called labor-s ponsored investment funds (LSIFs). Leg 1. Term describing an order entry technique used by brokers. A leg occurs when a broker executes contingent orders in separate phases, thus increasi ng the risk for price swings through time delays. 2. A description of different aspects in a combinat ion

Ladder Option An option that locks-in gains once the underlying r eaches predetermined price levels or "rungs," guaranteeing some profit even if the underlying sec urity falls back below these levels before the option expires. Lender of Last Resort An institution, usually a country's central bank, t hat offers loans to banks or other eligible institutions that are experiencing financial diffic ulty or are considered highly risky or near collaps e. In the U.S. the Federal Reserve acts as the lender of last resort to institutions that do not have any other means of borrowing and whose failure to obtai n credit would dramatically affect the economy. Lemon A very disappointing investment. Your expected retu rn wasn't even close to being achieved. Lehman Formula A compensation formula developed by Lehman Brothers for investment banking services. The structure is as follows: -5% of the first million dollars involved in the tr ansaction -4% of the second million -3% of the third million -2% of the fourth million -1% of everything thereafter (above $4 million) Lehman Aggregate Bond Index An index used by bond funds as a benchmark to measu re their relative performance. The index comprises government securities, mortgage-backed se curities, asset-backed securities and corporate securities to simulate the universe of bo nds in the market. The maturity of the bonds in the index are over one year. Legislative Overkill A law enacted to stop or prevent the abuse of a loo phole, but ends up imposing more restrictions than are necessary for reasonable prevention. Legend A notification placed on certain stock certificates describing the terms and conditions of sale and ownership. Legal List A selection of eligible companies and investments, determined by local state governments, for institutions such as insurance companies and pensio n plans. Leaseback An arrangement where the seller of an asset leases back the same asset from the purchaser. Lease An agreement in which one party gains a long-term r ental agreement, and the other party receives a form of secured long-term debt. Leakage A release of information to certain people before t he official public announcement. Leads And Lags The alteration of normal payment or receipts in a f oreign exchange transaction because of an expected change in exchange rates. An expected incr ease in exchange rates is likely to speed up payments, while an expected decrease in exchange ra tes will probably slow them down. Leading Lipstick Indicator An indicator based on the theory that a consumer tu rns to less-expensive indulgences, such as lipstick, when she (or he) feels less than confiden t about the future. Therefore, lipstick sales tend to

increase during times of economic uncertainty or a recession. Leading Indicator A measurable economic factor that changes before th e economy starts to follow a particular pattern or trend. Leading indicators are used to predict ch anges in the economy, but are not always accurate. Leader or Laggard Refers to a company that is either outperforming or underperforming the general market. To look for top stocks in leading industry groups, refer to the Relative Price Strength Rating and Industry Group Relative Strength Rating in Investor's Business Dai ly. Lady Godiva Accounting Principles - LGAP A theoretical set of accounting principles under wh ich corporations would have to fully disclose all information, including that which often doesn't get reported to investors under generally accepted accounting principles (GAAP). These principles include disclosure of the followin g: -all off-balance sheet items -how new goodwill accounting rules (introduced in 2 002) impact earnings per share (EPS) -the impact on EPS of stock options issued in lieu of salaries -how pension expenses are accounted for Laddering The promotion of inflated pre-IPO prices for the sa ke of obtaining a greater allotment of the offering . Lady Macbeth Strategy A corporate-takeover strategy with which a third pa rty poses as a white knight to gain trust, but then turns around and joins with unfriendly bidders. Laffer Curve Invented by Arthur Laffer, this curve shows the rel ationship between tax rates and tax revenue collected by governments. The chart below shows the Laffer Curve: The curve suggests that, as taxes increase from low levels, tax revenue collected by the government also increases. It also shows that tax rates increa sing after a certain point (T*) would cause people not to work as hard or not at all, thereby reducing tax revenue. Eventually, if tax rates reached 100% (the far right of the curve), then all people would choose not to work because everything they earned would go to the government. Lead Time In terms of a supply chain, the total time needed f or an order to be processed. LBP In currencies, this is the abbreviation for the Leb anese Pound Layoff 1. When a company eliminates jobs regardless of how good the employees' performance. 2. A risk reduction, made by investment bankers, that minimiz es the potential downside associated with a commitment to purchase and sell a stock issue unsub scribed by stockholders holding rights. Law of Supply A microeconomic law stating that, all other factors being equal, as the price of a good or service increases, the quantity of goods or services offere d by suppliers increases, and vice versa. Law of Diminishing Marginal Utility A law of economics stating that as a person increas es consumption of a product--while keeping consumption of other products constant--there is a decline in the marginal utility that person derives from consuming each additional unit of that product .

Law of Diminishing Marginal Returns A law of economics stating that, as the number of n ew employees increases, the marginal product of an additional employee will at some point be less t han the marginal product of the previous employee. Late-Stage Base A base that forms after a stock has staged a series of technical breakouts from prior bases. They usually occur near a stock's top and are often refe rred to as fourth- or fifth-stage bases. Late-stage bases often show erratic, wide-and-loose trading. Lagging Indicator 1. A measurable economic factor that changes after the economy has already begun to follow a particular pattern or trend. 2. A technical indicator that trails the price acti on of an underlying asset and is used by traders to generate transaction signals or to confirm the stre ngth of a given trend. Since these indicators lag the price of the asset, a significant move will gen erally occur before the indicator is able to provid e a signal. Laissez Faire An economic theory from the 18th century that is st rongly opposed to any government intervention in business affairs. Sometimes referred to as "Let it be economics." Late-Day Trading An unethical (if not illegal) practice of a hedge f und purchasing and then selling securities (usually shares of a mutual fund) after the close of a tradi ng day, but making the transactions appear as though they occurred before the market close. Last-Sale Reporting An electronic entry, to the Nasdaq Stock Market, of the amount and price of shares involved in a transaction's not less than a board lot. Last Twelve Months - LTM A term used to describe financial results during th e period of the last 12 months. Last Trading Day The final day that a futures or options contract ma y trade or be closed out before delivery of the underlying asset must occur. Last In, First Out - LIFO An asset-management and valuation method that assum es that assets produced or acquired last are the ones that are used, sold or disposed of first. Large Value Transfer System - LVTS An electronic wire payment system in Canada, facili tating the transfer of funds between large financial institutions, including the central Bank of Canada. Large Trader A futures trader who holds or controls a single pos ition that is equal to or greater than the CFTC specified reporting levels. Large Cap (Big Cap) Companies with a market capitalization between $10 billion and $200 billion. Landominium A type of residential property in which the owner o wns both the home and the land on which the home is built. The home is a part of a community, l ike a condominium, where the landscaping, maintenance and other services are provided by a ho meowners' association Land Value The total value of the land, including any upgrades or improvements to the land

Land Property or real estate, not including buildings or equipment, that does not occur naturally. Depending on the title, land ownership may also giv e the holder the rights to all natural resources on the land. These may include water, plants, human an d animal life, fossils, soil, minerals, electromagnetic features, geographical location, an d geophysical occurrences. Lame Duck A person who has defaulted on his or her debts or h as gone bankrupted due to the stock market. The financial use of the term is most commonly used in Europe. Lambda A ratio comparing change in option price to a 1% ch ange in option volatility. LAK In currencies, this is the abbreviation for the Lao s Kip. Large Value Transfer System - LVTS An electronic wire payment system in Canada, facili tating the transfer of funds between large financial institutions, including the central Bank of Canada. Law of Diminishing Marginal Returns A law of economics stating that, as the number of n ew employees increases, the marginal product of an additional employee will at some point be less t han the marginal product of the previous employee. Late-Stage Base A base that forms after a stock has staged a series of technical breakouts from prior bases. They usually occur near a stock's top and are often refe rred to as fourth- or fifth-stage bases. Late-stage bases often show erratic, wide-and-loose trading. Lease An agreement in which one party gains a long-term r ental agreement, and the other party receives a form of secured long-term debt. Leakage A release of information to certain people before t he official public announcement. Lender of Last Resort An institution, usually a country's central bank, t hat offers loans to banks or other eligible institutions that are experiencing financial diffic ulty or are considered highly risky or near collaps e. In the U.S. the Federal Reserve acts as the lender of last resort to institutions that do not have any other means of borrowing and whose failure to obtai n credit would dramatically affect the economy. Lemon A very disappointing investment. Your expected retu rn wasn't even close to being achieved. Leads And Lags The alteration of normal payment or receipts in a f oreign exchange transaction because of an expected change in exchange rates. An expected incr ease in exchange rates is likely to speed up payments, while an expected decrease in exchange ra tes will probably slow them do Last-Sale Reporting An electronic entry, to the Nasdaq Stock Market, of the amount and price of shares involved in a transaction's not less than a board lot. Last Twelve Months - LTM A term used to describe financial results during th e period of the last 12 months.

Leprechaun Leader A corporate manager or an executive who, like the f abled Irish elf, is a mischievous and elusive creature said to possess buried treasures of money and gold. Lessee The person who rents land or property from a lessor . Layoff 1. When a company eliminates jobs regardless of how good the employees' performance. 2. A risk reduction, made by investment bankers, that minimiz es the potential downside associated with a commitment to purchase and sell a stock issue unsub scribed by stockholders holding rights. Lehman Formula A compensation formula developed by Lehman Brothers for investment banking services. The structure is as follows: -5% of the first million dollars involved in the tr ansaction -4% of the second million -3% of the third million -2% of the fourth million -1% of everything thereafter (above $4 million) Lehman Aggregate Bond Index An index used by bond funds as a benchmark to measu re their relative performance. The index comprises government securities, mortgage-backed se curities, asset-backed securities and corporate securities to simulate the universe of bo nds in the market. The maturity of the bonds in the index are over one year. LBP In currencies, this is the abbreviation for the Leb anese Pound. Lead Time In terms of a supply chain, the total time needed f or an order to be processed Legend A notification placed on certain stock certificates describing the terms and conditions of sale and ownership. Leader or Laggard Refers to a company that is either outperforming or underperforming the general market. To look for top stocks in leading industry groups, refer to the Relative Price Strength Rating and Industry Group Relative Strength Rating in Investor's Business Dai ly. Leading Indicator A measurable economic factor that changes before th e economy starts to follow a particular pattern or trend. Leading indicators are used to predict ch anges in the economy, but are not always accurate. Leading Lipstick Indicator An indicator based on the theory that a consumer tu rns to less-expensive indulgences, such as lipstick, when she (or he) feels less than confiden t about the future. Therefore, lipstick sales tend to increase during times of economic uncertainty or a recession. Leaseback An arrangement where the seller of an asset leases back the same asset from the purchaser. Leasehold Improvement Improvements on a leased asset that increase the va lue of the asset.

Leg 1. Term describing an order entry technique used by brokers. A leg occurs when a broker executes contingent orders in separate phases, thus increasi ng the risk for price swings through time delays. 2. A description of different aspects in a combinat ion option. Legal List A selection of eligible companies and investments, determined by local state governments, for institutions such as insurance companies and pensio n plans. Lemming The act of following the crowd into an investment t hat will inevitably head for disaster. Legislative Overkill A law enacted to stop or prevent the abuse of a loo phole, but ends up imposing more restrictions than are necessary for reasonable prevention. Lessor The person who rents land or property to a lessee. Let Your Profits Run A saying often used in investing that acknowledges the tendency among investors to sell winning positions too early. Most traders tend to take gain s off the table early out of fear that they will evaporate quickly, while they also tend to hold ont o large losing positions in the hope that they will turn around. The key to letting your profits run is to not panic when volatility increases and to maintain your convictions about why you entered int o the trade. Letter of Comfort A letter issued to a lending institution by a paren t company acknowledging the approval of a subsidiary company's attempt for financing. Letter Of Credit A letter from a bank guaranteeing that a buyer's pa yment to a seller will be received on time and for the correct amount. In the event that the buyer is unable to make payment on the purchase, the bank will be required to cover the full or remaining amo unt of the purchase. Letter of Indemnity 1. A letter guaranteeing that contractual provision s will be met, otherwise financial reparations will be made. 2. A letter requesting replacements for lost shares from a company's treasury. Letter of Intent - LOI 1. A letter that describes in detail a corporation' s intention to act on something. 2. It is also a way to protect your son or daughter from unnecessary chaos and turmoil when he or she must depend upon someone other than you for car e and support (if you suddenly pass away). Letter Security A security that is not registered with the SEC, and so cannot be sold publicly in the marketplace. Level 1 A trading service consisting of real-time bid/ask q uotes for securities trading on the Nasdaq stock market and comparable information for securities qu oted in the OTC Bulletin Board Service. Level 2 A trading service consisting of real-time access to the quotations of individual market makers registered in every Nasdaq listed security, as well as market makers' quotes in OTC Bulletin Board securities.

Level 3 A trading service consisting of everything in Level 2, plus the ability to enter quotes, execute order s, and send information. This service is restricted to NASD member firms that function as registered market makers. Level Load An annual load charged to a mutual fund holder for the time he or she is invested in the fund Level-Premium Insurance A type of term life insurance for which the premium s remain the same throughout the duration of the contract. The premium paid on this type of policy w ill be higher at the beginning of its life but lowe r towards the end of its life as compared to term pol icies that have rising premium rates. Leverage 1. The use of various financial instruments or borr owed capital, such as margin, to increase the potential return of an investment. 2. The amount of debt used to finance a firm's asse ts. A firm with significantly more debt than equity is considered to be highly leveraged. Leverage helps both the investor and the firm to in vest or operate. However, it comes with greater risk. If an investor uses leverage to make an inves tment and the investment moves against the investor, his or her loss is much greater than it w ould've been if the investment had not been leveraged - leverage magnifies both gains Leverage Ratio 1. Any ratio used to calculate the financial levera ge of a company to get an idea of the company's methods of financing or to measure its ability to m eet financial obligations. There are several different ratios, but the main factors looked at in clude debt, equity, assets and interest expenses. 2. A ratio used to measure a company's mix of opera ting costs, giving an idea of how changes in output will affect operating income. Fixed and vari able costs are the two types of operating costs depending on the company and the industry, the mix will differ. Leveraged Buyout - LBO A strategy involving the acquisition of another com pany using a significant amount of borrowed money (bonds or loans) to meet the cost of acquisit ion. Often, the assets of the company being acquired are used as collateral for the loans in ad dition to the assets of the acquiring company. The purpose of leveraged buyouts is to allow companies to make large acquisitions without having to commit a lot of capital. Leveraged Lease A lease agreement wherein the lessor, by borrowing funds from a lending institution, finances the purchase of the asset being leased. Liquidated Damages Present in certain legal contracts, this provision allows for the payment of a specified sum should one of the parties be in breach of contract. Leveraged Recapitalization A strategy where a company takes on significant add itional debt with the purpose of either paying a large dividend or repurchasing shares. The result i s a far more financially leveraged company. Levy To collect or assess money that is due. Liability A company's legal debts or obligations that arise d uring the course of business operations. These are settled over time through the transfer of econo mic benefits including money, goods or services. Liability Driven Investment - LDI A form of investing in which the main goal is to ga in sufficient assets to meet all liabilities, both

current and future. This form of investing is most prominent with defined-benefit pension plans, whose liabilities can often reach into the billions of dollars for the largest of plans. Lien When a creditor or bank has the right to sell the m ortgaged or collateral property of those who fail t o meet the obligations of a loan contract. Life Annuity An insurance product that features a predetermined periodic payout amount until the death of the annuitant. These products are most frequently used to help retirees budget their money after retirement. Typically, the annuitant pays into the annuity on a periodic basis when he or she is still working. However, annuitants may also buy the annui ty product in one large purchase. When the annuitant retires, the annuity makes periodic (usua lly monthly) payouts to the annuitant, providing a reliable source of income. When a triggering event (such as death) occurs, the periodic payments from the annuity usually cease.

Liquid Market A market with many bid and ask offers. The market i s characterized by high liquidity, low spreads, and low volatility. Lintner's Model A model stating that dividend policy has two parame ters: (1) the target payout ratio and (2) the speed at which current dividends adjust to the targ et. Linear Price Scale A type of scale used on a chart that is plotted in such a way that the values on the scale are spaced equidistantly. Each unit change is represented by t he same vertical distance on the chart, regardless of what price level the asset is at when the change occurs. This price scale is mainly used in short-term trading, and it is often used by traders of co mmodity futures. Contrast this to "logarithmic pric e scale". Life Expectancy 1. The age until which a person is expected to live . 2. The remaining number of years an individual is e xpected to live, based on IRS issued life expectancy tables. The life expectancy, for require d minimum distribution (RMD) calculation purposes, is determined by the current age of the i ndividual. Life Insurance A protection against the loss of income that would result if the insured passed away. The named beneficiary receives the proceeds and is thereby sa feguarded from the financial impact of the death of the insured. Life Option An annuitization-method option for a typical annuit y offered by an insurance company with which the annuitant chooses to receive regular income pay ments from his or her annuity account for life. The insurance company guarantees that the annuitant will receive payments for the rest of his or her life, and structures the payment amounts to provide room for the insurance company's profit margin. Life With Guaranteed Term An annuitization-method option with which the annui tant chooses to receive regular income payments that are guaranteed to last the rest of hi s or her life but also guarantees income payments for a minimum number of years (the term) following the start of the annuitization period - even if the annuitant dies before the end of the term. Lifelong Learning Plan A provision applicable to the Canadian Registered R etirement Savings Plan (RRSP). The plan allows RRSP contributors a non-taxable temporary withdrawa l of up to $20,000 from their accounts in order

to finance their education or that of their spouse. The provision is subject to limitations, such as a $10,000 annual withdrawal limit and a maximum repay ment period of 10 years, after which the ability to recontribute the borrowed sum is lost. Lifestyle Fund An investment fund featuring an asset mix determine d by the level of risk and return that is appropriate for an individual investor. Factors tha t determine this mix include an investor's age, level of risk aversion, the investment's purpose an d the length of time until the principal will be withdrawn. Lifetime Learning Credit A federal initiative whereby a person is eligible f or a non-refundable credit for a specific amount spent on higher education tuition and fees during t he year. LIFO Liquidation When a company using the LIFO (Last In, First Out) method of inventory costing liquidates their older LIFO inventory. A LIFO liquidation would occu r if current sales are higher than current purchases, as a result, any inventory not sold in p revious periods must be liquidated. Like-for-Like Sales The portion of current sales achieved through activ ities that are comparable to the activities of the previous year. Like-Kind Property Any two assets or properties that are considered to be the same type, making an exchange between them tax free. To qualify as like kind, two assets must be of the same type (e.g. two pieces of residential real estate), but do not have to be of the same quality. Limit Down The maximum amount by which the price of a commodit y futures contract may decline in one trading day. Limit Order An order placed with a brokerage to buy or sell a s et number of shares at a specified price or better. Limit orders also allow an investor to limit the le ngth of time an order can be outstanding before being canceled. Limit Order Book A record of unexecuted limit orders maintained by t he specialist. Limit Up The maximum amount by which the price of a commodit y futures contract may advance in one trading day. Limit-On-Close Order A type of limit order to buy or sell shares near th e market close only if the closing price is trading better than the limit price. This order is an expan sion of the market-on-close order, adding to it a limit condition, which places a maximum on the entr y price and minimum on the selling price. Line Of Credit - LOC An arrangement between a financial institution (usu ally a bank) and a customer establishing a maximum loan balance that the bank will permit the borrower to maintain Limit-On-Open Order A type of limit order to buy or sell shares at the market open if the market price meets the limit condition. This type of order is good only for the market opening and does not last for the whole trading day. Limited Liability

A type of liability that does not exceed the initia l amount a person invested into a partnership. Limited Liability Company - LLC A corporate structure whereby the shareholders of t he company have a limited liability to the company's actions. Limited Partnership - LP Two or more partners formed to conduct a business j ointly, and in which one or more of the partners is liable only to the extent of the amount of money they have invested. Limited partners do not receive dividends, but enjoy direct access to the f low of income and expenses. Limited Partnership Unit An ownership unit in a publicly traded limited part nership, or master limited partnership (MLP). This trust gives the unit holder a stake in the income g enerated by the partnership company. A MLP often distributes all available cash flow from operations to unit holders after the deduction of maintenance capital. Also referred to as "master limited partnership uni ts" and "limited partner units". Limited Risk The risk of an investment that has a predetermined maximum downside potential, which is usually the initial amount invested. Liquidate 1. To convert assets into cash or equivalents by se lling them on the open market. 2. When an entity chooses or is forced by a legal j udgment or contract to turn assets into a "liquid" form (cash). Liquid Yield Option Note - LYON A zero coupon bond that is callable (by issuer), pu table (by investor), and convertible. LYONs are synthetic products that are financially engineered by Merrill Lynch. Liquidating Dividend Payment by a firm to its owners from capital rather than from earnings. Liquidation 1. When a business or firm is terminated or bankrup t, its assets are sold and the proceeds pay creditors. Any leftovers are distributed to shareho lders. 2. Any transaction that offsets or closes out a lon g or short position. Liquidation Level In forex trading, the specific value of a trader's account below which the liquidation of the trader's positions is automatically triggered and executed a t the best available exchange rate at the time. The liquidation level is expressed as a percentage valu e of assets. If a forex trader's positions go again st him or her, his or her account will eventually reac h the liquidation level, unless the trader contributes further margin to top up his or her acc ount. Liquidity 1. The degree to which an asset or security can be bought or sold in the market without affecting the asset's price. Liquidity is characterized by a high level of trading activity. 2. The ability to convert an asset to cash quickly. Also known as "marketability Liquidity Cushion A reserve fund for a company or person containing m oney market and highly liquid investments. Liquidity Path A way of referring to the process of taking a compa ny public. Liquidity Preference Theory The hypothesis that forward rates offer a premium o ver expected future spot rates. Liquidity Risk

The risk stemming from the lack of marketability of an investment that cannot be bought or sold quickly enough to prevent or minimize a loss. Liquidity Trap A situation in which prevailing interest rates are low and savings rates are high. As a result, monetary policy is ineffective. Listed Being included and traded on a given exchange. Most exchanges have specific requirements which companies must meet in order to be listed and conti nue to stay listed. Listed Security Securities that have been accepted for trading purp oses by a recognized and regulated exchange. Living Will A legal document that sets out the medical care an individual, or the principal, wants or does not want in the event that he or she becomes incapable of communicating his or her wishes. LKR In currencies, this is the abbreviation for the Sri Lankan Rupee. Load A fee or commission charged to an investor when buy ing or redeeming shares in a mutual fund. The fee may be charged at the time the investor buys in to the mutual fund (called a front-end load) or when the investor redeems his/her mutual fund share s (called a back-end load). Load Fund A mutual fund with shares sold at a price including a large sales charge. This sales fee may range from 3% to as high as 8% of the full purchase. Load Spread Option A method of collecting the annual fees from investo rs in load funds through periodic deductions. These periodic deductions often are taken off of re gular investor contributions to the fund to spread out the burden of the load fees over time. Loan When a lender gives money or property to a borrower , and the borrower agrees to return the property or repay the borrowed money, along with in terest, at a predetermined date in the future. Loan Constant The required annual cash flow needed to service bot h the principal and interest upon a loan obligation. Loan Loss Provision An expense set aside as an allowance for bad loans (customer defaults, or terms of a loan have to be renegotiated, etc). Loan Sharking When a borrower is charged interest above an establ ished legal rate. Depending on where you live, lenders typically cannot charge more than 60% inter est per annum. Loan Syndication The process of involving numerous different lenders in providing various portions of a loan Loan To Value Ratio - LTV Ratio A lending risk assessment ratio that financial inst itutions and others lenders examine before approving a mortgage. Typically, assessments with h igh LTV ratios are generally seen as higher risk and, therefore, if the mortgage is accepted, the lo an will generally cost the borrower more to borrow or he or she will need to purchase mortgage insuran ce.

Lobster Trap A strategy used by a target firm to prevent a hosti le takeover. In a lobster trap, the company passes a provision preventing anyone with more than 10% ow nership from converting convertible securities into voting stock. Local Traders on future exchanges who occasionally fill p ublic orders, but mainly buy and sell for their own personal accounts. Local Tax An additional tax on top of federal and state taxes , usually collected in the form of property taxes. Also called municipal tax. Lock Limit Commonly associated with the futures market, a lock limit occurs when the trading price of a futures contract arrives at the exchanges predetermined lim it price. At the lock limit, trades above or below the lock price are not executed. Lock-Up Agreement A legally binding contract between the underwriters and insiders of a company prohibiting these individuals from selling any shares of stock for a specified period of time. Lock-up periods typically last 180 days (six months) but can on occasion last for as little as 120 days or as long as 365 days (one year). Lock-Up Option A stock option offered by a target company to a whi te knight for additional equity or for the purchase of a valuable portion of their company. Lockdown A specified period when an employee of a public com pany is barred from selling - and occasionally buying - their company's stock. Locked Market A short-term situation occurring within a market wh ere both the bid and ask are identical, resulting in no bid-ask spread. Logarithmic Price Scale A type of scale used on a chart that is plotted in such a way that two equivalent percent changes are represented by the same vertical distance on the sc ale, regardless of what the price of the asset is when the change occurs. The distance between the nu mbers on the scale decreases as the price of the underlying asset increases. This is the case be cause a $1 increase in price becomes less influential as the price heads higher since it now corresponds to less of a percentage change than it did when the price of the asset was at a lower leve l. Also referred to as a "log scale". Logistics The overall management of the way resources are mov ed to the areas where they are required. Lombard Rate The rate charged to banks by the German central ban k for collateralized loan obligations. London Interbank Bid Rate - LIBID This is the rate bid by banks on eurocurrecy deposi ts. London Interbank Offered Rate - LIBOR An interest rate at which banks can borrow funds, i n marketable size, from other banks in the London interbank market. The LIBOR is fixed on a da ily basis by the British Bankers' Association. The LIBOR is derived from a filtered average of the world's most creditworthy banks' interbank deposit rates for larger loans with maturities betw een overnight and one full year. London International Financial Futures And Options Exchange - LIFFE A futures and options exchange in London, England t hat was modeled after the Chicago Board of

Trade and the Chicago Mercantile Exchange. Similar to its American counterparts, this exchange used to deal with futures, options and commodities contracts. However, in 2002, LIFFE was acquired by Euronext as part of its strategy to increase its presence as a derivatives market. LIFFE has been renamed Euronext.liffe. London Metal Exchange - LME A commodities exchange in London, England, that dea ls in metal futures. Contracts on the exchange include aluminum, copper and zinc. Trading on the LME can be done in three main ways: through open outcry, a telephone system between mem ber companies or the LME Select, an electronic trading platform. The LME is a non-ferro us exchange, which means that iron and steel are not traded on the exchange. London Stock Exchange - LSE The primary stock exchange in the U.K. and the larg est in Europe. Originated in 1773, the regional exchanges were merged in 1973 to form the Stock Exc hange of Great Britain and Ireland, later renamed the London Stock Exchange (LSE). The Financ ial Times Stock Exchange (FTSE) 100 Share Index, or "Footsie", is the dominant index, contain ing 100 of the top blue chips on the LSE. Long (or Long Position) 1. The buying of a security such as a stock, commod ity or currency, with the expectation that the asset will rise in value. 2. In the context of options, the buying of an opti ons contract. Opposite of "short (or short position)". Long Bond A bond that matures in more than 10 years. When peo ple refer to "the long bond," this typically is the 30-year U.S. treasury. Long Jelly Roll An option strategy that aims to profit from a time value spread through the sale and purchase of two call and two put options, each with different expir ation dates. Long Market Value The aggregate worth, in dollars, of a group of secu rities held in a cash or margin brokerage account, calculated using the prior trading day's closing pr ices of each security in the account. Long Run In terms of operating activities, a period of time in which all costs are variable. Long Run Incremental Cost - LRIC Forward-looking incremental costs that can be accou nted for by a company. Long Term Holding an asset for an extended period of time. De pending on the type of security, a long-term asset can be held for as little as one year or for as long as 30 years or more. Long-Term Assets 1. Reported on the balance sheet, it's the value of a company's property, equipment and other capital assets, less depreciation. 2. A stock, bond or other asset that you plan on ho lding in your portfolio for a lengthy period of tim e. Long-Term Capital Management - LTCM A large hedge fund led by Nobel Prize-winning econo mists and renowned Wall Street traders that nearly collapsed the global financial system in 199 8 as a result of high-risk arbitrage trading strategies. The fund formed in 1993 and was founded by renowned Salomon Brothers bond trader John Meriwether. Long-Term Care (LTC) Insurance Coverage that provides nursing-home care, home-heal th care, personal or adult day care usually for individuals above the age of 65 or with a chronic o r disabling condition that needs constant supervision. LTC insurance offers more flexibility and options than many public assistance

programs. Long-Term Debt Loans and financial obligations lasting over one ye ar. In the U.K., long-term debts are known as "long-ter m loans." Long-Term Debt/Capitalization A ratio showing the financial leverage of a firm, c alculated by dividing long-term debt by the amount of capital available: Long-Term Equity Anticipation Securities - LEAPS An options contract that expires more than nine mon ths in advance, and can last as long as two years. Normal options tend to last no longer than n ine months. Long-Term Liabilities Recorded on the balance sheet, a company's liabilit ies for leases, bond repayments and other items due in more than one year. Long/Short Equity A hedge fund strategy that involves buying certain stocks long and selling others short. There usually isn't a restriction on the country that the stocks trade in either. Long/Short Fund A type of mutual fund that mimics some of the tradi ng strategies typically employed by a hedge fund. Unlike most mutual funds, long/short funds us e leverage, derivatives and short positions in an attempt to maximize total returns, regardless of ma rket conditions. The amount of leverage used and the number of derivatives and short positions that long/short funds may contain are limited by law. These funds invest primarily in stocks. Look Thru An accounting method for calculating taxes owed on income from controlled foreign corporations. Look-Ahead Bias Bias created by the use of information or data in a study or simulation that would not have been known or available during the period being analyzed . This will usually lead to inaccurate results in the study or simulation. Lookback Option An exotic option that allows investors to "look bac k" at the underlying prices occurring over the life of the option, and then exercise based on the under lying asset's optimal value. Loonie A slang term for a Canadian dollar. It is derived f rom the picture of a loon on one side of the coin. Loophole A technicality that allows a person or business to avoid the scope of a law without directly violating the law. Losing Your Shirt In the investment world, this expression is used to describe a very bad investment that causes an investor to lose everything he or she has invested (and more, in some cases). Loss Carryback An accounting technique with which a company retroa ctively applies net operating losses to a preceding year's income in order to reduce tax liab ilities present in that previous year. Loss Carryforward

An accounting technique that applies the current ye ar's net operating losses to future years' profits in order to reduce tax liability. Generally accepte d accounting principles (GAAP) specify that loss carryforwards can be used in any one of the seven y ears following the loss. Loss Leader Strategy The strategy of offering a product or service at a considerable discount and loss of profit in order t o attract future business Lot In general, any group of goods or services making u p a transaction. In the financial markets, a lot represents the standardized quantity of a financial instrument as set out by an exchange or similar regulatory body. For exchange-traded securities, a lot may represent the minimum quantity of that security that may be traded Lottery Bond A bond issued in the U.S. and U.K. with a rate of r eturn dependent upon a lottery style payout. Love Money Seed money or capital given by family or friends to an entrepreneur to start a business. In this type of situation, the decision to lend money and the te rms of the agreement are usually based on qualitative factors and the relationship between th e two parties, rather than on a formulaic risk analysis Low The lowest price a security traded at within that t rading day. Low Ball A slang term for an offer that is significantly bel ow the fair value of an asset or group of assets. Lower of Cost and Market Method A requirement of GAAP in the United States that inv entory be recorded at the lower of either the cost to produce it, the cost to repurchase it or the mar ket value of the inventory. Lowest Price/Earnings (P/E) Ratio Tab (Best Value R ating) Theoretically measures the value of a stock by divi ding the current price by its earnings per share over the last twelve months. When a stock's P/E rat io is high, it is considered by the majority of investors as pricey or overvalued. Stocks with low P/Es are typically considered a good value. This tab in IBD's "Top Rated Stocks Under $10" prod uct screens stocks for a P/E of under 10, and minimum of 25,000 shares traded per day (Filtering for a minimum daily quantity traded allows us to provide "Top Rated" users with better overall quali ty stocks.) LRD In currencies, this is the abbreviation for the Lib erian Dollar LSL In currencies, this is the abbreviation for the Les otho Loti. LTL In currencies, this is the abbreviation for the Lit huanian Litas. LYD In currencies, this is the abbreviation for the Lib yan Dinar. Lump-Sum Distribution A one-time payment for the entire amount due, rathe r than breaking payments into smaller installments. Some lump-sum distributions receive s pecial tax treatment.

M1 The category of the money supply that includes all physical money like coins and currency. It also includes demand deposits, which a re checking accounts and NOW accounts. M2 A category within the money supply that includes M1 in addition to all time-related deposits, savings deposits, and non-institutional m oney-market funds. M3 The category of the money supply that includes M2 a s well as all large time deposits, institutional money-market funds, short-term repurc hase agreements, along with other larger liquid assets. Macaroni Defense An approach taken by a company that does not want t o be taken over. The company issues a large number of bonds with the condition t hey must be redeemed at a high price if the company is taken over. Macaulay Duration The weighted-average term to maturity of the cash f lows from a bond. The weight of each cash flow is determined by dividing the present val ue of the cash flow by the price. Macro Risk A type of political risk in which political actions in a host country can adversely affect all foreign operations. Macro risk can come about from events that may or may not be in the reigning government's control. Macro-Hedge An investment technique used to eliminate the risk of a portfolio of assets. In most cases, this would mean taking a position that offsets the whole portfolio. But this technique is difficult in practice because there is rarely one a sset that will offset the risk of a broader portfolio, so applying a macro-hedge most likely re quires taking an offsetting position in each individual asset. Macroeconomics The field of economics that studies the behavior of the aggregate economy. Macroeconomics examines economy-wide phenomena such as changes in unemployment, national income, rate of growth, gros s domestic product, inflation and price levels MAD In currencies, this is the abbreviation for the Mor occan Dirham. Mad Hatter A CEO or managerial team whose ability to lead a co mpany is highly suspect. Main Home A person's regular or permanent place of residence. Main Street Shorthand for "the investing public"--in the same w ay that "Wall Street" is used to refer to

investment professionals and brokers. Maintenance Margin The minimum amount of equity that must be maintaine d in a margin account. In the context of the NYSE and NASD, after an investor has bought securities on margin, the minimum required level of margin is 25% of the tota l market value of the securities in the margin account. Keep in mind that this level is a m inimum, and many brokerages have higher maintenance requirements of 30-40%. Also referred to as "minimum maintenance" or "maint enance requirement". Majority Shareholder A person or conglomerate who owns more than 50% of the outstanding shares of a corporation. Make A Market An action whereby a dealer stands by ready, willing and able to buy or sell a particular security at the quoted bid and ask price. Make Whole Call (Provision) A type of call provision on a bond allowing the bor rower to pay off remaining debt early. The borrower has to make a lump sum payment derived from a formula based on the net present value (NPV) of future coupon payments will not be paid because of the call. Managed Account An investment account that is owned by an individua l investor and looked after by a hired professional money manager. In contrast to mutual f unds (which are professionally managed on behalf of many mutual-fund holders), man aged accounts are personalized investment portfolios tailored to the specific need s of the account holder. Managed Futures Account An account that is like a mutual fund, except that positions in government securities, futures contracts and options on futures contracts are used to manage the portfolio. Managed Money A means of investment where the investor, rather th an buying and selling their own securities, places their investment funds in the ha nds of a qualified investment professional for a predetermined annual fee Management Buyin - MBI When a group of investors outside of a company purc hase a controlling block of shares and keep the existing management Management Discussion and Analysis - MD&A A section of a company's annual report in which man agement discusses numerous aspects of the company, both past and present. Management Fee A fixed fee that a mutual fund manager charges inve stors for his services and work with the fund. Management Ownership Percent of common stock which is owned by the compa ny's management; a higher

percentage generally assumes an increased level of commitment. Management Risk The risks associated with ineffective, destructive or underperforming management, which hurts shareholders and the company or fund being ma naged. This term refers to the risk of the situation in which the company and sharehold ers would have been better off without the choices made by management. Manager Universe (Benchmark) The comparison of an account's performance to that of a representative peer group of money managers. Managerial Accounting The process of identifying, measuring, analyzing, i nterpreting, and communicating information for the pursuit of an organization's go als Mandatory Convertible A type of convertible bond that has a required conv ersion or redemption feature. Either on or before a contractual conversion date, the holder must convert the mandatory convertible into the underlying common stock. These securities provide investors with higher yiel ds to compensate holders for the mandatory conversion structure. Manipulation The act of artificially inflating or deflating the price of a security. In most cases, manipulation is illegal. It is much easier to manip ulate the share price of smaller companies, such as penny stocks, because they are n ot as closely watched by analysts as the medium- and large-sized firms. Also known as "price manipulation". Manufactured Payment A tax concept whereby the lender of a stock receive s the equivalent dividend payment from the borrower of the stock. Margin 1. Borrowed money that is used to purchase securiti es. This practice is referred to as "buying on margin". 2. The amount of equity contributed by a customer a s a percentage of the current market value of the securities held in a margin account. 3. In a general business context, the difference be tween a product's (or service's) selling price and the cost of production. 4. The portion of the interest rate on an adjustabl e-rate mortgage that is over and above the adjustment-index rate. This portion is retained as profit by the lender. Margin Account A brokerage account in which the broker lends the c ustomer cash to purchase securities. The loan in the account is collateralized by the se curities and cash. If the value of the stock drops sufficiently, the account holder will b e required to deposit more cash or sell a portion of the stock. Margin Call A broker's demand on an investor using margin to de posit additional money or securities

so that the margin account is brought up to the min imum maintenance margin. This is sometimes called a "fed call" or "maintenance call" . Margin Of Safety A principle of investing in which an investor only purchases securities when the market price is significantly below its intrinsic value. I n other words, when market price is significantly below your estimation of the intrinsi c value, the difference is the margin of safety. This difference allows an investment to be made with minimal downside risk. The term was popularized by Benjamin Graham (known as "the father of value investing") and his followers, most notably Warren Buffett. Mar gin of safety doesn't guarantee a successful investment, but it does provide room for error in an analyst's judgment. Determining a company's "true" worth (its intrinsic value) is highly subjective. Each investor has a different way of calculating intrins ic value which may or may not be correct. Plus, it's notoriously difficult to predict a compa ny's earnings. Margin of safety provides a cushion against errors in calculation. Marginal Propensity To Consume - MPC A component of Keynesian theory, MPC represents the proportion of an aggregate raise in pay that is spent on the consumption of goods and s ervices, as opposed to being saved. Marginal Tax Rate The amount of tax paid on an additional dollar of i ncome. As income rises, so does the tax rate. Marginal Utility The additional satisfaction a consumer gains from c onsuming one more unit of a good or service. Marital Deduction A tax reduction that is mainly used for the purpose s of estate and gifts. It allows an individual to transfer some assets to his or her sp ouse tax free, creating a deduction in taxable income. Marital Property A U.S. state-level legal distinction of a married i ndividual's assets. Property acquired by either spouse during the course of a marriage is co nsidered marital property. For example, an IRA in the name of an individual with a spouse, which is accumulated during the course of the marriage, would be considered marital proper ty. Mark To Market - MTM 1. The act of recording the price or value of a sec urity, portfolio or account to reflect its current market value rather than its book value. 2. In terms of mutual funds, a MTM is when the net asset value (NAV) of the fund is valued upon the most current market values. Markdown The difference between the highest current bid pric e among broker-dealers in the market and the lower price that a dealer charges a custome r. Market 1. Typically refers to the equity market where stoc ks are traded, but can also refer to the bond, options, or commodity market. 2. People with the desire and ability to buy a spec ific product.

Market Arbitrage Purchasing and selling the same security at the sam e time in different markets to take advantage of a price difference between the two sep arate markets. Market Average A measure of the overall price level of a given mar ket, as defined by a specified group of stocks or other securities. A market average equals the sum of all current values of stocks in the group divided by the total number of shares in the group. Market Bottom Term that refers to the overall general market maki ng a low point and then turning around for a period of improvement. Market Cannibalization The negative impact of a company's new product on t he sales performance of its existing related products. Market Capitalization Total market value of company. Calculated by multip lying shares outstanding by the stock price. Market Disruption A situation where markets cease to function in a re gular manner, typically characterized by rapid and large market declines. Market disrupti ons can result from both physical threats to the stock exchange or a unusual trading (as in a crash). In either case, the disruption creates widespread panic and results in disorderly market conditions. Market Economy An economic system in which economic decisions and the pricing of goods and services are guided solely by the aggregate interactions of a country's citizens and businesses and there is little government intervention or central planning. This is the opposite of a centrally planned economy, in which government deci sions drive most aspects of a country's economic activity. Market Efficiency The degree to which stock prices reflect all availa ble, relevant information. Market Exposure The amount of funds invested in a particular type o f security and/or market sector or industry and usually expressed as a percentage of t otal portfolio holdings. Thus, it is the amount an investor has at risk or the amount he/she can lose. Also known as "exposure". Market If Touched - MIT An order to purchase or sell a security as soon as a specific price is reached. Market Index An aggregate value produced by combining several st ocks or other investment vehicles together and expressing their total value against a base value from a specific date. Market indexes are intended to represent an entire stock m arket and thus track the market's changes over time. Market Is Off A common phrase meaning that the market (or a major market index) is trading below the

previous closing price. Market Is Up A common phrase meaning the market (or a major mark et index) is trading higher than the previous closing price Market Jitters Feelings of nervousness created by uncertainty or f ear about the current investment environment Market Maker A broker-dealer firm that accepts the risk of holdi ng a certain number of shares of a particular security in order to facilitate trading in that security. Each market maker competes for customer order flow by displaying buy and sell quotations for a guaranteed number of shares. Once an order is received, the ma rket maker immediately sells from its own inventory or seeks an offsetting order. This pr ocess takes place in mere seconds. Market Maker Spread The difference between the price at which a Market Maker is willing to buy a security and the price at which the firm is willing to sell it ( the difference between the bid and ask for a given security). Since each market maker can either buy or sell a stock at any given time, the spread represents the market maker's profit on each trade. Market Maven Slang used to describe a good investor who is "in-t he-know." It also implies opinion leadership. Market Momentum A measure of overall market sentiment, calculated a s the change in the value of a market index multiplied by the aggregate trading volume oc curring within the index components. Market Neutral A strategy undertaken by an investor or an investme nt manager that seeks to profit from both increasing and decreasing prices in a single a nd numerous markets. Market-neutral strategies are often attained by taking matching lo ng and short positions in different stocks to increase the return from making good stoc k selections and decreasing the return from broad market movements. Market neutral strategists may also use other tools such as merger arbitrage, shorting sectors, and so on. There is no single accepted method of employing a market-neutral strategy. Market On Close - MOC A market order to be executed as near to the end of the exchange day as possible. Also known as an "at-the-close order." Market Order An order to buy or sell a stock immediately at the best available current price. Market Out Clause A clause in an underwriting agreement allowing the underwriter to cancel the agreement for certain specified reasons without penalty. Market Risk The day-to-day potential for an investor to experie nce losses from fluctuations in

securities prices. This risk cannot be diversified away. Also referred to as "systematic risk". Market Risk Premium The difference between the expected return on a mar ket portfolio and the risk-free rate. Market Sector Indexes Small daily industry sector charts in Investor's Bu siness Daily located on the 'General Market & Sectors' and 'Industry Groups' pages. Incl udes such major sectors as Dow Jones Utilities, High Tech and Defensive. Listed in order of sector relative strength performance. Useful in determining leading sectors in the curren t market. Market Segmentation A marketing term referring to the aggregating of pr ospective buyers into groups (segments) that have common needs and will respond similarly to a marketing action. Market Sentiment The feeling or tone of a market (i.e. crowd psychol ogy). It is shown by the activity and price movement of securities. Market Share The percentage of total industry sales that is made up by a particular company's individual sales. Market Surveillance A department responsible for investigating and prev enting abusive, manipulative, or illegal trading practices on the NASDAQ. Market Technicians Association - MTA A not-for-profit organization located in the US tha t promotes ethical trading practices among technical analysts. Market Timing 1. The act of attempting to predict the future dire ction of the market, typically through the use of technical indicators or economic data. 2. The practice of switching among mutual fund asse t classes in an attempt to profit from the changes in their market outlook. Market Value 1. The current quoted price at which investors buy or sell a share of common stock or a bond at a given time. 2. The market capitalization plus the market value of debt. Sometimes referred to as "total market value". Market versus Quote - MVQ A comparison between the last price at which a secu rity traded and the current bid/ask prices Market-With-Protection Order A type of market order that is canceled and re-subm itted as a limit order if the price of the asset moves dramatically after the investor places the order. The limit on the limit order is placed at around the current market price as determ ined by a broker. This type of order adds a protective measure, helping the investor ens ure his or her market order will not be completed at a price that is far off from the marke t price at the time of the order.

Marketable Securities Very liquid securities that can be converted into c ash quickly at a reasonable price. Marketable securities are very liquid as they tend to have maturities of less than one year. Furthermore, the rate at which these securities can be bought or sold has little effect on their prices. Marketing The activities of a company associated with buying and selling a product or service. It includes advertising, selling and delivering produc ts to people. People who work in marketing departments of companies try to get the a ttention of target audiences by using slogans, packaging design, celebrity endorsements a nd general media exposure. The four 'Ps' of marketing are product, place, price and pro motion. Markup The difference between an investment's lowest curre nt offering price among dealers and the higher price a dealer charges a customer. Marku ps occur when dealers act as principals (buying and selling securities from thei r own accounts, at their own risk), as opposed to brokers (receiving a fee for facilitatin g a transaction). Marlboro Friday A reference to Friday, Apr 2, 1993, when Philip Mor ris, the maker of Marlboro cigarettes, announced that it would be cutting the price of Mar lboros to compete with generic cigarette makers. The company's stock tanked 26% fo llowing the announcement, losing about $10 billion off its market cap in a single da y. The day is remembered as a landmark moment in the 1 990s consumer movement away from name brand products in favor of cheaper generi c products with prices 50% lower than their branded competitors. In its wake, money managers moved cash from name brand consumer goods makers like Coca-Cola and Tamb rands (the former maker of Tampax tampons) to technology stocks and generic co nsumer goods producers. Marquee Asset A company's most appealing asset. Also referred to as a trophy asset. Married Filing Jointly A filing status for married couples that have wed b efore the end of the tax year. They can record their respective incomes, exemptions and ded uctions on the same tax return. Married filing jointly is best if only one spouse h as a significant income. However, if both spouses work and the income and itemized deductions are large and very unequal, it may be more advantageous to file separately. Married Filing Separately A filing status for married couples who choose to r ecord their respective incomes, exemptions and deductions on separate tax returns. In most cases, "married filing jointly" offers the most tax savings, especially when the sp ouses have different income levels. However, there is a potential tax advantage to fili ng separately when one spouse has significant medical expenses or miscellaneous itemi zed deductions. Married Put An option strategy whereby an investor, holding a l ong position in stock, purchases a put on the same stock to protect against a depreciation in the stock's price.

Martingale System A money management system of investing in which the dollar values of investments continually increase after losses, or the position size increases with lowering portfolio size. Marubozo A type of candlestick charting formation that appea rs when a security's price does not trade outside the range of the opening and closing prices. Mass Customization The process of delivering wide-market goods and ser vices that are customized to satisfy a specific customer need. Master Fund In general, an investment vehicle that enables indi vidual investors to invest money into one or more underlying investments that are operate d by professional managers. Master Limited Partnership - MLP A limited partnership that is publicly traded. Master Notes High-quality debt instruments offered by the Federa l Farm Credit Bank (FFCB) with a minimum face value of $25 million. Master of Business Administration - MBA A graduate degree achieved at a university or colle ge that provides theoretical and practical training to help graduates gain a better understanding of general business management functions. The MBA degree can have a spe cific focus such as accounting, finance or marketing. Master Trust A collection of funds from individual investors tha t are pooled together in order to obtain wholesale prices and rates unavailable for regular investors. Matador Bond A foreign bond denominated in pesetas and issued in Spain by a non-Spanish company. Match-Rate Funds When the interest rate on a loan matches (or is ext remely close to) the interest rate on the source of the funds loaned out. An example of this would be if a bank accepted a $100,000 deposit and agreed to pay 5% interest on it for fiv e years, then loaned the $100,000 out at 5.25%. A securitization lender would be a typical user of match-rate funds. Matched Book A bank is running a matched book when the maturitie s of its assets and liabilities are equally distributed. Also known as "asset/liability management". Matching Contribution A type of contribution an employer chooses to make to his or her employee's employer-sponsored retirement plan. The contribution is base d on elective deferral contributions made by the employee.

Matching Orders Entering identical buy and sell orders at the same time to create the appearance of active trading in that security. Matching Strategy A strategy of creating investment portfolios that m eet the individual needs of investors through tiered investment durations. Material Insider Information Material information, about certain aspects of a co mpany, that has not yet been made public but that will have at least a small impact o n the company's share price once released. It is illegal for holders of material ins ider information to use the information - however it was received - to their advantage in tra ding stock, or to provide the information to family members or friends so they can use it to make trades. Material Weakness When one or more of a company's internal controls, put in place to prevent significant financial statement irregularities, is considered t o be ineffective. If a deficiency in an internal control is thought to be of material weakn ess, this means that it could lead to a material misstatement in a company's financial stat ements. Matilda Bond An bond denominated in the Australian dollar and is sued on the Australian market by a foreign entity. Mature Industry An industry which has passed both the emerging and the growth phases of industry growth. Earnings and sales grow slower in mature in dustries than in growth and emerging industries. As can be seen above, the third phase is the mature industry phase. Matured RRSP A Canadian retirement savings vehicle that is regis tered with the Canadian government and is being used to produce retirement income for the beneficiary Maturity 1. The length of time until the principal amount of a bond must be repaid. 2. The end of the life of a security. Maturity by Maturity Bidding - MBM A bond auction that allows bidders (who are underwr iters) to submit bids for selected maturities in its issue, rather than requiring buye rs to bid for the entire issue on an all-or-none (AON) basis. Maturity Date The date on which the principal amount of a note, d raft, acceptance bond or other debt instrument becomes due and is repaid to the investo r and interest payments stop. It is also the termination or due date on which an instal lment loan must be paid in full.

Maturity Guarantee The dollar amount of a contract (such as a life ins urance policy or segregated fund contract) that is guaranteed after a certain amount of time has elapsed Max Pain (TM) The point at which options expire worthless. Maximizer™ A brand of customer relationship management softwar e popularly used by brokers and investment advisors for tracking clients and leads. May Day Refers to May 1st, 1975, when brokerages changed fr om a fixed commission for securities transactions to a negotiated one. McClellan Oscillator A market breadth indicator that is based on the dif ference between the number of advancing and declining issues on the NYSE. It is p rimarily used for short and intermediate term trading. To calculate subtract a 39 day EMA (of advancing is sues - declining issues) from a 19 day EMA (of advancing issues - declining issues). Simplified, it looks as follows: (19 Day EMA of Adv ances - Declines) - (39 Day EMA of Advances - Declines) McClellan Summation Index The McClellan Summation Index is a long-term versio n of the McClellan Oscillator. It is a market breadth indicator, and interpretation is sim ilar to that of the McClellan Oscillator, except that it is more suited to major trends. Mean The simple mathematical average of a set of two or more numbers. The mean for a given set of numbers can be computed in more than one way , including the arithmetic mean method, which uses the sum of the numbers in the se ries, and the geometric mean method. However, all of the primary methods for com puting a simple average of a normal number series produce the same approximate result m ost of the time. Mean Return 1. In securities analysis, it is the expected value , or mean, of all the likely returns of investments comprising a portfolio. It is also know n as "expected return". Mean Reversion A theory suggesting that prices and returns eventua lly move back towards the mean or average. This mean or average can be the historical average of the price or return or another relevant average such as the growth in the economy or the average return of an industry. Mechanical Investing Buying and selling stocks according to a screen bas ed on predetermined criteria, usually ranking stocks using relative strength or momentum as the central indicator, but other indicators can also be used.

Medallion Signature Guarantee A guarantee seal applied to securities, in the proc ess of transfer, by member institutions of the Medallion program. Median The midpoint of the range numbers that are arranged in order of value. Medicaid A joint federal and state program that helps low-in come individuals or families pay for the costs associated with long-term medical and custodi al care, provided they qualify. Although largely funded by the federal government, Medicaid is run by the state where coverage may vary. Medicare A U.S. federal health program that subsidizes peopl e who meet one of the following criteria: 1. An individual over the age of 65 who has been a U.S. citizen or permanent legal resident for five years. 2. An individual who is disabled and has collected Social Security for a minimum of two years. 3. An individual who is undergoing dialysis for kid ney failure or who is in need of a kidney transplant. 4. An individual who has Amyotrophic Lateral Sclero sis (ALS-Lou Gehrig's disease). Medicare helps out people at a time in their lives when they may have serious health problems but lack the funding for treatment. Medicare Part D A prescription drug benefit program that was create d through the U.S. Medicare Prescription Drug, Improvement, and Modernization A ct of 2003. The "D" stands for "drugs". The program gives Medicare recipients thes e basic choices: stay in traditional Medicare without signing up for the prescription dr ug benefit outlined in the Act, stay in traditional Medicare and enroll in a Medicare drug plan, enroll in other Medicare plans, or enroll in a comprehensive private health plan (whic h may or may not cover prescription costs). The program began providing coverage for us ers on Jan 1, 2006. Medicare Wages The portion of a person's earnings that are subject to "Medicare tax." Medium Of Exchange An intermediary instrument used to facilitate the s ale, purchase or trade of goods between parties. In modern economies the medium of exchange is currency. Medium Term An intermediate period of time to hold an asset. Medium Term Note - MTN 1. A note that usually matures in five to 10 years. 2. A corporate note continuously offered by a compa ny to investors through a dealer. Investors can choose from differing maturities, ran ging from nine months to 30 years. Mega Cap Companies having a market capitalization greater th an $200 billion Mello-Roos In the U.S., a form of financing that can be used b y cities, counties and special districts (such as school districts) to finance major improve ments and services within the

particular district. Special taxes and bonds used f or Mello-Roos financing can only be issued by counties or districts in which two-thirds of the voters in the area have voted in favor of becoming a Mello-Roos district. Member 1. In the most general context, a brokerage firm (o r broker) holding membership on an organized stock or commodities exchange. Membership is generally required in order to fill trades for clients on the exchange. 2. For the New York Stock Exchange, one of over 130 0 individuals or firms owning a seat on the exchange. 3. For the National Association of Securities Deale rs (NASD), any broker-dealer admitted to membership in the association. Member Firm A broker-dealer in which at least one of the princi pal officers is a member of either the NYSE, another major stock exchange, a self-regulato ry organization or a clearing house corporation. Also referred to as "clearing member". Member Of Household A person who is claimed as a dependent when filing year-end tax forms. Such a dependent allows a taxpayer to qualify for the dependency exe mption. A member of household can be a relative or a non-relative, but in order for a non-relative to be claimed as a member of household, he or she must meet the relationship req uirements outlined by the IRS. Member Short-Sales Ratio A ratio comparing the number of short sales transac ted on behalf of NYSE members to the entire number of short sells transacted on the exch ange. Memorandum of Understanding - MOU A legal document outlining the terms and details of an agreement between parties, including each parties requirements and responsibil ities. Mental Accounting An economic concept established by economist Richar d Thaler, which contends that individuals divide their current and future assets into separate, non-transferable portions. The theory purports individuals assign different le vels of utility to each asset group, which affects their consumption decisions and other behav iors. Merchant Bank A bank that deals mostly in (but is not limited to) international finance, long-term loans for companies and underwriting. Merchant banks do not p rovide regular banking services to the general public. Merger The combining of two or more companies, generally b y offering the stockholders of one company securities in the acquiring company in exch ange for the surrender of their stock. Merger Arbitrage A hedge fund strategy with which the stocks of two merging companies are simultaneously bought and sold to create a risk les s profit. Mergers And Acquisitions - M&A A general term used to refer to the consolidation o f companies. A merger is a combination of two companies to form a new company, while an ac quisition is the purchase of one

company by another with no new company being formed . Merrill Lynch & Co. One of the better known management and advisory com panies. Merrill Lynch provides a wide range of services to both individual and insti tutional investors. Mezzanine Financing A hybrid of debt and equity financing that is is ty pically used to finance the expansion of existing companies. Mezzanine financing is basicall y debt capital that gives the lender the rights to convert to an ownership or equity interes t in the company if the loan is not paid back in time and in full. It is generally subordina ted to debt provided by senior lenders such as banks and venture capital companies. Since mezzanine financing is usually provided to th e borrower very quickly with little due diligence on the part of the lender and little or n o collateral on the part of the borrower, this type of financing is aggressively priced with the lender seeking a return in the 20-30% range. Mgmt Represents the amount of the total outstanding stoc k (capitalization) that is held by management. Figure is expressed as a percentage. Michael Milken As an executive at investment bank Drexel Burnham L ambert Inc during the 1980s, Milken used high-yield junk bonds for corporate financing and mergers and acquisitions. He amassed an enormous personal fortune, but in 1989 h e was indicted by a federal grand jury and eventually spent nearly two years in priso n after pleading guilty to charges of securities fraud. While he is credited with foundin g the high-yield debt market, he was banned for life from the securities industry. Michigan Consumer Sentiment Index - MCSI A survey of consumer confidence conducted by the Un iversity of Michigan. The preliminary report is released on the tenth (except on weekends) of each month. A final report for the prior month is released on the first of the month. Micro Cap Companies having a market capitalization between $5 0 million and $300 million. Micro Risk A type of political risk that refers to political a ctions in a host country that can adversely affect selected foreign operations. Micro risk can come about from events that may or may not be in the reigning government's control Micro-Hedge An investment technique used to eliminate the risk of a single asset. In most cases, this means taking an offsetting position in that single asset. If this asset is part of a larger portfolio, the he dge will eliminate the risk of the one asset but will have less of an effect on the risk associa ted with the portfolio. Micro credit An extremely small loan given to impoverished peopl e to help them become self employed. Also known as "micro lending." Microeconomics The branch of economics that analyzes the market be havior of individual consumers and firms in an attempt to understand the decision-maki ng process of firms and households. It is concerned with the interaction between individua l buyers and sellers and the factors

that influence the choices made by buyers and selle rs. In particular, microeconomics focuses on patterns of supply and demand and the de termination of price and output in individual markets (e.g. coffee industry). Microfinance A type of banking service that is provided to unemp loyed or low-income individuals or groups who would otherwise have no other means of g aining financial services. Ultimately, the goal of microfinance is to give low income people an opportunity to become self-sufficient by providing a means of savi ng money, borrowing money and insurance. Mid-Atlantic Option An option that can be exercised at different times during the life of the option. The various times set for exercise are written within the optio n and allow for flexibility for both the writer and holder of the option. Middle Office The group of employees in a financial services comp any that manages risk, calculates profits and losses, and (generally) is in charge of information technology. The middle office draws on the resources of both the front and the back offices. Mileage Allowance A deduction of automobile expenses for people using their vehicles for business, charity, moving, medical or any other purpose that qualifies for a deduction. Mill Rate The amount of tax paid per dollar of the assessed p roperty value. Mine and Yours Terms used by floor traders to signify buying and s elling. Mainly used in forex transactions. Mini Perm Short-term financing used to pay off income-produci ng construction or commercial properties, usually payable in three to five years. Mini-Sized Dow Options A type of option for which the underlying assets ar e Dow Jones Industrial Average futures contracts. The option has a 5 times multiplier, whi ch means that each option contract on the index controls 5 times the value of the index. This gives the option holder more leverage on his/her investment compared to cash ind ex options at a lower cost. The option is traded on the Chicago Board of Trade. Minimum Margin The initial amount required to be deposited in a ma rgin account before trading on margin or selling short. For example, the NYSE and the NAS D require investors to deposit a minimum of $2,000 in cash or securities to open a m argin account. Keep in mind that this amount is only a minimum - some brokerages may requ ire you to deposit more than $2,000. Minimum Price Contract A forward contract with a provision guaranteeing a minimum price at delivery of the underlying agricultural commodity.

Minority Interest A significant but non-controlling ownership of less than 50% of a company's voting shares by either an investor or another company. Minus Tick Designates a trade that occurs at a lower price tha n the immediately preceding trade. Also referred to as "downtick" or "zero minus tick". Mirror Fund A type of mutual fund, typically run by a life insu rance company, that enables an investor to access another company's mutual fund through his or her life insurance policies. Misery Index A measure of economic well-being for a specified ec onomy, computed by taking the sum of the unemployment rate and the inflation rate for a given period. An increasing index means a worsening economic climate for the economy in question, and vice versa. Mismatch Risk 1) A category of risk that refers to the possibilit y that a swap dealer will be unable to find a suitable counterparty for a swap transaction for wh ich it is acting as an intermediary. 2) The risk that an investor has chosen investments that are not suitable for his or her circumstances. MJSD An acronym representing the months March, June, Sep tember, and December. MMK In currencies, this is the abbreviation for the Mya nmar Kyat. MNT In currencies, this is the abbreviation for the Mon golian Tughrik. MOB (Municipals-over-Bonds) Spread The difference in yields between a municipal bond a nd a Treasury bond with the same time to maturity. The MOB is sometimes used for det ermining tax strategies. Mode A statistical term referring to the most frequently occurring term in a set of numbers. Modern Portfolio Theory - MPT A theory on how risk-averse investors can construct portfolios in order to optimize market risk for expected returns, emphasizing that risk is an inherent part of higher reward. Also called portfolio theory or portfolio management the ory. Modified Accelerated Cost Recovery System - MACRS The new accelerated cost recovery system, created a fter the release of the Tax Reform Act of 1986, which allows for greater accelerated depre ciation over longer time periods. Modified Adjusted Gross Income - MAGI The amount of income that determines how much of an individual's IRA contribution is deductible. The modified adjusted gross income is f ound by taking the individual's adjusted gross income and adding back certain items such as foreign income, foreign-housing deductions, student-loan deductions, IRA-co ntribution deductions and deductions for higher-education costs.

Modified Dietz Method A method of evaluating a portfolio's return based u pon a time weighted analysis. Modified Duration A formula that expresses the measurable change in t he value of a security in response to a change in interest rates. Calculated as the follo wing: Where: n = number of coupon periods per year YTM = the bond's yield to maturity Modified Internal Rate Of Return - MIRR While the internal rate of return (IRR) assumes the cash flows from a project are reinvested at the IRR, the modified IRR assumes tha t all cash flows are reinvested at the firm's cost of capital. Therefore, MIRR more accura tely reflects the profitability of a project Modigliani-Miller Theorem - M&M A financial theory stating that the market value of a firm is determined by its earning power and the risk of its underlying assets, and is independent of the way it chooses to finance its investments or distribute dividends. Re member, a firm can choose between three methods of financing: issuing shares, borrowi ng or spending profits (as opposed to dispersing them to shareholders in dividends). The theorem gets much more complicated, but the basic idea is that, under certain assumptio ns, it makes no difference whether a firm finances itself with debt or equity. Mom and Pop An adjective denoting a small-scale and family-like atmosphere, often used to describe these types of businesses and investors.

Momentum The rate of acceleration of a security's price or v olume. Momentum Fund Investment funds that invest in companies based on current trends in such things as earnings or price movement. The portfolio manager w ill look for companies that have been trending in a certain direction (e.g. a series of e xtremely positive earnings releases or upward price momentum in the short term). The manag er will then take positions in the same direction as the trend and attempt to ride the wave and sell once it has peaked. These funds are also known as "momo funds". Momo Play A slang term used to describe an investment purely as a momentum play, not worrying about the company's fundamentals. Monday Effect A theory that returns on the stock market on Monday s will follow the prevailing trend from the previous Friday. Therefore, if the market was u p on Friday, it should continue through the weekend and, come Monday, resume its rise. Monetarism A set of views based on the belief that inflation d epends on how much money the government prints. It is closely associated with Mi lton Friedman, who argued, based on

the Quantity Theory of Money, that the government s hould keep the money supply fairly steady, expanding it slightly each year mainly to a llow for the natural growth of the economy. Monetarist An economist who holds the strong belief that the e conomy's performance is determined almost entirely by changes in the money supply. Monetarist Theory An economic concept which contends that changes in the money supply are the most significant determinants of the rate of economic gr owth and the behavior of the business cycle. Monetary Base The total amount of a currency that is either circu lated in the hands of the public or in the commercial bank deposits held in the central bank's reserves. This measure of the money supply typically only includes the most liquid curr encies. Also known as the "money base". Monetary Conditions Index - MCI A measure of monetary conditions in the Canadian ec onomy, giving an idea of the relative ease or tightness of monetary policy. MCI gauges th e effect that Canada's monetary policy has on the Canadian economy through changes in the exchange rate and interest rates. Monetary Policy The actions of a central bank, currency board or ot her regulatory committee, that determine the size and rate of growth of the money supply, which in turn affects interest rates. Monetary Union Index of Consumer Prices - MUICP An average measure of inflation for all countries l ocated in the Euro-zone. It is a statistical indicator whose objective is to facilitate making c omparisons of inflation between the European Union and other economies such as the U.S. Monetize 1. To convert into money. 2. To convert from securities into currency that ca n be used to purchase goods and services. Money 1. A commodity or asset, such as gold, an officiall y issued currency, coin or paper note, that can be legally exchanged for something equival ent, such as goods or services. 2. As defined by common law: a medium of exchange t hat is authorized or adopted by a domestic or foreign government and includes a monet ary unit of account established by an intergovernmental organization or by agreement b etween two or more nations. Money Flow Calculated by averaging the high, low, and closing prices, and multiplying by the daily volume. Comparing that result with the number for t he previous day tells you whether money flow was positive or negative for the current day. Money Flow Index - MFI A momentum indicator that measures the strength of money in and out of a security. A divergence between the MFI and price trend can be i nterpreted as a possible trend

reversal. Money Laundering The process of creating the appearance that large a mounts of money obtained from serious crimes, such as drug trafficking or terrori st activity, originated from a legitimate source. Money Management The process of budgeting, saving, investing, spendi ng or otherwise in overseeing the cash usage of an individual or group. The predominant us e of the phrase in financial markets is that of an investment professional making investmen t decisions for large pools of funds, such as mutual funds or pension plans. Also referred to as "investment management" and/or "portfolio management". Money Manager A business or bank responsible for managing the sec urities portfolio of an individual or institutional investor. Typically, a money manager employs people with various expertise ranging from research and selection of investment o ptions to monitoring the assets and deciding when to sell them. In return for a fee, th e money manager has the fiduciary duty to choose and manage investments prudently for his or her clients, including developing an appropriate investment strategy, buying and sell ing securities to meet those goals. Also known as "portfolio manager" or "investment ma nager". Money Market The securities market dealing in short-term debt an d monetary instruments. Money market instruments are forms of debt that mature in less t han one year and are very liquid. Money Market Account A savings account that offers the competitive rate of interest (real rate) in exchange for larger-than-normal deposits. Also known by the acronym "MMDA", which stands for "money market demand account" or "money market deposit account". Money Market Fund A mutual fund that invests in short-term debt instr uments. The fund's objective is to earn interest for shareholders while maintaining a net a sset value of $1 per share. Money Supply The entire quantity of bills, coins, loans, credit, and other liquid instruments in a country's economy. Money Zero Maturity - MZM A measure of the liquid money supply within an econ omy. MZM represents all money in M2 less the time deposits, plus all money market fu nds. Money-Purchase Pension Plan A defined-contribution plan to which employer contr ibutions are fixed Money-Purchase Provisions The terms of a registered pension plan that detail the specific amounts that an employer and employee contribute to the plan. The amounts ma y be stated in dollars or percentages. The provisions of the pension plan sta tes the maximum amount of the employee's contribution that can be matched by the employer. Money-purchase provisions for registered plans must fall under the governing requirements outlined by the

Government of Canada Monopolist A person, group or organization with a monopoly. In other words, an individual or company that controls all of the market for a parti cular good or service. Monopolistic Competition A type of competition within an industry where: 1. All firms produce similar yet not perfectly subs titutable products. 2. All firms are able to enter the industry if the profits are attractive. 3. All firms are profit maximizers. 4. All firms have some market power, which means no ne are price takers. Monopoly A situation in which a single company or group owns all or nearly all of the market for a given type of product or service. By definition, mo nopoly is characterized by an absence of competition - which often results in high prices and inferior products. For a strict academic definition, a monopoly is a m arket containing a single firm. Monopsony A market similar to a monopoly except that a large buyer not seller controls a large proportion of the market and drives the prices down . Sometimes referred to as the buyer's monopoly. Monte Carlo Simulation A problem solving technique used to approximate the probability of certain outcomes by running multiple trial runs, called simulations, us ing random variables. Monthly Income Preferred Securities - MIPS Shares that are an interest in a limited partnershi p existing solely for the purpose of issuing preferred securities and lending the procee ds of the sales to its parent company. MIPS usually have a $25 par value, NYSE listing and cumulative monthly distributions. Montreal Exchange A Canadian derivatives exchange that facilitates th e trading of stock options, interest rate futures and options, as well as index options and f utures. Located in Montreal, Quebec, it is the country's main financial derivative market, while the Winnipeg Commodities Exchange in Manitoba is the home to Canadian commod ity derivative trading. Moody's Bond Survey A weekly publication that reports changes in corpor ate bond quality ratings for publicly traded companies, lists new debt registrations and provides market commentary. Also known as "Moody's Credit Survey". Moore's Law An observation, In 1965, by Intel co-founder Gordon Moore. He noticed the number of transistors per square inch on integrated circuits had doubled every year since their invention. Moore predicted the trend would continue for the foreseeable future. Although the pace has slowed, the number of transis tors per square inch has since doubled approximately every 18 months. This is used as the current definition of Moore's Law. MOP In currencies, this is the abbreviation for the Mac au Pataca.

Moral Hazard The risk that a party to a transaction has not ente red into the contract in good faith, has provided misleading information about its assets, l iabilities or credit capacity, or has an incentive to take unusual risks in a desperate atte mpt to earn a profit before the contract settles. Moral Obligation Bond A type of revenue bond issued by a municipality or similar government body. A moral obligation bond not only gives investors the tax ex emption benefits inherent in a municipal bond, but also provides an additional mor al pledge of commitment against default. The issuing body's commitment is supported by a reserve fund established to meet any debt service costs the government may be u nable to make. Moral Suasion A persuasion tactic used by an authority (i.e. Fede ral Reserve Board) to influence and pressure, but not force, banks into adhering to pol icy. Tactics used are closed-door meetings with bank directors, increased severity of inspections, appeals to community spirit, or vague threats. A good example of moral s uasion is when Fed Chairman Alan Greenspan speaks on the markets - his opinion on th e overall economy can send financial markets falling or flying. Moratorium 1) A period of time in which there is a suspension of a specific activity until future events warrant a removal of the suspension or issues regar ding the activity have been resolved. 2) In bankruptcy law, a legally binding halt of the right to collect debt. Morgan Stanley Capital International - MSCI A series of indexes constructed by Morgan Stanley t o help institutional investors benchmark their returns. These indexes are also use d for investment purposes - in the form of exchanged-traded funds - by all types of in vestors. There are a wide range of indexes created by Morgan Stanely covering a wide r ange of developed and emerging economies and a wide range of economic sectors. Morning Star A bullish candlestick pattern that consists of thre e candles that have demonstrated the following characteristics: 1. The first bar is a large red candlestick located within a defined downtrend. 2. The second bar is a small-bodied candle (either red or white) that closes below the first red bar. 3. The last bar is a large white candle that opens above the middle candle and closes near the center of the first bar's body. As shown by the chart, this pattern is used by trad ers as an early indication that the downtrend is about to reverse. Morningstar Risk Rating A rating system that measures how often a fund lose s money compared to the risk-free rate of return (T-bill return Mortality And Expense Risk Charge A variable annuity fee included in certain annuity or insurance products which serves to compensate the insurance company for various risks it assumes under the annuity contract Mortgage A debt instrument, secured by the collateral of spe cified real estate property, that the

borrower is obliged to pay back with a predetermine d set of payments. Mortgages are used by individuals and businesses wishing to make large value purchases of real estate without paying the entire value of the purchase up front. Mortgages are also known as liens against property, or claims on property. Mortgage Banker A company, individual or institution that originate s, sells and services mortgage loans. Mortgage Broker The matchmaker between a homebuyer and a lender who se goal is to originate a mortgage loan. The broker draws from a pool of various lende rs to find the right match. Mortgage-Backed Securities - MBS An investment instrument that represents ownership of an undivided interest in a group of mortgages. Principal and interest from the individu al mortgages are used to pay investors' principal and interest on the MBS. Also known as "m ortgage pass-through". Mortgagee An entity that lends money to a borrower for the pu rpose of purchasing a piece of real property. By accepting a mortgage on the real prope rty, the lender creates security in the full repayment of the loan in the future. Mortgagor An individual or company who borrows money to purch ase a piece of real property. By granting the lender an interest in the property, wh ich allows it to lend the funds with an accurate assessment of risk, the mortgagor provides the lender with a guarantee for the full repayment of the loan. Also known as a "chargo r". Most Active The stocks on an exchange that had the highest volu me over a given period. The most common time period used is a single trading day. Most Recent Quarter - MRQ The previous quarter Mothballing The preservation of a production facility without u sing it to produce. Machinery in a mothballed facility is kept in working order so tha t production may be restored quickly if needed. Moving Average - MA An indicator frequently used in technical analysis showing the average value of a security's price over a set period. Moving averages are generally used to measure momentum and define areas of possible support and r esistance. Moving Average Chart A tool used by technical analysts to track the pric e movements of a security or commodity. It plots average daily settlement prices over a defined period of time, anywhere from a few days to a couple years. Moving Average Convergence Divergence - MACD A trend-following momentum indicator that shows the relationship between two moving averages of prices. The MACD is calculated by subtr acting the 26-day exponential moving average (EMA) from the 12-day EMA. A nine-day EMA o f the MACD, called the "signal line", is then plotted on top of the MACD, functioning as a trigger for buy and sell signals.

Moving Average Ribbon A technique used in technical analysis to identify changing trends. It is created by placing a large number of moving averages onto the same cha rt. When all the averages are moving in the same direction, the trend is said to be strong. Reversals are confirmed when the averages crossover and head in the opposite dir ection. The moving averages used in the diagram start with the 50-day moving average and increase by 10-day periods up to the final average of 200. (50, 60, 70, 80 ... 190, 200) Moving Expenses Deductible expenses that are related to moving an i ndividual and/or his or her family and possessions for employment reasons Mr. Copper Otherwise known as Yasuo Hamanaka, Mr. Copper was a trader in the copper market who lost over $2.5 Billion for his employer, Sumitomo C orp. (in Japan). The losses amassed from unauthorized trading in secret accounts betwee n 1985 and 1996. MRO In currencies, this is the abbreviation for the Mau ritanian Ouguiya. MSCI Emerging Markets Index An index created by Morgan Stanley Capital Internat ional (MSCI) that is designed to measure equity market performance in global emergin g markets. The Emerging Markets Index is a float-adjusted mark et capitalization index. As of May 2005, it consisted of indices in 26 emerging econom ies: Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, In donesia, Israel, Jordan, Korea, Malaysia, Mexico, Morocco, Pakistan, Peru, Philippi nes, Poland, Russia, South Africa, Taiwan, Thailand, Turkey and Venezuela MTL In currencies, this is the abbreviation for the Mal tese Lira. Multi-Advisor Fund An investment fund that is managed by more than one investment manager, each with a particular specialty. The goal of the multi-advisor fund is to make investment decisions based on multiple professional opinions, rather tha n relying on a single person to have comprehensive knowledge of investment options. Multi-Discipline Account A type of investment account that allows access by several specialized investment managers within one main account. The account is sp lit into several sub-accounts that are separately run by managers with relevant expertise. The multi-discipline account provides investors with an efficient way to get professional investment management and asset diversification. It is also referred to as a "multi -style" and "multi-strategy account". Multinational Corporation - MNC A corporation that has its facilities and other ass ets in at least one country other than its home country. Such companies have offices and/or fa ctories in different countries and usually have a centralized head office where they c o-ordinate global management. Very large multinationals have budgets that exceed those of many small countries. Sometimes referred to as a "transnational corporati on".

Multiple Compression The effect that arises when a stock trades at a cer tain multiple and, while earnings may be strong, the stock price doesn't move up (or even go es down). The result is that the given multiple (P/E ratio) is reduced even though nothing is fundamentally wrong with the company. Compression of a company's multiple can be interpreted as the valuation being called into question. Multiples Approach A valuation theory based on the idea that similar a ssets sell at similar prices. This assumes that a ratio comparing value to some firm-s pecific variable (operating margins, cash flow, etc.) is the same across similar firms. Multiplier In Keynesian economic theory, a factor that quantif ies the change in total income as compared to the injection of capital deposits or in vestments which originally fueled the growth. It is usually used as a measurement of the effects of government spending on income, and it can be calculated as one divided by the marginal propensity to save. Multiplier Effect The expansion of a country's money supply that resu lts from banks being able to lend. The size of the multiplier effect depends on the pe rcentage of deposits that banks are required to hold on reserves. In other words, it is money used to create more money and calculated by dividing total bank deposits by the r eserve requirement. Municipal Bond A debt security issued by a state, municipality, or county, in order to finance its capital expenditures. Municipal bonds are exempt from feder al taxes and from most state and local taxes, especially if you live in the state th e bond is issued. Municipal Bond Fund A mutual fund that invests in municipal bonds, oper ating either as an investment trust or as an open-end fund. Municipal Convertible A zero-coupon municipal bond that can be converted into an interest-bearing bond under certain circumstances. Municipal Inflation-Linked Securities Investment vehicles issued by various levels of gov ernments containing variable coupon payments that increase and decrease with changes in the consumer price index (CPI). Municipal Securities Rulemaking Board - MSRB A regulating body that creates rules and policies f or investment firms and banks in the issuing and sale of municipal bonds, notes and othe r municipal securities by states, cities and counties. Activities regulated by the MSRB incl ude the underwriting, trading and selling of municipal securities financing public pr ojects. Munifacts A newswire service for municipal bonds that provide s information on new municipal bond issues in the primary market and secondary market. MUR In currencies, this is the abbreviation for the Mau ritius Rupee. Mutual Company

A private company whose ownership base is made of c ustomers. Also referred to as a "co-operative". Mutual Fund Custodian A trust company, bank or similar financial institut ion responsible for holding and safeguarding the securities owned within a mutual f und. A mutual fund's custodian may also act as the mutual fund's transfer agent, maint aining records of shareholder transactions and balances. Also referred to as a "mutual fund corporation". Mutual Fund Index, IBD Proprietary index of domestic growth stock funds lo cated every day on Investor's Business Daily's 'General Market & Sectors' page. C an be used along with other key indices as a general market indicator. Mutual Fund Liquidity Ratio A ratio published monthly by the Investment Company Institute that compares the amount of cash relative to total assets held by a mutual f und. Mutual Fund Timing A legal but frowned-upon practice whereby traders a ttempt to profit from the short-term differences between the daily closing prices of a m utual fund. Timing occurs when investors attempt to gain short- term profits from buying and selling mutual funds. This has a negative effect on the fun d's long-term holders, as they will be subjugated to higher fees due to the short-term tra ding. In order to prevent this, many mutual funds will impose a short term trading penal ty upon the sale of funds that are not held for a minimum period of time. This transfers t he short-term costs of buying and selling new shares within the fund's portfolio to t hose investors not planning to stay with the fund for the long-term. Don't confuse market ti ming with mutual fund timing. Market timing is a practice of trying to predict the best time to buy and sell stocks for the purpose of a short-term gain. Mutual fund timing is an prac tice publicly frowned upon by many mutual fund companies in their prospectuses. Mutual-Fund Advisory Program A portfolio of mutual funds that are selected to ma tch a pre-set asset allocation model based on the investor's objectives and offered in a single investment account together with the services of a professional investment advi sor. Typically, investors won't be charged separate transaction fees, but periodic (i. e. monthly/quarterly/yearly) asset-management fees based on the average value of asset s held within the account. Also known as a "mutual fund wrap". MVR In currencies, this is the abbreviation for the Mal dive Rufiyaa. MWK In currencies, this is the abbreviation for the Mal awi Kwacha. MXN In the currency market, this is the abbreviation fo r the Mexican peso My Stock Lists My Stock Lists tracks those stocks you want to keep a close eye on. Besides providing price and price change, My Stock Lists also tracks Volume % Change and IBD’s unique Earnings Per Share and Relative Strength Rat ings for up to 80 stocks (2 lists of up

to 40 each). Links are also provided for easy acces s to the IBD Investing Tools. MYR In currencies, this is the abbreviation for the Mal aysian Ringgit MZM In currencies, this is the abbreviation for the Moz ambique Metical N A Nasdaq stock symbol specifying that it is the com pany's third class of preferred shares. NAD In currencies, this is the abbreviation for the Nam ibia Dollar. Naked Call A call option position held by a writer who does no t hold a long position in the stock on which the call has been written. Sometimes referred to as an "uncovered call". Naked Option An option position where the buyer or seller has no underlying security position. Naked Position A securities position that is not hedged from marke t risk. Both the potential gain and the potential risk are greater when a position is naked instead o f covered (a covered position is hedged from market risk). Naked Put A put option whose writer does not have a short pos ition in the stock on which he or she has written the put. Sometimes referred to as an "uncovered put ." Naked Put A put option whose writer does not have a short pos ition in the stock on which he or she has written the put. Sometimes referred to as an "uncovered put ." Naked Shorting The illegal practice of short selling shares that h ave not been affirmatively determined to exist. Ordinarily, traders must borrow a stock, or determi ne that it can be borrowed, before they sell it short. However, some professional investors and hed ge funds take advantage of loopholes in the rules to sell shares without making any attempt to borrow the stock. Nano Cap Small public companies having a market capitalizati on below $50 million. Narrow Basis A condition found in futures markets in which the s pot price of underlying commodities is close to the futures price of the same contract. Narrow Money Another term for M1, the category of the money supp ly that includes all physical money like coins and currency. It also includes demand deposits, whi ch include checking accounts and NOW accounts. Narrow-Based Weighted Average An anti-dilution provision used to ensure that inve stors are not penalized when companies are

undergoing additional financing or issuing new shar es. A narrow-based weighted average takes into account only the total number of outstanding prefer red shares for determining the new weighted average price for the old shares. Nasdaq Created in 1971, the Nasdaq was the world's first e lectronic stock market. The Nasdaq is a computerized system that facilitates trading and pr ovides price quotations on some 5,000 of the more actively traded over-the-counter stocks. Nasdaq 100 Index An index composed of the 100 largest, most actively traded U.S companies listed on the Nasdaq stock exchange. This index includes companies from a broad range of industries with the exception of those that operate in the financial industry, su ch as banks and investment companies. Nasdaq Composite Index A market-capitalization weighted index of the more than 3,000 common equities listed on the Nasdaq stock exchange. The types of securities in the inde x include American depository receipts, common stocks, real estate investment trusts (REITs) and t racking stocks. The index includes all Nasdaq listed stocks that are not derivatives, preferred s hares, funds, exchange-traded funds (ETFs) or debentures. Nasdaq National Market Securities - Nasdaq-NM The Nasdaq National Market consists of over 3000 co mpanies that have a national or international shareholder base, meet stringent financial requirem ents, and agree to specific corporate governance standards. National Association of Securities Dealers - NASD A self-regulatory organization of the securities in dustry responsible for the operation and regulation of the Nasdaq stock market and over-the-counter mar kets. It also administrates exams for investment professionals, such as the Series 7 exam . National Best Bid and Offer - NBBO A term applying to the SEC requirement that brokers must guarantee customers the best available ask price when they buy securities and the best ava ilable bid price when they sell securities. National Bureau of Economic Research - NBER This private, non-profit, non-partisan research org anization's main aim is to promote greater understanding of how the economy works. It dissemin ates economic research among public policymakers, business professionals and the academ ic community. National Commodities And Derivatives Exchange - NCD EX India's largest and most recognized commodities exc hange, which was established in 2003. The exchange was founded by some of India's leading fin ancial institutions such as ICICI Bank Limited, the National Stock Exchange of India and the Nation al Bank for Agricultural and Rural Development, among others. National Futures Association - NFA An independent self-regulatory non-profit organizat ion that regulates the futures market. National Market System - NMS A system with two main functions: 1. To facilitate trading of OTC stocks whose size, profitability, and trading activity meet specific criteria. 2. To post prices for securities on the NYSE and ot her regional exchanges simultaneously, allowing investors to obtain the best price. National Registration Database - NRD A Canadian database, launched in 2003 to replace th e old paper form system, that allows security dealers and investment advisors to file registratio n forms electronically.

National Securities Clearing Corporation - NSCC A subsidiary of the DTCC that provides centralized clearing, information, and settlement services to the financial industry. National Securities Markets Improvement Act - NSMIA Passed by the U.S. Congress in 1996, the NSMIA was an attempt to update and amend previous security acts and create one uniform code that comp anies and regulators could follow. National Treatment A concept of international laws that declares that if a state provides certain rights and privileges t o its own citizens, it should also provide equivalent rights and privileges to foreigners who are currently in the country. This concept of equality can be found in bilateral tax treaties and also in most World Trade Organization agreements. Natural Unemployment The lowest rate of unemployment that an economy can sustain over the long run. Keynesians believe that a government can lower the rate of une mployment (i.e. employ more people) if it were willing to accept a higher level of inflation (the idea behind the Phillips Curve). However, critics o f this say that the effect is temporary and that unem ployment would bounce back up but inflation would stay high. Thus, the natural, or equilibrium, rate is the lowest level of unemployment at which inflation remains stable. Also known as the "non-ac celerating inflation rate of unemployment" (NAIRU). Near Term - NT Another word for "short term." Nearby Month In the context of options and futures, it's the mon th closest to delivery (futures) or expiration (options). Needs Approach A method of calculating how much life insurance is required by an individual/family to cover their needs (i.e. expenses). These include things like fu neral expenses, legal fees, estate and gift taxes, business buyout costs, probate fees, medical deduct ibles, emergency funds, mortgage expenses, rent, debt and loans, college, child care, private schooling and maintenance costs. The needs approach contrasts the human-life approach. Negative Amortization The increase in the balance of a loan caused by int erest payments being larger than the re-payments made on the loan. On adjustable-rate mortgages, if the monthly payments are not enough to cover both the interest and principal payments on the loa n, the shortage is added to the principal. This situation occurs when the mortgage payments reach t he maximum (as defined by the loan agreement) while the interest rate on the loan is i ncreasing. Negative Butterfly A non-parallel yield curve shift in which long- and short-term yields decrease by a greater degree than intermediate rates. This yield curve shift eff ectively humps the curve, adding to the curvature o f the yield curve. Negative Carry A situation in which the cost of financing a securi ties or financial futures position exceeds the yiel d earned. Negative Covenant

A bond covenant preventing certain activities, unle ss agreed to by the bondholders. Negative covenants are written directly into the agreement c reating the bond issue, are legally binding on the issuer, and exist to protect the best interests of the bondholders. Also referred to as "restrictive covenant". Negative Goodwill A gain occurring when the price paid for an acquisi tion is less than the fair value of its net assets. Negative Income Tax A taxation system where income subsidies are given to persons or families that are below the poverty line. Negative Obligation An obligation of NYSE specialists to remain on the sidelines and refrain from acting as principal when there is sufficient market demand and supply t o efficiently match orders. Negative Pledge Clause A negative covenant in an indenture stating that th e corporation will not pledge any of its assets if doing so gives the lenders less security. Also be r eferred to as a "covenant of equal coverage". Negative Volume Index - NVI An index that focuses on days where the volume has significantly decreased from the previous day's trading. Neglected Firm Effect The phenomenon of less-known firms producing abnorm ally high returns on their stocks. Negotiable 1. Describing the price of a good or security that is not firmly established. 2. Describing a good or security whose ownership is easily transferable from one party to another. Negotiable Certificate Of Deposit - NCD A certificate of deposit with a minimum face value of $100,000. These are guaranteed by the bank and can usually be sold in a highly liquid secondar y market, but they cannot be cashed-in before maturity Negotiable Order of Withdrawal (NOW) Account An interest-earning bank account with which the cus tomer is permitted to write drafts against money held on deposit. Also known as a "NOW account". Negotiated Market A type of secondary market exchange in which the pr ices of each security are bargained out between buyers and sellers. Negotiated Sale A method of offering municipal bonds or similar fin ancial instruments in which the issuing entity and a selected underwriter negotiate the terms of t he issue, as opposed to having multiple underwriting groups competitively bidding on the is sue to establish its terms. Negotiated Underwriting A process in which both the purchase price and the offering price for a new issue are negotiated between the issuer and a single underwriter. Neoclassical Economics An approach to economics that relates supply and de mand to an individual's rationality and his or

her ability to maximize utility or profit. Neoclass ical economics also increased the use of mathematical equations in the study of various aspe cts of the economy. This approach was developed in the late-nineteenth century, based on books by William Stanley Jevons, Carl Menger and Leon Walras. Nervous Nellie An investor who isn't comfortable with investing an d the risks associated with it. Nest Egg A special sum of money saved or invested for one sp ecific future purpose. Net Advantage To Leasing - NAL The total monetary savings that would result from a person or a business choosing to lease an asset, as opposed to purchase it outright. The bene fit of leasing is determined by comparing the net present value of purchasing the asset outright to t he net present value of leasing it Net Asset Value - NAV 1. In the context of mutual funds, the total value of the fund's portfolio less liabilities. The NAV i s usually calculated on a daily basis. 2. In terms of corporate valuations, the book value of assets less liabilities. Net Change The difference between the closing price of a secur ity on the day's trading and the previous day's closing price. Net change can be positive or negati ve and is quoted in terms of dollars. This is what the newspaper stock tables quote Net Debt Per Capita A measurement of the value of a government's debt e xpressed in terms of the amount attributable to each citizen under the government's jurisdiction. I t is commonly computed using the following formula: Net Debt To Assessed Valuation In a municipal bond issue, a ratio measuring the va lue of the municipality's net debt compared to the specified value of the real property being purchase d as assessed for tax purposes. Net Debt To Estimated Valuation A ratio comparing the net value of a municipal bond issue to the estimated market value of the property secured by the debt. This ratio can differ significantly from a municipal bond's net debt to assessed valuation if real-estate prices for the mu nicipality's holdings incur large increases or decreases. Net Domestic Product An annual measure of the economic output of a natio n that is adjusted to account for depreciation, calculated by subtracting depreciation from the gro ss domestic product (GDP). Net Exporter A country or territory whose value of exported good s is higher than its value of imported goods over a given period of time. A net exporter is the opposite of a net importer. Net Exports The value of a country's total exports minus the va lue of its total imports. It is used to calculate a country's aggregate expenditures, or GDP, in an ope n economy. Net Importer A country or territory whose value of imported good s is higher than its value of exported goods over a given period of time.

A net importer is the opposite of a net exporter. Net Income - NI 1. A company's total earnings (or profit). Net inco me is calculated by taking revenues and adjusting for the cost of doing business, depreciation, inter est, taxes and other expenses. This number is found on a company's income statement and is an imp ortant measure of how profitable the company is over a period of time. The measure is al so used to calculate earnings per share. Often referred to as "the bottom line" since net in come is listed at the bottom of the income statement. In the U.K., net income is known as "pro fit attributable to shareholders". 2. An individual's income after deductions, credits and taxes are factored into gross income. Deductions and credits are subtracted from gross in come to arrive at taxable income, which is used to calculate income tax. Net income is income tax s ubtracted from taxable income. Net Interest Margin Securities - NIMS A type of security that allows holders to access ex cess cash flows resulting from securitized mortgage loan pools. Net Investment A measure of a company's investment in capital, fou nd by subtracting non-cash depreciation from capital expenditures. This measure helps to give a sense of how much money a company is spending on capital items (such as property, plants and equipment), which are used for operations. Net Investment Income Income received from investment assets (before taxe s) such as bonds, stocks, mutual funds, loans and other investments (less related expenses). The individual tax rate on net investment income depends on whether it is interest income, dividend income or capital gains. Net Long A condition in which an investor has more long posi tions than short positions in a given asset, market, portfolio or trading strategy. Investors wh o are net long will benefit when the price of the asset increases. Net Loss The result that occurs when expenses exceed the inc ome produced. Net Operating Income - NOI A company's operating income after operating expens es are deducted, but before income taxes and interest are deducted. If this is a positive value, it is referred to as net operating income, while a negative value is called a net operating loss (NOL) . Net Operating Loss - NOL A period in which a company's allowable tax deducti ons are greater than its taxable income, resulting in a negative taxable income. This genera lly occurs when a company has incurred more expenses than revenues during the period. The net operating loss for the company can generall y be used to recover past tax payments or reduce future tax payments. The reasoning behind th is is that because corporations are required to pay taxes when it earns money, it deserves some for m of tax relief when it loses money. Net Operating Profit After Tax - NOPAT A company's potential cash earnings if its capitali zation were unleveraged (that is, if it had no debt ). NOPAT is frequently used in economic value added (E VA) calculations. Calculated as: NOPAT = Operating Income x (1 - Tax Rate) Net Operating Profit Less Adjusted Taxes - NOPLAT Total operating profits for a firm with adjustments made for taxes.

Net Present Value - NPV The difference between the present value of cash in flows and the present value of cash outflows. NPV is used in capital budgeting to analyze the pro fitability of an investment or project. NPV analysis is sensitive to the reliability of fut ure cash inflows that an investment or project will yield. Net Proceeds The amount received after all costs are deducted fr om the sale of a piece of property or security. Net Realizable Value - NRV The value of an asset that can be realized by a com pany or entity upon the sale of the asset, less a reasonable prediction of the costs associated with either the eventual sale or the disposal of the asset in question. Net Receivables A company's accounts receivable (money owed to the company) minus bad debts. Net Revenue Pledge A provision in a municipal bond issue that requires the issuing municipality to use net revenues (revenues left after expenses) from the project bei ng financed to pay first the debt service costs of the issue Net Sales The amount a seller receives from the buyer after c osts associated with the sale are deducted. Net Short A condition in which an investor has more short pos itions than long positions in a given asset, market, portfolio or trading strategy. Investors wh o are net short will benefit when the price of the underlying asset decreases. Net Tangible Assets Calculated as the total assets of a company, minus any intangible assets such as goodwill, patents and trademarks, less all liabilities and the par va lue of preferred stock. Also known as "net asset value" or "book value". Net Unrealized Appreciation - NUA The difference in value between the average cost ba sis of shares and the current market value of the shares held in a tax-deferred account. Net Volume A security's uptick volume minus its downtick volum e over a specified period. An indicator very similar to money flow. Net Worth The amount by which a company or individual's asset s exceed their liabilities. Netback A summary of all the costs associated with bringing one unit of oil to the marketplace, and all of the revenues from the sale of all the products generate d from that same unit. The netback is calculated by taking all of the revenues from the oil, less al l costs associated with getting the oil to a market . These costs can include, but are not limited to, im porting, transportation, production and refining costs, and royalty fees. Netscaped A slang term referring to an instance in which a co mpany gets hurt materially or put out of business as a result of head-to-head competition with Micros oft. Microsoft's size, resources and expertise mean there is always a risk that the company will s teal market share. Many competitors have tried to beat the software giant and ended up suffering seri ous damage.

Netting 1. Settling mutual obligations at the net value of a contract as opposed to its gross dollar value. 2. Reducing the transfer of funds between subsidiar ies to a net amount. Neutral 1) A term that describes an option on a security or market that is neither bullish nor bearish. 2) A term that describes a person who is non-biased in the case of a dispute, such as an arbitrator. New Economy A buzzword describing the new, high growth industri es that are on the cutting edge of technology and are the driving force of economic growth. New Highs Refers to a stock attaining a new price high when c ompared to its old price high of the last 52 weeks New Highs List Found daily on Investor's Business Daily's ‘Industr y Group’ page. Identifies both the top industry sectors with the greatest number of stocks making n ew price highs as well as lists the individual stocks hitting new highs within that sector (‘New H ighs’ list). New Home Sales An economic indicator that measures sales of newly built homes. Released by the U.S. Department of Commerce's Census Bureau, it includes both quant ity and price statistics. It is considered to be a lagging indicator of demand in the market and to af fect mortgage rates. New Issue A reference to a security that has been registered, issued and is being sold on a market to the public for the first time. New issues are sometimes referr ed to as primary shares or new offerings. The term does not necessarily refer to newly issued stocks, although initial public offerings are the most commonly known new issues. Securities that can be n ewly issued include both debt and equity. New Paradigm In the investing world, a totally new way of doing things that has a huge effect on business. New York Mercantile Exchange - NYMEX The world's largest physical commodity futures exch ange. Trading is conducted through two divisions: the NYMEX Division, which is home to the energy, platinum and palladium markets, and the COMEX Division, where metals like gold, silver and copper and the FTSE 100 index options are traded. The NYMEX uses an outcry trading system dur ing the day and an electronic trading system after hours New York Stock Exchange - NYSE A corporation, operated by a board of directors, re sponsible for listing securities, setting policies and supervising the stock exchange and its member a ctivities. The NYSE also oversees the transfer of members' seats on the Exchange, judging whether a potential applicant is qualified to be a specialist. News Item Summary of the most recent news event. News items a re obtained from several sources, including all major news wires and company press releases NGN In currencies, this is the abbreviation for the Nig erian Naira. Nifty 50 The 50 stocks that were most favored by institution al investors in the 1960s and 1970s. Companies

in this group were usually characterized by consist ent earnings growth and high P/E ratios. Nigerian Scam A scam most often perpetrated by email. In a Nigeri an scam, the sender requests help in facilitating the transfer of a substantial sum of money. In retu rn, the sender offers a commission, usually in the range of several million dollars. The scammers then request that money be sent to pay for some of the costs associated with the transfer. If money is sent to the scammers, they will either immediately disappear or try to get more money with claims of c ontinued problems with the transfer. Nikkei Short for Japan's Nikkei 225 Stock Average, the lea ding and most-respected index of Japanese stocks. It is a price-weighted index comprised of J apan's top 225 blue-chip companies on the Tokyo Stock Exchange. The Nikkei is equivalent to the Dow Jones Industrial Average Index in the U.S. In fact, it was called the Nikkei Dow Jones Stock Aver age from 1975 to 1985. Nil-Paid Security that are tradeable but originally posed no cost to the seller. For example, a renounceable right being sold by the original owner to another i nvestor is considered nil-paid. A right is an opportunity to purchase more shares, usually at dis count, given to shareholders by a corporation. The shareholders receive these rights at no cost, a nd if the rights are renounceable, the shareholders can choose to sell them on the market Nine-Bond Rule The NYSE requirement that all orders for nine bonds or less be sent to the floor for one hour, in which time a market is sought. The rule doesn't app ly if the customer directs the broker to go to the OTC market. Also known as "Rule 396". NIO In currencies, this is the abbreviation for the Nic araguan Cordoba. NMF An abbreviation for "no meaningful figure". You'll often see this when comparing financial data among companies where a certain ratio or figure isn 't applicable. No Quote A designation indicating that no market makers are making an inside market at this time. No-Load Fund A mutual fund whose shares are sold without a commi ssion or sales charge. The reason for this is that the shares are distributed directly by the inv estment company, instead of going through a secondary party. This is the opposite of a load fun d, which charges a commission upon the initial purchase at the time of sale. No-Par Value Stock Stock that is issued without the specification of a par value indicated in the company's articles of incorporation or on the stock certificate itself. Noise Price and volume fluctuations in the market that ca n confuse one's interpretation of market direction. Used in the context of equities, it is s tock market activity caused by program trading, dividend payments or other phenomena that is not re flective of overall market sentiment. Also known as "market noise". Noise Trader The term used to describe an investor who makes dec isions regarding buy and sell trades without the use of fundamental data. These investors genera lly have poor timing, follow trends, and over-react to good and bad news.

Noise Trader Risk A form of market risk associated with the investmen t decisions of noise traders. The higher the volatility in market price for a particular securit y, the greater the associated noise trader risk NOK In currencies, this is the abbreviation for the Nor wegian Krone. Nominal An unadjusted rate, value or change in value. This type of measure often reflects the current situation, such as the current price of a car, and doesn't make adjustments to reflect factors such as seasonality or inflation, which provide a more accu rate measure in real terms. Nominal Effective Exchange Rate - NEER The unadjusted weighted average value of a country' s currency relative to all major currencies being traded within an index or pool of currencies. The w eights are determined by the importance a home country places on all other currencies traded withi n the pool, as measured by the balance of trade. Nominal GDP A gross domestic product (GDP) figure that has not been adjusted for inflation. Also known as "current dollar GDP" or "chained doll ar GDP". Nominal Interest Rate The interest rate unadjusted for inflation. Nominal Quotation A quote generated by a futures exchange or broker f or contracts that have not traded for a specific period of time. Also referred to as a "nominal quote" or "nominal p rice". Nominal Value The stated value of an issued security that remains fixed, as opposed to its market value, which fluctuates. Nominal Yield The interest rate stated on the face of a bond, it represents the percentage of interest to be paid by the issuer on the face value of the bond. Nominalism The principle of keeping the amount of a debt oblig ation fixed despite fluctuations in the money's purchasing power or exchange rate. Nominee A person or firm into whose name securities or othe r properties are transferred in order to facilitate transactions, while leaving the customer as the act ual owner. Nominee Dividend A dividend that a person receives on behalf of some one else. If you pass the dividends on to another person, then you must file a Form 1099-DIV to get a dividend adjustment and thereby reduce your taxable dividend interest. Nominee Interest Interest that a person receives on behalf of someon e else. If you pass the interest on to another person, then you must file a Form 1099-INT to get a n interest adjustment and thereby reduce your taxable interest. Non Performing Asset

Any asset that is not effectively producing income. Non Performing Loan - NPL Loans that are in default or close to being in defa ult. Non-Accredited Investor An investor who does not meet the net worth require ments for an accredited investor under the Securities & Exchange Commission's Regulation D. A non-accredited individual investor is one who has a net worth of less than $1 million (including spouse) and who earned less than $200,000 annually ($300,000 with spouse) in the last two yea rs. Non-Assessable Stock A class of stock in which the issuing company is no t allowed to impose levies on its shareholders for additional funds for further investment. Non-as sessable stocks typically have the words "fully paid and non-assessable" printed on the stock certi ficate. These are the opposite of assessable stocks. Non-Cash Charge A charge off, made by a company against earnings, t hat does not require an initial outlay of cash. Non-Client Order An order on an exchange made by a participant firm or on behalf of a partner, officer, director or employee of the participant firm. Where a participa nt firm is a firm that is entitled to trade on the exchange, it also known as a member firm. While the se orders are allowed, priority must be given to client orders for the same securities. Non-Competitive Tender One of the two bid processes for buying debt issuan ces. Non-competitive tender is for small investors, while competitive tender is for large in stitutional investors. The price that a non-competitive bidder receives is the average bid pric e of all competitive bids. Also known as a "non-competitive bid". Non-Contestability Clause 1. A provision in a person's will designed to stop beneficiaries from contesting the will. The provision states that if beneficiaries try to conte st the will, their potential inheritances will be effectively redistributed to other beneficiaries. 2. A provision in a life insurance policy designed to stop life insurance companies from refusing to pay out a claim to individuals because of fraud or error. Non-Deliverable Forward - NDF A cash-settled, short-term forward contract on a th inly traded or non-convertible foreign currency, where the profit or loss at the time at the settlem ent date is calculated by taking the difference between the agreed upon exchange rate and the spot rate at the time of settlement, for an agreed upon notional amount of funds Non-Deliverable Swap - NDS A swap that is similar to a non-deliverable forward , with the only difference being that settlement fo r both parties is done through a major currency. Non- deliverable swaps are used when the swap includes a major currency, such as the U.S. dollar, and a restricted currency, such as the Philippine peso or South Korean won. Non-Directed Order A customer order where specific instructions are no t given, by the customer to the broker, pertaining to its routing destination. Non-Equity Option A term for option contracts whose underlying securi ties are instruments other than equities.

Non-Farm Payroll A statistic researched, recorded and reported by th e U.S. Bureau of Labor Statistics intended to represent the total number of paid U.S. workers of any business, excluding the following employees: - general government employees - private household employees - employees of nonprofit organizations that provide assistance to individuals - farm employees This monthly report also includes estimates on the average work week and the average weekly earnings of all non-farm employees. Non-Financial Asset An asset with a physical value such as land, proper ty or some type of object. Non-Fluctuating The characteristic of constancy in a security or me asurement's value, rate of change or other metric. Non-Interest-Bearing Current Liability - NIBCL A category of debt entered on the liabilities side of a balance sheet under current liabilities. While a NIBCL is debt, representing a sum of money that the company owes and must pay within one year, it does not require interest payments. Non-Negotiable 1. A term relating to the price of a good or securi ty which is firmly established and cannot be adjusted. 2. A term relating to a good or security whose owne rship is not easily transferable from one party to another. Non-Operating Asset Assets that are unnecessary to the ongoing operatio ns of a business. Non-Operating Cash Flows Cash inflows and outflows related to non-current in vestments, financing, and dividends. Non-Qualified Deferred Compensation - NQDC Compensation that has been earned by an employee, b ut not yet received from the employer. Because the ownership of the compensation - which m ay be monetary or otherwise - has not been transferred to the employee, it is not yet part of the employee's earned income and is not counted as taxable income. Non-Qualified Distribution 1) A distribution from a Roth IRA that occurs befor e the Roth IRA owner meets certain requirements (see definition for qualified distributions). 2) A distribution from an education savings account that exceeds the amount used for qualified education expenses. Non-Qualified Stock Option - NSO A type of employee stock option where you pay ordin ary income tax on the difference between the grant price and the price at which you exercise the option. Non-Qualifying Investment An investment that does not qualify for any level o f tax-deferred or tax-exempt status. Investments of this sort are made with after-tax money. They ar e purchased and held in tax-deferred accounts, plans or trusts. Returns from these investments are taxed on an annual basis.

Non-Recourse Debt A loan that is secured by some sort of collateral, usually property. The issuer can seize the collater al if the borrower defaults. Non-Recourse Finance A loan where the lending bank is only entitled to r epayment from the profits of the project the loan i s funding, not from other assets of the borrower. Non-Recurring Item Indicates pre-tax, non-recurring items were include d in calculation. Daily Graphs Online uses a blue delta (triangle) to denote non-recurring items. Non-Renounceable Rights An offer issued by a corporation to shareholders to purchase more shares of the corporation (usually at a discount). Unlike a renounceable righ t, a non-renounceable right is not transferable, and therefore cannot be bought or sold. Non-Resident An individual who mainly resides in one region or j urisdiction but has interests in another region. In the region where he or she does not mainly reside, he or she will be classified by government authorities as a non-resident. The classification i tself will be determined in each region based on se t circumstances such as the amount of time spent with in the region during the calendar year. This classification is focused on where the person resid es and does not focus on citizenship. Non-Resident Alien A non-U.S. citizen who doesn't pass the green card test or the substantial presence test. If a non-citizen currently has a green card or has had a gre en card in the past calender year, he or she would pass the green card test and would be classified as a resident alien. If the individual has resided in the U.S. for more than 31 days in the current year and has resided in the U.S. for more than 183 days over a three-year period, including the current yea r, he or she would pass the substantial presence test and also be classified as a resident alien. Noncallable Securities that cannot be called by the issuer prio r to maturity. Noncommercial Trader A classification used by the Commodity Futures Trad ing Commission (CFTC) to identify traders that use the futures market for speculative purposes. Nonconvertible Currency Any currency that is used primarily for domestic tr ansactions and is not openly traded on a forex market. This usually is a result of government rest rictions, which prevent it from being exchanged for foreign currencies. Also known as a "blocked currency". Noncumulative A type of preferred stock that does not pay the hol der any unpaid or omitted dividends. If the corporation chooses to not pay dividends in a given year, the investor does not have the right to claim any of those forgone dividends in the future. Nonelective Contribution A type of contribution an employer chooses to make to each of his or her eligible employee's employer-sponsored retirement plan. The contributio n is not based on salary reduction contributions made by the employee.

Nonprofit Organization An association that is given tax-free status. Donat ions to a nonprofit organization are often tax deductible as well. Nonrecurring Charge An expense occurring only once on a company's finan cial statement. Nontaxable Dividends Dividends from a mutual fund or some other regulate d investment company that are not taxed. Taxes are not paid out because the fund invests in municipal and other tax exempt investments. Normal Market Size A share classification structure based on the numbe r of shares outstanding. This determines the number of shares that a market maker can trade at t he quoted price. Normal Market Size A share classification structure based on the numbe r of shares outstanding. This determines the number of shares that a market maker can trade at t he quoted price. Normal Yield Curve A yield curve in which short-term debt instruments have a lower yield than long-term debt instruments of the same credit quality. This gives the yield curve an upward slope. This is the most often seen yield curve shape. Sometimes referred to as "positive yield curve". Normal-Course Issuer Bid-NCIB The action of a company buying back its own outstan ding shares from the markets so it can cancel them. Normalized Earnings 1. Earnings adjusted for cyclical ups and downs in the economy. 2. On the balance sheet, earnings adjusted to remov e unusual or one-time influences. North American Free Trade Agreement - NAFTA A trade agreement between Canada, the United States and Mexico that encourages free trade between these North American countries. North American Securities Administrators Associatio n - NASAA A voluntary organization, established in 1919, of s ecurities regulators whose aim is to protect investors who buy securities or investment advice b y educating the public, investigating violations of state and provincial law and filing enforcement actions. Membership includes securities regulators from all 50 U.S. states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Canada and Mexico. North Sea Brent Crude A type of oil that is sourced from the North Sea. T his type of oil is used as a benchmark to price European, African and Middle Eastern oil that is ex ported to the West. Nostro Account An account that a bank holds with a foreign bank. Not-Held Order A market or limit order that gives the broker or fl oor trader both time and price discretion to attemp t to get the best possible price. Note

A debt security, usually maturing in one to 10 year s. Note Against Bond Spread - NOB A spread within futures contracts created by offset ting positions in 30-year treasury bond futures with positions in 10-year treasury note contracts. Note Issuance Facility - NIF A syndicate of commercial banks that have agreed to purchase any short to medium-term notes that a borrower is unable to sell in the eurocurrency ma rket. Notice Of Assessment - NOA An annual statement sent by revenue authorities to taxpayers detailing the amount of income tax they owe. It includes the amount of their tax refun d, tax credit and income tax already paid. Notice Of Seizure A letter or written notice from the Internal Revenu e Service (IRS) informing the recipient that authorization has been given to liquidate his or he r assets in order to cover the income taxes due. Notional Principal Amount In an interest rate swap, the predetermined dollar amount on which the exchanged interest payments are based. Notional Value The total value of a leveraged position's assets. T his term is commonly used in the options, futures and currency markets because in them a very little amount of invested money can control a large position (have a large consequence for the trader). Novation 1.The act of replacing one participating member of a contract with another. 2. The exchange of new debts or obligations for old er existing ones NPR In currencies, this is the abbreviation for the Nep al Rupee. Numeraire An economic term that represents a unit of account. In French, the term means counting or measuring. Usually a numeraire is applied to a sing le good, which becomes the base good. All other similar goods are then valued and priced against th e base good. This comparison makes it possible to identify which goods are worth more than others. Nuncupative Will A verbal will that must have two witnesses and can only deal with the distribution of personal property. A nuncupative will is considered a "death bed" will, meaning that it is a safety for people struck with a terminal illness and robbed of the ab ility or time to draft a proper written will. NY Empire State Index A seasonally-adjusted index that tracks the results of the Empire State Manufacturing Survey. The survey is distributed to roughly 175 manufacturing executives and asks questions intended to gauge both the current sentiment of the executives and th eir six-month outlook on the sector. NYSE Composite Index Measures all common stocks listed on the New York S tock Exchange and four subgroup indexes: Industrial, Transportation, Utility, and Finance. T he index tracks the change in market value of NYSE common stocks, adjusted to eliminate the effects of new listings and de-listings. The market value of each stock is calculated by multiplying its price p er share by the number of shares listed.

NZD In the currency market, this is the abbreviation fo r the New Zealand dollar. O A Nasdaq stock symbol specifying that it is the com pany's second class of preferred shares. Obligation Bond A municipal bond used to secure a mortgage on prope rty or other physical assets that can be liquidated. The face value of the bond is greater t han the value of the property itself. Obligation The legal responsibility to meet the terms of a con tract. If the obligation is not met there is often recourse for the other party to the contract. Obligor An entity that has an obligation to pay all princip al and interest payments on a debt. Obsolete Inventory Term that refers to inventory that is at the end of its product life cycle and has not seen any sales or usage for a set period of time usually determined b y the industry. This type of inventory has to be written down and can cause large losses for a compa ny. Also referred to as "dead inventory" or "excess inv entory". October Effect A theory that postulates that stocks will tend to d ecline during the month of October. Odd Lot An amount of a security that is less than the norma l unit of trading for that particular security. Odd Lot Theory A technical analysis theory/indicator based on the assumption that the small individual investor is always wrong. Therefore, if odd lot sales are up - that is small investors are selling stock - it is probably a good time to buy. Odd Lotter An individual investor who buys securities, usually stocks, in odd lots. This is the opposite of someone who buys securities in round lots. OEX The ticker symbol for the Standard & Poor's 100 Ind ex. Off-Balance-Sheet Financing A form of financing in which large capital expendit ures are kept off of a company's balance sheet through various classification methods. Companies w ill often use off-balance-sheet financing to keep their debt to equity (D/E) and leverage ratios low, especially if the inclusion of a large expenditure would break negative debt covenants. Off-The-Run Treasuries All Treasury bonds and notes issued before the most recently issued bond or note of a particular maturity. These are the opposite of "on-the-run tre asuries".

Offering In the most general sense, the issue or sale of a s ecurity by a company. It is often used in reference to an initial public offering (IPO) when a company' s stock is made available for purchase by the public but it can also be used in the context of a bond issue. Offering Circular An abbreviated prospectus for a new security listin g. Delivered to individuals and brokerage houses, these documents are issued to arouse interest in th e new issue. Offering Memorandum A legal document stating the objectives, risks and terms of investment involved with a private placement. This includes items such as the financia l statements, management biographies, detailed description of the business, etc. An offering memor andum serves to provide buyers with information on the offering and to protect the sellers from the liability associated with selling unregistered securities. Also known as a "private placement memorandum (PPM) ". Offering Price The price at which publicly issued securities are m ade available for purchase by the investment bank underwriting the issue. A security's offering price includes the underwriter's fee and any management fees applicable to the issue. Office Audit An examination of documents by the Internal Revenue Service (IRS) for a matter that is considered to be reasonably simple. Office of Foreign Asset Control - OFAC A department of the U.S. Treasury that enforces eco nomic and trade sanctions against countries and groups of individuals involved in terrorism, na rcotics and other disreputable activities. Office Of Thrift Supervision - OTS The bureau of the U.S. Treasury Department that is responsible for issuing and enforcing regulations governing the nation's savings and loan industry Offline Debit Card A card that combines characteristics of both a trad itional (online) debit card and a credit card, allowing the cardholder to pay for goods and servic es directly from his or her bank account. As with a traditional debit card, a transaction using the o ffline debit card creates a debit against the cardholder's bank account. But unlike with a tradit ional debit card, no PIN is required during the transaction - all that is required is the user's si gnature. These cards are generally issued by credit card companies in association with the bank in whic h the account is held. Also known as "check cards". Offset 1. To liquidate a futures position by entering an e quivalent, but opposite, transaction which eliminates the delivery obligation. 2. To reduce an investor's net position in an inves tment to zero, so that no further gains or losses will be experienced from that position. Offshore Located or based outside of one's national boundari es. Offshore Mutual Fund A mutual fund that is managed and housed in a forei gn country, usually outside the U.S. Offshore Portfolio Investment Strategy - OPIS A tax shelter product designed to create large, see mingly real losses to be used for tax sheltering. This tax shelter involves creating a shell company, which enters into a long chain of sophisticated

and complex financial investments. These investment s usually create fake accounting losses that are more than 100 times larger than the real financ ial loss. Ultimately, these large losses are then used to offset legitimate capital gains, allowing t he tax shelter's creators to pay less tax. OHLC Chart Short for "Open, High, Low, Close chart." This is a securities chart that clearly shows the opening, high, low and closing prices for a security. Oil Sands Sand and rock material which contains crude bitumen (a heavy, viscous form of crude oil). Oil sands are found primarily in the Athabasca region of nort hern Alberta, Canada, and in areas of Venezuela. Bitumen is extracted and processed using two method s: 1. Mining - Large areas of land are cleared of tree s and brush, then the top soil and clay are removed to expose the oil sand. This surface mining method uses large trucks and shovels to remove the sand, which can have a volume of anywhere from 1-20 % of actual bitumen. After processing and upgrading, the end result is sent to refineries, wh ere it's made into gasoline, jet fuel and other petroleum products. 2. In situ - This relatively new method is mainly u sed to get bitumen in oil sand that is buried too deep below the earth's surface to be recovered with a truck and shovel. In situ technology injects steam deep beneath the earth to separate the viscou s bitumen from the sand and pump it up to the surface. The bitumen then goes through the same upg rading process as it would in the mining method. Okun's Law A relationship between an economy's GDP gap and the actual unemployment rate. Old Age, Survivors and Disability Insurance Program - OASDI The official name for Social Security in the United States. Old Economy A term describing the old blue chip industries whic h enjoyed fabulous growth during the early parts of the century. These companies are usually very tr aditional in their ways of doing business. Oligopoly A situation in which a particular market is control led by a small group of firms. An oligopoly is much like a monopoly, in which only one company exerts control over most of a market. In an oligopoly, there are at least two fir ms controlling the market Oligopsony Similar to an oligopoly (few sellers), this is a ma rket in which there are only a few large buyers for a product or service. This allows the buyers to exert a great deal of control over the sellers and can effectively drive down prices. Omega A measure of the change in an option's value with r espect to the percentage change in the underlying price. The omega gives option investors an idea of how the option price and the stock price that underlies it move together. Omega is the third derivative of the option price, and the derivative of gamma. Omnibus Account An account between two futures merchants (brokers). It involves the transaction of individual accounts which are combined in this type of account , allowing for easier management by the futures merchant. OMR In currencies, this is the abbreviation for the Oma n Rial. On Stream

An investment that is on track to earn its expected return. On Track 1. A type of commodities delivery for futures contr acts that is deferred and priced according to the seller's location FOB. 2. A physical commodity that is already loaded on r ailroad cars or trucks and ready for delivery. On-Balance Volume - OBV A method used in technical analysis to detect momen tum, the calculation relates volume to price change. OBV provides a running total of volume and shows if this volume is flowing in or out. This indicator was developed by Joe Granville. On-The-Run Treasuries The most recently issued U.S. Treasury bond or note of a particular maturity. These are the opposite of "off-the-run treasuries". One Night Stand Investment Buying a security with the intention of holding it for the long term, but subsequently panicking and selling it the following day. One-Cancel-All Order A type of order comprising several limit orders for several companies, but in the event that one gets filled, the rest are canceled. This type of order a llows a trader to buy one out of a number of potent ial stocks at the best price in the shortest amount of time. One-Cancels-the-Other Order - OCO An order stipulating that if one part of the order is executed, then the other part is automatically canceled. One-sided Market When the market for a security only shows either on e bid or one ask. One-Stop Shop A company or a location that offers a multitude of services to a client or a customer. The idea is to provide convenient and efficient service and also t o create the opportunity for the company to sell more products to clients and customers. One-Touch Option A type of exotic option that gives an investor a pa yout once the price of the underlying asset reaches or surpasses a predetermined barrier. This type of option allows the investor to set the position of the barrier, the time to expiration and the payout to be received once the barrier is broken. Only two outcomes are possible with this ty pe of option: 1) the barrier is breached and the trader collects the full payout agreed upon at the outset of the contract, or 2) the barrier is not breached and the trader loses the full premium paid to the broker. Online Banking The performance of banking activities via the Inter net. Online Trading Making trades via the Internet. OPEC Basket A weighted average of oil prices collected from var ious oil producing countries. This average is determined according to the production and exports of each country and is used as a reference point by OPEC to monitor worldwide oil market condi tions.

Open 1. An unexecuted order that is still valid. 2. The start of trading on a securities exchange. Open End Credit A pre-approved loan that may be used repeatedly up to a certain limit. Open Interest 1. The total number of options and/or futures contr acts that are not closed or delivered on a particular day. 2. The number of buy market orders before the stock market opens. Open Ended Investment Company - OEIC A type of company or fund in the UK that is structu red to invest in other companies with the ability to adjust constantly its investment criteria and fu nd size. The company's shares are listed on the London Stock Exchange, and the price of the shares are based largely on the underlying assets of the fund. There are no bid and ask quotes on the OE IC shares buyers and sellers receive the same price. Open Listing A property that is simultaneously marketed by multi ple real estate agents. Open Order An order to buy or sell a security that remains in effect until it is either canceled by the customer or executed. Open Outcry A method of trading on a commodity exchange by maki ng verbal bids and offers in the trading pits. Open Rotation Orders to be executed only during the initial tradi ng rotation of the specified day. Open-End Fund A mutual fund that continues to sell shares to inve stors and will buy back shares when investors wish to sell Open-End Indenture A clause in a revenue-bond agreement that permits t he issuance of additional revenue bonds in the future, provided that the revenue of the previous y ear was sufficient enough to cover the costs of the new issue. Open-End Indenture A clause in a revenue-bond agreement that permits t he issuance of additional revenue bonds in the future, provided that the revenue of the previous y ear was sufficient enough to cover the costs of the new issue. Open-End Lease A rental agreement that obliges the lessee (the per son making periodic lease payments) to purchase the leased asset at the end of the agreement. Also called a "finance lease". Open-End Management Company A company that distributes and redeems securities i t issues. The most common open-end

management companies are mutual fund companies whic h sell and redeem shares at the net asset value per share. Open-Market Transaction An order placed by an insider, after all appropriat e documentation has been filed, to buy or sell restricted securities openly on an exchange Opening Bell A bell that rings to signify the day's start of tra ding on a securities exchange. Opening Price The price at which a security first trades upon the opening of an exchange on a given trading day. Opening Transaction The initial or primary transaction of an options co ntract. Rights for a buyer are created as is the obligation of the seller. Operating Cash Flow - OCF The cash generated from the operations of a company , generally defined as revenues less all operating expenses, but calculated through a series of adjustments to net income. The OCF can be found on the statement of cash flows. Also known as "cash flow provided by operations" or "cash flow from operating activities". Operating Cash Flow Demand - OCFD A measure of the amount of operating cash flow need ed to meet the capital costs of a company's strategic investments. This value is used to comput e the cash value added of a company's strategic investments and operations. Operating Cash Flow Ratio A measure of how well current liabilities are cover ed by the cash flow generated from a company's operations. Operating Earnings Profits after subtracting expenses such as marketin g, cost of goods sold, administration and general operating costs from revenue. Operating Expense The essential things that a company must pay for in order to maintain business. Also known as "OPEX". Operating Income Before Depreciation And Amortizati on - OIBDA A non-GAAP measure of financial performance used by companies to show profitability in continuing business activities, excluding the effec ts of capitalization and tax structure. Sometimes OIBDA is also considered to not include i tems such as changes in accounting principles that are not indicative of core operating results, income from discontinued operations and the earnings/losses of subsidiaries. Calculated as: OIBDA = Operating Income + Depreciat ion + Amortization + Tax + Interest Operating Lease A lease contract that allows the use of an asset, b ut does not convey rights similar to ownership of the asset Operating Leverage A measurement of the degree to which a firm or proj ect incurs a combination of fixed and variable costs. 1. A business that makes few sales, with each sale providing a very high gross margin, is said to be highly leveraged. A business that makes many sales, with each sale contributing a very slight

margin, is said to be less leveraged. As the volume of sales in a business increases, each new sale contributes less to fixed costs and more to profita bility. 2. A business that has a higher proportion of fixed costs and a lower proportion of variable costs is said to have used more operating leverage. Those bu sinesses with lower fixed costs and higher variable costs are said to employ less operating le verage. Operating Margin A ratio used to measure a company's pricing strateg y and operating efficiency. Calculated by: Operating margin is a measurement of what proportio n of a company's revenue is left over after paying for variable costs of production, such as wa ges, raw materials, etc. A healthy operating margin is required for a company to be able to pay for its fixed costs, such as interest on debt. Also known as "operating profit margin" or "net pro fit margin". Operating Netback A measure of oil and gas sales net of royalties, pr oduction and transportation expenses. This is a non-GAAP measure used specifically in the oil and g as industry as a benchmark to compare performance between time periods, operations and co mpetitors. Operating Ratio A ratio that shows the efficiency of management by comparing operating expense to net sales: Opinion Shopping A company's action of searching for an auditor who will give a positive opinion of the company's accounting practices (even though they might not de serve it). Opportunity Cost 1. The cost of an alternative that must be forgone in order to pursue a certain action. Put another way, the benefits you could have received by taking an alternative action. 2. The difference in return between a chosen invest ment and one that is necessarily passed up. Say you invest in a stock and it returns a paltry 2% ov er the year. In placing your money in the stock, yo u gave up the opportunity of another investment - say , a risk-free government bond yielding 6%. In this situation, your opportunity costs are 4% (6%-2 %). Optimization In the context of technical analysis, it is the pro cess of adjusting one's trading system in an attemp t to make it more effective. These adjustments includ e changing the number of periods used in moving averages, changing the number of indicators used, or simply taking away what doesn't work. Optimized Portfolio as Listed Securities - OPALS A portfolio of securities used to closely track an index without the exposure of purchasing all securities within that index. Option A privilege sold by one party to another that offer s the buyer the right, but not the obligation, to b uy (call) or sell (put) a security at an agreed-upon p rice during a certain period of time or on a specif ic date. Option Adjusted Spread - OAS Mainly used for fixed income products, OAS measures the yield spread that is not directly attributable to the fixed income's characteristics Option Agreement 1. A signed agreement between an investor who is se eking to open an options account and his or her brokerage firm. This agreement is used to verif y the investor's level of experience and to ensure that the investor clearly understands the various r isks involved when trading options. 2. An agreement between two parties that provides o ne of the parties with the right but not the

obligation to buy, sell or obtain a specific asset at an agreed upon price at some time in the future. Option Chain A way of quoting options prices through a list of a ll of the options for a given security. Option Cycle A pattern of months in which option contracts usual ly expire (usually a nine month period). There are three common cycles: JAJO - January, April, July, and October MJSD - March, June, September, and December FMAN - February, May, August, and November Option Disclosure Document A publication issued by the Options Clearing Corpor ation (OCC) that first-time option traders are required to read before being allowed to make any o ption trades. The document prepares traders for the options market. Option Indicator Indicates options are available for trading and the exchange(s) which it trades through. Exchange names are abbreviated as follows: • • • • AM = American Stock Exchange • • • • CB = Chicago Board of Exchange • • • • PA = Pacific Stock Exchange • • • • PH = Philadelphia Stock Exchange • • • • NONE = Indicates options are not traded Option Series A specific set of calls or puts on the same underly ing security, in the same class and with the same strike price and expiration date. Optionable Stock A stock that has options trading on a market exchan ge. Not all companies that trade publicly have exchange traded options, this is due to requirement s that need to be met, such as minimum share price and minimum outstanding shares. Options Clearing Corporation - OCC A clearing organization that acts as both the issue r and guarantor for option and futures contracts. Options Contract One options contract represents one hundred shares in the underlying stock. The quoted price of an option is per share. Options Price Reporting Authority - OPRA A committee of representatives from participating e xchanges responsible for providing last-sale options quotations and information from the partici pating exchanges. Oracle Of Omaha A nickname for Warren Buffett, who is arguably one of the greatest investors of all time. He is called the "Oracle of Omaha" because his investment picks and comments on the market are very closely followed by the investment community, and he lives and works in Omaha, Nebraska. Order The instruction, by a customer to a brokerage, for the purchase or sale of a security with specific conditions.

Order Book Official A trading floor participant responsible for maintai ning a list of public market or limit orders of a specific option class using the "market-marker" sys tem of executing orders. Order Driven Market An auction market in which prices are determined by the publication of orders to buy or sell shares. Order Splitting When brokers split up larger orders to qualify them for the Small Order Execution System (SOES) and, therefore, have them automatically executed. Ordering Rules The order in which Roth IRA assets are distributed. Assets are distributed from a Roth IRA in the following order: 1. IRA participant contributions 2. Taxable conversions 3. Non-taxable conversions 4. Earnings Orderly Market Any market in which the supply and demand are reaso nably equal. Ordinary and Necessary Expenses - O and NE A tax provision for business expenses, it states th at necessary business expenses are fully deductible as current expenses. Ordinary Income Income derived from regular business activities. Organic Act of the Department of Labor An act of law reluctantly signed by former U.S. pre sident William Howard Taft in 1913 that created the Department of Labor and the Department of Comme rce, dividing the former Department of Commerce and Labor Organic Growth The growth rate of a company, excluding any growth from takeovers, acquisitions, or mergers. Organization for Economic Co-operation and Developm ent - OECD The OECD is a group of 30 member countries who disc uss and develop economic and social policy. Organization of Petroleum Exporting Countries - OPE C An organization consisting of the world's major oil -exporting nations, OPEC was founded in 1960 to coordinate the petroleum policies of its members an d to provide member states with technical and economic aid. OPEC is a cartel that aims to manage the supply of oil in an effort to set the price of oil on the world market, in order to avoid fluctuat ions that might affect the economies of both producing and purchasing countries. Organized Labor An association of workers united as a single, repre sentative entity for the purpose of improving the workers' economic status and working conditions thr ough collective bargaining with employers. Also known as "unions". There are two types: the ho rizontal union, in which all members share a

common skill, and the vertical union, composed of w orkers from across the same industry. Original Cost All of the costs directly associated with acquiring an asset and putting it into use. Original Equipment Manufacturer - OEM 1. The original definition: a company whose product s are used as components in another company's product. The OEM will generally work closely with t he company that sells the finished product (often called a "value-added reseller" or VAR) and customi ze the designs based on the VAR's needs. 2. The more recent definition: a company that buys a product and incorporates or re-brands it into a new product under its own name. Original Issue Discount - OID The discount from par value at the time a bond or o ther debt instrument is issued. It is the differenc e between the stated redemption price at maturity and the issue price. Original Issue Discount Bond A municipal bond which is issued at a dollar price below par value and for which gains realized upon the receipt of the full par value at maturity are p rotected from capital gains taxes under U.S. federa l law. Also referred to as an "OID bond". Origination The process through which a mortgage lender creates a mortgage secured by some amount of the mortgagor's real property. Oscillator A technical analysis tool that is banded between tw o extreme values and built with the results from a trend indicator for discovering short-term overboug ht or oversold conditions. As the value of the oscillator approaches the upper extreme value the a sset is deemed to be overbought, and as it approaches the lower extreme it is deemed to be ove rsold. OTC Options Exotic options traded on the over-the-counter marke t, where participants can choose the characteristics of the options traded. Other Current Assets A balance sheet item that includes the value of non -cash assets due within one year. Other Current Liabilities A balance sheet entry used by companies to group to gether current liabilities that are not assigned to common liabilities such as debt obligations or a ccounts payable. Other Long-Term Liabilities A balance sheet item that includes obligations that do not currently require interest payments. Out Of The Money 1. For a call, when an option's strike price is hig her than the market price of the underlying asset. 2. For a put, when the strike price is below the ma rket price of the underlying asset. Out Trade A trade that cannot be cleared by the associated ex change clearing house because of discrepancies between the data submitted by both parties on the o pposite sides of a transaction.

Out-of-pocket Expenses An expense that an individual incurs for either bus iness or personal usage. These expenses are tax deductible. Outlay Cost Any concrete costs that can be identified in the pa st, present or future. Also referred to as "explicit costs". Outperform An analyst recommendation meaning a stock is expect ed to do slightly better than the market return. Also known as "market outperform", "moderate buy", or "accumulate". Output Gap An economic measure of the difference between the a ctual output of an economy and the output it could achieve when it is most efficient, or at full capacity. There are two types of output gaps: positive and negative. A positive output gap occurs when actual output is more than the full-capacity output. Negative output gap occurs when ac tual output is less than full-capacity output. Outright Futures Position A position in a futures contract that is not offset . Outside Director Any member of a company's board of directors who is not an employee or stakeholder in the company. Outside Earnings The amount of income an elderly individual under th e age of 70 has earned outside of his or her social security benefits. Outside Reversal A charting trend in which a stock price's high and low for the day exceed those of the preceding day. Outsourcing A practice used by different companies to reduce co sts by transferring portions of work to outside suppliers rather than completing it internally. Outstanding Shares Stock currently held by investors, including restri cted shares owned by the company's officers and insiders, as well as those held by the public. Shar es that have been repurchased by the company are not considered outstanding stock. They are also known as "issued shares" or "issued a nd outstanding". Over-Hedging A hedged position in which the offsetting position is for a greater amount than the underlying position held by the firm entering into the hedge. While hedging ensures price certainty, over-hedging can in effect become partly a hedge and par tly a speculative investment and can unduly hurt a firm. Over-The-Counter - OTC A security traded in some context other than on a f ormal exchange such as the NYSE, TSX, AMEX, etc. The phrase "over-the-counter" can be used to r efer to stocks that trade via a dealer network as opposed to on a centralized exchange. It also refer s to debt securities and other financial instruments such as derivatives, which are traded t hrough a dealer network. Over-The-Counter Bulletin Board - OTCBB

A regulated electronic trading service offered by t he National Association of Securities Dealers (NASD) that shows real-time quotes, last-sale price s and volume information for over-the-counter (OTC) equity securities. Companies listed on this e xchange are required to file current financial statements with the SEC or a banking or insurance r egulator. There are no listing requirements, such as those found on the Nasdaq and New York Stoc k Exchange, for a company to start trading on the OTCBB. Stock that trade on the OTCBB, will have the suffix ".OB". Over-The-Counter Exchange Of India - OTCEI An electronic stock exchange based in India that is comprised of small- and medium-sized firms looking to gain access to the capital markets. Like electronic exchanges in the U.S. such as the Nasdaq, there is no central place of exchange and a ll trading is done through electronic networks. Over-The-Counter Market A decentralized market of securities not listed on an exchange where market participants trade over the telephone, facsimile or electronic network inst ead of a physical trading floor. There is no centra l exchange or meeting place for this market. Also ref erred to as the "OTC market". Overadvance When a company obtains a loan in order to increase their inventory prior to an expected increase in sales volume. Overall Rank This compares a stock's Overall Rating to all other stocks in its industry group. For example, if a stock ranks 10th out of 100, it is in the top 10% o f its industry group, based on the Overall Rating. If 2 or more stocks within a group have the same 1-99 rating, they will receive the same Overall Rank. For example, if 3 stocks have a 99 Overall Rating, they will all three be ranked best in group. The stock with the next best rating will be ranked 4th in group. Overall Rating (or Diagnosis) The Overall Rating is determined by a proprietary f ormula incorporating all five of the Stock Diagnosis Ratings. These five ratings are not weigh ted equally. Stocks with superior characteristics are rated A or A+, while low rated stocks (D & E) r eveal weakness that could negatively affect the price of a stock. On a scale of 1-99, with 99 being best, a stock rated 90 places in the top 10% of stocks. This rating is based on technical and funda mental factors that most influence a stock's price, based on current and historical studies of t he greatest stock market winners. A stock's Overall Rating is not an average of its 5 Checkup Ratings. These five ratings are not weighted equally. It combines the 5 weighted rating s and then compares the results to all other companies in the market. For example, a stock may h ave an Overall Rating of A+, while its individual Checkup Ratings are no higher than A-. A high Overall Rating compares a stock to nearly 10 ,000 stocks in the Investor's Business Daily database but does not necessarily indicate the stoc k is a potential buy or sell candidate. A high rated stock in a strong market will often outperfor m a high rated stock in a weak, or bear, market. A+ 99-97 A 96-93 A- 92-90 B+ 89-85 B 84-80 B- 79-75 C+ 74-69 C 68-61 C- 60-55 D+ 54-47 D 46-38 D- 30-37 E 29-1

Overallotment Selling more securities than are available in an IP O. Overbought 1. A situation in which the demand for a certain as set unjustifiably pushes the price of an underlying asset to levels that do not support the fundamental s. 2. In technical analysis, this term describes a sit uation in which the price of a security has risen t o such a degree - usually on high volume - that an os cillator has reached its upper bound. This is generally interpreted as a sign that the price of t he asset is becoming overvalued and may experience a pullback. Overcapitalization When a company has too much capital for the needs o f its business. Overcollateralization The posting of more collateral than is needed to ob tain financing. Overcontribution Any contribution to a tax-deductible retirement sav ings plan exceeding the maximum allowed contribution for a given period as determined by th e retirement plan's registrar. Overcontributions are subject to the retirement plan's regulations or laws. Overcontributions are usually subject to some form of monetary penalty, intentioned to reduc e their occurrences. Overdraft An instant extension of credit from a lending insti tution. Overhang A measure of the potential dilution to which a comm on stock's existing shareholders are exposed due to the potential that stock-based compensation will be awarded to executives, directors or key employees of the company. It is usually represented in percentage form and is calculated as stock options granted, plus the remaining options that ha ve yet to be granted divided by the total shares outstanding. Overhead A reference in accounting to all costs not includin g or related to direct labor, materials, or administration costs. Overlapping Debt The debt of a political entity such as a state wher e its tax base overlaps the tax base of another political entity such as a city within the state. Overnight Index Swap An interest rate swap involving the overnight rate being exchanged for some fixed interest rate. Overnight Rate The interest rate at which a depository institution lends immediately available funds (balances within the central bank) to another depository institution overnight. Overnight Trading The buying or selling of currencies between 9pm and 8am local time. This type of transaction occurs when an investor takes a position at the end of the trading day in a foreign market that will be open while the local market is closed. The trade will be executed sometime that evening or early morning Overshopped The perception that a firm's attempt to raise capit al by selling equity or debt through a private or

public offering is an act of desperation. When a co mpany's management overshops a financing deal, it leaves investment banks, bridge financiers, lend ers and private equity groups wondering why they should be the ones to take on the risk of financing a project that others have rejected. Oversold 1. A condition in which the price of an underlying asset has fallen sharply, and to a level below which its true value resides. This condition is usu ally a result of market overreaction or panic selling. 2. A situation in technical analysis where the pric e of an asset has fallen to such a degree - usually on high volume - that an oscillator has reached a l ower bound. This is generally interpreted as a sign that the price of the asset is becoming undervalued and may represent a buying opportunity for investors. Overstay The act of holding an investment for too long. It o ften occurs when traders attempt to time the market by identifying the end of a price trend and the beginning of a new one, but, due to greed and fear, tend to overstay their positions. This usuall y results in reduced gains or, worse, further losse s. Oversubscribed A situation in which the demand for an initial publ ic offering of securities exceeds the number of shares issued. Overtrading 1. Excessive buying and selling of stocks by a brok er on an investor's behalf in order to increase the commission the broker collects. This situation has been known to arise when brokers are pressured to place a newly issued security underwritten by a firm's investment banking arm. Also known as "churning". 2. A situation in which a company is growing its sa les faster than it can finance them. This usually leads to enormous accounts payable or accounts rece ivable and a lack of working capital to finance operations. Overvalued A stock whose current price is not justified by the earnings outlook or price/earnings (P/E) ratio and thus, expected to drop in price. Overvaluation may result from an emotional buying spurt, which inflates the market price of the stock or from a de terioration in a company's financial strength. Overweight Refers to an investment position that is larger tha n the generally accepted benchmark. Overwrite A type of covered-call strategy that consists of wr iting call options on stocks that the writer alread y owns to generate maximum current income from option s premiums and dividends. Overwriting An options strategy that involves the sale of call or put options on stocks that are believed to be overpriced or underpriced. The options are not expe cted to be exercised. P A Nasdaq stock symbol specifying that it is the com pany's first class of preferred shares. P To P (Peer To Peer) or (Path To Profitability) P to P can mean one of two things: 1. Peer to peer allows internet users to transfer f iles directly, rather than through the use of a website or directory. File transfers are done direc tly from the users' computers. 2. An abbreviation of "path to profitability". This refers to the roadmap a startup company follows in order to propel its operations from its current sta te of losing money to becoming profitable.

PAB In currencies, this is the abbreviation for the Pan ama Balboa. Pac Man A form of defense used in a hostile takeover situat ion. The target firm turns around and tries to take over the company that has made the hostile bid. Pacific Exchange - PCX An exchange network that coordinates the trading of stock options between both institutional and individual investors. Paid In Capital Capital received from investors in exchange for sto ck. This is recorded as an entry on the balance sheet. Paid-Up The state of a settlement when all payment obligati ons for a security have been completed in a customer account. When an individual has paid up, h e or she has paid for the security in full. Paid-Up Capital The total amount of shareholder capital that has be en paid in full by shareholders. Painting the Tape An illegal action by a group of market manipulators buying and/or selling a security among themselves to create artificial trading activity, w hich, when reported on the ticker tape, lures in unsuspecting investors as they perceive an unusual volume. Paired Shares Stock of two companies under the same management th at is sold as one unit and usually appears on one certificate. Pairing Off An illegal practice of a brokerage firm offsetting short and long positions between house accounts by collecting cash payments without physically deli vering the securities. Pairoff A purchase of securities to offset a previously tra nsacted sale of the same security. Pairs Trade The strategy of matching a long position with a sho rt position in two stocks of the same sector. This creates a hedge against the sector and the overall market that the two stocks are in. The hedge created is essentially a bet that you are placing o n the two stocks the stock you are long in versus the stock you are short in. Palladium An element commonly used in jewelry, electronics, a nd the purification of hydrogen. Panel Bank The name given to the group of banks contributing t o the EURIBOR. This group is made up of the largest participants within the Euro money market. Panic Buying High volume buying brought about by sharp price inc reases.

Panic Selling Wide-scale selling of an investment, causing a shar p decline in price. In most instances of panic selling, investors just want to get out of the inve stment, with little regard for the price at which t hey sell. Paper Dealer A firm that specializes in buying commercial paper from companies and then selling/marketing it to investors. Paper Profit (Paper Loss) Unrealized capital gain (or capital loss) in an inv estment. It is calculated by comparing the market price of a security to the original purchase price. Gains or losses only become realized when the security is sold. Paper Trade Simulated trading that investors use to practice mi micking trades (buys and sells) without actually entering into any monetary transactions. Par 1. The face value of a bond. Generally $1,000 for c orporate issues, with higher denominations such as $10,000 for many government issues. 2. A dollar amount assigned to a security when firs t issued. Par Value 1) The face value of a bond. 2) A dollar amount that is assigned to a security w hen representing the value contributed for each share in cash or goods. Parabolic Indicator A technical analysis strategy that uses a trailing stop and reverse method called "SAR," or stop-and-reversal, to determine good exit and entry points. Parallel Loan A type of foreign exchange loan agreement that was a precursor to currency swaps. A parallel loan involves two parent companies taking loans from the ir respective national financial institutions and then lending the resulting funds to the other compa ny's subsidiary. Parent Company A company that controls other companies by owning a n influential amount of voting stock. Pareto Principle A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The principle states that, for many phenomena, 20% of invested input is responsible for 80% of the results obtained. Put an other way, 80% of consequences stem from 20% of the causes. Also referred to as the "Pareto rule " or the "80/20 rule". Pari-passu Two securities or obligations having equal rights t o payment. Paris Club A monthly meeting in Paris attended by creditors of 19 countries to discuss debt issues. Among other things, the Paris Club addresses the issue of coordinated debt relief for developing countries that cannot service their debt.

Parity 1. In general, a situation of equality. Parity can occur in many different contexts, but it always mea ns that two things are equal. 2. The official value. 3. In an exchange market, when all brokers bidding for the same security have equal standing due to identical bids. Parity Bond Two or more bond issues with equal rights to bond p ayments. Parity Price The term "parity" refers to equality. Thus, parity price is a price for an asset that is directly link ed to another price. Examples of parity price are: 1. Convertibles - the price at which a convertible security equals the value of the underlying stock. 2. Options - when an option is trading at its intri nsic value ("trading at parity"). 3. International parity - official rates for a curr ency in terms of other pegged currencies, typically the U.S. dollar. 4. Commodities - a commodity's price dependent on a composite of prices during a period of time, usually the most recent 10-year period. 5. Listed parity - situation when all parties invol ved are of equal standing and priority. Parking A form of kiting shares that a brokerage commits by moving long positions in unrelated accounts to cover short positions that are improperly settled a ccording to SEC regulations. Parking Violation The illegal practice of an acquiring company concea ling ownership of the target company by holding stock under a related third party before attempting corporate takeover. Parsonage Allowance An allowance designated by a church or other organi zation for its church professionals (clergy) for the expenses of providing and maintaining a home. Partial Redemption An investment-transaction classification that refer s to the withdrawal of a portion of a security's value by the owner. Rather than withdrawing the ent ire amount of his or her security's value from the account, an investor may prefer to keep a portion o f the value invested in the asset while still obtaining some cash. Partial Release A mortgage provision allowing some of the pledged c ollateral to be released from the mortgage contract if certain conditions are met Participating Preferred Stock A type of preferred stock that, under certain condi tions, gives holders the right to receive earnings payouts over and above the specified dividend rate. Participation Rate A measure of the participating portion of an econom y's labor force.

Partnership A business organization in which two or more indivi duals manage and operate the business. Both owners are equally and personally liable for the de bts from the business. Pass-Through Certificate Fixed-income securities that represent an undivided interest in a pool of federally insured mortgages put together by the Government National Mortgage As sociation (Ginnie Mae). Pass-Through Security A pool of fixed-income securities backed by a packa ge of assets. A servicing intermediary collects the monthly payments from issuers, and, after deduc ting a fee, remits or passes them through to the holders of the pass-through security. Also known as a "pass-through certificate" or "pay- through security." Passive Activity An activity from which you have the potential to pr ofit but in which you do not physically participate . Passive Foreign Investment Company - PFIC A foreign company whose income is 75% passive or ha s over 50% of its assets in investments earning interest, dividends, and/or capital gains. Passive Income Earnings an individual derives from a rental proper ty, limited partnership or other enterprise in which he or she is not actively involved. Passive Investing An investment strategy involving limited ongoing bu ying and selling actions. Passive investors will purchase investments with the intention of long-ter m appreciation and limited maintenance Passive Loss A loss incurred through a rental property, limited partnership, or other enterprise in which the individual is not actively involved. Passive Management An investing strategy that mirrors a market index a nd does not attempt to beat the market. Also known as "passive strategy" or "passive invest ing". Past Due Balance Method A finance/accounting method that bases costs (and i nterest) on the amounts owing that are past due. Patent A government license that gives the holder exclusiv e rights to a process, design or new invention for a designated period of time. Path Dependent Option An exotic option that is valued according to pre-de termined price requirements for its underlying asset or commodity.

Pattern In technical analysis, the distinctive formation cr eated by the movement of security prices on a chart. It is identified by a line connecting common price points (closing prices, highs, lows) over a period of time. Chartists try to identify patterns to try to anticipate the future price direction. Al so known as "trading pattern". People Pill A defensive strategy to ward off a hostile takeover . Management threatens that, in the event of a takeover, the entire management team will resign. Pattern Day Trader An SEC designation for traders who make four or mor e trades (buys and sells) in a particular security in a single day over a five-day period, an d for whom same-day trades make up at least 6% of their activity for that period. Pay/Collect An abbreviated reference to the payment or collecti on of funds (after futures positions have been marked to market) between clearing members and thei r respective clearing houses. Payback Period The length of time required to recover the cost of an investment. Paydown A payment made towards an outstanding loan balance. Paydown Factor The portion of cash subtracted each month from the principal of a mortgage security divided by the original principal of the security. Payee A party who receives payment. Payer A person who makes a payment to a payee. Paying Agent An agent who accepts payments from the issuer of a security and then distributes the payments to the holders of the security. Also known as a "disbu rsing agent." Payment The transfer of one form of good, service or financ ial asset in exchange for another form of good, service or financial asset in proportions that have been previously agreed upon by all parties involved. Payment can be made in the form of funds, assets or services. Payment Date The date on which a declared stock dividend is sche duled to be paid. Payment For Order Flow The compensation and benefit a brokerage receives b y directing orders to different parties to be executed. The brokerage firm receives a small payme nt, usually a penny per share, as compensation for directing the order to the different parties. Payment in Kind Bonds A type of bond that pays interest in additional bon ds, as opposed to cash payouts.

Payout The expected financial return from an investment ov er a given period of time. Payout may be expressed on an overall or periodic basis as either a percentage of the investment's cost or in a real dollar amount. Payout can also refer to the period of time in which an investment or a project is expected to recoup its initial capital investment a nd become minimally profitable. Short for "time to payout", "term to payout" or "pa yout period". Payout Phase The phase in an annuity during which payments are m ade to the annuitant. These are usually paid on a monthly basis and last for the lifetime of the annuitant. The income received from an annuity by a retired investor is considered taxable income. Payout Ratio The amount of earnings paid out in dividends to sha reholders. Investors can use the payout ratio to determine what companies are doing with their earni ngs. Payroll Tax Tax an employer withholds and/or pays on behalf of their employees based on the wage or salary of the employee. In most countries, including the U.S. , both state and federal authorities collect some form of payroll tax Peak The highest point between the end of an economic ex pansion and the start of a contraction in a business cycle. The peak of the cycle refers to the last month before several key economic indicators, such as employment and new housing star ts, begin to fall. It is at this point that real GD P spending in an economy is its highest level. Pearson Coefficient A type of correlation coefficient that represents t he relationship between two variables that are measured on the same interval or ratio scale. Pegging 1. A method of stabilizing a country's currency by fixing its exchange rate to that of another country . 2. A practice of and investor buying large amounts of an underlying commodity or security close to the expiry date of a derivative held by the investo r. This is done to encourage a favorable move in market price. PEN In currencies, this is the abbreviation for the Per uvian Nuevo Sol. Penalty Bid A bid intended to facilitate a securities offering by stabilizing its price during the distribution pe riod. This bid is typically entered by the managing under writer on behalf of a syndicate. Pennant A continuation pattern in technical analysis formed when there is a large movement in a stock, the flagpole, followed by a consolidation period with c onverging trendlines, the pennant, followed by a breakout movement in the same direction as the init ial large movement, the second half of the flagpole. As can be seen in the above picture, there is a lar ge rise in the stock, followed by a converging consolidation period that resembles a pennant and a resulting continuation of the initial trend. Penny Stock

A stock that sells for less than $1 per share but m ay also rise to as much as $10 per share as a result of heavy promotion. All p enny stocks are traded over the count (OTC) or on the pink sheets. Pension Adjustment - PA The amount of contributions that can be made to a R egistered Retirement Savings Plan (RRSP) on top of any contributions to a Registered Pension Pl an (RPP) in a given year. Pension Benefit Guaranty Corporation - PBGC A non-profit corporation, functioning under the jur isdiction of the Department of Labor, that guarantees the payment of certain pension benefits under defined-benefit plans that have been terminated with insufficient money to pay benefits. Pension Fund A fund established by an employer to facilitate and organize the investment of employees' retirement funds contributed by the employer and employees. Th e pension fund is a common asset pool meant to generate stable growth over the long term, and p rovide pensions for employees when they reach the end of their working years and commence retirem ent. P A Nasdaq stock symbol specifying that it is the com pany's first class of preferred shares. P To P (Peer To Peer) or (Path To Profitability) P to P can mean one of two things: 1. Peer to peer allows internet users to transfer f iles directly, rather than through the use of a website or directory. File transfers are done direc tly from the users' computers. 2. An abbreviation of "path to profitability". This refers to the roadmap a startup company follows in order to propel its operations from its current sta te of losing money to becoming profitable. PAB In currencies, this is the abbreviation for the Pan ama Balboa. Pac Man A form of defense used in a hostile takeover situat ion. The target firm turns around and tries to take over the company that has made the hostile bid. Pacific Exchange - PCX An exchange network that coordinates the trading of stock options between both institutional and individual investors. Paid In Capital Capital received from investors in exchange for sto ck. This is recorded as an entry on the balance sheet. Paid-Up The state of a settlement when all payment obligati ons for a security have been completed in a customer account. When an individual has paid up, h e or she has paid for the security in full. Paid-Up Capital The total amount of shareholder capital that has be en paid in full by shareholders. Painting the Tape An illegal action by a group of market manipulators buying and/or selling a security among themselves to create artificial trading activity, w hich, when reported on the ticker tape, lures in

unsuspecting investors as they perceive an unusual volume. Paired Shares Stock of two companies under the same management th at is sold as one unit and usually appears on one certificate. Pairing Off An illegal practice of a brokerage firm offsetting short and long positions between house accounts by collecting cash payments without physically deli vering the securities. Pairoff A purchase of securities to offset a previously tra nsacted sale of the same security. Pairs Trade The strategy of matching a long position with a sho rt position in two stocks of the same sector. This creates a hedge against the sector and the overall market that the two stocks are in. The hedge created is essentially a bet that you are placing o n the two stocks the stock you are long in versus the stock you are short in. Palladium An element commonly used in jewelry, electronics, a nd the purification of hydrogen. Panel Bank The name given to the group of banks contributing t o the EURIBOR. This group is made up of the largest participants within the Euro money market. Panic Buying High volume buying brought about by sharp price inc reases. Panic Selling Wide-scale selling of an investment, causing a shar p decline in price. In most instances of panic selling, investors just want to get out of the inve stment, with little regard for the price at which t hey sell. Paper Dealer A firm that specializes in buying commercial paper from companies and then selling/marketing it to investors. Paper Profit (Paper Loss) Unrealized capital gain (or capital loss) in an inv estment. It is calculated by comparing the market price of a security to the original purchase price. Gains or losses only become realized when the security is sold. Paper Trade Simulated trading that investors use to practice mi micking trades (buys and sells) without actually entering into any monetary transactions. Par 1. The face value of a bond. Generally $1,000 for c orporate issues, with higher denominations such as $10,000 for many government issues. 2. A dollar amount assigned to a security when firs t issued. Par Value 1) The face value of a bond. 2) A dollar amount that is assigned to a security w hen representing the value contributed for each share in cash or goods.

Parabolic Indicator A technical analysis strategy that uses a trailing stop and reverse method called "SAR," or stop-and-reversal, to determine good exit and entry points. Parallel Loan A type of foreign exchange loan agreement that was a precursor to currency swaps. A parallel loan involves two parent companies taking loans from the ir respective national financial institutions and then lending the resulting funds to the other compa ny's subsidiary. Parent Company A company that controls other companies by owning a n influential amount of voting stock. Pareto Principle A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The principle states that, for many phenomena, 20% of invested input is responsible for 80% of the results obtained. Put an other way, 80% of consequences stem from 20% of the causes. Also referred to as the "Pareto rule " or the "80/20 rule". Pari-passu Two securities or obligations having equal rights t o payment. Paris Club A monthly meeting in Paris attended by creditors of 19 countries to discuss debt issues. Among other things, the Paris Club addresses the issue of coordinated debt relief for developing countries that cannot service their debt. Parity 1. In general, a situation of equality. Parity can occur in many different contexts, but it always mea ns that two things are equal. 2. The official value. 3. In an exchange market, when all brokers bidding for the same security have equal standing due to identical bids. Parity Bond Two or more bond issues with equal rights to bond p ayments. Parity Price The term "parity" refers to equality. Thus, parity price is a price for an asset that is directly link ed to another price. Examples of parity price are: 1. Convertibles - the price at which a convertible security equals the value of the underlying stock. 2. Options - when an option is trading at its intri nsic value ("trading at parity"). 3. International parity - official rates for a curr ency in terms of other pegged currencies, typically the U.S. dollar. 4. Commodities - a commodity's price dependent on a composite of prices during a period of time, usually the most recent 10-year period. 5. Listed parity - situation when all parties invol ved are of equal standing and priority. Parking A form of kiting shares that a brokerage commits by moving long positions in unrelated accounts to cover short positions that are improperly settled a ccording to SEC regulations.

Parking Violation The illegal practice of an acquiring company concea ling ownership of the target company by holding stock under a related third party before attempting corporate takeover. Parsonage Allowance An allowance designated by a church or other organi zation for its church professionals (clergy) for the expenses of providing and maintaining a home. Partial Redemption An investment-transaction classification that refer s to the withdrawal of a portion of a security's value by the owner. Rather than withdrawing the ent ire amount of his or her security's value from the account, an investor may prefer to keep a portion o f the value invested in the asset while still obtaining some cash. Partial Release A mortgage provision allowing some of the pledged c ollateral to be released from the mortgage contract if certain conditions are met Participating Preferred Stock A type of preferred stock that, under certain condi tions, gives holders the right to receive earnings payouts over and above the specified dividend rate. Participation Rate A measure of the participating portion of an econom y's labor force. Partnership A business organization in which two or more indivi duals manage and operate the business. Both owners are equally and personally liable for the de bts from the business. Pass-Through Certificate Fixed-income securities that represent an undivided interest in a pool of federally insured mortgages put together by the Government National Mortgage As sociation (Ginnie Mae). Pass-Through Security A pool of fixed-income securities backed by a packa ge of assets. A servicing intermediary collects the monthly payments from issuers, and, after deduc ting a fee, remits or passes them through to the holders of the pass-through security. Also known as a "pass-through certificate" or "pay- through security." Passive Activity An activity from which you have the potential to pr ofit but in which you do not physically participate . Passive Foreign Investment Company - PFIC A foreign company whose income is 75% passive or ha s over 50% of its assets in investments earning interest, dividends, and/or capital gains. Passive Income Earnings an individual derives from a rental proper ty, limited partnership or other enterprise in which he or she is not actively involved.

Passive Investing An investment strategy involving limited ongoing bu ying and selling actions. Passive investors will purchase investments with the intention of long-ter m appreciation and limited maintenance Passive Loss A loss incurred through a rental property, limited partnership, or other enterprise in which the individual is not actively involved. Passive Management An investing strategy that mirrors a market index a nd does not attempt to beat the market. Also known as "passive strategy" or "passive invest ing". Past Due Balance Method A finance/accounting method that bases costs (and i nterest) on the amounts owing that are past due. Patent A government license that gives the holder exclusiv e rights to a process, design or new invention for a designated period of time. Path Dependent Option An exotic option that is valued according to pre-de termined price requirements for its underlying asset or commodity. Pattern In technical analysis, the distinctive formation cr eated by the movement of security prices on a chart. It is identified by a line connecting common price points (closing prices, highs, lows) over a period of time. Chartists try to identify patterns to try to anticipate the future price direction. Al so known as "trading pattern". People Pill A defensive strategy to ward off a hostile takeover . Management threatens that, in the event of a takeover, the entire management team will resign. Pattern Day Trader An SEC designation for traders who make four or mor e trades (buys and sells) in a particular security in a single day over a five-day period, an d for whom same-day trades make up at least 6% of their activity for that period. Pay/Collect An abbreviated reference to the payment or collecti on of funds (after futures positions have been marked to market) between clearing members and thei r respective clearing houses. Payback Period The length of time required to recover the cost of an investment. Paydown A payment made towards an outstanding loan balance. Paydown Factor The portion of cash subtracted each month from the principal of a mortgage security divided by the original principal of the security.

Payee A party who receives payment. Payer A person who makes a payment to a payee. Paying Agent An agent who accepts payments from the issuer of a security and then distributes the payments to the holders of the security. Also known as a "disbu rsing agent." Payment The transfer of one form of good, service or financ ial asset in exchange for another form of good, service or financial asset in proportions that have been previously agreed upon by all parties involved. Payment can be made in the form of funds, assets or services. Payment Date The date on which a declared stock dividend is sche duled to be paid. Payment For Order Flow The compensation and benefit a brokerage receives b y directing orders to different parties to be executed. The brokerage firm receives a small payme nt, usually a penny per share, as compensation for directing the order to the different parties. Payment in Kind Bonds A type of bond that pays interest in additional bon ds, as opposed to cash payouts. Payout The expected financial return from an investment ov er a given period of time. Payout may be expressed on an overall or periodic basis as either a percentage of the investment's cost or in a real dollar amount. Payout can also refer to the period of time in which an investment or a project is expected to recoup its initial capital investment a nd become minimally profitable. Short for "time to payout", "term to payout" or "pa yout period". Payout Phase The phase in an annuity during which payments are m ade to the annuitant. These are usually paid on a monthly basis and last for the lifetime of the annuitant. The income received from an annuity by a retired investor is considered taxable income. Payout Ratio The amount of earnings paid out in dividends to sha reholders. Investors can use the payout ratio to determine what companies are doing with their earni ngs. Payroll Tax Tax an employer withholds and/or pays on behalf of their employees based on the wage or salary of the employee. In most countries, including the U.S. , both state and federal authorities collect some form of payroll tax Peak The highest point between the end of an economic ex pansion and the start of a contraction in a business cycle. The peak of the cycle refers to the last month before several key economic indicators, such as employment and new housing star ts, begin to fall. It is at this point that real GD P

spending in an economy is its highest level. Pearson Coefficient A type of correlation coefficient that represents t he relationship between two variables that are measured on the same interval or ratio scale. Pegging 1. A method of stabilizing a country's currency by fixing its exchange rate to that of another country . 2. A practice of and investor buying large amounts of an underlying commodity or security close to the expiry date of a derivative held by the investo r. This is done to encourage a favorable move in market price. PEN In currencies, this is the abbreviation for the Per uvian Nuevo Sol. Penalty Bid A bid intended to facilitate a securities offering by stabilizing its price during the distribution pe riod. This bid is typically entered by the managing under writer on behalf of a syndicate. Pennant A continuation pattern in technical analysis formed when there is a large movement in a stock, the flagpole, followed by a consolidation period with c onverging trendlines, the pennant, followed by a breakout movement in the same direction as the init ial large movement, the second half of the flagpole. As can be seen in the above picture, there is a lar ge rise in the stock, followed by a converging consolidation period that resembles a pennant and a resulting continuation of the initial trend. Penny Stock A stock that sells for less than $1 per share but m ay also rise to as much as $10 per share as a result of heavy promotion. All p enny stocks are traded over the count (OTC) or on the pink sheets. Pension Adjustment - PA The amount of contributions that can be made to a R egistered Retirement Savings Plan (RRSP) on top of any contributions to a Registered Pension Pl an (RPP) in a given year. Pension Benefit Guaranty Corporation - PBGC A non-profit corporation, functioning under the jur isdiction of the Department of Labor, that guarantees the payment of certain pension benefits under defined-benefit plans that have been terminated with insufficient money to pay benefits. Pension Fund A fund established by an employer to facilitate and organize the investment of employees' retirement funds contributed by the employer and employees. Th e pension fund is a common asset pool meant to generate stable growth over the long term, and p rovide pensions for employees when they reach the end of their working years and commence retirem ent.

Pension Plan A retirement plan, usually tax exempt, wherein the employer makes contributions for the employee. Many pension plans are being replaced by the 401(k) . Pension Shortfall A situation in which a company offering employees a defined benefit plan does not have enough money set aside to meet the pension obligations to employees who will be retired in the future. Per Capita

A Latin term that translates into "by head," basica lly meaning "average per person." Per Share Basis A measure used in the financial world to illustrate the quantity of something for one share of a company's stock. Such measures are used in the anal ysis and valuation of a company. Examples include 'earnings per share', 'cash per share', 're venue per share' and 'debt per share'. Per Stirpes A stipulation that, should a beneficiary predecease the testator, the beneficiary's share of the inheritance will go to his or her heirs. Percentage Price Oscillator - PPO A technical momentum indicator showing the relation ship between two moving averages. To calculate the PPO, subtract the 26-day exponential moving average (EMA) from the nine-day EMA, and then divide this difference by the 26-day EMA. The end result is a percentage that tells the trade r where the short-term average is relative to the lon ger-term average. Perfect Competition A market structure in which the following five crit eria are met: 1. All firms sell an identical product. 2. All firms are price-takers. 3. All firms have a relatively small market share. 4. Buyers know the nature of the product being sold and the prices charged by each firm. 5. The industry is characterized by freedom of entr y and exit. Sometimes referred to as "pure competition". Performance Bond A bond issued to one party of a contract as a guara ntee against the failure of the other party to meet obligations specified in the contract. Performance Index Paper - PIP A short-term paper on which the rate is denominated and paid in a base currency. However, the rate movement is based on the exchange rate with an alte rnate currency. Performance Shares In the case of stock compensation, shares of compan y stock given to managers only if certain company wide performance criteria are met, such as earnings per share targets. Period Certain An annuitization-method option with which the annui tant selects a specific time period for which the annuity income payments will last. This is unlike t he more commonly selected life option, with which the annuitant receives an income payment for the re st of his or her life, regardless of how long (or short) their retirement years end up lasting. Permanent Life Insurance An umbrella term for life insurance plans that do n ot expire (unlike term life insurance) and combine a death benefit with a savings portion. This saving s portion can build a cash value - against which the policy owner can borrow funds, or in some insta nces, the owner can withdraw the cash value to help meet future goals, such as paying for a child' s college education. The two main types of permanent life insurance are whole and universal li fe insurance policies. Perp Walk A slang term describing the police action of paradi ng an arrested suspect in handcuffs before the media. Perpetual Bond A bond with no maturity date. Perpetual bonds are n ot redeemable but pay a steady stream of

interest forever. Some of the only notable perpetua l bonds in existence are those that were issued by the British Treasury to pay off smaller issues u sed to finance the Napoleonic Wars (1814). Some in the U.S. believe it would be more efficient for the government to issue perpetual bonds, which may help it avoid the refinancing costs associated with bond issues that have maturity dates. Perpetual Inventory An accounting method of maintaining up-to-date prop erty records that accurately reflect the level of goods on hand. Perpetuity A constant stream of identical cash flows with no e nd. The formula for determining the present value of a perpetuity is as follows: Personal Consumption Expenditures - PCE A measure of price changes in consumer goods and se rvices. It consists of the actual and imputed expenditures of households and includes data pertai ning to durables, non-durables, and services. It is essentially a measure of goods and services targ eted towards individuals and consumed by individuals. Also referred to as "consumption." Personal Equity Plan - PEP An investment plan in the U.K. that used to allow p eople over the age of 18 to invest in shares of U.K. companies. It was done through an approved pla n, qualifying unit trust, or investment trust. Investors received both income and capital gains fr ee of tax. Personal Finance Financial planning for individuals. Generally, it i nvolves analyzing their current financial position, predicting short-term and long-term needs, and reco mmending a financial strategy. This may involve advice on pensions, school fees, mortgages, life in surance, and investments. Personal Income An individual's total annual gross earnings coming from wages, business enterprises and various investments. Personal Property A type of property which, in it's most general defi nition, can include any asset other than real estat e. The distinguishing factor between personal property and real estate is that personal property is movable. That is, the asset is not fixed permanentl y to one location as with real property such as land or buildings. Examples of personal property in clude vehicles, furniture, boats, collectibles, etc . Also known as "movable property", "movables" and "c hattels". Personal Use Property A type of property that an individual does not use for business purposes or hold as an investment. In other words, property that an individual owns fo r personal enjoyment. Petrodollars The money that oil exporters receive from selling o il and then deposit into Western banks. Petrodollars are also known as petrocurrency. Petty Cash The small amount of cash and coins that an organiza tion uses for minor purchases and providing change to customers. Pfandbriefe A type of bond issued by German mortgage banks that is collateralized by long-term assets used. These types of bonds represent the largest segment of the German private debt market and are considered to be the safest debt instruments in the private market.

PGK In currencies, this is the abbreviation for the Pap ua New Guinea Kina. Phantom Stock Plan An employee benefit plan that gives selected employ ees (senior management) many of the benefits of stock ownership without actually giving them any company stock. Sometimes referred to as "shadow stock." Philadelphia Federal Index A regional federal-reserve-bank index measuring cha nges in business growth. The index is constructed from a survey of participants who volun tarily answer questions regarding the direction of change in their overall business activities. The survey is a measure of regional manufacturing growth. When the index is above 0 it indicates fact ory-sector growth, and when below 0 indicates contraction. Also known as the "Business Outlook Survey". Philadelphia Semiconductor Index - SOX A price-weighted index composed of 18 U.S. semicond uctor companies primarily involved in the design, distribution, manufacture, and sale of semi conductors. Philadelphia Stock Exchange - PHLX The first securities exchange to be formed in the U nited States. Philanthropy 1. An activity performed with the goal of promoting the well-being of fellow man. 2. To dispense or receive aid in the form of a gift from funds intentioned for humanitarian purposes. Phillips Curve An economic concept developed by A. W. Phillips sta ting that inflation and unemployment have a stable and inverse relationship. Phishing A method of identity theft carried out through the creation of a website that seems to represent a legitimate company. The visitors to the site, think ing they are buying something from a real business, submit their personal information to the site. The criminals then use the personal information for their own purposes, or sell the inf ormation to other criminal parties. PHP In currencies, this is the abbreviation for the Phi lippine Peso. Physical Asset An item of economic, commercial or exchange value t hat has a tangible or material existence. For most businesses, physical assets usually refer to c ash, equipment, inventory and properties owned by the business. Physical assets are the opposite o f intangible assets, which are non-physical assets such as leases, computer programs or agreeme nts. Physical Delivery Term in an options or futures contract which requir es the actual underlying asset to be delivered upon the specified delivery date, rather than being traded out with offsetting contracts. Pick-Up Tax A tax imposed by state authorities based on the est ate tax credit the U.S. federal government allows on the federal estate tax return. As this tax is im posed at the state level, the amounts owing vary state to state. And because estates are taxed at th e federal level only when the minimum federal estate threshold has been surpassed, state pick-up taxes are not always applied.

Pickup A gain in yield made by selling one bond and buying another. Also referred to as "yield pickup." Pig An investor who is often seen as greedy, having for gotten his or her original investment strategy to focus on securing unrealistic future gains. After e xperiencing a gain, these investors often have very high expectations about the future prospects of the investment and, therefore, do not sell their position to realize the gain. Piggy Back Registration When an underwriter allows existing holdings of a c ompany's shares to be sold in conjunction with an offering of new public shares. Piggyback Warrants Additional warrants that are acquired following the exercise of primary warrants. Pin Risk A risk that the writer of an options or futures con tract faces when the price of the underlying asset closes at or very near the exercise price of the co ntract upon expiration. Pink Sheets A daily publication compiled by the National Quotat ion Bureau with bid and ask prices of over-the-counter stocks, including the market makers who tra de them. Unlike companies on a stock exchange, companies quoted on the pink sheets syste m do not need to meet minimum requirements or file with the SEC. Pink sheets also refers to OT C trading. Pinning the Strike The tendency of a stock's price to close near the s trike price of heavily traded options (in the same stock) as the expiration date nears. Pip The smallest price change that a given exchange rat e can make. Since most major currency pairs are priced to four decimal places, the smallest cha nge is that of the last decimal point - for most pairs this is the equivalent of 1/100 Pipeline 1) An investment company whose purpose is to collec t investment funds from a pool of individual investors and invest them in financial securities. 2) The underwriting procedure which must be complet ed by the Securities & Exchange Commission (SEC) before a security can be offered for sale to the public. 3) A type of risk most often present in mortgage tr ansactions. It expresses the potential for change in financial factors during the time lapse between the mortgage application and the purchase of the property. Pipeline Theory A theory stating that an investment firm passing al l capital gains, interest and dividends onto their customers/shareholders shouldn't be levied at the c orporate level like most regular companies are. Also referred to as "conduit theory". Pit A specific area of the trading floor that is design ated for the trading of an individual futures or options contract. Pitchbook A sales book created by an investment bank/firm tha t details the main attributes of the firm. The

pitchbook is used by the firm's sales force to aid it with selling products and issues, and generating new clients. Pivot A price level established as being significant eith er by the market's failure to penetrate it or when a sudden increase in volume accompanies the move thro ugh the price level. Pivot Point A technical indicator derived by calculating the nu merical average of a particular stock's high, low and closing prices. Pivot Point (or Buy Point) Optimal buy point of a stock as it emerges from a s ound and proper basing area or chart pattern (the most common of which include the 'cup with handle,' 'flat base' and 'double bottom') and breaks out into a new high in price. This is the point of leas t resistance and has shown, through William J. O'Neil's research, to have the greatest chance of m oving substantially higher based on its current and historical price and volume activity. PKR In currencies, this is the abbreviation for the Pak istani Rupee. Placement The act of marketing new securities to the private or public sector. Plain Vanilla The most basic or standard version of a financial i nstrument, usually options, bonds, futures and swaps. Its opposite is an exotic instrument, which alters the components of a traditional financial instrument, resulting in a more complex security. Platinum An element that is sometimes used in jewelry or as a catalyst in electronics. Pledge Fund A special type of fund in which members of the fund work toward a specific investment goal by making defined contributions in a pool over a perio d of time. Many angel investors have started to employ a pledge fund format in venture capital inve sting. Pledged Asset An asset that is transferred to a lender for the pu rpose of securing debt. The lender of the debt maintains possession of the pledged asset, but does not have ownership unless default occurs. PLN In currencies, this is the abbreviation for the Pol ish Zloty. Plowback Ratio A fundamental analysis ratio that measures the amou nt of earnings retained after dividends have been paid out. This is the opposite of the payout r atio, which measures the amount of dividends that are paid out as a percentage of earnings. Also know n as "retention rate", "retention ratio" or the "earnings retention ratio". Plunge Team A colloquial reference to a group of economic leade rs within the United States whose purpose is to ensure the nation's financial markets are efficient , competitive, and provide confidence for investors . Plus Tick A price designation referring to the trading of a s ecurity at a price higher than the previous sale price for the same security.

Point & Figure Chart A chart that plots day-to-day price movements witho ut taking into consideration the passage of time. Point and figure charts are composed of a number of columns that either consist of a series of stacked Xs or Os. A column of Xs is used to illustr ate a rising price, while Os represent a falling price. As you can see from the chart below, this ty pe of chart is used to filter out non-significant price movements, and enables the trader to easily d etermine critical support and resistance levels. Traders will place orders when the price moves beyo nd identified support/resistance levels Point Balance A statement typically produced at the end of the ca lendar month indicating the profits and losses of a client's open futures contracts. Point of Purchase - POP A place where sales are made. On a macro-level, a p oint of purchase may be a mall, market or city. On a micro-level, retailers consider a point of pur chase to be the area surrounding the counter where customers pay. Also known as "point of sale". Points 1. A 1% change in the face value of a bond or a deb enture. 2. In futures contracts, a price change of one one- hundredth, or 1% of one cent. 3. A $1 price change in the value of common stock. 4. In real estate mortgages, the initial fee charge d by the lender, with each point being equal to 1% of the amount of the loan. It can also refer to each p ercentage difference between a mortgage's interest rate and the prime interest rate. Poison Pill A strategy used by corporations to discourage a hos tile takeover by another company. The target company attempts to make its stock less attractive to the acquirer. There are two types of poison pills: 1. A "flip-in" allows existing shareholders (except the acquirer) to buy more shares at a discount. 2. The "flip-over" allows stockholders to buy the a cquirer's shares at a discounted price after the merger. Polarized Fractal Efficiency - PFE A technical indicator developed by Hans Hannula tha t was invented to determine price efficiency over a user-defined time period. This indicator flu ctuates between -100 and +100 with 0 as the center line. Securities with a PFE greater than zero are d eemed to be trending up, while a reading of less than zero indicates the trend is down. Policy Loan A loan issued by an insurance company that uses the cash value of a person's life insurance policy as collateral. Sometimes referred to as a "life ins urance loan." Political Risk The financial risk that a country's government will suddenly change its policies. Also known as "geopolitical risk". Ponzi Scheme A fraudulent investing scam that promises high rate s of return at little risk to investors. The scheme generates return by acquiring new investors Pooled Income Fund A type of mutual fund comprised of gifts that are p ooled and invested together. Income from the fund is distributed to both the fund's participants and named beneficiaries according to their share of the fund. If you are a donor to the fund, you an d the other income recipients you choose receive

quarterly payments for life, and upon your death th e value of the assets will be transferred to the beneficiaries. Pooling of Interests An accounting method, used in mergers and acquisiti ons, where the balance sheet items of the two companies are simply added together. Poop A slang term often used to describe people with ins ider information. Poop And Scoop A highly illegal practice occurring mainly on the I nternet. A small group of informed people attempt to push down a stock by spreading false information and rumors. If they are successful, they can purchase the stock at bargain prices. Pop-Up Option A joint and survivor option that allows you to be r einstated to the basic pension amount if the spouse predeceases the retiree. More and more compa nies are utilizing this option for an additional charge. Pork Bellies The commodities underlying the majority of futures contracts trading pork livestock. Pork Chop An arrangement on the floor of the NYSE whereby cle rks cover the booth of a floor broker and accept orders, phone calls, and associated tasks. Portable Alpha The strategy of portfolio managers separating alpha from beta by investing in securities that differ from the market index from which their beta is deri ved. Alpha is the return achieved over and above the return that results from the correlation betwee n the portfolio and the market (beta). In simple terms, this is a strategy that involves investing i n areas that have little to no correlation with the market. Porter's 5 Forces Named after Michael E. Porter, this model identifie s and analyzes 5 competitive forces that shape every industry, and helps determine an industry's w eaknesses and strengths. 1. Competition in the industry 2. Potential of new entrants into industry 3. Power of suppliers 4. Power of customers 5. Threat of substitute products Portfolio The group of assets - such as stocks, bonds and mut uals - held by an investor. Portfolio Income Income from investments, including dividends, inter est, royalties, and capital gains. Portfolio Insurance 1. A method of hedging a portfolio of stocks agains t the market risk by short selling stock index futures. 2. Brokerage insurance such as the Securities Inves tor Protection Corporation (SIPC). Portfolio Management The art and science of making decisions about inves tment mix and policy, matching investments to objectives, asset allocation for individuals and in stitutions, and balancing risk vs. performance.

Portfolio Manager The person responsible for investing a mutual fund' s assets, implementing its investment strategy, and managing the day-to-day portfolio trading. Portfolio Pumping The illegal act of bidding up the value of a fund's holdings right before the end of a quarter, when t he fund's performance is measured. This is done by pla cing a large number of orders on existing holdings, which drives up the value of the fund. Also known as "marking the close". Portfolio Runoff A decrease in the value and size of portfolios inve sting in mortgages and mortgage-backed securities. Portfolio Turnover A measurement of how frequently assets within a fun d are bought and sold by the managers. It is calculated by taking either the total amount of new securities purchased or the amount of securities sold - whichever is less - over a particular period , divided by the total net asset value (NAV) of the fund. The measurement is usually reported for a 12- month time period. Position The amount of a security either owned (which consti tutes a long position) or borrowed (which constitutes a short position) by an individual or b y a dealer. In other words, it's a trade an investo r currently holds open. Position Limit A predetermined position level set by regulatory bo dies for a specific contract or option. Position Sizing The dollar value being invested into a particular s ecurity by an investor. An investor's account size and risk tolerance should be taken into account whe n determining appropriate position sizing. Position Trader A commodities trader who holds a long position for the long term. Positive Butterfly A non-parallel yield curve shift in which short- an d long-term rates shift upward by a greater magnitude than medium term rates. This yield curve shift effectively humps the curve, adding to its curvature. Positive Carry A strategy of holding two offsetting positions, one of which creates an incoming cashflow that is greater than the obligations of the other Positive Volume Index - PVI An index that focuses on days where the volume has significantly increased from the previous day's trading. Post-Analysis Vital process of evaluating your successes and mist akes in the stock market by posting all previous buys and sells on charts for a specified timeframe and separating out those that made money from those that were losses. Allows investors a way to i mprove their future performance by realistically learning from past decisions Post-Money Valuation The value of a company after external financing alt ernatives are added to its balance sheet. Pot

The portion of a stock or bond issue that investmen t bankers return to the underwriter so the portion can be sold to institutional investors. Pot Is Clean A slang phrase referring to a situation in which an underwriter has successfully sold to investors all of its available issues of a public offering of sec urities. Also known in more formal terms as "fully subscribed". Pour-Over Will A will established by an individual who has already taken the necessary steps to set up a trust, so that upon the death of the individual, all of his o r her assets are to be transferred - or "poured ove r" - to the trust. By doing so, the individual ensures t hat his or her estate has an explicit direction to shift assets into the trust. Power Of Attorney A legal document giving one person (called an "agen t" or "attorney-in-fact") the power to act for another person (the principal). The agent can have broad legal authority or limited authority to make legal decisions about the principal's property and finance. The power of attorney is frequently used in the event of a principal's illness or disability , or when the principal can't be present to sign necessary legal documents for financial transaction s. Power of Attorney of Property A legal document transferring the legal right to th e attorney or agent to manage and access the principal's property in the event the principal is unable to do so themselves. Power Ratio Measures a media company's revenue performance in c omparison to the audience share it controls. You need to know three numbers in order to make thi s calculation work: 1. Total market revenue 2. The company's revenue 3. The audience share Pre-arranged Trading Trading that occurs between brokers through an expr essed or implied agreement or understanding. Pre-Emptive Right The right of a company's existing common shareholde rs to have the first chance to purchase shares in a company's future stock issue. Pre-Market Trading done before the regular market opens Pre-Money Valuation A slang phrased that refers to the value of a compa ny's stock before it goes public. The term is often used by venture capitalists. Also known as "pre-money". Pre-Settlement Risk The risk that one party of a contract will fail to meet the terms of the contract and default before t he contract's settlement date, prematurely ending the contract. This type of risk can lead to replacement-cost risk . Pre-Syndicate Bid A bid entered by a syndicate manager or underwriter in the Nasdaq system to stabilize the price of a Nasdaq security prior to the effective date of a re gistered secondary offering. The term "penalty bid" is also used.

Precious Metals Valuable metals such as gold, iridium, palladium, p latinum and silver. Predatory Dumping A type of anti-competitive event in which foreign c ompanies or governments price their products below market values in an attempt to drive out dome stic competition. This may lead to conditions where one company has a monopoly in a certain produ ct or industry. Antitrust or competition laws forbid predatory dumping in many countries such as the U.S. and the European Union. Also referred to as "predatory pricing". Preferred Dividend Coverage Ratio A coverage ratio that measures a company's ability to pay off its required preferred dividend payments. A healthy company will have a high covera ge ratio, indicating that it has little difficulty in paying off its preferred dividend requirements. Preferred Equity Redemption Stock - PERC Preferred stock with special provisions limiting th e value of its convertible shares and the mandatory redemption value at maturity. Preferred Redeemable Increased Dividend Equity Secu rity - PRIDES First introduced by Merrill Lynch, PRIDES are synth etic securities consisting of a forward contract to purchase the issuer's underlying security and an in terest bearing deposit. Interest payments are made at regular intervals, and conversion into the underlying security is mandatory at maturity. Preferred Stock A class of ownership in a corporation that has a hi gher claim on the assets and earnings than common stock. Preferred stock generally has a divid end that must be paid out before dividends to common stockholders and the shares usually do not h ave voting rights. The precise details as to the structure of preferre d stock is specific to each corporation. However, the best way to think of preferred stock is as a fi nancial instrument that has characteristics of both debt (fixed dividends) and equity (potential apprec iation). Also known as "preferred shares". Preliminary Prospectus A first draft registration statement filed by a fir m prior to proceeding with an initial public offeri ng of securities. The document, filed with the Securities & Exchange Commission, is intended to provide pertinent information to prospective shareholders a bout the company's business description, management, strategic initiatives, financial statem ents and ownership structure Premium 1. The total cost of an option. 2. The difference between the higher price paid for a fixed-income security and the security's face amount at issue. 3. The specified amount of payment required periodi cally by an insurer to provide coverage under a given insurance plan for a defined period of time. The premium is paid by the insured party to the insurer, and primarily compensates the insurer for bearing the risk of a payout should the insurance agreement's coverage be required. Premium Bond A bond that is priced higher than its par value Premium Put Convertible A convertible bond with an additional put feature t hat allows it to be redeemed at a premium sometime during its life. Prenuptial Agreement A type of contract created by two people before ent ering into marriage. This contract could outline each party's responsibilities and property rights f or the duration of the marriage. More commonly, prenuptial agreements outline terms and conditions associated with dividing up financial assets and

responsibilities if the marriage dissolves. Prepackaged Bankruptcy When acompany prepares a reorganization plan that i s negotiated and voted on by creditors and shareholders before the company actually files for bankruptcy. Prepaid Expense An asset that arises on a balance sheet because of the payment of something in advance (prepayment). Services for the payment will be rece ived in the near future. Prepaid Interest The interest that a debtor pays before the first sc heduled debt repayment. For taxation purposes, most kinds of prepaid interest are expensed over th e life of the loan. For mortgage loans, prepaid interest can also be th e interim interest that accrues from the settlement day to the beginning of the first mortga ge period. Prepayment 1. The payment of a debt obligation prior to its du e date. 2. The excess payment over a scheduled debt repayme nt amount. Prepayment Risk The uncertainty related to unscheduled prepayment i n excess of scheduled principal repayment. Prepetition Liability A term that refers to liabilities that arise prior to a company filing of bankruptcy. A company has to petition for bankruptcy protection once this is don e, liabilities fall into two categories: prepetitio n, or those that arise prior to petition, and post-petiti on, those that arise after petition. These two type s of liabilities are often shown on the balance sheets o f companies in bankruptcy protection Present Situation Index A subindex that measures overall consumer sentiment s toward the present economic situation and is used to derive (about 40% of) the Consumer Confi dence Index, a widely used economic indicator. The sub-index is compiled from data gathered from a survey of 5,000 households on questions regarding current business and employment condition s. Also known as "Current Situation Index". Present Value - PV The amount that a future sum of money is worth toda y given a specified rate of return. Preservation Of Capital An investment strategy whose primary goal is to pre vent the loss of an investment's total value Presidential Election Cycle (Theory) A theory developed by Yale Hirsch that states that U.S. stock markets are weakest in the year following the election of a new U.S. president, and then after the first year, the market improves unt il the next presidential election. Press Release If it's an earnings press release, the release will discuss the financial results of the company for t he recently completed quarter and may provide comments from management. Press releases often list valuable contact information that can assist you in your research, such as the company's web address.

Press Release If it's an earnings press release, the release will discuss the financial results of the company for t he

recently completed quarter and may provide comments from management. Press releases often list valuable contact information that can assist you in your research, such as the company's web address. Price The amount of money a security most recently traded for. Price and Volume Chart Daily, weekly or monthly basis graphs that show a s tock's price and volume history. Used by most professional investors today to assist in the timin g and selection of stocks. Price Bars Blue or pink colored marks that represent price his tory (high/low/close). The amount of trading history each bar represents is based on the period of a chart (i.e., weekly, daily, intraday). The len gth of each vertical bar illustrates a stock's high/low price range. The small intersecting horizontal sla sh indicates the current price or where a stock closed at the end of official market hours. A Price Bar will be presented in blue if the price of the most recent trade is equal to or greater tha n the previous period's last price, or it may be pink if it is less than the previous period’s price. Price bars, like price quotes, are updated througho ut market hours on a 20-minute delayed basis for all stocks listed on NASDAQ, NYSE and AMEX exchange s. This update schedule will often result in the length, location of the horizontal slash, and c oloring of a Price Bar to change during market hours. Price Basing A method of pricing commercial commodity transactio ns that bases these prices on related futures contract prices. This method is used by commodity p roducers, processors, merchants and consumers. Price By Volume Chart - PBV A horizontal histogram plotted on the chart of a se curity, which corresponds to the volume of shares traded at a specific price level. Price by volume h istograms are found on the Y-axis and are used by technical traders to predict areas of support and r esistance. Price Change The difference between the latest price and its pre vious closing price. Price Change presented in blue font is an indication the price is equal to or greater than its previous close. A pink font color represents a current price that is below the previo us close. When viewing a daily or intraday chart, the difference in price is a reference to the prior day's closing price. For a weekly chart, font coloring reflects the rela tionship between the current price and the price recorded at the previous week’s close. For Daily Graphs Online subscribers with monthly ch arts, font coloring reflects the relationship between the current price and the price recorded at the previous month's close. Price information is presented on a 20-minute delay ed basis for all stocks listed on the NASDAQ, NYSE and AMEX exchanges. Prices for all other stock s are updated after the market close. Price information does not reflect after-hours trading. A ll prices, including those stocks trading on Canadian exchanges, are reported in U.S. dollars. Price Discovery A method of determining the price for a specific co mmodity or security through basic supply and demand factors related to the market. Price Elasticity Of Demand A measure of the responsiveness of the quantity dem anded of a good to a change in its price. It is calculated as: Price Fixing

Establishing the price of a product or service, rat her than allowing it to be determined naturally through free market forces. This procedure is often an illegal practice. Price Improvement Attaining a higher bid price, if you are selling a stock, or a lower ask price, if you are buying a st ock, than the price quoted at the time your order was pl aced. Price Line, 200-Day Moving Average Presented as a black line, it represents the averag e price over the previous two-hundred trading sessions. It is calculated by summing the closing p rice over the last 200 trading sessions and dividing by 200. On a Weekly Chart, it is calculate d by summing the closing price over the last 40 week trading sessions and dividing by 40. Price Line, 50-Day Moving Average Presented as a red line, it represents the average price over the previous fifty trading sessions. It is calculated by summing the closing price over the la st 50 trading sessions and dividing by 50. On a Weekly Chart, it is calculated by summing the closi ng price over the last 10 week trading sessions and dividing by 10. Price Maker A monopoly or a firm within monopolistic competitio n that has the power to influence the price it charges as the good it produces does not have perfe ct substitutes. Price Multiple Any ratio that uses the share price of a company in conjunction with some specific per-share financial metric in order to evaluate a company's f inancial situation. The share price is typically divided by a chosen per-share metric to form a rati o. Price Peak/Valley Points Displays high and low points on Daily. High and Low Price points are measured over a 19-period interval. For example, on a Daily graph, a High Pri ce point is marked on the date where there has been no higher price the 9 days prior to that date and the 9 days following that date. Price Range, 52-Week High/Low Indicates the highest and lowest price the stock ha s reached in the last 52 weeks of trading. Price range data includes intra-day highs and lows. Price Range, Calendar Year High/Low Calendar year high/low prices for an equity. Histor ical prices are adjusted for dividends and splits. Price Rate Of Change - ROC A technical indicator that measures the percentage change between the most recent price and the price "n" periods in the past. It is calculated by using the following formula: (Closing Price Today - Closing Price "n" Periods Ag o) / Closing Price "n" Periods Ago ROC is classed as a price momentum indicator or a v elocity indicator because it measures the rate of change or the strength of momentum of change. Price Relative to Book Value Calculated by dividing the current stock price by t he per share book value (total shareholders' equity for fiscal year-end divided by common shares outsta nding). Price Risk The risk that the value of a security or portfolio of securities will decline in the future.

Price Scale Numeric scaling on a chart grid used to visually de termine the value of a Price Line or Price Bar. The numeric interval is based on arithmetic scaling for daily and intraday charts, and logarithmic scaling for weekly charts. Price Skimming A product pricing strategy by which a firm charges the highest initial price that customers will pay. As the demand of the first customers is satisfied, the firm lowers the price to attract another, more price-sensitive segment. Therefore, the skimming strategy gets its name from skimming successive layers of "cream," or customer segments, as prices are lowered over time. Price Swap Derivative An obligation made by one company to secure the dec lining value of another company's assets through the commitment of shares. Price Target 1. A projected price level as stated by an investme nt analyst or advisor. 2. A price that, if achieved, would result in a tra der recognizing the best possible outcome for his o r her investment. This is the price at which the trad er would like to exit his or her existing position so that he or she can realize the most reward. Price Tension The phenomenon by which the seller of a particular good, service, or security desires to maximize the selling price, while the buyer desires to minim ize the purchasing price. Generally speaking, the greater the price tension within a particular marke t, the greater the bid-ask spread. Price Transparency The accessibility of information on the order flow for a particular stock, allowing knowledge of the quantities of stock being offered and the bids at t he various price levels. Also referred to as "marke t depth". Price Value of a Basis Point - PVBP A measure used to describe how a basis point change in yield affects the price of a bond Price, % Off 52-Week High The percentage a stock's current price is below its 52-week high price Price, Current/Close The dollar value at which a stock most recently tra ded or closed. Price information is presented on a 20-minute delayed basis for all stocks listed on th e NASDAQ, NYSE and AMEX exchanges. Prices for all other stocks are updated after the market close . Price information does not reflect after-hours trading. A price quote presented in blue font is an indicati on the price is equal to or greater than its previo us close. A pink font color represents a current price that is below the previous close. When viewing a daily or intraday chart, the change reference is to the prior day's trading session. For a weekly char t, font coloring reflects the relationship between the current price and the price the previous week’s close. All prices, including those stocks trading on Canad ian exchanges, are reported in U.S. dollars. Price, Percentage Off High The percentage difference of a stock's latest price to its 52-week high(includes intra-day prices). This figure is updated throughout the trading sessi on on a 20-minute delayed basis for all stocks listed on the NASDAQ, NYSE and AMEX exchanges. This data item is updated for all other stocks after the market close. Price-Based Option

A derivative financial instrument in which the unde rlying asset is a debt security. Typically, these options give their holders the right to purchase or sell an underlying debt security (usually a bond) or to receive cash payment based on the current val ue of the underlying debt security Price-Earnings Ratio - P/E Ratio A valuation ratio of a company's current share pric e compared to its per-share earnings. For example, if a company is currently trading at $ 43 a share and earnings over the last 12 months were $1.95 per share, the P/E ratio for the stock w ould be 22.05 ($43/$1.95). EPS is usually from the last four quarters (trailin g P/E), but sometimes it can be taken from the estimates of earnings expected in the next four qua rters (projected or forward P/E). A third variation uses the sum of the last two actual quarters and th e estimates of the next two quarters. Also sometimes known as "price multiple". Price-Earnings Relative A price-earnings ratio of a stock divided by the pr ice-earnings ratio of a market measure, or index, such as the S&P 500 or Wilshire 5000. Price-Taker 1. An investor whose buying or selling transactions are assumed to have no effect on the market. 2. A firm that can alter its rate of production and sales without significantly affecting the market price of its product. Price-to-Book Value Compares a stock's value in the market (determined by the current stock price) to the value of total company assets less total company liabilities (book value). Based on the '45-Year Study of the Greatest Stock Market Winners', this measurement di d not prove to be significant among winning stocks. Price-to-Earnings Growth Ratio (PEG) Calculated by dividing a stock’s forward P-E ratio by its projected three-to-five year annual earnings growth. Value investors use this ratio to uncover “ undervalued” companies, or companies trading at a discount to their projected growth. Generally spe aking, the higher the PEG, the more “expensive” the stock. Price-To-Innovation-Adjusted Earnings A variation of the price-to-earnings ratio (P/E rat io) that takes a company's level of spending on research and development (R&D) into account. It is calculated by adding any expenditure on R&D back to earnings and then calculating the P/E ratio for that company. Price-To-Research Ratio A measure of the relationship between a company's m arket capitalization and research and development (R&D) expenses. Price-To-Sales Ratio - Price/Sales A ratio for valuing a stock relative to its own pas t performance, other companies or the market itself . Price to sales is calculated by dividing a stock's current price by its revenue per share for the trai ling 12 months: The ratio can also be referred to as a stock's "PSR ". Price/Earnings (P/E) Ratio Theoretically measures the value of a stock by divi ding the current price by its earnings per share over the last twelve months. When a stock's P/E ratio is high, it is considered by the majority of investors as pricey or overvalued. Stocks with low P/Es are typically cons idered a good value. However, through his studies of the biggest stock market winners, Willia m J. O'Neil found the opposite to be true: the higher the P/E, the better the stock. The average P /E of the best winners over the last fifteen years at

the initial buy point prior to their huge price inc reases was 31 times earnings. These P/Es went on to expand more than 100% to over 70 times earnings as the stocks significantly increased in price. Price/Earnings (P/E) Ratio, Current and Relative to S&P500 Current price-to-earning ratio and its relation to the P/E ratio of the stocks making up the S&P500 index. The P/E ratio is computed daily using the mo st recent closing price and the latest trailing 12 months of earnings. Stocks with a P/E ratio of 300 or greater are considered statistical outliers and are excluded from this calculation. A measure of "1 .5xSP" means the stock's P/E ratio is 50% above the P/E ratio of the S&P 500 index. For companies reporting Funds From Operations, this figure is presented as "P/F". Relative value with the P/E of S&P500 index is not presented as fu nd from operations results is not directly comparable to earnings per share data. Price/Earnings (P/E) Ratio, Quarterly High/Low Rang e Calculated by dividing the company's highest and lo west prices for the quarter by the latest trailing 12-months of earnings. Companies that report Funds From Operations will present this data as "P/F" instead of "P/E". Price/Earnings To Growth - PEG Ratio A ratio used to determine a stock's value while tak ing into account earnings growth. The calculation is as follows Price/Growth Flow A measure formulated to identify companies that are producing solid earnings and investing a large amount in research and development (R&D). This meas ure is calculated as the following: Q Nasdaq stock symbol specifying that a particular st ock is in bankruptcy proceedings. QAR In currencies, this is the abbreviation for the Qat ar Riyal. QQQQ Formerly the QQQ, this is the ticker symbol for the Nasdaq 100 Trust, which is an ETF that trades on the Nasdaq. This security offers broad exposure to the tech sector by tracking the Nasdaq 100 Index, which consists of the 100 largest and most actively traded non-financial stocks on the Nasdaq. It is also known as "cubes" or the "quadruple-Qs". Qstick Indicator A technical indicator developed by Tushar Chande to numerically identify trends in candlestick charting. It is calculated by taking an 'n' period moving average of the difference between the open and closing prices. A Qstick value greater than zer o means that the majority of the last 'n' days have been up, indicating that buying pressure has been i ncreasing. Quadrix A stock valuation system that uses over 100 variabl es in seven major categories to determine the value of a stock. The overall score for a particula r stock is determined by a weighted average of all 100 variables. Quadruple Witching A day on which contracts for stock index futures, s tock index options, stock options, and single stock futures (SSF) all expire Qualified Acquisition Cost These are items, in the context of IRA withdrawls, that constitute penalty free withdrawls for an IRA owner who uses the assets to purchase a first home.

Qualified Adoption Expenses - QAE Used for the adoption credit, this includes all the necessary expenses surrounding the adoption of a child. Qualified Disclaimer A refusal to accept property that meets with provis ions set forth in the Internal Revenue Code Tax Reform Act of 1976 allowing for the property or int erest in property to be treated as an entity that h as never been received. These types of refusals can be used to avoid federal estate tax and gift tax, and to create legal inter-generational transfers which avoid taxation, provided they meet the following set of requirements: 1. The disclaimer must be made in writing and signe d by the disclaiming party. 2. The disclaimer must identify the property, or in terest in property that is being disclaimed. 3. The disclaimer must be delivered, in writing, to the person or entity charged with the obligation o f transferring assets from the giver to the receiver( s). 4. The disclaimer must be written less than nine mo nths after the date the property was transferred. In the case of a disclaimant aged under 21, the dis claimer must be written less than nine months after the disclaimant reaches 21. Disclaimed property is given to the "contingent ben eficiary" by default. Qualified Distribution Distributions made from a Roth IRA that are tax and penalty free. In order to be a qualified distribution, the following two requirements must b e met: 1) It must occur at least five years after the Roth IRA owner established and funded his/her first Rot h IRA 2) At least one of the following requirements must be met: a) The Roth IRA holder must be at least age 59.5 wh en the distribution occurs. b) Distributed assets limited to $10,000 are used t owards the purchase or rebuilding of a first home for the Roth IRA holder or a qualified family membe r. c)The distribution occurs after the Roth IRA holder becomes disabled. d)The assets are distributed to the beneficiary of the Roth IRA holder after his/her death Qualified Dividend A type of dividend to which capital gains tax rates are applied. These tax rates are usually lower tha n regular income tax rates Qualified Higher Education Expense Expenses such as tuition and tuition related expens es that an individual, spouse, or child must pay to an eligible post-secondary institution. Qualified Institutional Buyer (QIB)(QUIB) Primarily referring to institutions that manage at least $100 million in securities including banks, savings and loans institutions, insurance companies , investment companies, employee benefit plans, or an entity owned entirely by qualified inv estors. Also included are registered broker-dealers owning and investing, on a discretionary basis, $10 million in securities of non-affiliates. Qualified Joint And Survivor Annuity - QJSA An annuity payment from a qualified plan or 403(b) account that provides a life annuity to the participant and a survivor annuity for the spouse a fter the participant's death. QJSA rules apply to money-purchase pension plans, defined-benefit plans and target benefits. They can also apply to profit-sharing and 401(k) plans, but only if so ele cted under the plan. Qualified Opinion A statement written upon the front page of an audit done by a professional auditor. A qualified opinion suggests that the information provided was limited in scope and/or the company being audited has not maintained GAAP accounting principl es. Qualified Retirement Plan (Qualified Plan) A plan that meets requirements of the Internal Reve nue Code and as a result, is eligible to receive certain tax benefits. These plans must be for the e xclusive benefit of employees or their beneficiaries. Qualified Savings Bond

Refers to a series EE savings bond which has been i ssued after December 1989 and purchased by an individual at least 24 years of age. Qualified Special Representative Agreement - QSR An agreement between broker-dealers to clear trades without the interaction of the NASDAQ ACT system. This is achieved by sending trades directly to the National Securities Clearing Corporation (a subsidiary of the DTCC). Qualified Terminable Interest Property (QTIP) Trust A type of trust that enables the grantor to provide for a surviving spouse and also to maintain control of how the trust's assets are distributed o nce the surviving spouse has also died. Income, and sometimes principal, generated from the trust i s given to the surviving spouse to ensure that he or she is taken care of for the rest of his or her life Qualified Trust A trust whose underlying beneficiary may use his or her life expectancy to determine RMD (required minimum distribution) amounts, including those for the beneficiary of a retirement account. Qualifying Investment An investment purchased with pretax income. Money i nvested in a qualifying investment trust, annuity or plan is exempt from income taxes until i t is withdrawn. These sorts of investments are tax-deferred, because the money invested in them is taxed at withdrawal only. Qualitative Analysis Securities analysis that uses subjective judgment b ased on nonquantifiable information, such as management expertise, industry cycles, strength of research and development, and labor relations. This type of analysis technique is different than q uantitative analysis, which focuses on numbers. The two techniques, however, will often be used tog ether. Quality of Earnings The amount of earnings attributable to higher sales or lower costs rather than artificial profits created by accounting anomalies such as inflation o f inventory. Quality Spread Differential - QSD In an interest rate swap, the difference between th e interest rates of debt obligations offered by two parties of different creditworthiness that engage i n the swap. A swap transaction is considered beneficial to both parties only when the QSD is pos itive. Quant Fund An investment fund that selects securities based on quantitative analysis. In such funds, the managers build computer-based models to determine w hether or not an investment is attractive. In a pure "quant shop" the final decision to buy or sell is made by the model. However, there is a middle ground where the fund manager will use human judgme nt in addition to a quantitative model. Quantitative Analysis A business or financial analysis technique that see ks to understand behavior by using complex mathematical and statistical modeling, measurement and research. By assigning a numerical value to variables, quantitative analysts try to replicat e reality mathematically. Quantitative analysis can be done for a number of r easons such as measurement, performance evaluation or valuation of a financial instrument. It can also be used to predict real world events such as changes in a share price. Quantity-Adjusting Option - Quanto A cash-settled cross-currency derivative in which t he underlying asset is denominated in a currency other than the currency in which the option is sett led. Quantos are settled at a fixed rate of exchange, providing investors with shelter from exc hange-rate risk because they contain an embedded currency forward based on a variable notio nal amount on which the derivatives are quantity adjusted. Quanto Swap A swap with varying combinations of interest rate, currency and equity swap features, where payments are based on the movement of two different countries' interest rates.

This is also referred to as a differential or "diff " swap Quarter (Q1, Q2, Q3, Q4) A three-month period on a financial calendar that a cts as a basis for the reporting of earnings and the paying of dividends Quarter on Quarter - QOQ A measuring technique that calculates the change be tween one financial quarter and the previous financial quarter. This is similar to the year over year measure, which compares the quarter of one year (Q1 2005) to the same quarter of the previous year (Q1 2004). The measure gives investors and analysts an idea of how a company is growing over e ach quarter Quarterly Earnings Report A quarterly filing made by public companies to repo rt their performance. Included in earnings reports are items such as net income, earnings per share, earnings from continuing operations and net sales. These reports follow the end of each qua rter. Most companies file in January, April, July and October. Quarterly Income Preferred Securities - QUIPS Shares that are an interest in a limited partnershi p that exists solely for the purpose of issuing preferred securities and lending the proceeds of th e sales to its parent company. They usually have a $25 par value, NYSE listing and cumulative quarte rly distributions. Quartile A statistical term describing a division of observa tions into four defined intervals based upon the values of the data and how they compare to the enti re set of observations. Quick Assets Assets that can be easily be converted into cash or are already in cash form. It is calculated as current assets minus inventories Quick Ratio An indicator of a company's short-term liquidity. T he quick ratio measures a company's ability to meet its short-term obligations with its most liqui d assets. The higher the quick ratio, the better th e position of the company. The quick ratio is calculated as: Also known as the "acid-test ratio." Quid Pro Quo A Latin phrase meaning "something for something". T his term is typically used in financial circles to describe a mutual agreement between two parties in which each party provides a good or service in return for a good or service. Quiet Filing The name given to an IPO filing where important det ails are intentionally excluded. Sent to the SEC in order to begin the process of issuing a new secu rity, these details must be submitted through amendments. This form of filing generally takes lon ger than the conventional methods. Quiet Period In terms of an IPO, the period where an issuer is s ubject to a SEC ban on promotional publicity. The quiet period usually lasts either 40 or 90 days fro m the IPO. Quitclaim Deed A deed releasing all of a person's interest in a pr operty or land. Quorum The minimum acceptable level of individuals with a vested interest in a company needed to make the proceedings of a meeting valid under the corporate charter. Quota In the context of international trade, this is a li mit put on the amount of a specific good that can b e

imported. Quotation A very common term which actually refers to two num bers - the highest bid price currently available for a security or commodity and the lowest ask pric e currently available for the same security/commodity Quote 1. The last price at which a security or commodity traded, meaning the most recent price on which a buyer and seller agreed and at which some amount of the asset was transacted. 2. The bid or ask quotes are the most current price s and quantities at which the shares can be bought or sold. The bid quote shows the price and q uantity at which a current buyer is willing to purchase the shares, while the ask shows what a cur rent participant is willing to sell the shares for. This is also known as an asset's "quoted price". Quote Driven Market An electronic stock exchange system in which prices are determined from quotations made by market makers or dealers. Also known as a "price dr iven market". R A Nasdaq stock symbol specifying that the stock has rights. R-Squared A statistical measure that represents the percentag e of a fund's or security's movements that are explained by movements in a benchmark index. For fi xed-income securities the benchmark is the T-bill, and for equities the benchmark is the S&P 500 . Rabbi Trust A trust created for the purpose of supporting the n on-qualified benefit obligations of employers to their employees. These trusts are sometimes referred to as "grantor trusts". Raider An individual or organization who tries to take ove r a company by initiating a hostile takeover bid. Rain Check A promise or commitment by a seller to a buyer that an item currently out of stock can be purchased at a later date for today's sale price. Rainbow Option A single option linked to two or more underlying as sets. In order for the option to pay off, Rainmaker An employee of a brokerage firm who brings a large amount of wealthy individuals or corporations to the brokerage firm's client base. Rally A period of sustained increases in the prices of st ocks, bonds or indexes. This type of price movement can happen during either a bull or a bear market, when it is known as either a bull market rally or a bear market rally, respectively. However , a rally will generally follow a period of flat or declining prices. Rally (and False Rally) An attempt by a stock or the general market to turn and advance in price after a period of decline. Successful rallies are usually identified by more c onsistent price increases on greater than normal volume. False rallies are generally signified by in creases in price but a lack of big or increased volume, indicating absence of large buying in the m arket. False rallies frequently either do not last

as long or do not recover as much in price. Ramp Up To increase a company's operations in anticipation of increased demand. Random Walk Theory The theory that stock price changes have the same d istribution and are independent of each other, so the past movement or trend of a stock price or m arket cannot be used to predict its future movement. Range-Bound Trading A trading strategy that identifies stocks trading i n channels. By finding major support and resistance levels with technical analysis, a trend trader buys stocks at the lower level of support (bottom of th e channel) and sells them near resistance (top of the channel). Rate Anticipation Swap A type of swap in which bonds are swapped according to their current duration and predicted interest rate movements. Rate Level Risk A type of interest rate risk which asserts that the characteristics of interest rate fluctuation are variable (as opposed to constant) over a period of time. Although interest rates are expected to fluctuate over the period of an investment, the pro bability of an interest rate change is not always constant, nor is the magnitude of the volatility of interest rate changes Rate Of Change The speed at which a variable changes over a specif ic period of time. Rate of change is often used when speaking about momentum, and it can generally be expressed as a ratio between a change in one variable relative to a corresponding change in another. Graphically, the rate of change is represented by the slope of a line. Rate Of Return The gain or loss of an investment over a specified period, expressed as a percentage increase over the initial investment cost. Gains on investments a re considered to be any income received from the security, plus realized capital gains. Rating 1. An evaluation of a corporate or municipal bond's relative safety from an investment standpoint. Basically, it scrutinizes the issuer's ability to r epay principal and make interest payments. 2. An analyst's recommendation on whether to buy, s ell or hold a specific stock. Ratings Service A company, such as Moody's or Standard & Poor's, th at rates various debt and preferred stock issues for safety of payment of principal, interest , or dividends. Ratio Analysis A tool used by individuals to conduct a quantitativ e analysis of information in a company's financial statements. Ratios are calculated from current year numbers and are then compared to previous years, other companies, the industry, or even the e conomy to judge the performance of the company. Ratio analysis is predominately used by pr oponents of fundamental analysis Ratio Spread

An options strategy in which an investor simultaneo usly holds an unequal number of long and short positions. A commonly used ratio is two short optio ns for every option purchased. Rational Expectations Theory An economic idea that the people in the economy mak e choices based on their rational outlook, available information and past experiences. The the ory suggests that the current expectations in the economy are equivalent to what the future state of the economy will be. This contrasts the idea that government policy influences the decisions of peopl e in the economy. Rationalization A reorganization of a company in order to increase its efficiency. This reorganization may lead to an expansion or reduction in company size, a change of policy, or an alteration of strategy pertaining to particular products. Razor - Razorblade Model A business tactic involving the sale of dependent g oods for different prices - one good is sold at a discount, while the second dependent good is sold a t a considerably higher price. Reaction The typical downward movement in the price of a sec urity after the price had previously risen. Reaganomics A popular term used to refer to the economic polici es of Ronald Reagan, the 40th U.S. President (1981-1989), which called for widespread tax cuts, decreased social spending, increased military spending, and the deregulation of domestic markets. Real Asset Physical or identifiable assets such as gold, land, equipment, patents, etc. They are the opposite of a financial asset. Real Body In candlestick charting this is the wide part of a candle that represents the range between the opening and the closing prices over a specific time period. Real Economic Growth Rate A measure of economic growth from one period to ano ther expressed as a percentage and adjusted for inflation (i.e. expressed in real as opposed to nominal terms). The real economic growth rate is a measure of the rate of change that a nation's gross domestic product (GDP) experiences from one year to another. Gross national product (GNP) can a lso be used if a nation's economy is heavily dependent on foreign earnings. Real Effective Exchange Rate - REER The weighted average of a country's currency relati ve to an index or basket of other major currencies adjusted for the effects of inflation. T he weights are determined by comparing the relative trade balances, in terms of one country's currency, with each other country within the index. Real Estate

Land plus anything permanently fixed to it, includi ng buildings, sheds and other items attached to the structure. Real Estate Investment Trust - REIT A security that sells like a stock on the major exc hanges and invests in real estate directly, either through properties or mortgages. REITs receive special tax considerations and typica lly offer investors high yields, as well as a highl y liquid method of investing in real estate. Equity REITs: Equity REITs invest in and own proper ties (thus responsible for the equity or value of their real estate assets). Their revenues come prin cipally from their properties' rents. Mortgage REITs: Mortgage REITs deal in investment a nd ownership of property mortgages. These REITs loan money for mortgages to owners of real es tate, or purchase existing mortgages or mortgage-backed securities. Their revenues are gene rated primarily by the interest that they earn on the mortgage loans. Hybrid REITs: Hybrid REITs combine the investment s trategies of equity REITs and mortgage REITs by investing in both properties and mortgages. Real Estate Limited Partnership A direct participation program formed to build new structures and generate income from existing property, or profit from the capital appreciation o f undeveloped land. Real Estate Mortgage Investment Conduits - REMIC A complex pool of mortgage securities created for t he purpose of acquiring collateral. This base is then divided into varying classes of securities bac ked by mortgages with different maturities and coupons. Real Estate Owned Property owned by a lender - usually a bank - after an unsuccessful sale at a foreclosure auction. This is common because most of the properties up fo r sale at these auctions are worth less than the total amount owed to the bank: the minimum bid in m ost foreclosure auctions equal the outstanding loan amount, the accrued interest and any fees asso ciated with the foreclosure sale. Real Estate Owned Property owned by a lender - usually a bank - after an unsuccessful sale at a foreclosure auction. This is common because most of the properties up fo r sale at these auctions are worth less than the total amount owed to the bank: the minimum bid in m ost foreclosure auctions equal the outstanding loan amount, the accrued interest and any fees asso ciated with the foreclosure sale. Real Income The income of an individual or group after taking i nto consideration the effects of inflation on purchasing power. For example, if you received a 2% salary rise over the previous year and inflation for the year was 1%, then your real income only ros e 1%. Conversely, if you received a 2% raise in salary and inflation stood at 3%, then your real in come would have shrunk 1%. Also known as "real wages". Real Interest Rate The amount by which the nominal interest rate is hi gher than the inflation rate.

Real Option An alternative or choice that becomes available wit h a business investment opportunity Real Rate Of Return The annual percentage return realized on an investm ent adjusted for changes in prices due to inflation or deflation. Real Time Gross Settlement - RTGS The continuous settlement of payments on an individ ual order basis without netting debits with credits across the books of a central bank. Real-Estate Agent A person with a state/provincial license to represe nt a buyer or a seller in a real-estate transaction in exchange for commission. Most agents work for a rea l-estate broker or realtor. Real-Time Trade Reporting A requirement imposed on market makers (and in some instances, non market makers) to report each trade immediately after the transaction is com pleted. Realized Gain A gain resulting from selling an asset at a price h igher than the original purchase price. Realized Loss A loss recognized when assets are sold for a price lower than the original purchase price. Reallowance In securities underwriting, the fee that the underw riting group pays to a securities firm that isn't p art of the syndicate, but who still sells shares in the offering. Realtor In the United States a designation used to describe a member of the National Association of Realtors (NAR). Reassessment The process of re-determining the value of property or land for tax purposes. Rebalancing The process of realigning the weightings of one's p ortfolio of assets. Rebate 1. In a short-sale transaction, the portion of inte rest or dividends earned by the owner (lender) of shares that are paid to the short seller (borrower) of the shares. 2. In an options transaction, the amount paid to th e holder of the option if the option expires worthless. Rebate Barrier Option

A barrier option that offers a predetermined rebate , should the option be 'knocked-out.' Recapitalization Restructuring a company's debt and equity mixture, most often with the aim of making a company's capital structure more stable. Essentially, the pro cess involves the exchange of one form of financing for another, such as removing preferred s hares from the company's capital structure and replacing them with bonds. Recapture 1. A condition set by the seller of an asset that g ives him/her the right to purchase back some or all of the assets within a certain period of time. 2. A situation where an individual must add back a deduction from a previous year to their income. Receivables An asset designation applicable to all debts, unset tled transactions or other monetary obligations owed to a company by its debtors or customers. Rece ivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed to the company, even if the debts are not currently due. Receivables Turnover Ratio An accounting measure used to quantify a firm's eff ectiveness in extending credit as well as collecting debts. The receivables turnover ratio is an activity ratio, measuring how efficiently a fir m uses its assets. Formula: Some companies' reports will only show sales - this can affect the ratio depending on the size of cash sales. Receive Versus Payment - RVP An instruction accompanying sell orders, stating th at only cash will be accepted in exchange for delivery of the securities. Receiver A person appointed by a bankruptcy court or secured creditor to run a company for a short period of time in a manner that will ensure as much debt is p aid back to creditors as possible. Receivership A type of bankruptcy a company enters when a receiv er is appointed by bankruptcy courts or creditors to run the company. Recession A significant decline in activity spread across the economy, lasting longer than a few months. It is visible in industrial production, employment, real income and wholesale-retail trade. The technical indicator of a recession is two consecutive quarter s of negative economic growth as measured by a country's gross domestic product (GDP). Recharacterization The treatment of a contribution as being made to an other type of IRA instead of the IRA that the contribution was initially made. Reclassification The process of changing the class of mutual funds o nce certain requirements have been met. These requirements are generally placed on load mutual fu nds. Reclassification is not considered to be a

taxable event. Recognized Gain The amount of gain reported for income tax purposes . Recognized Loss The amount of loss reported for income tax purposes . Reconversion A method used by individuals to minimize the tax bu rden of converting by recharacterizing Roth IRA-converted amounts back to a Traditional IRA and then converting these assets back to a Roth IRA again. Be aware that the IRS released regulatio ns in 1999 placing limits on reconversions. Record Date The date established by an issuer of a security for the purpose of determining the holders who are entitled to receive a dividend or distribution Recording Fee The fee a government charges for reporting a real e state purchase or sale into the public record Recurring Revenue The portion of a company's revenue that is highly l ikely to continue in the future. This is revenue that is predictable, stable and can be counted on i n the future with a high degree of certainty. Red A term relating to a negative balance on a company' s financial statements. Red Chip A company incorporated and listed in Hong Kong with controlling Chinese shareholders. Red Flag An indicator of potential problems with a security. Most often used to refer to a stock, a red flag ca n be any undesirable characteristic that stands out t o an analyst. There is no universal standard for identifying red flags the method used will depend o n the investment methodology being employed. Red Herring A preliminary registration statement that must be f iled with the SEC describing a new issue of stock and the prospects of the issuing company Redemption The return of an investor's principal in a security , such as a stock, bond, or mutual fund. Redenomination 1. The process whereby a country's currency is reca librated due to significant inflation and currency devaluation. Certain currencies have been redenomin ated a number of times over the last century

for various reasons. 2. The process of changing the currency value on a financial security.

Redeposit 1. The requirement for a person to reinvest a certa in amount of money into their retirement fund after he or she previously requested and obtained a retur n on the deposits made to the fund during a set time period, in order to receive a certain payout f rom the fund upon retirement. 2. A cash management policy used by the Bank of Can ada, where money is transferred from the central bank to the chartered banks. Registration 1. The process by which a company files required do cuments with the Securities and Exchange Commission detailing the particulars of a proposed public offering. A company issuing shares must reveal essential facts and detailed information abo ut its business during the registration process, including a business and asset description, a descr iption of the security being offered and the details of that offering, a description and names o f the company's management, and the company's financial statements, which have been certified by an accountant working independently of the company. 2. The process by which securities brokers or deale rs become legally entitled to sell securities. To have the authority to sell securities, a broker or dealer must file forms and be granted registration with the SEC, must already be a member, or must bec ome a member of a self-regulatory organization such as the NASD, be registered with t he state or states in which he or she intends to sell securities if such state laws require him or h er to do so, and finally, be or become a member of the Security Investor Protection Corporation. Redlining The unethical practice whereby financial institutio ns either flat out deny or make it extremely diffic ult for residents of poor inner-city neighborhoods to b orrow money, gain approval for a mortgage, take out insurance or gain access to other financial ser vices because of high default rates. In this case, the rejection does not take the individual's qualif ications and creditworthiness into account. The federal Community Reinvestment Act was passed in 19 77 to put an end to all redlining practices, but critics say the discrimination still occurs. Registration Right A contractual right giving investors holding restri cted stock the ability to demand that the issuing company register the shares to the SEC, effectively making the stock available for sale to the public. Regression A statistical measure that attempts to determine th e strength of the relationship between one dependent variable (usually denoted by Y) and a ser ies of other changing variables (known as independent variables). The two basic types of regr ession are linear regression and multiple regression. Linear regression uses one independent variable to explain and/or predict the outcome of Y, while multiple regression uses two or more in dependent variables to predict the outcome. The general form of each type of regression is: Linear Regression: Y = a + bX + u Multiple Regression: Y = a + b Regressive Tax

A tax that takes a larger percentage from the incom e of low-income people than the income of high-income people. Reference Rate The underlying index or rate upon which a floating- rate security is based. Refinance 1. When a business or person revises their payment schedule for repaying debt. 2. Replacing an older loan with a new loan offering better terms. Refinancing Risk A type of risk that a borrower faces when the actua l cost of extending or reborrowing funds may exceed the predicted cost of financing. Refinancing risk can occur whenever an investor possesses short-term liabilities and longer term investments. Reflation An economic policy whereby a government uses fiscal or monetary stimulus in order to expand a country's output Refinance 1. When a business or person revises their payment schedule for repaying debt. 2. Replacing an older loan with a new loan offering better terms. Refinancing Risk A type of risk that a borrower faces when the actua l cost of extending or reborrowing funds may exceed the predicted cost of financing. Refinancing risk can occur whenever an investor possesses short-term liabilities and longer term investments Refinancing Risk A type of risk that a borrower faces when the actua l cost of extending or reborrowing funds may exceed the predicted cost of financing. Refinancing risk can occur whenever an investor possesses short-term liabilities and longer term investments Refund A payment from the government for an individual's o verpaid taxes. An individual in this situation is said to be "over-withholding." Federal income tax r efunds are not taxable. Refundable Credit A tax credit that is not limited by the amount of a n individual's tax liability. Typically a tax credi t only reduces an individual's tax liability to zero. Refu ndable credits go beyond this and so really can be considered the same as a payment. Refunded Bond A bond, originally issued as a regular or revenue b ond, that is now secured by a second issue of bonds which are held in an "escrow fund" consisting of U.S. government debt until the first bond issue reaches maturity.

Refunding Retiring an outstanding bond issue at maturity by u sing money from the sale of a new offering. Refunded Bond A bond, originally issued as a regular or revenue b ond, that is now secured by a second issue of bonds which are held in an "escrow fund" consisting of U.S. government debt until the first bond issue reaches maturity. Regional Fund A mutual fund that confines itself to investments i n securities from a specified geographical area, such as Latin America, Europe or Asia. A regional m utual fund will generally look to own a diversified portfolio of companies based in and ope rating out of its specified geographical area. However, some regional funds can also be set up to invest in a specific segment of the region's economy, such as energy. Regional Stock Exchange Any exchange located outside a country's main finan cial center. Registered Education Savings Plan - RESP A savings plan sponsored by the Canadian government that encourages investing in a child's future post-secondary education. Subscribers to an RESP ma ke contributions that build up tax-free earnings - tax-free because subscribers cannot dedu ct payments made to the plan from their income. The government contributes a certain amount to plans for children under 18 under the Canada Education Savings Grant (CESG). Refunding Retiring an outstanding bond issue at maturity by u sing money from the sale of a new offering. Regional Fund A mutual fund that confines itself to investments i n securities from a specified geographical area, such as Latin America, Europe or Asia. A regional m utual fund will generally look to own a diversified portfolio of companies based in and ope rating out of its specified geographical area. However, some regional funds can also be set up to invest in a specific segment of the region's economy, such as energy. Regional Stock Exchange Any exchange located outside a country's main finan cial center. Registered Education Savings Plan - RESP A savings plan sponsored by the Canadian government that encourages investing in a child's future post-secondary education. Subscribers to an RESP ma ke contributions that build up tax-free earnings - tax-free because subscribers cannot dedu ct payments made to the plan from their income. The government contributes a certain amount to plans for children under 18 under the

Canada Education Savings Grant (CESG). Registered Investment Advisor - RIA An advisor, registered with the Securities and Exch ange Commission, who manages the investments of others Registered Options Trader An individual working on the floor of an exchange w hose function it is to watch a number of options traded on the exchange to ensure that they are bein g traded fairly, in fair market conditions. The individual may trade for him/herself or for other p arties, but is under no obligation to 'make a marke t' for any options traded on the exchange. Registered Pension Plan - RPP A form of a trust that provides pension benefits fo r an employee of a company upon retirement. RPPs are registered with the Canada Revenue Agency. The employee and employer, or just the employer make contributions to this retirement plan until the employee leaves the company or retires. Registered Representative (RR) A person who works for a brokerage company that is licensed by the Security and Exchange Commission (SEC) and acts as an account executive f or clients trading investment products such as stocks, bonds and mutual funds. Also known as an "a ccount executive". It is also refers to a person registered with the C ommodity Futures Trading Commission (CFTC) who works for a commission house or a futures commissio n merchant. Regional Stock Exchange Any exchange located outside a country's main finan cial center. Registered Education Savings Plan - RESP A savings plan sponsored by the Canadian government that encourages investing in a child's future post-secondary education. Subscribers to an RESP ma ke contributions that build up tax-free earnings - tax-free because subscribers cannot dedu ct payments made to the plan from their income. The government contributes a certain amount to plans for children under 18 under the Canada Education Savings Grant (CESG Registered Investment Advisor - RIA An advisor, registered with the Securities and Exch ange Commission, who manages the investments of others. Registered Options Trader An individual working on the floor of an exchange w hose function it is to watch a number of options traded on the exchange to ensure that they are bein g traded fairly, in fair market conditions. The individual may trade for him/herself or for other p arties, but is under no obligation to 'make a marke t' for any options traded on the exchange. Registered Pension Plan - RPP

A form of a trust that provides pension benefits fo r an employee of a company upon retirement. RPPs are registered with the Canada Revenue Agency. The employee and employer, or just the employer make contributions to this retirement plan until the employee leaves the company or retires. Registered Representative (RR) A person who works for a brokerage company that is licensed by the Security and Exchange Commission (SEC) and acts as an account executive f or clients trading investment products such as stocks, bonds and mutual funds. Also known as an "a ccount executive". It is also refers to a person registered with the C ommodity Futures Trading Commission (CFTC) who works for a commission house or a futures commissio n merchant. Registered Representative (RR) A person who works for a brokerage company that is licensed by the Security and Exchange Commission (SEC) and acts as an account executive f or clients trading investment products such as stocks, bonds and mutual funds. Also known as an "a ccount executive". It is also refers to a person registered with the C ommodity Futures Trading Commission (CFTC) who works for a commission house or a futures commissio n merchant. Registered Retirement Income Fund - RRIF A retirement fund similar to an annuity contract th at pays out income to a beneficiary or a number of beneficiaries. To fund their retirement, RRSP holde rs often roll over their RRSPs into an RRIF. RRIF payouts are considered a part of the beneficiary's normal income and are taxed as such by the Canadian Revenue Agency in the year that the benefi ciary receives payouts. The organization or company that holds the RRIF is known as the carrier of the plan. Carriers can be insurance companies, banks or any kind of licensed financial intermediary. The Government of Canada is not the carrier for RRIFs it merely registers them for tax purposes. Registered Retirement Savings Plan - RRSP A legal trust registered with the Canada Revenue Ag ency and used to save for retirement. RRSP contributions are tax deductible and taxes are defe rred until the money is withdrawn. An RRSP can contain stocks, bonds, mutual funds, GICs, contract s and even mortgage-backed equity. RRSPs have two main tax advantages: 1) Contributors deduct contributions against their income. For example, if a contributor's tax rate is 40%, every $100 he or she invests in an RRSP will s ave that person $40 in taxes, up to his or her contribution limit. 2) The growth of RRSP investments is tax sheltered. Unlike with non-RRSP investments, returns are exempt from any capital-gains tax, dividend tax or income tax. This means that investments under RRSPs compound at a pretax rate. Registered Retirement Savings Plan - RRSP A legal trust registered with the Canada Revenue Ag ency and used to save for retirement. RRSP contributions are tax deductible and taxes are defe rred until the money is withdrawn. An RRSP can contain stocks, bonds, mutual funds, GICs, contract s and even mortgage-backed equity. RRSPs have two main tax advantages: 1) Contributors deduct contributions against their income. For example, if a contributor's tax rate is 40%, every $100 he or she invests in an RRSP will s ave that person $40 in taxes, up to his or her contribution limit. 2) The growth of RRSP investments is tax sheltered. Unlike with non-RRSP investments, returns are exempt from any capital-gains tax, dividend tax or income tax. This means that investments under RRSPs compound at a pretax rate.

Registered Retirement Savings Plan Contribution - R RSP Contribution Assets invested in an RRSP. RRSP contributions can be made at any time and for any amount up to an individual's contribution limit for the year. If a contributor does not make the maximum allowable contribution, the balance of unused contribution ro om from 1991 onwards is carried forward indefinitely. This allows people to make up for the years that they did not maximize their allowed RRSP contributions. Registered Retirement Savings Plan Deduction - RRSP Deduction The amount that a Canadian taxpayer contributes to his or her RRSP. This amount can be deducted from the taxpayer's annual income to arrive at his or her taxable income for the year. Registered Retirement Savings Plan Deduction Limit - RRSP Deduction Limit The maximum amount that the Canada Revenue Agency ( CRA) allows a taxpayer to deduct from his or her personal income when calculating tax liabili ty. The sum of contributions made to a taxpayer's personal RRSP and his or her spouse's or common-law partner's RRSP must be lower than the RRSP deduction limit or withholding taxes will be i mposed on the coverage. Registered Security 1. The name given to securities whereby ownership i s registered with the issuing company or their agent. 2. Securities that are unavailable for sale due to restrictions placed upon them at the time of issue Registrar An institution or organization that is responsible for keeping records of bondholders and shareholders. If you are the owner of a bond or a s hare in a company you will be registered as a owner by one of these institutions. Registration 1. The process by which a company files required do cuments with the Securities and Exchange Commission detailing the particulars of a proposed public offering. A company issuing shares must reveal essential facts and detailed information abo ut its business during the registration process, including a business and asset description, a descr iption of the security being offered and the details of that offering, a description and names o f the company's management, and the company's financial statements, which have been certified by an accountant working independently of the company. 2. The process by which securities brokers or deale rs become legally entitled to sell securities. To have the authority to sell securities, a broker or dealer must file forms and be granted registration with the SEC, must already be a member, or must bec ome a member of a self-regulatory organization such as the NASD, be registered with t he state or states in which he or she intends to sell securities if such state laws require him or h er to do so, and finally, be or become a member of the Security Investor Protection Corporation. Registered Retirement Savings Plan Contribution - R RSP Contribution Assets invested in an RRSP. RRSP contributions can be made at any time and for any amount up to an individual's contribution limit for the year. If a contributor does not make the maximum allowable contribution, the balance of unused contribution ro om from 1991 onwards is carried forward indefinitely. This allows people to make up for the years that they did not maximize their allowed RRSP contributions

Registered Retirement Savings Plan Contribution - R RSP Contribution Assets invested in an RRSP. RRSP contributions can be made at any time and for any amount up to an individual's contribution limit for the year. If a contributor does not make the maximum allowable contribution, the balance of unused contribution ro om from 1991 onwards is carried forward indefinitely. This allows people to make up for the years that they did not maximize their allowed RRSP contributions. Registered Retirement Savings Plan Deduction - RRSP Deduction The amount that a Canadian taxpayer contributes to his or her RRSP. This amount can be deducted from the taxpayer's annual income to arrive at his or her taxable income for the year. Registered Retirement Savings Plan Deduction Limit - RRSP Deduction Limit The maximum amount that the Canada Revenue Agency ( CRA) allows a taxpayer to deduct from his or her personal income when calculating tax liabili ty. The sum of contributions made to a taxpayer's personal RRSP and his or her spouse's or common-law partner's RRSP must be lower than the RRSP deduction limit or withholding taxes will be i mposed on the coverage. Registered Security 1. The name given to securities whereby ownership i s registered with the issuing company or their agent. 2. Securities that are unavailable for sale due to restrictions placed upon them at the time of issue. Registrar An institution or organization that is responsible for keeping records of bondholders and shareholders. If you are the owner of a bond or a s hare in a company you will be registered as a owner by one of these institutions. Registration 1. The process by which a company files required do cuments with the Securities and Exchange Commission detailing the particulars of a proposed public offering. A company issuing shares must reveal essential facts and detailed information abo ut its business during the registration process, including a business and asset description, a descr iption of the security being offered and the details of that offering, a description and names o f the company's management, and the company's financial statements, which have been certified by an accountant working independently of the company. 2. The process by which securities brokers or deale rs become legally entitled to sell securities. To have the authority to sell securities, a broker or dealer must file forms and be granted registration with the SEC, must already be a member, or must bec ome a member of a self-regulatory organization such as the NASD, be registered with t he state or states in which he or she intends to sell securities if such state laws require him or h er to do so, and finally, be or become a member of the Security Investor Protection Corporation Registered Security 1. The name given to securities whereby ownership i s registered with the issuing company or their agent. 2. Securities that are unavailable for sale due to restrictions placed upon them at the time of issue Registrar An institution or organization that is responsible for keeping records of bondholders and shareholders. If you are the owner of a bond or a s hare in a company you will be registered as a owner by one of these institutions.

Registration Right A contractual right giving investors holding restri cted stock the ability to demand that the issuing company register the shares to the SEC, effectively making the stock available for sale to the public. Regression A statistical measure that attempts to determine th e strength of the relationship between one dependent variable (usually denoted by Y) and a ser ies of other changing variables (known as independent variables). The two basic types of regr ession are linear regression and multiple regression. Linear regression uses one independent variable to explain and/or predict the outcome of Y, while multiple regression uses two or more in dependent variables to predict the outcome. The general form of each type of regression is: Linear Regression: Y = a + bX + u Multiple Regression: Y = a + b Regressive Tax A tax that takes a larger percentage from the incom e of low-income people than the income of high-income people. Regret Theory A theory that says people anticipate regret if they make a wrong choice, and take this anticipation into consideration when making decisions. Fear of r egret can play a large role in dissuading or motivating someone to do something. Regular-Way Trade - RW A type of trade that is settled through the regular settlement cycle required for the particular investment being traded. The settlement cycle is th e time that the regulations of the securities market allows for the buyer to complete payment and for the seller to deliver the goods being purchased. The settlement cycle differs for differe nt assets. Most trades are regular-way trades. Regulation A - Reg A An SEC regulation that governs offerings of $5,000, 000 or less, which qualify for simplified registration (an exemption). Regulation G The Federal Reserve Board regulation that governs t he extension of credit for securities transactions by commercial lenders and non-financia l corporations. Regulated Investment Company - RIC A mutual fund or real estate investment trust that is eligible to pass the taxes on capital gains, dividends, or interest payments onto the clients or individual investors. Regulation D - Reg D A Securities and Exchange Commission (SEC) regulati on governing private placement exemptions. Reg D allows usually smaller companies to raise cap ital through the sale of equity or debt securities without having to register their securities with th e SEC.

Remittance The process of sending money to remove an obligatio n. This is most often done through an electronic network, wire transfer or mail. The term also refers to the amount of money being sent to remove the obligation. Regulation Fair Disclosure - Reg FD A rule passed by the Securities and Exchange Commis sion in an effort to prevent selective disclosure by public companies to market profession als and certain shareholders. The Reg FD rule reads as follows: "Whenever an issu er, or any person acting on its behalf, discloses any material nonpublic information regarding that i ssuer or its securities to [certain enumerated persons], the issuer shall make public disclosure o f that information... simultaneously, in the case o f an intentional disclosure and... promptly, in the c ase of a non-intentional disclosure. Regulation M An IRS regulation that allows regulated investment companies to pass taxes from capital gains, dividends, and interest distributions onto individu al investors. Regulation SHO A regulatory addition by the Securities & Exchange Commission, expanding and updating the restrictions placed on short sale transactions. The updated regulations came into effect on Jan 3, 2005 and help to address several key issues in the short sale market. Regulation T - Reg T The Federal Reserve Board regulation that governs c ustomer cash accounts and the amount of credit that brokerage firms and dealers may extend to customers for the purchase of securities Regulation U The Federal Reserve Board regulation that governs l oans by banks for the purchase of securities. Rehypothecation When a broker pledges hypothecated client owned sec urities in a margin account to secure a bank loan. Reinsurance The practice of insurers transferring portions of r isk portfolios to other parties by some form of agreement in order to reduce the likelihood of havi ng to pay a large obligation resulting from an insurance claim. Also known as "insurance for insurers" or "stop-los s insurance". Reinvestment Using dividends, interest and capital gains earned in an investment or mutual fund to purchase additional shares or units, rather than receiving t he distributions in cash. 1. In terms of stocks, it is the reinvestment of di vidends to purchase additional shares. 2. In terms of mutual funds, it is the reinvestment of distributions and dividends to purchase additional units of that fund. 3. In terms of tax gain/loss harvesting, it is the realization of losses to offset a capital gains lia bility. Reinvestment Rate The rate at which cash flows from fixed-income secu rities may be reinvested.

Reinvestment Risk The risk that future proceeds will have to be reinv ested at a lower potential interest rate. Related-Party Transaction A business deal or arrangement between two parties who are joined by a special relationship prior to the deal. For example, a business transaction be tween a major shareholder and the corporation, such as a contract for the shareholder's company to perform renovations to the corporation's offices, would be deemed a related-party transactio n. Relative Price Strength (RS) Rating or Relative Str ength This IBD SmartSelect® Corporate Rating is a measure of a stock’s price performance over the last twelve months, compared to all stocks in our databa se. The rating scale ranges from 1 (lowest) to 99 (high est). Initial Public Offering (IPO) stocks will be assign ed a "1" rating until the data from five trading sessions are available for calculation. Regulation Q A Federal Reserve Board regulation that limits the interest rate banks can pay on savings deposits. Relative Purchase Power Parity An expansion of the purchase power parity theory su ggesting that prices in countries vary for the same product but that they differ by the same propo rtional rate over time. The reasons suggested for this price difference include taxes, shipping c osts and differences in product quality. Relative Return The return that an asset achieves over a period of time compared to a benchmark. The relative return is the difference between the absolute return achie ved by the asset and the return achieved by the benchmark. Relative Strength A measure of price trend that indicates how a stock is performing relative to other stocks in its industry

Relative Strength (RS) Line A stock's Relative Strength line compares a stock's price performance versus the S&P 500 index. Many charting services plot a RS Line along with th e stock's price, moving averages, etc. The line is derived by dividing the stock price by the S&P 500 Index value. An upward sloping line means that the stock's price is outperforming the S&P 500 Inde x. Relative Strength Index - RSI A technical momentum indicator that compares the ma gnitude of recent gains to recent losses in an attempt to determine overbought and oversold condit ions of an asset. It is calculated using the following formula: Relevant Cost A managerial accounting term that is used to descri be costs that are specific to management's decisions. The concept of relevant costs eliminates unnecessary data that could complicate the decision-making process

Repudiation When one party refuses to honor their terms in a lo an contract. Research And Development - R&D A company's activities that are directed at develop ing new products or procedures. Reload Option An employee stock option that grants additional opt ions upon exercise of the original. Reloading A term lenders commonly use to refer to the habits of borrowers taking out loans to repay the balance on other loans. Often reloading is done to take advantage of lower interest rates offered by other loans, and potential tax benefits. Remainder Man The person who receives the principal remaining in a trust account after all other required payments have been made, such as those to the beneficiary an d expenses. Remittance The process of sending money to remove an obligatio n. This is most often done through an electronic network, wire transfer or mail. The term also refers to the amount of money being sent to remove the obligation. Remuneration Payment or compensation received for services or em ployment. This includes the base salary and any bonuses or other economic benefits that an empl oyee or executive receives during employment. Renko Chart A type of chart, developed by the Japanese, that is only concerned with price movement time and volume are not included. It is thought to be named for the Japanese word for bricks, "renga". A renko chart is constructed by placing a brick in th e next column once the price surpasses the top or bottom of the previous brick by a predefined amount . White bricks are used when the direction of the trend is up, while black bricks are used when t he trend is down. This type of chart is very effective for traders to identify key support/resis tance levels. Transaction signals are generated when the direction of the trend changes and the bri cks alternate colors. Renounceable Right An offer issued by a corporation to shareholders to purchase more shares of the corporation's stock (usually at a discount). Renounceable rights have a value and can be traded Rent-Seeking When a company, organization or individual uses the ir resources to obtain an economic gain from others without reciprocating any benefits back to s ociety through wealth creation. Reorganization A process designed to revive a financially troubled or bankrupt firm. A reorganization involves the restatement of assets and liabilities, as well as h olding talks with creditors in order to make arrangements for maintaining repayments

Repatriation The process of converting a foreign currency into t he currency of one's own country. The amount that the investor will receive depends on the excha nge rate between the two currencies being traded at the settlement time. Replacement Cost The price that will have to be paid to replace an e xisting asset with a similar asset. Reporting Currency The currency used in published reports and financia l documents. Reporting Level A level of ownership of a specific futures position wherein the holders exceed the stated amounts and are required by the CFTC to submit daily report s. Also known as reporting limit. Repurchase Agreement - Repo A form of short-term borrowing for dealers in gover nment securities. The dealer sells the government securities to investors, usually on an o vernight basis, and buys them back the following day. For the party selling the security (and agreeing to repurchase it in the future) it is a repo for the party on the other end of the transaction, (buying the se curity and agreeing to sell in the future) it is a reverse repurchase agreement. Required Beginning Date - RBD The date by which a qualified plan participant or I RA owner must begin receiving required minimum distributions from his or her retirement account. Required Minimum Distribution - RMD The amount that Traditional, SEP and SIMPLE IRA own ers and qualified plan participants must begin distributing from their retirement accounts by Apri l 1 following the year they reach age 70.5. RMD amounts must then be distributed each subsequent ye ar. Required Rate Of Return The rate of return needed to induce investors or co mpanies to invest in something. Required Yield The return a bond must offer in order to be a worth while investment. Required yield is set by the market and sets the precedent for how current bond issues will be priced. Rescission The right of an individual involved within a contra ct to return to the identical state as before they entered into the agreement, due to courts not recog nizing the contract as legally binding Reserve Currency A foreign currency held by central banks and other major financial institutions as a means to pay off international debt obligations, or to influence the ir domestic exchange rate. Reserve Fund An account set aside by an individual or business t o meet any unexpected costs that may arise in

the future as well as the future costs of upkeep. I n most cases, the fund is simply a savings account or another highly liquid asset, as it is impossible to predict when an unexpected cost may arise. However, if the fund is set up to meet the costs of scheduled upgrades, less liquid assets may be used. Reserve Ratio The portion (expressed as a percent) of depositors' balances banks must have on hand as cash. This is a requirement determined by the country's c entral bank, which in the U.S. is the Federal Reserve. The reserve ratio affects the money supply in a country. This is also referred to as the "cash reserve ratio" (CRR). Reserve Requirements Requirements regarding the amount of funds that ban ks must hold in reserve against deposits made by their customers. This money must be in the bank' s vaults or at the closest Federal Reserve Bank. Resident Alien A foreigner who is a permanent resident of the coun try in which he or she resides but does not have citizenship. To fall under this classification in t he U.S., you need to either currently have a green card or have had one in the last calendar year. You also fall under the U.S. classification of residen t alien if you have been in the U.S. for more than 31 days during the current year along with having been in the U.S. for at least 183 days over a three -year period that includes the current year Residential Mortgage-Backed Security - RMBS A type of security whose cash flows come from resid ential debt such as mortgages, home-equity loans and subprime mortgages. This is a type of mor tgage-backed securities that focuses on residential instead of commercial debt. Residual Interest A type of interest payment received by investors in a real estate mortgage investment conduit (REMIC). Residual Security Another way to describe convertibles. Resistance In technical analysis, a price level at which a sto ck has a tendency to stay below. When a stock moves above such a level on high volume, it is some times viewed as a bullish indication. Resistance (Resistance Level) The price at which a stock or market can trade, but which it cannot exceed, for a certain period of time. Often referred to as "resistance level". Respite Care Short-term or temporary care of a few hours or week s of the sick or disabled to provide relief, or respite, to the regular caregiver, usually a family member. Restatement A revision in a company's earlier financial stateme nts. Restricted Stock Insider holdings that are under some other kind of sales restriction. Restricted stock must be traded in compliance with special SEC regulations

Restructuring A significant modification made to the debt, operat ions or structure of a company. This type of corporate action is usually made when there are sig nificant problems in a company, which are causing some form of financial harm and putting the overall business in jeopardy. The hope is that through restructuring, a company can eliminate fina ncial harm and improve the business Retail Banking Retail banking is typical mass-market banking where individual customers use local branches of larger commercial banks. Services offered include: savings and checking accounts, mortgages, personal loans, debit cards, credit cards, and so f orth. Retail Investor Individual investors who buy and sell securities fo r their personal account, and not for another company or organization. Also known as an "individual investor" or "small in vestor". Retail Note A medium-term, subordinated, unsecured debt obligat ion usually issued by a multinational corporation. Retail notes can be purchased directly from the issuer at par in $1,000 increments with no accrued interest or added markups. They will usu ally pay a fixed interest rate for nine months or more (after that, the rate may vary). Retail notes may be callable and can be redeemed at the option of the issuer or holder. Most retail notes also fea ture a survivor's option. Also known as "retail bonds". Retail Price Index - RPI An index that gathers the prices of several retail goods in outlets across the United States in order to give an indication of the rate of inflation. Retained Earnings The percentage of net earnings not paid out as divi dends, but retained by the company to be reinvested in its core business or to pay debt. It is recorded under shareholders' equity on the balance sheet. Calculated by adding net income to (or subtracting any net losses from) beginning retained earnings and subtracting any dividends paid to shareholders: Also known as the "retention ratio" or "retained su rplus". Retender The act of an investor selling the delivery note is sued by a clearing house upon tender by the counter-party of the futures contract. Retention Ratio The percent of earnings credited to retained earnin gs. In other words, the proportion of net income that is not paid out as dividends. Retired Securities Securities that have been repurchased by the issuer out of the company's retained earnings and cancelled according to Securities & Exchange Commis sion (SEC) regulations. They have no market value and no longer represent a share of ownership in the issuing corporation. Retirement of Securities 1. The cancellation of stocks or bonds because the issuer has bought them back. 2. The removal of an asset from securities markets because its maturity date has been reached. Retracement A reversal in the movement of a stock's price, coun tering the prevailing trend.

Retractable Bond A bond that features an option for the holder to fo rce the issuer to redeem the bond before maturity at par value. An investor may choose to shorten the maturity on a bond because of market conditions or if he or she requires the principal s ooner than expected. Retrocession 1. The practice of one reinsurance company essentia lly insuring another reinsurance company by accepting business that the other company had agree d to underwrite. 2. The voluntary act of returning ceded property fr om one group to another. Retrocession can also be the result of a request to have property returne d but, by definition, is not the result of a forced transaction. 3. The process of differentiating or diversifying a ssets by consolidating and then subdividing them amongst a number of stakeholders. Return Of Capital A return from an investment that is not considered income. The return of capital is when some or all of the money an investor has in an investment is pa id back to him or her, thus decreasing the value of the investment. This is not a gain of any type b ecause it is not in excess of the original investment. Return On Assets - ROA An indicator of how profitable a company is relativ e to its total assets. ROA gives an idea as to how efficient management is at using its assets to gene rate earnings. Calculated by dividing a company's annual earnings by its total assets, ROA is display ed as a percentage. Sometimes this is referred to as "return on investment". Note: Some investors add interest expense back into net income when performing this calculation because they'd like to use operating returns before cost of borrowing. Return On Capital Employed - ROCE A ratio that indicates the efficiency and profitabi lity of a company's capital investments. Return on Capital Gains The return that one gets from an increase in the va lue of a capital asset (investment or real estate). Return On Equity - ROE An indicator of a company's financial performance. It measures how efficient a company is with its money. The biggest stock market winners historicall y showed an ROE of 17% to 50% before they made their huge gains. Presented as a percentage fi gure, it is derived by dividing annual income (before extraordinary items, discontinued operation s, cumulative accounting adjustments and non-recurring items) by an average of the latest fiscal year and the prior year's stockholders' equity. Return On Gross Invested Capital - ROGIC The amount that a company earns on the total invest ment it has made in its business. Total gross invested capital is equal to all of the shareholder s' equity (both common and preferred shares) plus the total gross debt that the company has accumulat ed before making any payments on the debt. Return On Investment - ROI A performance measure used to evaluate the efficien cy of an investment or to compare the efficiency of a number of different investments. To calculate ROI, the benefit (return) of an investment is divided by the cost of the investment the result is expressed as a percentage or a ratio. Return on investment is a very popular metric becau se of its versatility and simplicity. That is, if a n investment does not have have a positive ROI, or if there are other opportunities with a higher ROI, then the investment should be not be undertaken.

Return On Investment Capital - ROIC A calculation used to assess a company's potential to be a quality investment by determining how well (i.e.. profitably) a company's management is a ble to allocate capital into its operations. Comparing a company's ROIC with its cost of capital (WACC) reveals whether invested capital was used effectively. Return On Net Assets - RONA A measure of financial performance calculated as: Return On Revenue - ROR A measure of a corporation's profitability, calcula ted as net income divided by revenue. Return On Sales - ROS A ratio widely used to evaluate a company's operati onal efficiency. ROS is also known as a firm's "operating profit margin". It is calculated using t his formula: Reuters A global information provider headquartered in Lond on, England, and serving professionals in the financial services, media and corporate markets. Th e news agency provides text, graphics, video and pictures to subscribers around the world, inclu ding general and economic news. Reuters Group trades on the London Stock Exchange and Nasdaq as ' RTR' and 'RTRSY'. Revaluation A calculated adjustment to a country's official exc hange rate relative to a chosen baseline. The baseline can be anything from wage rates to the pri ce of gold to a foreign currency. In a fixed exchange rate regime, only a decision by a country' s government (i.e. central bank) can alter the official value of the currency. Contrast to "devalu ation". Revaluation Rates Market currency rates from a specific point in time that are used as a base value by currency traders to assess whether a profit or a loss has been reali zed for the day. In most cases, the revaluation rat e is the closing rate for the previous trading day. Revenue The amount of money that a company actually receive s during a specific period, including discounts and deductions for returned merchandise. It is the "top line" or "gross income" figure from which costs are subtracted to determine net income. Revenue is calculated by multiplying the price at w hich goods or services are sold by the number of units or amount sold. Revenue is also known as "REVs" Revenue Agent A person who works for the Internal Revenue Service (IRS) examination department. Revenue Agent's Report - RAR Changes to an assessment after examination by an IR S agent. The changes are recorded on form 4549 Revenue Anticipation Note - RAN A short-term debt security issued on the premise th at future revenues will be sufficient to meet repayment obligations. Revenue Bond A municipal bond supported by the revenue from a sp ecific project, such as a toll bridge, highway, or local stadium.

Revenue Deficit When actual revenues exceed actual expenditures. Th is occurs when actual revenues and expenditures do not correspond with predicted figur es. A revenue deficit is calculated by many groups including governments, corporations and univ ersities/colleges. Revenue Officer 1. A person working for the Internal Revenue Servic e (IRS) collections department. 2. Short for Chief Revenue Officer, a person respon sible for all revenue-generating functions. Revenue Per Employee An important ratio that looks at a company's sales in relation to the number of employees they have. It is calculated as Revenue Per User - RPU A ratio used to express the profitability of a comp any on a per-user basis. RPUs are calculated by taking overall revenue and dividing by total number of users: Revenue Recognition An accounting principle under generally accepted ac counting principles (GAAP) that determines the specific conditions under which income becomes real ized as revenue. Generally, revenue is recognized only when a specific critical event has occurred and the amount of revenue is measurable. Revenue Seat Miles - RPM Also known as revenue passenger miles, RPM refers t o how many seats were actually sold on an airline's flight. Reversal A sudden change in the price direction of a stock, index, commodity or derivative security. Also referred to as a "trend reversal", "rally" or "correction". Reversal Amount The amount of price movement required to shift a ch art to the right. This condition is used on charts that only take into consideration price movement in stead of both price and time. Risk-Return Tradeoff The principle that potential return rises with an i ncrease in risk. Low levels of uncertainty (low ris k) are associated with low potential returns, whereas high levels of uncertainty (high risk) are associated with high potential returns. In other wo rds, the risk-return tradeoff says that invested money can render higher profits only if it is subje ct to the possibility of being lost. Risk Lover An investor who is willing to take on additional ri sk for an investment that has a relatively low expected return. This contrasts with the typical in vestor mentality - risk aversion. Risk averse investors tend to take on increased risks only if t hey are warranted by the potential for higher returns. Reverse Conversion A finance and risk management technique based on a put-call parity strategy that consists of selling a put and buying call (a synthetic long position), while shorting the underlying stock. As long as the put and call have the same underlying, strike price and expiration date, a synthetic long position wil l have the same risk/return profile as ownership of a n equivalent amount of the underlying stock.

Reverse Convertible Bond - RCB A bond that can be converted to cash, debt or equit y at the discretion of the issuer at a set date. Th e bond contains an embedded derivative that allows th e issuer to put the bond to bondholders at a set date prior to the bond's maturity for existing debt or shares of an underlying company. The underlying company need not be related in any way t o the issuer's business. These types of bonds usually have shorter terms to maturity and higher y ields than most other bonds because of the risk involved for investors, who may be forced to redeem their bonds for securities in a company that have, or are expected to, decrease substantially in value. Reverse Convertible Note - RCN A synthetic instrument that behaves similar to both bonds and stocks, providing high coupon payments with final payoffs dependant upon the equi ty markets. Reverse Leveraged Buyout The action of offering new shares to the public by companies that initially went private through past LBOs. Reverse Mortgage A special type of loan used to convert the equity i n a home into cash. The money obtained through a reverse mortgage is usually used to provide seniors with financial security in their retirement years. Reverse Repurchase Agreement The purchase of securities with the agreement to se ll them at a higher price at a specific future date . For the party selling the security (and agreeing to repurchase it in the future) it is a repo for the party on the other end of the transaction (buying the sec urity and agreeing to sell in the future) it is a reverse repurchase agreement. Reverse Stock Split A reduction in the number of a corporation's shares outstanding that increases the par value of its stock or its earnings per share. The market value o f the total number of shares (market capitalization) remains the same. Reverse Takeover - RTO 1. The buying out of larger company by a smaller co mpany. 2. The purchasing of a public company by a private company. Reverse Triangular Merger When the subsidiary of the acquiring corporation me rges with the target firm. In this case, the subsidiary's equity merges with the target firm's s tock. As a result of the merger, the target would become a wholly-owned subsidiary of the acquirer an d shareholders of the target would get shares of the acquirer. Revocable Beneficiary The ability of a policy owner either to change who will receive the compensation from his or her policy or to terminate the policy without having to get consent from the current beneficiary. Most lif e insurance policies have this feature. This is the opposite of an "irrevocable beneficiary ". Revocable Trust A trust whereby provisions can be altered or cancel ed dependent on the grantor. During the life of the trust, income earned is distributed to the gran tor, and only after death does property transfer to the beneficiaries. Also referred to as a "revocable living trust". Revoked IRA An IRA holder may revoke an IRA within the 7 days a fter the IRA is established. When an IRA holder elects to revoke the IRA, the full amount contribut ed to the IRA must be returned to the IRA holder. Revolving Credit A line of credit where the customer pays a commitme nt fee and is then allowed to use the funds

when they are needed. It is usually used for operat ing purposes, fluctuating each month depending on the customers current cash flow needs. Often referred to as "revolver." Revolving Underwriting Facility - RUF A form of revolving credit in which a group of unde rwriters agrees to provide loans in the event that a borrower is unable to sell in the Eurocurrency ma rket. These loans are generally provided through the purchase of short-term Euronotes. Rho The rate at which the price of a derivative changes relative to a change in the risk-free rate of interest. Rho measures the sensitivity of an option or options portfolio to a change in interest rate. Rider A provision in an insurance policy allowing for ame ndments to its terms and/or coverage Riding the Yield Curve A trading strategy that is based upon the yield cur ve and used for interest rate futures. Investors hope to achieve capital gains by employing this str ategy. Right of First Refusal In general, the right of a person or company to pur chase something before the offering is made available to others Rights A security giving stockholders entitlement to purch ase new shares issued by the corporation at a predetermined price (normally less than the current market price) in proportion to the number of shares already owned. Rights are issued only for a short period of time, after which they expire. Rights of Accumulation - ROA A right that allows a shareholder to receive reduce d sales charges when the amount of mutual funds purchased, plus the amount already held, equals an ROA breakpoint. In addition, there is no time limit on how long the mutual fund needs to be held to qualify for a ROA. Rights Offering (Issue) The issuing of rights, to existing shareholders of a security, to buy a proportional number of additional securities at a given price (usually at a discount) within a fixed period. Ring Fence A strategy with which an investor isolates a certai n amount of money from any outside risk. Rings Trading arenas, located on the floor of an exchange , in which traders execute orders. Rings are also referred to as pits. Rio Trade In the securities market, a transaction made in a d esperate attempt to recover previous losses. Ripple A metaphor for a short-term market trend. Rising Bottom A pattern on a security's chart that results from t he daily low price rising over time, creating a ser ies of ascending troughs. Technical traders use this pa ttern to confirm that the trend of the underlying security is heading upward. The chart below illustr ates a security that has three rising bottoms, indicating progressively higher lows over time. Also known as "ascending bottom". Risk The chance that an investment's actual return will be different than expected. This includes the possibility of losing some or all of the original i nvestment. It is usually measured by calculating th e standard deviation of the historical returns or ave rage returns of a specific investment.

Risk Adjusted Return on Capital - RAROC In financial analysis, riskier projects and investm ents must be evaluated differently from their riskless counterparts. By discounting risky cashflo ws against less risky cashflows RAROC accounts for changes in the profile of the investment. Risk Arbitrage A broad definition for three types of arbitrage tha t contain an element of risk: 1) Merger and acquisition arbitrage - The simultane ous purchase of stock in a company being acquired and the sale (or short sale) of stock in t he acquiring company. 2) Liquidation arbitrage - The exploitation of a di fference between a company's current value and its estimated liquidation value. 3) Pairs trading - The exploitation of a difference between two very similar companies in the same industry that have historically been highly correla ted. When the two company's values diverge to a historically high level you can take an offsetting position in each (e.g. go long in one and short the other) because, as history has shown, they will ine vitable come to be similarly valued. Risk Averse Describes an investor who, when faced with two inve stments with a similar expected return (but different risks), will prefer the one with the lowe r risk Risk Capital The money that a person allocates to investing in h igh-risk securities. Risk Graph A two-dimensional graphical representation that dis plays the profit or loss of an option at various prices. The x-axis represents the price of the unde rlying security and the y-axis represents the potential profit/loss. Often called a "profit/loss diagram", this graph provides an easy way to understand and visualize the effects of what may ha ppen to an option in various situations. Risk Management The process of identification, analysis and either acceptance or mitigation of uncertainty in investment decision-making. Essentially, risk manag ement occurs anytime an investor or fund manager analyzes and attempts to quantify the poten tial for losses in an investment and then takes the appropriate action (or inaction) given their in vestment objectives and risk tolerance. Risk Neutral A description of an investor who purposely overlook s risk when deciding between investments. Risk Premium The return in excess of the risk-free rate of retur n that an investment is expected to yield. An asset 's risk premium is a form of compensation for investor s who tolerate the extra risk - compared to that of a risk-free asset - in a given investment. Risk Reversal 1. In commodities trading, it is a hedge strategy t hat consists of selling a call and buying a put option. This strategy protects against unfavorable, downward price movements but limits the profits that can be made from favorable upward price moveme nts. 2. In foreign-exchange trading, risk reversal is th e difference in volatility (delta) between similar call and put options, which conveys market information u sed to make trading decisions. Risk Tolerance The degree of uncertainty that an investor can hand le in regards to a negative change in the value of their portfolio. Risk-Adjusted Return A measure of how much risk a fund or portfolio take s on to earn its returns, usually expressed as a number or a rating. Risk-Based Capital Requirement A stated requirement of liquid reserves placed upon banks and institutions that deal in risky

ventures. Risk-Free Asset An asset which has a certain future return. Treasur ies (especially T-bills) are considered to be risk-free because they are backed by the U.S. government . Risk-Free Rate Of Return The theoretical rate of return of an investment wit h zero risk. The risk-free rate represents the interest an investor would expect from an absolutel y risk-free investment over a specified period of time. Risk-Free Return The theoretical rate of return attributed to an inv estment with zero risk. The risk-free rate represen ts the interest on an investor's money they would expe ct from an absolutely risk-free investment over a specified period of time. Risk-Weighted Assets In terms of the minimum amount of capital that is r equired within banks and other institutions, based on a percentage of the assets, weighted by risk. Risk/Reward Ratio A ratio used by many investors to compare the expec ted returns of an investment to the amount of risk undertaken to capture these returns. This rati o is calculated mathematically by dividing the amount of profit the trader expects to have made wh en the position is closed (i.e. the reward) by the amount he or she stands to lose if price moves in t he unexpected direction (i.e. the risk). Riskless Principal Two principal transactions occurring at the same pr ice that are reported only once as an agency transaction. Road Show A presentation by an issuer of securities to potent ial buyers. It is intended to create interest in th e securities. Rocket Scientist In the world of finance, these are people with scie nce and math degrees who work in the finance field building highly advanced quantitative finance models. These models help banking, insurance and investment firms to price financial instruments . Rogue Trader A trader who acts independently of others - and, ty pically, recklessly - usually to the detriment of both the clients and the institution that employs h im or her. In most cases this type of trading is hi gh risk and can create huge losses. Roll Back When an investor replaces an old options position w ith new one having an earlier expiration date (and the same strike price). Roth 401(k) A new employer-sponsored investment savings account that is funded with after-tax money. After the investor reaches age 59.5, withdrawals of any m oney from the account (including investment gains) are tax-free. Unlike the Roth IRA, the Roth 401(k) has no income limitations for those investors who want to participate - anyone, no matt er what his/her income, is allowed to invest up to the contribution limit into the plan. Roll Down When an investor replaces an old options position w ith new one at a lower strike price. Run When a large amount of bank customers try to withdr awal their bank deposits simultaneously, and the bank's reserves are not sufficient to cover the withdrawals.

Roll Forward When an investor replaces an old options position w ith a new one having a later expiration date (and same strike price). RS This IBD SmartSelect® Corporate Rating is a measure of a stock’s price performance over the last twelve months, compared to all stocks in our databa se. The rating scale ranges from 1 (lowest) to 99 (high est). Initial Public Offering (IPO) stocks will be assign ed a “1” rating until the data from five trading sessions are available for calculation. Roll Up 1. The move from one option position to another wit h a higher exercise price. 2. In the context of venture capital, when a VC for ces small companies to merge in order to reduce costs. Rust Bowl An area that was once known for its manufacturing p lants but is now abandoned as the plants have either gone out of business or moved to Latin American or Asia, where labor cos ts are lower. Rollercoaster Swap A seasonal swap providing flexibility of payments a t predetermined periods in order to best meet cyclical financing needs or other requirements of t he counterparty. Russian Option A lookback option without an expiry date. This type of option can have either an American or a Mid-Atlantic settlement. Russell 2000 Index An index measuring the performance of the 2,000 sma llest companies in the Russell 3000 Index, which is made up of 3,000 of the biggest U.S. stock s. The Russell 2000 serves as a benchmark for small-cap stocks in the United States. Runoff The procedure of printing the end-of-day prices for every stock on an exchange onto ticker tape Rolling EPS Measuring a company's EPS by using the previous 2 q uarters and adding them to the following 2 quarter's estimated EPS Rolling Returns The annualized average return for a period ending w ith the listed year. Rolling returns are useful for examining the behavior of returns for holding perio ds similar to those actually experienced by investors. Also known as 'rolling period returns' or 'rolling time periods'. Rollover 1. The process of reinvesting funds from a mature s ecurity into a new issue of the same or a similar security. 2. The process of transferring the holdings of one retirement plan to another without suffering tax consequences. Running Yield Used to describe the income investors get from thei r portfolio as a percentage of market value of the securities.

RON In currencies, this is the abbreviation for the Rom anian New Leu Runaway Gap A type of gap on a price chart that occurs during s trong bull or bear movements characterized by an abrupt change in price and appearing over a range o f prices. They are best decribed as gaps caused by an sudden increase/decrease in interest for a st ock. The image shows a gap in the middle of a large upwa rd movement. Run Rate 1. How the financial performance of a company would look if you were to extrapolate current results out over a certain period of time. 2. The average annual dilution from company stock o ption grants over the most recent three year period recorded in the annual report. Roth IRA An individual retirement plan that bears many simil arities to the Traditional IRA. Contributions are never deductible, and qualified distributions are t ax-free. Roth IRA Conversion A reportable movement of assets from a Traditional, SEP or SIMPLE IRA to a Roth IRA. The movement of assets may be taxable. Rump The name given to the group of investors refusing t o tender their shares into a corporate action, such as a merger or acquisition. Round Lot The normal unit of trading for a security, which is generally 100 shares of stock. Rumortrage A term often used by traders to refer to increased trading caused by a takeover rumor. Rule Of 72 A rule stating that in order to find the number of years required to double your money at a given interest rate, you divide the compound return into 72. The result is the approximate number of years that it will take for your investment to double. Rule Of 18 A rule whereby the sum of the inflation rate and th e P/E ratio of the Dow Jones Industrial Average is an indicator of the direction of the stock market. If the total is above 18, stocks are supposed to decrease. If the total is under 18, then the stock market is expected to increase. Rule 72(t) An Internal Revenue Service (IRS) rule that allows for penalty-free withdrawals from an IRA account. The rule requires that, in order for the IRA owner to take penalty-free early withdrawals, he or she must take at least five "substantially equal period ic payments" (SEPPs). The amount depends on the IRA owner's life expectancy calculated with various IRS-approved methods. Rule 144A A Securities & Exchange Commission rule modifying a two-year holding period requirement on privately placed securities to permit qualified ins titutional buyers to trade these positions among themselves. Rule 144 A Securities and Exchange Commission rule that sets the conditions under which restricted, unregistered and control securities can be sold. Th ese are the five conditions that must be met for these securities to be sold: 1. The prescribed holding period must be met.

2. There is an 'adequate' amount of current informa tion available to the public regarding the historical performance of the security. 3. The amount to be sold is less than 1% of the sha res outstanding and accounts for less than 1% of the average of the previous four weeks' trading vol ume. 4. All of the normal trading conditions that apply to any trade have been met. 5. If wishing to sell more than 500 shares or an am ount worth more than $10,000, the seller must file a form with the SEC before the sale. Rubber Check Another name for a "bounced check," the check canno t be processed because the writer has insufficient funds. RUB In currencies, this is the abbreviation for the Rus sian ruble Royalty Units An ownership unit in a royalty trust. A royalty uni t gives the unit holder a stake in the income generated by the holdings of the trust. A royalty t rust takes ownership stakes in operating companies or in their cash flows. The royalty trust owns the income or cash flow that the company generates and passes this income on to the royalty unit holders of that trust. Royalty units are seen as an attractive investment because the income gene rated by the assets is subject to taxes at the individual level, rather than the double taxation w hich is seen with dividends on common stock. Royalty Income Trust A type of special-purpose financing created to hold investment in operating companies or their cash flows. These trusts are neither stocks nor bonds bu t investment trusts (a legal entity). Royalty trust s buy the right to royalties on the production and sa les of a natural-resource company and pass on the profits to trust unit holders Royalty A payment to an owner for the use of property, espe cially patents, copyrighted works, franchises or natural resources. Round-Trip Trading An action that attempts to inflate transaction volu mes through the continuous and frequent purchase and sale of a particular security, commodi ty or asset. Round-trip trading can be used to refer to the practice of a business selling an unus ed asset to another company while agreeing to buy back the same asset for about the same price (which has been seen in the energy and telecom business Round Trip Transaction Costs All of the costs associated with completing a trans action. Also known as round turn transaction costs. S A Nasdaq stock symbol indicating shares of benefici al interest. S&P Core Earnings The Standard and Poor's revised version of the meas urement of core earnings, which excludes any gains related to pension activities, net revenues f rom the sale of assets, impairment of goodwill charges, prior-year charge and provision reversals, and settlements related to litigation or insurance claims. Expenses related to employee stock option g rants, pensions, restructuring of present operations or any merger and acquisition costs, R&D purchases, write-downs of depreciable or amortizable operating assets, and unrealized gains/ losses from hedging activities are all included in the core earnings. S&P Phenomenon The tendency for a stock that is newly added to the S&P index to temporarily increase in price.

S-3 Filing The most simplified registration form. It can only be used by companies that have been required to report under the '34 Act for a minimum of twelve mo nths and have met the timely filing requirements set forth under Form S-2. S-8 Filing A SEC filing required for companies wishing to issu e equity to their employees. Sacrifice Ratio An economic ratio that measures the costs associate d with slowing down economic output to change inflationary trends. The ratio is calculated by taking the cost of lost production and dividing it by the percentage change in inflation, and its q uotient gives the loss of output per 1% change in inflation: Safe Harbor 1. A legal provision to reduce or eliminate liabili ty as long as good faith is demonstrated. 2. A form of shark repellent implemented by a targe t company acquiring a business that is so poorly regulated that the target itself is less attractive . In effect, this gives the target company a "safe harbor." 3. An accounting method that avoids legal or tax re gulations and allows for a simpler method (usually) of determining a tax consequence than tho se methods described by the precise language of the tax code. Safekeeping The storage of assets or other items of value in a protected area. Individuals may use self-directed methods of safeke eping or the services of a bank or brokerage firm. Financial institutions are custodians and are therefore legally responsible for the items in safekeeping. Also known as "safekeep" Saitori A member of the Tokyo Stock Exchange who facilitate s the trading of securities by matching buy and sell orders. Their role is to make the market a s orderly and efficient as possible. Salad Oil Scandal One of the worst corporate scandals of its time. It occurred when Allied Crude Vegetable Oil Company discovered that banks would make loans secu red by its salad oil inventory. When the ships full of salad oil would arrive in th e docks, inspectors would test it and confirm that the ship was full of salad oil. However, the compan y didn't remind anyone that oil floats on water. They had filled salad oil tanks with water and put a few feet of oil on top, fooling everyone. The company would even transfer oil to different tanks while taking inspectors out to lunch. In 1963, the scam was busted and over $175 million worth of sala d oil was missing. Salary Freeze The action of a company suspending salary increases for a period of time. Salary-Reduction Contribution A cash- or deferred-contribution arrangement of an employer-sponsored retirement plan, under which participants can choose to set aside part of their pre-tax compensation as a contribution to the plan. Sale 1) In general, a transaction between two parties wh ere the buyer receives goods (tangible or intangible), services and/or assets in exchange for money. 2) An agreement between a buyer and seller on the p rice of a security. Sale and Repurchase Agreement - SRA An open market operation, implemented by the centra l Bank of Canada, that is designed to affect

overnight interest rates and modify the supply of m oney. Sales + Profit Margins + ROE (SMR) Rating A proprietary rating pioneered by Investor's Busine ss Daily to help investors identify companies with superior Sales Growth, Profit Margins, and Ret urn on Equity ratios. The SMR Rating data item is one of five Investor's Business Daily SmartSelect® Corporate Ratings. This data item combines into one simple "A" to "E" rating system, four fundamental factors used by analysts: • • • • Sales growth rate over the last three quarters; • • • • Pre-tax profit margins; • • • • After-tax profit margins; • • • • Return on equity (ROE). Sales growth and after-tax margins are computed wit h quarterly figures, while return on equity and pre-tax margins are calculated using annual figures . All four factors take into account acceleration of the variables (rate of increase). The rating system is weighted in the following mann er: • • • • A = Top 20% (Outperforming over 80% of other stocks ) • • • • B = Next 20% (Outperforming 60%-80% of other stocks ) • • • • C = Next 20% (Outperforming 40%-60% of other stocks ) • • • • D = Next 20% (Outperforming 20%-40% of other stocks ) • • • • E = Bottom 20% (Outperformed by over 80% of other s tocks) NOTE: Stocks will be listed as "N/A" when some or a ll of the variables used for calculation, are not available. Sales Charge A commission or fee paid by an investor at the time of purchasing mutual fund shares. The charge is paid to a mutual fund salesperson or financial advi sor and is intended to provide compensation for the financial salesperson's efforts in assisting th eir client select the mutual fund best suited to th eir needs. The term is also used when referring to fees associated with stock and real-estate transactions. Sales Growth A company's annual and quarterly rate of increase i n revenues (sales). A measure of growth and success as long as it is accompanied by an equally strong rate of increase in earnings per share. You want to see both in a potential investment. Sales Growth Rate %, 3 Years Calculated using the least squares fit over the las t three years of sales history on a trailing 4-quar ter basis. Growth rate will be calculated only if a min imum of 11 quarters of sales exist. Expressed as a percent. Sales Per Share A ratio that computes the total revenue earned per share over a 12-month period. It is calculated by dividing total revenue earned in a fiscal year by t he weighted average of shares outstanding for that fiscal year: Also known as "revenue per share". Sales Tax A tax imposed by the government at the point of sal e on retail goods and services. It is collected by the retailer and passed on to the state. Sales to Cash Flow Ratio A measure of whether or not a company's sales are h igh in comparison to its cash flow. Calculated as:

Sales, Percentage Change Percentage change in sales compared to the same qua rter of the previous year. Figures in blue are equal to, or greater than sales from prior year qua rter, whereas figures in red indicate a decrease in sales. Sales, Quarterly Comparison Most recent quarterly sales amount versus sales amo unt of same quarter in the previous year. Sallie Mae - Student Loan Marketing Association A publicly traded company that is the largest provi der of educational loans in the U.S. Along with providing student loans, Sallie Mae purchases stude nt loans from the original lenders and provides financing to state student-loan agencies. Salomon Brothers World Equity Index - SBWEI An index that measures the performance of fixed-inc ome and equity securities from domestic and international markets that consist of companies wit h a float of at least $100 million. Salvage Value The estimated value that an asset will realize upon its sale at the end of its useful life. The value is used in accounting to determine depreciation amount s and in the tax system to determine deductions. The value can be a best guess of the en d value or can be determined by a regulatory body such as the IRS. Salvage Value The estimated value that an asset will realize upon its sale at the end of its useful life. The value is used in accounting to determine depreciation amount s and in the tax system to determine deductions. The value can be a best guess of the en d value or can be determined by a regulatory body such as the IRS. Same-Day Substitution An offsetting change in a margin account, made over the trading day, that results in no overall change in the value of the account. When a same-day substitution is made, a margin call is not generated. Samurai Bond A yen-denominated bond issued in Tokyo by a non-Jap anese company and subject to Japanese regulations. Other types of yen-denominated bonds a re Euroyens issued in countries other than Japan. Sandbag A stalling tactic used by management to deter a com pany that is showing interest in taking them over. Sandwich Generation The generation of middle-aged individuals who are p ressured to support both aging parents and growing children Sanku (Three Gaps) Pattern The Japanese word for a candlestick pattern that co nsists of three individual gaps located within a well-defined trend. After the appearance of the thi rd gap, the pattern is used to suggest an impending reversal in the direction of the current trend.

Santa Claus Rally A surge in the price of stocks that often occurs in the week between Christmas and New Year's. There are numerous explanations for this phenomenon , including tax considerations, happiness around Wall Street, people investing their Christma s bonuses, and the fact that the pessimists are usually on vacation this week. SAR In currencies, this is the abbreviation for the Sau di Riyal. Sarbanes-Oxley Act Of 2002 - SOX An act passed by U.S. Congress to protect investors from the possibility of fraudulent accounting activities by corporations. Saturday Night Special A slang term used to refer to a surprise takeover a ttempt. Saucer A technical charting formation that indicates that a stock's price has reached its low and that the downward trend has come to a close. Savings According to Keynesian economics, the amount left o ver when the cost of a person's consumer expenditure is subtracted from the amount of dispos able income that he or she earns in a given period of time. Savings Account A deposit account intended for funds that are expec ted to stay in for the short term. A savings account offers lower returns than the market rates. Savings Incentive Match Plan for Employees of Small Employers - SIMPLE A retirement plan that may be established by employ ers, including self-employed individuals. The employer is allowed a tax deduction for contributio ns made to the SIMPLE. The employer makes either matching or non-elective contributions to ea ch eligible employee's SIMPLE IRA and employees may make salary deferral contributions. SBD In currencies, this is the abbreviation for the Sol omon Islands Dollar. SBO-401(k) A tax-deferred, government-registered retirement sa vings plan that is specially designed for small business owners (SBOs). Eligible participants are b usinesses that employ the business's owners and their spouses. The business must not have any o ther eligible employees. Scale Order A type of order that comprises several limit orders at incrementally increasing or decreasing prices. If it is a buy scale order, the limit orders will d ecrease in price, triggering buys at lower prices a s the price starts to fall. With a sell order, the limit orders will increase in price, allowing the trader to take advantage of increasing prices, thereby locking in higher returns. Scalpers A person trading in the equities or options and fut ures market who holds a position for a very short period of time, attempting to make money off of the bid-ask spread. Scalping

A trading strategy that attempts to make many profi ts on small price changes. Traders who implement this strategy will place anywhere from 10 to a couple hundred trades in a single day in the belief that small moves in stock price are easier t o catch than large ones. Scarcity The basic economic problem which arises from people having unlimited wants while there are and always will be limited resources. Because of scarci ty, various economic decisions must be made to allocate resources efficiently. Schedule 13D An form that must be filed with the SEC under Rule 13D when a person or group acquiring more than 5% of any class of a company's shares to disclose t his information within 10 days of the transaction. Rule 13D requires the owner to also disclose any ot her person who has voting power or the power to sell the security. Schedule 13G An SEC form similar to the Schedule 13D used to rep ort a party's ownership of stock that is over 5% of the company. Schedule 13G is shorter and require s less information from the filing party. Ownership of over 5% in a publicly-traded stock is considered to be significant ownership, and therefore must be reported to the public Schedule D A U.S. income tax form used by taxpayers to report their realized capital gains or losses. Investors are required to report their capital gains (and los ses) from the sales of assets, which result in different cash values being received for them than what was originally paid, in order to affix some amount of taxation to the income and wealth that is generated through investment activities. Scorched Earth Policy An anti-takeover strategy that a firm undertakes by liquidating its valuable and desired assets and assuming liabilities in an effort to make the propo sed takeover unattractive to the acquiring firm. SCR In currencies, this is the abbreviation for the Sey chelles Rupee. Screen Of The Day Each day, we screen our database to generate a time ly list of stocks that meet key criteria. This respected database of over 10,000 stocks is used by more than 400 of today's leading institutional money managers. Many of these screens will feature unique ratings and measurements exclusive to this database. Scrip 1. A written document that acknowledges a debt. 2. A temporary document representing a fraction of a share resulting from a split or spin-off. Scrips may be applied to the purchase of full shares. 3. Currency issued by a private corporation Scrip 1. A written document that acknowledges a debt. 2. A temporary document representing a fraction of a share resulting from a split or spin-off. Scrips may be applied to the purchase of full shares. 3. Currency issued by a private corporation Scripophily The hobby of collecting antique bonds, stocks, and other financial instruments based upon their

esthetics and prominence in the financial world. SDD In currencies, this is the abbreviation for the Sud anese Dinar. SDP In currencies, this is the abbreviation for the Sud anese Pound. Search By Date (advanced mode) Select a date range to narrow your search. Search By Industry Group (advanced mode) Industry-group based searches will deliver articles of all feature company profiles that are members of the specified industry group. For example, if yo u select the Building/Residential -Commercial industry group, articles will be delivered on all s tocks in the group that have been profiled in IBD where the company was the primary focus of the arti cle. Note: You can select multiple industry groups by ho lding the Control key down on your keyboard. Search By Section (advanced mode) Pick a particular section in IBD to narrow your sea rch Search By Ticker Symbol To find feature articles where the company is the p rimary focus of the article, enter the ticker symbol. Most articles will come from company featur e sections including "The New America, "Internet & Technology," and "Company In The News." To find articles where a company is mentioned insid e the text or headline of any article, but not the primary focus, simply enter the company name in the Keyword field and use the "Exact keyword order" button. Seasonality A characteristic of a time series in which the data experiences regular and predictable changes which recur every calendar year. Any predictable ch ange or pattern in a time series that recurs or repeats over a one-year period can be said to be se asonal. Note that seasonal effects are different from cycli cal effects, as seasonal cycles are contained withi n one calendar year, while cyclical effects (such as boosted sales due to low unemployment rates) can span time periods shorter or longer than one calend ar year.

Seasonally Adjusted Annual Rate - SAAR A rate adjustment used for economic or business dat a that attempts to remove the seasonal variations in the data. Most data will be affected by the time of the year. Adjusting for the seasonal ity in data means more accurate relative comparisons ca n be drawn from month to month all year. Seasoned Issue An issue of securities from an established company whose existing shares have exhibited stable price movements and substantial trading volume over time, thereby earning a good reputation. Seasons A slang phrase used by venture capitalists to refer to the current stage of a proposed business idea or concept. The progression is spring (infancy), summer (adoles cence), fall (maturing), winter (mature). Seat Membership to the NYSE SEC Fee A nominal fee that was created by the Securities Ex change Act of 1934 to be an additional transaction cost attached to the selling of exchang e-listed equities. This fee is usually listed as a separate fee, independent of any associated brokera ge commissions or fees. Up until 2007, the fee is 1% of one three-hundredth of the dollar value of the equities sold. After 2007, the fee will be 1% of one eight-hundredth of the dollar value of the equities sold.

SEC Release IA-1092 A release from the Securities & Exchange Commission (SEC) that provides uniform interpretations of how state and federal advisor laws would apply t o people providing financial services. SEC Yield A standard yield calculation developed by the Secur ities and Exchange Commission (SEC) that allows for fairer comparisons of bond funds. It is based on the most recent 30-day period covered by the fund's filings with the SEC. The yield figure r eflects the dividends and interest earned during th e period, after the deduction of the fund's expenses. This is also referred to as the "standardized yield." Second-to-Die Insurance A type of life insurance on two people (usually mar ried) that provides benefits to the heirs only afte r the last surviving spouse dies. This differs from r egular life insurance in that the surviving partner doesn't receive any benefits after their spouse die s. Thus, second-to-die insurance is used for estate planning. Secondary Market A market on which an investor purchases an asset fr om another investor rather than an issuing corporation. Secondary Offering 1. The issuance of new stock for public sale from a company that has already made its initial public offering (IPO). Usually, these kinds of public offe rings are made by companies wishing to refinance, or raise capital for growth. Money raised from thes e kinds of secondary offerings goes to the company, through the investment bank that underwrit es the offering. Investment banks are issued an allotment, and possibly an overallotment which t hey may choose to exercise if there is a strong possibility of making money on the spread between t he allotment price and the selling price of the securities. 2. A sale of securities in which one or more major stockholders in a company sell all or a large portion of their holdings. The proceeds of this sal e are paid to the stockholders that sell their shares. Often, the company that issued the shares h olds a large percentage of the stocks it issues. Secondary Stock A stock that is considered riskier than blue chips because it has a smaller market capitalization. Section 1031 A section of the U.S. Internal Revenue Service Code that allows investors to defer capital gains taxes on any exchange of like-kind properties for busines s or investment purposes. Taxes on capital gains are not charged upon sale of a property if the mone y is being used to purchase another property - the payment of tax is deferred until property is so ld with no re-investment. Section 1035 Exchange A tax-free exchange of an existing annuity contract for a new one. Section 1245 A part of the IRS code stating that depreciable pro perty that has been sold at a price in excess of depreciated or salvage value may qualify for favora ble capital-gains tax treatment. Section 1250 A section of the IRS code stating that a gain from selling real estate that has been subjected to accelerated depreciation should be treated as ordin ary income instead of a capital gain. Sector

Consist of a number of similar industry groups. Sec tors are broader than industries. For instance, the high-tech or consumer sector can include severa l different industries. Sector Charts Found on the 'General Markets & Sectors' page of In vestor's Business Daily, these charts show the last three months percentage increase for the leadi ng sectors. Sector charts are useful in determining the strength of each sector. Sector Fund An investment fund that makes investments solely in businesses that operate in a particular industry or sector of the economy. Sector Rotation The action of a mutual fund or portfolio manager sh ifting investment assets from one sector of the economy to another. Secular An adjective used to describe a long-term time fram e, usually at least 10 years. Secured Bond A type of bond that is secured by the issuer's pled ge of a specific asset, which is a form of collater al on the loan. In the event of a default, the bond is suer passes title of the asset or the money that ha s been set aside onto the bondholders. Secured bonds can also be secured with a revenue stream that comes from the project that the bond issue was used to finance. Secured Card A type of credit card that is backed by a savings a ccount used as collateral on the credit available with the card. Money is deposited and held in the a ccount backing the card. The limit will be based on both your previous credit history and the amount deposited in the account. The limit as a percent of the deposit tends to range between 50% and 100%. Secured Debt Debt backed or secured by collateral to reduce the risk associated with lending. An example would be a mortgage, your house is considered collateral towards the debt. If you default on repayment, the bank seizes your house, sells it and uses the p roceeds to pay back the debt. Secured Note A bilateral lending agreement, the note represents a contractual obligation to lend and borrow money at a specified interest rate. Securities Act of 1933 A federal piece of legislation enacted as a result of the market crash of 1929. The legislation had tw o main goals: (1) to ensure more transparency in fina ncial statements so investors can make informed decisions about investments, and (2) to establish l aws against misrepresentation and fraudulent activities in the securities markets. Securities And Exchange Board Of India - SEBI The regulatory body for the investment market in In dia. The purpose of this board is to maintain stable and efficient markets by creating and enforc ing regulations in the market place. Securities And Exchange Commission - SEC A government commission created by Congress to regu late the securities markets and protect investors. In addition to regulation and protection , it also monitors the corporate takeovers in the U.S. The SEC is composed of five commissioners appo inted by the U.S. President and approved by

the Senate. The statutes administered by the SEC ar e designed to promote full public disclosure and to protect the investing public against fraudulent and manipulative practices in the securities markets. Generally, most issues of securities offer ed in interstate commerce, through the mail or on the internet, must be registered with the SEC. Securities Exchange Act Of 1934 The Securities Exchange Act of 1934 was created to provide governance of securities transactions on the secondary market (after issue) and regulate the exchanges and broker-dealers in order to protect the investing public. Securities Investor Protection Corporation - SIPC A nonprofit corporation created by an act of Congre ss to protect the clients of brokerage firms that are forced into bankruptcy. Members to the SIPC inc lude all brokers and dealers registered under the Securities Exchange Act of 1934, all members of securities exchanges and most NASD members. Securities Lending When a brokerage lends securities owned by its clie nts to short sellers. Securities Transfer Association Medallion Program - STAMP A verification system used by many different instit utions to authorize and guarantee the individual signatures applied to securities requiring transfer s. Securitization The process of creating a financial instrument by c ombining other financial assets and then marketing them to investors. Securitize The practice of a company selling accounts receivab les or other debts owed to it. The third party that buys the debt assumes ownership of it and the responsibility for collecting the debts, and keeps the repayments when made. When it sells the debt to the third party, the company recognizes the sale price of debts as a positive cash flow under G AAP rules. Security An instrument representing ownership (stocks), a de bt agreement (bonds), or the rights to ownership (derivatives). Security Analyst A financial professional who studies various indust ries and companies, providing research and valuation reports, and making buy, sell, and hold r ecommendations. Security Market Line - SML The line that graphs the systematic, or market, ris k versus return of the whole market at a certain time and shows all risky marketable securities. Seed Capital The initial equity capital used to start a new vent ure or business. Segregated Fund A type of annuity that is similar to a mutual fund, and is an insurance product and offered only by insurance companies.

Seigniorage The difference between the value of money and the c ost to produce it - in other words, the economic cost of producing a currency within a given economy or country. If the seigniorage is positive, then the government will make an economic profit; a nega tive seigniorage will result in an economic loss. SEK In currencies, this is the abbreviation for the Swe dish Krona. Self-Directed RRSP A type of RRSP (Registered Retirement Savings Plan) whose owner determines the asset mix held in the trust. An RRSP is a Canadian retirement savings vehicle to which contributions are tax deductible on an annual basis, up to a certain amou nt. With a self-directed RRSP, an investor can determine the portfolio of investment products in h is or her RRSP. Investments that are not RRSP eligible, however, are sill not allowed in a self-d irected RRSP. Self-Employment Tax A tax imposed on self-employed people, who must pay this tax in order to receive social-security benefits upon retirement. Self-Regulatory Organization - SRO A non-government organization that has the power to create and enforce industry regulations and standards. The priority is to protect investors thr ough the establishment of rules that promote ethics and equality. Sell 1. A recommendation to sell a particular security. 2. The process of liquidating an asset in exchange for money. Sell Plus An order to sell a stock at a price above the curre nt market price. Sell Side The retail brokers and research departments that se ll securities and make recommendations for brokerage firms' customers. Sell To Close A phrase used by many brokerages on the street to r epresent the closing of a long position in option transactions. Sell To Open A phrase used by many brokerages on the street to r epresent the opening of a short position in option transactions. Sell To Open A phrase used by many brokerages on the street to r epresent the opening of a short position in option transactions. Sell-Off The rapid selling of securities, such as stocks, bo nds and commodities. The increase in supply

leads to a decline in the value of the security. Sell-Out When a broker or investor buying stocks has failed to settle the trade in a timely manner and, as a result, the broker can forcibly sell the securities on the investor's behalf. Seller 1. An individual or entity that exchanges any type of good or service in return for payment. 2. In the option market, the seller is the investor who collects a premium from the buyer in return fo r taking on the risk associated with holding a short position in an option. The seller of an option is also known as a "writer". Seller's Call An agreement between a buyer and a seller for a spe cific grade and quantity of commodity that allows a period of time for the seller to set the p rice a fixed number of points above (or below) a specified delivery month's futures price. Seller's Market A market condition characterized by a shortage of g oods available for sale. Seller's Option The right of a forward contract seller to choose so me of the specifications of a commodity to be delivered. The choices about the delivered commodit y's quality and delivery specifications must fit among the limits imposed by the terms of the contra ct. Seller's option can also refer to a put option. Selling Away When a broker solicits you to purchase securities n ot held or offered by the brokerage firm. As a general rule, such activities are a violation of se curities regulations. Selling Group All financial institutions involved in selling or m arketing a new issue of debt or equity but not necessarily participating in the underwriting conso rtium. Selling Hedge A hedging strategy with which the sale of futures c ontracts are meant to offset a long underlying commodity position. Also known as a "short hedge." Selling Hedge A hedging strategy with which the sale of futures c ontracts are meant to offset a long underlying commodity position. Also known as a "short hedge." Selling Into Strength A proactive trading strategy carried out by selling out of a long or into a short position when the price of the asset being traded is still rising but is expected to reverse in price. Opposite of "buyi ng into weakness". Selling, General & Administrative Expense - SGA Reported on the Income Statement, it is the sum of all direct and indirect selling expenses and all general and administrative expenses of a company. Direct selling expenses are expenses that can be di rectly linked to the sale of a specific unit such a s credit, warranty and advertising expenses. Indirect selling expenses are expenses which cannot be

directly linked to the sale of a specific unit, but which are proportionally allocated to all units so ld during a certain period, such as telephone, interes t and postal charges. General and administrative expenses include salaries of non-sales personnel, r ent, heat and lights. Semi-Strong Form Efficiency A class of EMH (Efficient Market Hypothesis) that i mplies all public information is calculated into a stock's current share price. Meaning that neither f undamental nor technical analysis can be used to achieve superior gains. Semi-Variable Cost A cost composed of a mixture of fixed and variable components. Costs are fixed for a set level of production or consumption, becoming variable after the level is exceeded. Also known as a "semi-fixed cost." Semiannual An event that occurs twice in a calendar year Semiconductor Another word for "chip." A semiconductor is a mater ial such as silicon, which conducts electrical charges but not as well as metals such as copper an d aluminum. Senior Debt A bond or other form of debt that takes priority ov er other debt securities sold by the issuer. Senior Security A security (usually debt) that, in the event the is suer goes bankrupt, must be repaid before other creditors receive any payment. Sensex An abbreviation of the Bombay Exchange Sensitive In dex (Sensex) - the benchmark index of the Bombay Stock Exchange (BSE). It is composed of 30 o f the largest and most actively-traded stocks on the BSE. Initially compiled in 1986, the Sensex is the oldest stock index in India. Sensitivity The magnitude of a financial instrument's reaction to changes in underlying factors. Financial instruments, such as stocks and bonds, are constant ly impacted by many factors. Sensitivity accounts for all factors that impact a given instru ment in a negative or positive way in an attempt to learn how much a certain factor will impact the val ue of a particular instrument. Sensitivity Analysis A technique for determining the outcome of a decisi on if a key prediction turns out to be wrong. Sentiment Indicator A general term used to describe indicators that gau ge investor attitudes toward the market. Separate Account 1. A privately managed investment account opened th rough a brokerage or financial advisor that uses pooled money to buy individual assets. 2. In the context of variable annuities, these are payments made to an insurance company for the purpose of investing in securities. These securitie s are kept separate from the insurer's general

investments. Serial Bond A bond issue in which a portion of the outstanding bonds matures at regular intervals until eventually all of the bonds have matured. As they m ature gradually over a period of years, these bonds are used to finance a project providing regul ar, level or predictable income streams. Serial bonds are also used to finance projects with regula r, level debt payments such as residential developments Serial Bond With Balloon A combination of a serial bond issue and a term bon d issue. Essentially, the serial bond with balloon has bonds that mature at different intervals throug hout the issue's life, and then a large percentage of the bonds (the term bonds) mature in the last ye ar of the issue's term. Alternatively, the bulk of the bonds may mature at the first maturity date wit h the rest of the bonds gradually maturing over the remainder of the issue's life. Series 11 A securities license for sales assistants who also take unsolicited securities orders for customers. Series 24 A securities license entitling the holder to superv ise and manage branch activities. Before taking the Series 24 exam, you must have your Series 7 license . Series 26 A securities license entitling the holder to superv ise and manage sales activities for investment companies and annuity activities. Series 27 A securities license entitling the holder to become a chief financial officer for a NASD member firm. Series 3 A securities license entitling the holder to sell c ommodities or futures contracts. Series 30 A securities license entitling the holder to become a futures branch office manager Series 31 A securities license entitling the holder to sell m anaged futures(funds). Series 4 A securities license entitling the holder to superv ise options sales personnel and compliance issues. Before taking the Series 4 exam, you must h ave your Series 7 license. Series 55 A securities license entitling the holder to active ly participate in equity trading.

Series 6 A securities license entitling the holder to sell m utual funds and variable annuities. Series 63 A securities license entitling the holder to solici t orders for any type of security in a particular s tate. This license is required in addition to the Series 7 or Series 6. Series 65 A securities license required by most U.S. states f or individuals that act as an investment advisor. Series 66 An exam administered by the North American Securiti es Administrators Association. Successful completion of the Series 66 exam is equivalent to s uccessful completion of both the Series 63 and Series 65 exams. Series 7 A general securities registered representative lice nse, it entitles the holder to sell all types of securities products with the exception of commoditi es/futures (which requires a Series 3 license). Series 9/10 A securities license entitling the holder to superv ise branch activities. Before taking the Series 9/1 0 exam, you must have your Series 7 license. Series A - Preferred Stock The first round of stock offered to the venture cap italist in the early stages of a startup. This stoc k is convertible into common stock if the company goes p ublic or is sold.

Series EE Bond A non-marketable, interest-bearing U.S. government savings bond issued at a discount from par. Series HH Bond A non-marketable, interest-bearing U.S. government savings bond issued at par and acquired only by exchanging Series EE bonds. Series I Bond A non-marketable, interest-bearing U.S. government savings bond that is a combination of two separate rates: 1) Fixed Interest Rate 2) Variable Inflation Rate (adjusted semiannually) Settlement Date 1. The date by which an executed security trade mus t be settled. That is, the date by which a buyer must pay for the securities delivered by the seller . 2. The payment date of benefits from a life insuran ce policy. Settlement Price The average price at which a contract trades, calcu lated at both the open and close of each trading day. Settlement Risk The risk that one party will fail to deliver the te rms of a contract with another party at the time of settlement. Settlement risk can be the risk associa ted with default at settlement and any timing differences in settlement between the two parties. This type of risk can lead to principal risk.

Settlement Statement A statement that summarizes all the fees and charge s that both the homebuyer and seller face during the settlement process of a housing transact ion. This form, which is under the jurisdiction of the U.S. Department of Housing and Urban Developmen t, is also known as the HUD-1. Settling Price The price used daily by clearing houses to clear al l trades and settle accounts between clearing members. Also commonly referred to as "settlement p rice." Severability A clause in a contract that allows for the terms of the contract to be independent of one another, so that if a term in the contract is deemed unenforcea ble by a court, the contract as a whole will not be deemed unenforceable. If there were no severability clause in a contract, a whole contract could be deemed unenforceable because of one unenforceable t erm. Also known as a "severability clause" or a "savings clause". Severance Pay Compensation that an employer gives to someone who is about to lose his or her job. SGD In currencies, this is the abbreviation for the Sin gapore Dollar. Shadow A small line found on a candle in a candlestick cha rt that is used to indicate where the price of a stock has fluctuated relative to the opening and cl osing prices. Essentially, these shadows illustrate the highest and lowest prices at which a security h as traded over a specific time period. Shadow Open Market Committee - SOMC A committee created by two university professors, f rom Rochester and Carnegie Mellon, in the early 1970's. The committees purpose is to evaluate the p olicy and actions of the FOMC. Shadow Pricing The arbitrary assignment of dollar values to non-ma rketed goods. Shadow Rating 1. The name given to a bond rating performed on an issuing party by a credited institution, but without any public announcement of the results. 2. A rating given by S&P to Israel Bonds, which are not permitted to be traded on the secondary marke Shakeout A situation in which many investors exit their posi tions, often at a loss, because of uncertainty or recent bad news circulating around a particular sec urity or industry. Share Capital The portion of a corporation's equity obtained from issuing shares in return for cash or other considerations. Share Premium Account Usually found on the balance sheet, this is the acc ount to which the amount of money paid (or promised to be paid) by a shareholder for a share i s credited to, only if the shareholder paid more than the cost of the share. Shares Held by Banks Represents the percentage of stock owned by institu tional banks. This amount is based on the floating supply of stock (total shares outstanding less insider positions and percent held by

management). This information is reported quarterly by approximately 250 banks Share Purchase Rights A type of security that gives the holder the option , but not the obligation, to purchase a predetermined number of shares at a predetermined p rice, similar to a stock option or warrant. These rights are typically distributed to existing shareholders, who have the ability to trade these rights on an exchange. Share Repurchase A program by which a company buys back its own shar es from the marketplace, reducing the number of outstanding shares. This is usually an in dication that the company's management thinks the shares are undervalued. Share Turnover A measure of stock liquidity calculated by dividing the total number of shares traded over a period by the average number of shares outstanding for the period. The higher the share turnover, the more liquid the share of the company Shareholder Any person, company, or other institution that owns at least 1 share in a company. A shareholder may also be referred to as a stockholder. Shareholder Activist A person who attempts to use his or her rights as a shareholder of a publicly-traded corporation to bring about social change. Some of the issues most often addressed by shareholder activists are related to the environment, investments in politica lly sensitive parts of the world and workers' right s (sweatshops). The term can also refer to investors who believe th at a company's management is doing a bad job and who attempt to gain control of the company and replace management for the good of the shareholders. Shareholder Activist A person who attempts to use his or her rights as a shareholder of a publicly-traded corporation to bring about social change. Some of the issues most often addressed by shareholder activists are related to the environment, investments in politica lly sensitive parts of the world and workers' right s (sweatshops). The term can also refer to investors who believe th at a company's management is doing a bad job and who attempt to gain control of the company and replace management for the good of the shareholders. Shareholder Equity Ratio A ratio used to help determine how much shareholder s would receive in the event of a company-wide liquidation. The ratio, expressed as a percent age, is calculated by dividing total shareholders' equity by total assets of the firm, and it represen ts the amount of assets on which shareholders have a residual claim. The figures used to calculate the ratio are taken from the company's balance sheet. Shareholder Services Agent A financial institution or similar entity responsib le for looking after the needs of the shareholders of publicly-traded corporations or mutual funds. Share holder services agents typically look after investor record-keeping and communication and other administrative responsibilities, and they attend to shareholders' problems or concerns. Shareholder Value Added - SVA A value-based performance measure of a company's wo rth to shareholders. The basic calculation is

net operating profit after tax (NOPAT) minus the co st of capital from the issuance of debt and equity, based on the company's weighted average cost of cap ital: Shareholder Value Transfer - SVT A measurement of the amount of shareholders' equity flowing out of a company to its executives through exercised stock options. Shareholders' Equity A firm's total assets minus its total liabilities. Equivalently, it is share capital plus retained ear nings minus treasury shares. Shareholders' equity represe nts the amount by which a company is financed through common and preferred shares. Also known as "share capital", "net worth" or "stoc kholders' equity". Shark Repellent Any number of measures taken by a corporation to di scourage an unwanted takeover attempt. Shark Watcher A firm specializing in the early detection of takeo vers. The firm's primary business is usually the solicitation of proxies for client corporations. Sharpe Ratio A ratio developed by Nobel Laureate Bill Sharpe to measure risk-adjusted performance. It is calculated by subtracting the risk-free rate from t he rate of return for a portfolio and dividing the result by the standard deviation of the portfolio r eturns. Sheep An investor who lacks a focused trading strategy an d trades on emotion and the suggestions of others, including friends, family and financial gur us. This type of investor often makes rash investments without reviewing their financial viabi lity. The behavior of sheep contrasts with that of bulls and bears, who have focused views about the m arket. Shelf Offering An SEC provision allowing an issuer to register a n ew issue security without selling the entire issue at once. Shelf Registration A term used for the SEC rule 415, which allows a co rporation the ability to comply with registration requirements up to 2 years before doing a public of fering. The corporation must still file the require d annual and quarterly reports to the SEC. Shell Corporation A corporation without active business operations or significant assets. Shingle Theory A suitability doctrine first introduced by the Secu rities and Exchange Commission in the 1930s. The idea is that a broker who hangs out a shingle will represent his or her customers fairly and responsibly when making suggestions regarding secur ities. Shipping Certificate

An instrument used by futures exchanges as a negoti able commitment by an approved delivery facility to transfer the underlying commodity to th e holder of the certificate under the prescribed terms. Shock Absorber A temporary restriction placed on the trading of in dex futures because of substantial intraday decreases in the underlying indexes. Shogun Bond A type of foreign-currency denominated bond that is issued in Japan by foreign entities. Organizations such as the World Bank have issued su ch debt instruments in the past . Also known as a "geisha bond". Shooting Star A type of candlestick formation that results when a security's price, at some point during the day, advances well above the opening price but closes lo wer than the opening price. Short (or Short Position) 1. The sale of a borrowed security, commodity or cu rrency with the expectation that the asset will fall in value. 2. In the context of options, it is the sale (also known as "writing") of an options contract. Opposite of "long (or long position)". Short And Distort A buzzword describing an illegal practice employed by unethical internet investors who short-sell a stock and then spread unsubstantiated rumors and ot her kinds of unverified bad news in an attempt to drive down the equity's price and realized a pro fit. Short Covering The purchase of shares previously sold short in ord er to close the open position. Short Form Prospectus Distribution System - SFPDS A system that allows firms making an issue to produ ce a short form prospectus. The short form prospectus must contain any material changes not pr eviously reported. Short Interest The total number of shares of a security that have been sold short by customers and securities firms. Short Form Prospectus Distribution System - SFPDS A system that allows firms making an issue to produ ce a short form prospectus. The short form prospectus must contain any material changes not pr eviously reported. Short Interest The total number of shares of a security that have been sold short by customers and securities firms. Short Interest The total number of shares of a security that have been sold short by customers and securities firms.

Short Interest Ratio Indicates the number of days it would take short-se llers to cover their positions. Short Interest Theory The theory that a large short interest is the prede cessor of a rise in the price of a stock. Short Market Value The total value of all short sales in place in a cu stomer's account at the end of the trading day. Short Run A period of time in which the quantity of some inpu ts cannot be increased beyond the fixed amount that is available. Short Sale A market transaction in which an investor sells bor rowed securities in anticipation of a price decline and is required to return an equal amount of shares at some point in the future. The payoff to selling short is the opposite of a lo ng position. A short seller will make money if the stock goes down in price, while a long position mak es money when the stock goes up. The profit that the investor receives is equal to the value of the sold borrowed shares less the cost of repurchasing the borrowed shares. Short Sale Rule A SEC rule requiring short sales to be made only on a plus tick or zero plus tick. Also called the "plus tick rule" or the "tick-test rule". Short Sell Against the Box The act of short selling securities that you alread y own. This results in a neutral position where you r gains in a stock are equal to the losses. For examp le, if you own 100 shares of ABC and you tell your broker to sell short 100 shares of ABC, you have sh orted against the box. An alternative way to short selling against the box is to buy a put on your sto ck. This may or may not be less expensive than doing the short sale. Also known as "shorting again st the box". Short Selling The selling of a security that the seller does not own, or any sale that is completed by the delivery of a security borrowed by the seller. Short sellers as sume that they will be able to buy the stock at a lower amount than the price at which they sold shor t. Short Squeeze A situation in which a lack of supply and an excess demand for a traded stock forces the price upward Short Straddle An options strategy carried out by holding a short position in both a call and a put that have the same strike price and expiration date. The maximum profit is the amount of premium collected by writing the options. Short Term 1. In general, holding an asset for short period of time. 2. In accounting, an asset expected to be converted into cash in the next year, or a liability coming due in the next year. Also known as current assets and liabilities. 3. For investing, a security that matures in one ye ar or less.

4. For taxes, a holding period of less that one yea r. Short the Basis A futures strategy involving the purchase of a futu res position to hedge against a future commitment to deliver the underlying commodity. Short-Swing Profit Rule A Securities & Exchange Commission regulation that requires company insiders to return any profits made from the purchase and sale of company stock if both transactions occur within a six-month period. A company insider, as determined by t he rule, is any officer, director or holder of more than 10% of the company's shares Short-Term Investment Fund - STIF A type of fund that invests in short-term investmen ts of high quality and low risk. The goal of this type of fund is to protect capital with low-risk in vestments while achieving a return that beats a relevant benchmark such as a Treasury bill index. Shortfall The amount by which the capital required to fulfill a financial obligation exceeds available capital. Shotgun Clause A buy-sell provision used by related parties in a b usiness venture which gives an investor within the partnership the right to offer his/her portion to a partner at a specified price. If the partner does not buy the offered interest at this price, the partner must then sell his/her own interest to the offerin g party at the same specified price. Shout Option An exotic option that allows the holder to lock in a defined profit while maintaining the right to continue participating in gains without a loss of l ocked-in monies. SHP In currencies, this is the abbreviation for the St. Helana Pound. Shrinkage The amount by which inventory on hand is shorter th an the amount of inventory recorded. Sideways Market A situation in which stock price changes little ove r a period of time. Sight Letter of Credit A letter of credit that is payable once it is prese nted along with the necessary documents. Signaling Approach The idea that insiders have information not availab le to the market. Moves made by insiders can signal information to outsiders and change the stoc k price. Signature Guarantee A form of authentication issued by a bank or other financial institution that verifies the legitimacy of a signature and the signatory's overall request. Th is type of guarantee is often used in situations

where financial instruments are being transferred. In most cases, the guarantor accepts all consequences in the event that the signature is fra udulent. Significant Order An order to buy or sell a security that, due to its abnormally large size, has the potential to have a significant effect on a security's price. Silent Partner An investor who does not have any management respon sibilities but provides capital and shares liability for any losses experienced by the entity. Silicon Valley Nickname for the region in North California (around San Jose) that contains a huge concentration of computer and Internet companies. Siliconaires Slang referring to young dotcom entrepreneurs in th eir 20s and 30s who found themselves suddenly rich due to stock options from their Silicon Valley Internet companies Silver An element commonly used in jewelry, coins, electro nics, and photography. Silver has the highest electrical conductivity of any metal. Silver Parachute A form of severance that is paid to employees of a company should the company be taken over by another. Simple Moving Average - SMA A simple, or arithmetic, moving average that is cal culated by adding the closing price of the security for a number of time periods and then dividing this total by the number of time periods. Short-term averages respond quickly to changes in the price of the underlying, while long-term averages are slow to react. Simplified Employee Pension - SEP (Simplified Emplo yee Pension IRA) A type of retirement plan that an employer can esta blish, including self-employed individuals. The employer is allowed a tax deduction for contributio ns made to the SEP Plan. The employer makes contributions to each eligible employee's SEP IRA o n a discretionary basis. Sine Wave An geometric waveform that oscillates (moves up, do wn or side-to-side) periodically, and is defined by the function y = sin x. In other words, it is an s-shaped, smooth wave that oscillates above and below zero. Sinful Stock Stock from companies that are associated with (or a re directly involved in) activities considered unethical or immoral. Single The filing status used by a taxpayer who is unmarri ed and does not qualify for any other filing status. Single Payment Options Trading - SPOT

A type of option product that allows an investor to set not only the conditions that need to be met in order to receive a desired payout, but also the siz e of the payout he or she wishes to receive if the conditions are met. The broker that provides this p roduct will determine the likelihood that the conditions will be met and, in turn, will charge wh at it feels is an appropriate commission. This type of arrangement is often referred to as a "binary op tion" because only two types of payouts are possible for the investor: 1. The conditions set out by both parties occur, an d the investor collects the agreed-upon payout amount. 2. The event does not occur and the investor loses the full premium paid to the broker. Single Stock Future - SSF A futures contract with an underlying of one partic ular stock, usually in batches of 100. No transmission of share rights or dividends occur. Single-Country Fund A mutual fund that restricts its investment to the assets of one country and is able to allocate its funds only within the range of investment instrumen ts available in the specified country. This restriction is based on the mutual fund prospectus. If the fund's prospectus states that it is only investing in one country, the fund is bound by this statement. Sinker A bond whose payments are provided by the issuer's sinking fund Sinking Fund A means of repaying funds that were borrowed throug h a bond issue. The issuer makes periodic payments to a trustee who retires part of the issue by purchasing the bonds in the open market. Sinking Fund Call A provision allowing a bond issuer the opportunity to buy outstanding bonds from bondholders for a set rate, using money (a sinking fund) from the iss uer's earnings saved specifically for security buybacks. Because it adds doubt for investors over whether the bond will continue to pay until its maturity date, a sinking fund call is seen as an ad ditional risk for investors. SIT In currencies, this is the abbreviation for the Slo venian Tolar. Skewness A statistical term used to describe a situation's a symmetry in relation to a normal distribution. Skimming An electronic method of capturing a victim's person al information used by identity thieves. The skimmer is a small device that scans a credit card and stores the information contained in the magnetic strip. Skimming can take place during a le gitimate transaction at a business Skin In The Game A term coined by renowned investor Warren Buffett r eferring to a situation in which high-ranking insiders use their own money to buy stock in the co mpany they are running. Skirt Length Theory The idea that skirt lengths are a predictor of the stock market direction. According to the theory, if skirts are short, it means the markets are going up . And if skirt are long, it means the markets are heading down.

SKK In currencies, this is the abbreviation for the Slo vak Koruna. Sleeping Beauty A company that is prime for takeover but has not be en approached by an acquiring company. Slippage The difference between estimated transaction costs and the amount actually paid SLL In currencies, this is the abbreviation for the Sie rra Leone Leone SLR In currencies, this is the abbreviation for the Sri Lankan rupee. Sluggish Economy A state in the economy in which the growth is slow, flat or declining. The term can refer to the economy as a whole or a component of the economy, s uch as weak housing starts. Slush Fund A fund (or something similar) that does not have a designated purpose. These types of funds are often illegal Small Cap Refers to stocks with a relatively small market cap italization. The definition of small cap can vary among brokerages, but generally it is a company wit h a market capitalization of between $300 million and $2 billion. Small Firm Effect A theory that holds that smaller firms, or those co mpanies with a small market capitalization, outperform larger companies. This market anomaly is a factor used to explain superior returns in the Three Factor Model, created by Gene Fama and Kennet h French - the three factors being the market return, companies with high book-to-market values, and small stock capitalization. Small Order Execution System - SOES A computer network that automatically executes trad es in Nasdaq market securities and some Nasdaq SmallCap securities. This allows individual investors to execute trades in fast moving markets. Small Trader An options or futures investor holding or controlli ng a single position below the required reporting levels. Smoking Gun Something that serves as indisputable evidence or p roof, especially of a crime. SMR Rating A proprietary rating pioneered by Investor's Busine ss Daily to help investors identify companies with superior Sales Growth, Profit Margins, and Ret urn on Equity ratios. The SMR Rating data item is one of five Investor's Business Daily SmartSelect® Corporate Ratings. This data item combines into one simple "A" to "E" rating system, four fundamental factors used by

analysts: • • • • Sales growth rate over the last three quarters; • • • • Pre-tax profit margins; • • • • After-tax profit margins; • • • • Return on equity (ROE). Sales growth and after-tax margins are computed wit h quarterly figures, while return on equity and pre-tax margins are calculated using annual figures . All four factors take into account acceleration of the variables (rate of increase). The rating system is weighted in the following mann er: • • • • A = Top 20% (Outperforming over 80% of other stocks ) •••• B = Next 20% (Outperforming 60%-80% of other stocks ) • • • • C = Next 20% (Outperforming 40%-60% of other stocks ) • • • • D = Next 20% (Outperforming 20%-40% of other stocks ) • • • • E = Bottom 20% (Outperformed by over 80% of other s tocks) NOTE: Stocks will be listed as "N/A" when some or a ll of the variables used for calculation, are not available. Smurf Slang for somebody who frequently launders money. Soccer Mom Indicator An indicator based on the theory that listening to what people are talking about at their children's soccer game (or similar event) is one of the best w ays to find out how the economy or investing environment Social Capital An economic idea that refers to the connections bet ween individuals and entities that can be economically valuable. Social networks that include people who trust and assist each other can be a powerful asset. These relationships between individ uals and firms can lead to a state in which each will think of the other when something needs to be done. Along with economic capital, social capital is a valuable mechanism in economic growth. Social Responsibility The principle that companies should contribute to t he welfare of society and not be solely devoted to maximizing profits. Social Security A U.S. federal benefits program developed in 1935. The program includes retirement benefits, disability income, veteran's pension, public housin g, and even the food stamp program. Social Security Administration - SSA A U.S. government agency created in 1935 by Preside nt Franklin D. Roosevelt, the SSA administers the social insurance programs in the United States. The agency covers a wide range of social security services, such as disability, retirement a nd survivors' benefits. Previously operating under the Department of Health and Human Services, the SS A has operated as a wholly independent agency since 1994. Social Security Number - SSN A federal taxpayer identification number for Americ ans. An SSN number is required to get a job and claim taxes or other tax benefits. Socially Responsible Investment - SRI Investments or funds containing stock in companies whose activities are considered ethical.

Société d'Investissement À Capital Variable - SICAV A type of open-ended investment fund in which the a mount of capital in the fund varies according to the number of investors. Shares in the fund are bou ght and sold based on the fund's current net asset value. SICAV funds are some of the most commo n investment vehicles in Europe. Society for Worldwide Interbank Financial Telecommu nications - SWIFT An industry owned co-operative supplying secure mes saging services and interface software to financial institutions. SOES Bandits A slang term for traders who make rapid buy and sel l orders, using the SOES system, in order to make a profit from small price changes Soft Call Provision A feature added to convertible fixed-income and deb t securities. The provision dictates that a premium will be paid by the issuer if early redempt ion occurs. Soft Commodity A commodity such as coffee, cocoa, sugar and fruit. This term generally refers to commodities that are grown, rather than mined. Soft Currency Another name for "weak currency". The values of sof t currencies fluctuate often, and other countries do not want to hold these currencies due to politic al or economic uncertainty within the country with the soft currency. Soft Dollars A means of paying brokerage firms for their service s through commission revenue, as opposed to through normal payments (hard-dollar fees). Soft Landing A term used to describe a rate of economic growth h igh enough to avoid recession, but slow enough to avoid high inflation Soft Loan 1. A loan with a below-market rate of interest. 2. Loans made by multinational development banks an d the World Bank to developing countries. Typically, soft loans have extended grace periods i n which only interest or service charges are due. They also offer longer amortization schedules and l ower interest rates than conventional bank loans. Soft Metrics A slang term for intangible indicators used to valu e a startup company. Soft Money 1. The "one-time" funding from governments and orga nizations for a project or special purpose. 2. Paper currency, as opposed to gold, silver, or s ome other coined metal. Soft Patch A period of economic slowdown amid a larger trend o f economic growth. The term is most often

used in the financial media and by the U.S. Federal Reserve to describe a period of economic weakness. Sold-Out Market A market for a specific futures contract that, due to a substantial liquidation of holdings by investors, has limited offerings. Sole Proprietorship A business organization that is unincorporated and has only one owner Solvency The ability of a corporation to meet its long-term fixed expenses and to accomplish long-term expansion and growth. Solvency Ratio One of many ratios used to measure a company's abil ity to meet long-term obligations. The solvency ratio measures the size of a company's after-tax in come, excluding non-cash depreciation expenses, as compared to the firm's total debt obligations. I t provides a measurement of how likely a company will be to continue meeting its debt obligations. The measure is usually calculated as follows: Sortino Ratio A ratio developed by Frank A. Sortino to differenti ate between good and bad volatility in the Sharpe ratio. This differentiation of upwards and downward s volatility allows the calculation to provide a risk-adjusted measure of a security or fund's perfo rmance without penalizing it for upward price changes. It it is calculated as follows SOS In currencies, this is the abbreviation for the Som ali Shilling. Sotheby's One of the world's most venerable auction houses. T he company is largely known for holding auctions of very valuable and rare collectors' item s such as jewelry, antiques and fine art. Sour Crude The name given to barrels of crude oil that do not meet certain content requirements, such as low levels of sulfur and hydrogen. South Sea Bubble One of the largest stock scams of all time. The U.K .-based South Sea Company's shares saw a huge appreciation based on rumor, speculation and false claims before plummeting and eventually becoming worthless. Thousands of people lost their life savings. Sovereign Bond A debt security issued by a national government wit hin a given country and denominated in a foreign currency. The foreign currency used will mo st likely be a hard currency, and may represent significantly more risk to the bondholder. Sovereign Risk

The risk that a foreign central bank will alter its foreign-exchange regulations thereby significantly reducing or completely nulling the value of foreign -exchange contracts. Spark Spread The difference between the market price of electric ity and its cost of production Special Assessment Bond A special type of municipal bond used to fund a dev elopment project. Interest owed to lenders is paid by taxes levied on the community benefiting fr om the particular bond-funded project.

Special Dividend A non-recurring distribution of company assets, usu ally in the form of cash, to shareholders. A special dividend is larger compared to normal divid ends paid out by the company. Also referred to as an "extra dividend". Special Drawing Rights - SDR An international type of monetary reserve currency, created by the International Monetary Fund (IMF) in 1969, which operates as a supplement to th e existing reserves of member countries. Created in response to concerns about the limitations of go ld and dollars as the sole means of settling international accounts, SDRs are designed to augmen t international liquidity by supplementing the standard reserve currencies. Special Memorandum Account - SMA A special account where excess margin generated fro m a client's margin account is deposited. Also known as "special miscellaneous account". Special Needs Child Children who have been determined to require specia l attention and specific necessities that other children do not. The state decides upon this status and offers benefits that follow a special needs child because it is believed the child will not be adopted if assistance is not provided. Special Product Acquisition Company - SPAC A publicly-traded buyout company that raises money in order to pursue the acquisition of an existing company. SPACs raise blind pool money (mos t of which goes into a trust) from the public for an unspecified merger, sometimes in a targeted industry. Each SPAC is typically sold at $6 per unit for one share of common stock (to be publicly- traded in the future) and two warrants that can purchase additional shares. If an acquisition is no t made in two years, the money is returned to the original investors. Also known as a "targeted acquisition company (TAC) ". Special Purchase and Resale Agreement - SPRA An open market operation in which the Bank of Canad a purchases securities that are repurchased by the seller the following day. This is designed t o lower overnight interest rates and increase the money supply. Special Purpose Vehicle/Entity - SPV/SPE 1. Also referred to as a "bankruptcy-remote entity" whose operations are limited to the acquisition and financing of specific assets. The SPV is usuall y a subsidiary company with an asset/liability structure and legal status that makes its obligatio ns secure even if the parent company goes bankrupt. 2. A subsidiary corporation designed to serve as a counterparty for swaps and other credit sensitive derivative instruments. Also called a "derivatives product company

Special Tax Bond A type of bond that is repaid by revenues derived f rom taxation of a particular activity or asset. These bonds are repaid with either excise taxes, sp ecial assessment taxes or ad valorem taxes. Specialist A member of an exchange who acts as the market make r to facilitate the trading of a given stock. The specialist holds an inventory of the stock, pos ts the bid and ask prices, manages limit orders and executes trades. Specialists are also responsib le for managing large movements by trading out of their own inventory. If there is a large shift i n demand on the buy or sell side, the specialist wi ll step in and sell out of their inventory to meet the demand until the gap has been narrowed. Specialist Short Sale Ratio A ratio comparing the number of short sales made by specialists versus the total number of short sales transacted on the market. Specific Risk Risk that affects a very small number of assets. Th is is sometimes referred to as "unsystematic risk." Specific-Shares Method A personal financial accounting method that, when u sed properly, can help reduce capital gains realized for an investor who purchased multiple set s of a stock or mutual fund. In turn, the investor' s total tax paid in a given tax year is also reduced. In order to use the specific-shares method, the investor needs to keep careful records - particular ly the cost basis - of each stock or mutual fund purchase. Then he/she must provide detailed informa tion on which particular shares are to be sold to the broker managing the investor's account. Speculation The process of selecting investments with higher ri sk in order to profit from an anticipated price movement. Speculation Index A ratio comparing the volume of trades upon the Ame rican Stock Exchange and the NYSE. Speculative Bubble A temporary market condition created through excess ive buying, and an unfounded run-up in prices occurs. Speculative Capital The funds earmarked by an investor for the sole pur pose of speculation. This capital is often associated with extreme volatility and a high proba bility of loss. Most speculators have short-term investment horizons and often use high degrees of l everage in their efforts to obtain profits. Speculative Company A company with a large number of assets tied up in projects with uncertain returns. Speculative Risk A category of risk that, when undertaken, results i n an uncertain degree of gain or loss. All speculative risks are made as conscious choices and are not just a result of uncontrollable circumstances.

Speculative risk is the opposite of pure risk. Speculative Stock A stock with extremely high risk relative to potent ial return. Speculator A person who trades (i.e. derivatives, commodities, bonds, equities or currencies) with a higher-than-average risk, in return for a higher-than-aver age profit potential. Speculators take large risks, especially with respect to anticipating future pric e movements, or gambling, in the hopes of making quick, large gains. Spending Phase The period in a person's life following retirement in which earning income has come to a stop and the person is living off government subsidy, retire ment plans, investments and/or money saved for retirement Spiders - SPDRs Shares in a trust that owns stocks in the same prop ortion as that represented by the S&P 500 stock index. Due to the acronym SPDR, Standard & Poor's D epository Receipts are commonly known as "spiders". Each share of a spider contains one-tent h of the S&P 500 index, and so trades at roughly one-tenth of the level of the S&P 500. Spiders trad e on the American Stock Exchange (AMEX) under the ticker symbol SPY. Spike 1) The comparatively large upward or downward movem ent of a price or value level in a short period. 2) The trade order execution confirmation slip whic h shows all the pertinent data, such as the stock symbol, price, type and trading account information . Spinning The practice of brokerage houses exchanging IPO sha res with top executives for reciprocating business from their companies. Spinoff The creation of an independent company through the sale or distribution of new shares of an existing business/division of a parent company. A s pinoff is a type of divestiture. Split Adjusted A stock price that takes into consideration the eff ect of a stock split in order to accurately compare the company's current price to its historical price . Split Close A market closing with price discrepancies within a series of final daily futures-contract transactions . Split-Off A type of corporate reorganization whereby the stoc k of a subsidiary is exchanged for shares in a parent company. Split-Up

A corporate action in which a single company splits into two or more separately run companies. Shares of the original company are exchanged for sh ares in the new companies, with the exact distribution of shares depending on each situation. This is an effective way to break up a company into several independent companies. After a split-u p, the original company ceases to exist. Sponsor 1. In the context of stocks, an influential investo r who creates demand for a security because of thei r positive outlook on it. 2. In the context of mutual funds, an underwriting company that offers shares in its mutual funds. 3. In the context of exchange-traded funds (ETFs), the fund manager or other entity who files the needed regulatory materials with the SEC to create an ETF. The sponsor also solicits and approves an authorized participant to create and redeem ETF shares. Sponsored ADR An American depositary receipt (ADR) that is issued in co-operation with the underlying foreign company whose equity shares will underly the ADR sh ares. With the corporation's sponsorship, the ADRs created in the issue usually afford their owne rs the same rights normally given to stockholders, such as voting rights. Sponsorship Refers to the shares of a company owned by an insti tution. The largest sources of demand for stocks are mutual funds and other institutional buy ers. Sponsorship Rating Unique Investor's Business Daily rating that helps investors know if a company's stock is owned by the better performing mutual funds. Its calculation averages 3-year performance of all mutual funds owning the stock. The rating scale ranges from "A" to "E" (A=Best, E=Worst). An "N/A" appears if not enough data is available to calculate a rating. Spot Commodity A commodity traded on the spot market. That is, wit h the expectation of actual delivery, as opposed to a commodity future that is usually not delivered . Spot Delivery Month Used in commodity trading, this is the nearest of t he months currently being traded in which a commodity could be delivered. Spot Exchange Rate The rate of a foreign-exchange contract for immedia te delivery. Also known as "benchmark rates", "straightforward rates" or "outright rates", spot r ates represent the price that a buyer expects to pa y for a foreign currency in another currency. Spot Market 1. A commodities or securities market in which good s are sold for cash and delivered immediately. Contracts bought and sold on these markets are imme diately effective. 2. A futures transaction for which commodities can be reasonably expected to be delivered in one month or less. Though these goods may be bought and sold at spot prices, the goods in question are traded on a forward physical market. Spot Price The current price at which a particular commodity c an be bought or sold at a specified time and

place. Spot Secondary A secondary distribution made by a company without any additional filings to the SEC Spot Trade The purchase or sale of a foreign currency or commo dity for immediate delivery. Spot trades are settled "on the spot", as opposed to at a set date in the future. Also known as "cash trades". Futures transactions that expire in the current mon th are also known as spot trades because in the case that goods are actually delivered, delivery ti me is reasonably expected to take one month. Spousal IRA A Traditional or Roth IRA established and funded by an individual for his/her spouse. pread 1. The difference between the bid and the ask price of a security or asset. 2. An options position established by purchasing on e option and selling another option of the same class but of a different series. Spread Option A type of option that derives its value from the di fference between the prices of two or more assets. Spread options can be written on all types of finan cial products including equities, bonds and currencies. This type of position can be purchased on large exchanges, but is primarily traded in the over-the-counter market. Spread To Worst The difference in overall returns between two diffe rent classes of securities, or returns from the same class, but different representative securities . The spread to worst measures the difference from the worst performing security to the best, and can be seen as a measure of dispersion of returns within a given market or between markets. T he spread to worst can vary significantly depending on different market and economic variable s. Spread-Load Contractual Plan A fee-payment structure applicable to mutual funds in which the sales charge or commission (load) is not entirely paid at the time the investor first contributes funds to the mutual fund (or in the fi rst several contributions either). Instead, the mutual fund load is dispersed across an extended time period, so that the load is more accurately applied to each contribution. Spreadlock An agreement that fixes the spread between the forw ard price of an interest rate swap and its underlying government bond yield. Squawk Box An intercom speaker often used on brokers' trading desks in investment banks and stock brokerages. A squawk box allows a firm's analysts a nd traders to communicate with the firm's brokers. Squeeze

1. In financial terms, a period of time when borrow ing is difficult. 2. In general business terms, times when increasing costs cannot be passed onto consumers. The decrease in profits is said to be caused by a "sque eze" on profit margins. SRD In currencies, this is the abbreviation for the Sur iname Dollar. Stag A slang term for short-term speculator. Stage of Base A term referring to the number or 'stage' of the ba ses a stock will form as it advances on its way up in price. Successful stock advances over a year can consist of two, three or four bases on the way up before going into a major decline. The initial b ase is referred to as a 'first stage' base, the sec ond base as the 'second stage,' etc. Stagflation A condition of slow economic growth and relatively high unemployment - a time of stagnation - accompanied by a rise in prices, or inflation. Stagger System A method of electing a company's board of directors that puts up only part of the board for re-election in any one year. This method contrasts the system in which all board members go up for re-election annually. Stagnation A period of little or no growth in the economy. Eco nomic growth of less than 2-3% is considered stagnation. Sometimes used to describe low trading volume or inactive trading in securities. Stakeholder One who has a share or an interest in an enterprise . Stalking-Horse Bid An initial bid on a bankrupt company's assets from an interested buyer chosen by the bankrupt company. From a pool of bidders, the bankrupt compa ny chooses the stalking horse to make the first bid. Stalling of Price (on one of the indices) A term indicating a type of price activity occurrin g on one of the market indices (the Dow, S&P 500 or Nasdaq Composite). It occurs when the index pric e closes barely up, unchanged or slightly down on increased volume from the day before after havin g advanced noticeably for several days. This indicates distribution or selling in the index at t hat point. Stalwart A description of companies that have large capitali zations and provide investors with slow but steady and dependable growth prospects. Stamp Duty An ad-valorem or flat rate charged upon certain doc uments. Standard & Poor's - S&P

A financial services company that rates stocks and corporate and municipal bonds according to risk profiles Standard Deduction A base amount of income not subject to tax. This ba se amount can be used to reduce a taxpayer's adjusted gross income (AGI) if he/she does not choo se the itemized deduction method of calculating taxable income. The amount of the standard deductio n is based on a taxpayer's filing status, age and whether he or she is blind or claimed as a depe ndent on someone else's tax return. Standard Deviation 1. A measure of the dispersion of a set of data fro m its mean. The more spread apart the data is, the higher the deviation. 2. In finance, standard deviation is applied to the annual rate of return of an investment to measure the investment's volatility (risk). Standard Industrial Classification - SIC Code A standard series of 4-digit codes that are used to categorize business activities. Standard Poor's Underlying Rating - SPURs A measurement tool prepared by Standard and Poor's for a more in depth rating of Municipal Bonds. Standby Letter of Credit A stipulation that states a letter of credit will b e called back if the payer defaults. Standby Underwriting (Standby) A type of underwriting in which an investment bank (the underwriter) agrees to purchase the portion of the new securities issue that remains after a pu blic offering. Star One of the four categories (quadrants) of the BCG g rowth-share matrix that represents the division within a company that has a large market share in a rapidly expanding industry. STARC Bands A type of technical indicator that is created by pl otting two bands around a short-term simple moving average (SMA) of an underlying asset's price . The upper band is created by adding a value of the average true range (ATR) - a popular indicat or used by technical traders - to the moving average. The lower band is created by subtracting a value of the ATR from the SMA. Upper STARC band = SMA + ATR State Administrator An entity governing the rules and regulations set f orth in the state-level Uniform Securities Act. Stated Annual Interest Rate The annual rate of interest that does not account f or compounding occurring within the year. Stated Value A value that, instead of being par value, is assign ed to a corporation's stock for accounting purposes. Stated value has no relation to market pr ice.

Statement of Additional Information - SAI A supplementary document to a mutual fund's prospec tus that contains additional information about the fund and includes further disclosure regarding its operations. Also, known as "Part B" of the fund's registration statement. Statistical Arbitrage A profit situation arising from pricing inefficienc ies between securities. Investors identify the arbitrage situation through mathematical modeling t echniques. Statutory Accounting Principles - SAP A set of accounting regulations prescribed by the N ational Association of Insurance Commissioners for the preparation of an insuring firm's financial statements. Statutory Voting The procedure of voting for a company's directors i n which each shareholder is entitled to one vote per share. This is sometimes known as straight voti ng. STD In currencies, this is the abbreviation for the Sao Tome/Principe Dobra. Stem The Tide An attempt to stop a prevailing trend. Sometimes re ferred to as "stop the bleeding." Step-out Trading When a brokerage firm executes an order, but gives other firms credit and some of the commission for the trade. Step-up Bond A bond that pays an initial coupon rate for the fir st period, and then a higher coupon rate for the following periods. Step-Up In Basis The readjustment of the value of an appreciated ass et for tax purposes upon inheritance. With a step-up in basis, the value of the asset is determi ned to be the higher market value of the asset at the time of inheritance, not the value at which the original party purchased the asset Sterile Investment An investment that does not provide dividends or in terest to the investor. In a sterile investment, th e return is generated completely by capital gains. Sterilization A form of monetary action in which a central bank o r federal reserve attempts to insulate itself from the foreign exchange market to counteract the effec ts of a changing monetary base. The sterilization process is used to manipulate the value of one dome stic currency relative to another, and is initiated in the forex market. Sterilized Intervention A method used by monetary authorities to equalize t he effects of foreign exchange transactions on the domestic monetary base by offsetting the purcha se or sale of domestic assets within the domestic markets. The process limits the amount of domestic currency available for foreign exchange. Sterling Ratio

A ratio used mainly in the context of hedge funds. This risk-reward measure determines which hedge funds have the highest returns while enduring the least amount of volatility. The formula is as follows: This formula uses the average for risk (drawdown) a nd return over the past three years. Drawdown is calculated at the maximum potential loss in the given year. Sticky Deal An issue of new securities that may present a selli ng challenge to an underwriter, usually because there's been some bad news about the issuing compan y or overall economy. STIR Futures & Options An acronym standing for "short-term interest rate" options or futures contract. STIX A short-term trading oscillator that compares the a mount of volume flowing into advancing and declining stocks. Stochastic Oscillator A technical momentum indicator that compares a secu rity's closing price to its price range over a given time period. The oscillator's sensitivity to market movements can be reduced by adjusting the time period or by taking a moving average of the re sult. This indicator is calculated with the following formula: %K = 100[(C - L14)/(H14 - L14)] Stock A type of security that signifies ownership in a co rporation and represents a claim on part of the corporation's assets and earnings. There are two main types of stock: common and prefe rred. Common stock usually entitles the owner to vote at shareholders' meetings and to receive di vidends. Preferred stock generally does not have voting rights, but has a higher claim on assets and earnings than the common shares. For example, owners of preferred stock receive dividends before common shareholders and have priority in the event that a company goes bankrupt and is liquidate d. Also known as "shares" or "equity". Stock Ahead A situation in which an order is placed, but not ex ecuted, because of a previously sent order involving the same price. Depending on the exchange 's priority rules, this can also happen when two bids are made at the same time with identical p rices only the larger order will be executed. Stock Appreciation Right - SAR A right, usually granted to an employee, to receive a bonus equal to the appreciation in the company's stock over a specified period. Like emplo yee stock options, SARs benefit the holder with an increase in stock price the difference is that t he employee is not required to pay the exercise price (as with an employee stock option), but rathe r just receives the amount of the increase in cash or stock. Stock Basher An individual, either acting alone or on behalf of someone else, who attempts to devalue a stock by spreading untrue or exaggerated claims against a pu blic company. After the stock's price has dropped, the basher, or the basher's employer, will then purchase the stock at a lower price than what they believe it is intrinsically worth. Stock Certificate Another name for stock, certificate actually refers to the physical piece of paper representing ownership in a company.

Stock Compensation The payment of stock in lieu of cash for services p rovided. Stock Dividend A dividend payment made in the form of additional s hares, rather than a cash payout. Also known as a "scrip dividend Stock Exchange Public market where securities are traded. The majo rity of stocks in the William O'Neil + Co database are listed on one of the three main U.S. markets: N ew York Stock Exchange, Nasdaq, and American Stock Exchange. This database also provides informa tion for numerous stocks traded as a bulletin board listing and stocks traded on Canadian exchang es. The following symbols are use to identify an exchange: • • • • AMEX = American Stock Exchange • • • • NYSE = New York Stock Exchange • • • • NMS = National Market Securities (one of two NASDAQ classifications) • • • • SCM = SmallCap Market (one of two NASDAQ classifica tions) • • • • PCSE = Pacific Stock Exchange • • • • BB = Bulletin Board • • • • TOR = Toronto Stock Exchange • • • • VAN = Vancouver Stock Exchange

Stock Exchange Daily Official List - SEDOL An identification code, consisting of seven alphanu meric characters, that is assigned to all securities trading on the London Stock Exchange and on other smaller exchanges in the U.K Stock Jobbing The buying and selling of securities with the inten t of generating quick profits. While most investors seek value through long-term investments, stock job bing takes on a more speculative short-term tone. Stock Market The market in which shares are issued and traded ei ther through exchanges or over-the-counter markets. Also known as the equity market, it is one of the most vital areas of a market economy as it provides companies with access to capital and inves tors with a slice of ownership in the company and the potential of gains based on the company's f uture performance Stock Option A privilege, sold by one party to another, that giv es the buyer the right, but not the obligation, to buy (call) or sell (put) a stock at an agreed-upon pric e within a certain period or on a specific date. In the U.K., it is known as a "share option Stock Participation Accreting Redemption Quarterly- Pay Securities - SPARQS A callable note that pays interest to the holder, a nd upon maturity is exchanged for shares in the underlying company. These investment products are i ssued and underwritten by Morgan Stanley and provide investors with both interest payments a nd exposure to the stock market. Stock Performance This measures a stock’s price percentage change ove r the last four weeks, 12 months and year to date. For example, a percentage change of 50% indic ates that a stock has increased 50% within the specified time period. Stock Performance vs. Index This compares your stock’s price performance to fou r major market indexes: the Dow Jones

Industrial Average, Nasdaq 100, S & P 500 and Russe ll 2000. You can see how your stocks fared against the indexes over the last four weeks, twelv e months, and year to date. 100%, for example, means that stock has doubled the performance of the specified market index for that time period. Stock Power A power of attorney that allows the current owner o f a registered security to transfer ownership to another party. Stock Quote A list of prices (generally bid, ask, and last) for a stock at a particular point during the trading d ay. Stocks used to be quoted in fractions, but now most all exchanges use decimals. Stock Record A system that helps brokerage firms keep track of t he position and physical location of the securities they are holding. Stock Savings Plan In Canada, a plan wherein some provinces will provi de a tax credit for provincial income taxes to residents who spend their income on certain investm ents. Stock Screener A tool investors can use to filter stocks given cer tain criteria of their choice Stock Split The dividing of a company's existing stock into mul tiple shares. In a 2-for-1 split, each stockholder receives an additional share for each share he or s he holds. In the U.K., a stock split is referred to as a "scr ip issue", "bonus issue", "capitalization issue" or "free issue". Stock Symbol A unique series of letters assigned to a security f or trading purposes. NYSE and AMEX listed stocks have three characters or less. Nasdaq-listed securi ties have four or five characters. If a fifth lette r appears, it identifies the security as other than a single issue of common stock. They are also known as "ticker symbols". Stock Watcher A computer program used by the NYSE that continuous ly monitors all trading activity in order to detect any illegal trades. Stock-for-Stock 1. In the context of mergers and acquisitions, the exchange of an acquiring company's stock for the stock of the acquired company at a predetermined ra te. Usually, only a portion of a merger is completed with a stock-for-stock transaction, with the rest of the expenses being covered with cash or other payment methods. 2. A method of satisfying the option price in an em ployee stock option compensation scheme. Under these compensation programs, employees are granted stock options but must pay the company the option price before they are given the grant. By ex changing mature stock (stock that has been held for a required holding period), the grantee can rec eive his/her options without having to pay for them. After a given time period, grantees are given back the stock they used to pay for their options. Stockbroker 1. An agent that charges a fee or commission for ex ecuting buy and sell orders submitted by an

investor. 2. The firm that acts as an agent for a customer, c harging the customer a commission for its services. Stockholders' Equity The portion of the balance sheet that represents th e capital received from investors in exchange for stock (paid-in capital), donated capital and retain ed earnings. Stockholders' equity represents the equity stake currently held on the books by a firm' s equity investors. It is calculated either as a firm's total assets mi nus its total liabilities, or as share capital plus retained earnings minus treasury shares: Also known as "shareholders' equity". Stocks On The Move list Important daily list in Investor's Business Daily t hat highlights stocks that had the greatest percentage increase in volume above their normal pa st daily trading level. Usually a sign that institutions are buying or selling stock. Found at the beginning of both the NYSE and Nasdaq stock tables. Stop Order An order to buy or sell a security when its price s urpasses a particular point, thus ensuring a greate r probability of achieving a predetermined entry or e xit price, limiting the investor's loss or locking in his or her profit. Once the price surpasses the pre defined entry/exit point, the stop order becomes a market order. Also referred to as a "stop" and/or "stop-loss orde r". Stop Payment When a bank account holder instructs his or her fin ancial institution not to honor payment. Stop-Limit Order An order placed with a broker that combines the fea tures of stop order with those of a limit order. A stop-limit order will be executed at a specified pr ice (or better) after a given stop price has been reached. Once the stop price is reached, the stop-l imit order becomes a limit order to buy (or sell) a t the limit price or better. The primary benefit of a stop-limit order is that t he trader has precise control over where the order should be filled. The downside, as with all limit o rders, is that the trade is not guaranteed to be executed if the stock/commodity does not reach the limit price. Stop-Loss Order An order placed with a broker to sell a security wh en it reaches a certain price. It is designed to li mit an investor's loss on a security position. Also known as a "stop order" or "stop-market order" . Stopped Order A market order on the NYSE that is stopped from bei ng executed by the specialist because of a request from a member firm to obtain a better price than that available. According to NYSE rules, once the order is stopped, it must be identified an d the specialist must guarantee the market price at the time of the stop should they be unsuccessful in obtaining a better price. Stopped Out A situation where a stock price decreases and, cons equently, an investor's stop order is executed. Story Stock A stock whose value is a reflection of expected fut ure potential (or favorable press coverage) rather than its assets and income. STOXX A series of market indexes that are representative of the European and global markets. These indexes cover a wide range of market segments inclu ding the broad market, blue chips, individual sectors and global indexes. While there are global STOXX indexes, the majority of the focus is

placed on the European market. Straddle An options strategy with which the investor holds a position in both a call and put with the same strike price and expiration date. Straight Life Annuity An insurance product that makes periodic payments t o the annuitant until his or her death, at which point the payments stop completely. These products do not allow annuitants to designate a beneficiary. Straight life annuities may be bought over the course of the annuitant's working life by making periodic payments into the annuity, or they may be purchased with a single lump sum payment. Usually, lump sum purchases are made at, o r shortly after, the annuitant's retirement. Straight Line Basis A method of computing amortization (depreciation) b y dividing the difference between an asset's cost and its expected salvage value by the number o f years it is expected to be used. Straight Through Processing - STP An initiative by many financial companies to stream line transactions by maintaining contact throughout processing. Strangle An options strategy where the investor holds a posi tion in both a call and put with different strike prices but with the same maturity and underlying as set. This option strategy is profitable only if there are large movements in the price of the under lying asset. This is a good strategy if you think there will be a large price movement in the near future but are unsure of which way that price movement will be. Strap An options strategy created by being long in one pu t and two call options, all with the exact same strike price, maturity and underlying asset. Also r eferred to as a "triple option". Strategic Alliance An arrangement between two companies who have decid ed to share resources in a specific project. Strategic Asset Allocation A portfolio strategy that involves periodically reb alancing the portfolio in order to maintain a long-term goal for asset allocation. Street Book A record of futures-contract transactions that is m aintained daily by futures commission merchants and clearing houses Street Expectation The average earnings estimates made by brokers and securities analysts. Also known as the "market consensus" or "earnings expectations." Street Name When securities are held in the name of a broker or other nominee, as opposed to holding them in the customer's name. Streetable A company that has a management team with enough st rength and experience to run a public company. It's imperative for Wall Street to have co nfidence in a company's management - otherwise it will be difficult, if not impossible, for that c ompany to go public

Stress Testing A simulation technique used on asset and liability portfolios to determine their reactions to differen t financial situations. Strike Price The stated price per share for which underlying sto ck may be purchased (for a call) or sold (for a put) by the option holder upon exercise of the opti on contract. Strip 1. For bonds, the process of removing coupons from a bond and then selling the separate parts as a zero coupon bond and interest paying coupons. Also known as a stripped bond or zero coupon bond. 2. In options, a strategy created by being long in one call and two put options, all with the exact same strike price Strip Bond A bond where both the principal and regular coupon payments--which have been removed--are sold separately. Also known as a "zero-coupon bond." Stripped Yield The implied sovereign yield of a bond, or the theor etical yield of the non-collateralized portion of a bond. Stripper Slang for an individual homeowner who strips the eq uity out of his or her home through mortgage refinancing. The proceeds are generally not re-inve sted, but spent on consumer goods. Strong Form Efficiency The strongest version of market efficiency. It stat es all information in a market, whether public or private, is accounted for in a stock price. Not eve n insider information could give an investor the advantage. Strong Hands 1. The intention of futures-contract holders to rec eive delivery of the underlying commodity. Structural Unemployment Unemployment resulting from changes in the basic co mposition of the economy. These changes simultaneously open new positions for trained worke rs. Structured Finance A service offered by many large financial instituti ons for companies with very unique financing needs. These financing needs usually don't match co nventional financial products such as a loan. Structured finance generally involves highly comple x financial transactions. Stub Stock in a company that is over-leveraged as a resu lt of recapitalization. Student Loan Interest Deduction An adjustment to an individual's income for any int erest paid on "higher education loans" during the tax year. Stutzer Index A performance measure that rewards portfolios with a lower probability of underperforming a benchmark. Technically, the Stutzer index penalizes negative skewness and high kurtosis - such a distribution will have a lower Stutzer index than a normal distribution with the same mean and variance.

Style The investment approach an investment manager takes to reach his/her objectives. Style Box A tool showing a fund's characteristics such as the investment philosophy, underlying investments and risks. This helps investors and investment comp anies easily understand and convey information about the fund. The above mutual fund style box illustrates that th e mutual fund is a large-cap, value-oriented fund. This conveys to investors that the fund is investin g in well-established companies that are under- or fairly valued. The company will not be invested in small-cap, mid-cap or growth stocks. Style Drift The tendency of a broker or investment portfolio ma nager to alter his or her investment style over time Subchapter S (S Corporation) A form of corporation that meets the IRS requiremen ts to be taxed under Subchapter S of the Internal Revenue Code. This gives a corporation wit h 100 shareholders or less the benefit of incorporation while being taxed as a partnership. T his means that any profits earned by the corporation are not taxed at the corporate level, b ut rather at the level of the shareholders. Also known as "S corporation". Subindex A group of securities that is part of an index but is also tracked separately as a smaller, separate index. Subordinated Debt A loan (or security) that ranks below other loans ( or securities) with regard to claims on assets or earnings. Also known as "junior security" or "subor dinated loan". Subordination Clause A clause in an agreement which states that the curr ent claim on any debts will take priority over any other claims formed in other agreements made in the future. Subordination is the act of yielding priority. Subprime Loan A loan that is offered at a rate above prime to ind ividuals who do not qualify for prime rate loans. Subscribed Newly issued securities that an investor has agree to, or stated his intent to, buy in a public offeri ng prior to the issue date. When an investor uses righ ts, he expects to own the designated number of shares they have subscribed to once the offering is completed. Subscription Agreement An application by an investor to join a limited par tnership. In most cases, the investor will have to fill out a form created by the general partner evaluatin g the investor's suitability for the investment in the partnership. Subsequent Offering An offering of additional shares after the issuing company has already had an initial public offering (IPO). Subsidiary A company whose voting stock is more than 50% contr olled by another company, usually referred to as the parent company. Subsidiary Bank A type of foreign bank that is incorporated in the host country but is considered to be owned by a foreign parent bank. The subsidiary bank only needs to operate under the host country's regulations.

Subsidy A benefit given by the government to groups or indi viduals usually in the form of a cash payment or tax reduction. The subsidy is usually given to remo ve some type of burden and is often considered to be in the interest of the public. Politics play an important part in subsidization. I n general, the left is more in favor of having subsidized industries, while the right feels that i ndustry should stand on its own without public funds. Substandard Health Annuity An insurance product that can be purchased by a per son with a serious, demonstrable health problem which will likely shorten the annuitant's l ife expectancy. A substandard health annuity is a type of straight life annuity. Substantial Gainful Activity - SGA The threshold prescribed by the Social Security Adm inistration (SSA) for determining eligibility for Social Security benefits. Substantial gainful activ ity (SGA) is a specified dollar amount. It is updat ed each year to reflect inflation, and it represents t he minimum level of employability which will render a person productive and, therefore, ineligible for Social Security benefits. The SSA employs higher threshold levels of SGA for persons with specific d isabilities, such as blindness. Substantially Equal Periodic Payment - SEPP A plan that allows individuals who have invested in an IRA or another qualified retirement plan to withdraw funds prior to the age of 59.5 and avoid i ncome tax and early-withdrawal penalties. Typically, an individual who removes assets from a plan prior to age 59.5 will face taxes on any income generated by the fund - interest income or c apital gain - and will also be subject to a 10% penalty. With substantially equal periodic payments , the funds are placed into an SEPP plan that pays the individual annual distributions for five y ears or until he or she turns 59.5, whichever comes last. Substitute A product or service that partly satisfies the need of a consumer that another product or service fulfills. Substitution Swap A swap that is carried out by trading a fixed-incom e security for a higher-yielding bond with similar features. Succession The action of one party, person or product being re placed by another that has become obsolete, incapacitated, retired or deceased. Ideally, a succ essor will fill the role of its predecessor, being fully compatible with all other entities in place and per fectly functional without any interruption in servi ce Suicide Pill A defensive strategy by which a target company enga ges in an activity that might actually ruin the company rather than prevent the hostile takeover. A lso known as the "Jonestown Defense." Sum Certain A legal description of the predetermined settlement price for a contract or negotiable instrument. Sum-Of-Parts Valuation Valuing a company by determining what its divisions would be worth if it was broken up and spun off or acquired by another company. Sundry Income External income that results from factors outside o f a firm's control.

Sunk Cost A cost that has been incurred and cannot be reverse d. Also referred to as "stranded cost." Sunrise Industry Slang for a new, emerging growth industry that is e xpected to be a strong sector in the future. Sunset Provision A clause in a statute, regulation or similar piece of legislation that provides for an automatic repealing of the entirety or sections of the law on ce a specific future date is reached. Once the sunset provision date is reached, the pieces of leg islation mentioned in the clause are rendered void. If the government wishes to extend the length of time for which the law in question will be in effect, it can push back the sunset provision date anytime before it is reached Sunshine Laws U.S. federal and state laws requiring regulatory au thorities' meetings, decisions and records to be made available to the public. T A Nasdaq stock symbol specifying that the stock has warrants or rights. T+1 (T+2,T+3) Abbreviations that refer to the settlement date of security transactions. The T stands for transaction date, which is the day the transaction takes place. The numbers 1, 2 or 3 denote how many days after the transaction date the settlement or the tr ansfer of money and security ownership takes place. Tactical Asset Allocation - TAA An active management portfolio strategy that rebala nces the percentage of assets held in various categories in order to take advantage of market pri cing anomalies or strong market sectors. Taft-Hartley Act A Federal law that was enacted in 1947 that prohibi ted certain union practices and required improvement in union disclosure of financial and po litical dealings. Tag-Along Rights A contractual obligation used to protect a minority shareholder (usually in a venture capital deal). Basically, if a majority shareholder sells their st ake, then the minority shareholder has the right to join the transaction and sell their minority stake in the company. Also referred to as "co-sale rights ". Tailgating The action of a broker or advisor purchasing or sel ling a security for his or her client(s) and then immediately making the same transaction in his or h er own account. Take A Bath A slang term referring to the situation of an inves tor who has experienced a large loss from an investment or speculative position. Investors whose shares have declined significantly are said to have taken a bath. Take A Flier The slang term for a decision to invest in highly s peculative investments. Take or Pay A provision, written into a contract, whereby one p arty has the obligation of either taking delivery o f goods or paying a specified amount. Take-Profit Order - T/P An order used by currency traders specifying the ex act rate or number of pips from the current price point where to close out their current position for a profit. The rate deemed to be the level where th e

trader wants to take a profit is sometimes referred to as the "take-profit point". Takedown 1. The price at which underwriters obtain securitie s to be offered to the public. 2. The portion of securities that each investment b anker will distribute in a secondary or initial pub ic offering. Takeover A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the acquiring company will make an offer for the outstanding shares. Takeunder A corporate takeover where the target firm is offer ed a price per share that is less than its current market value. Taking the Street A slang phrase referring to the hedge fund tactic o f buying large amounts of a particular stock from banks and brokers in an effort to clean out these i nstitutions' inventory in a short period of time Tangible Asset An asset that has a physical form such as machinery , buildings and land. Tankan Survey An economic survey of Japanese business issued by t he central Bank of Japan, which it then uses to formulate monetary policy. The report is release d four times a year in April, July, October and mid-December. Tape Is Late A situation on the trading floor where trading volu me is so heavy that the real-time ticker quotes are delayed by a minute or two. When the tape is late s ome price or volume digits will be deleted. Target Firm A firm that has been targeted by another firm for a takeover. Target-Benefit Plan A benefit plan that is similar to a defined benefit plan since contributions are based on projected retirement benefits. However, unlike a defined bene fit plan, the benefits provided to participants at retirement are based on the performance of the inve stments, and are therefore not guaranteed. Tariff A taxation imposed on goods and services imported i nto a country. Also known as a duty tax. Tax Anticipation Notes - TAN Short-term debt securities issued in anticipation o f future tax collections. Tax Base The assessed value of a set of assets, investments or income streams that is subject to taxation, or the assessed value of a single asset that is subjec t to taxation. Anything that can be taxed has a tax base. Tax Bracket The rate at which an individual is taxed due to a p articular income level. Tax Court A court of law whose sole jurisdiction is to decide litigation involving federal income, death, and

other taxes. Tax Credit A dollar-for-dollar reduction in the tax payment re quired from a person. Tax Deferred Refers to investment earnings such as interest, div idends or capital gains that accumulate free from taxation until the investor withdraws and takes pos session of them. The most common types of tax-deferred investments include those in individual re tirement accounts (IRAs) and deferred annuities. Tax Equity And Fiscal Responsibility Act Of 1982 - TEFRA Federal tax legislation passed in 1982 that modifie d some aspects of the Economic Recovery Tax Act of 1981 (ERTA). Both of these pieces of tax leg islation took place during the Reagan Presidency. Tax Equivalent Yield The pretax yield that a taxable bond needs to posse ss for its yield to be equal to that of a tax-free municipal bond. This calculation can be used to fai rly compare the yield of a tax-free bond to that of a taxable bond in order to see which bond has a hig her applicable yield. Tax Evasion An illegal practice whereby an individual intention ally avoids paying their true tax liability. Anyone caught evading taxes is generally subject to crimin al charges and substantial penalties. Tax Gain/Loss Harvesting A process of selling securities at a loss to offset a capital-gains tax liability. It is typically use d to limit the recognition of short-term capital gains, which are normally taxed at higher federal income-tax rates than long-term capital gains. Also known as "tax-loss selling". Tax Haven A country that offers individuals and businesses li ttle or no tax liability. Tax Holiday A government incentive program that offers a tax re duction to foreign investors. Tax Home An individual's primary place of work or residence. This is used when determining tax for travel or transportation expenses. Tax Liability The total amount of tax that an entity is legally o bligated to pay to an authority as the result of th e occurrence of a taxable event. Taxable events inclu de, but are not limited to, annual income, the sale of an asset, a fiscal year-end or an inheritance. T ax liability can be calculated by applying the appropriate tax rate to the taxable event's tax bas e. Tax Lien A claim imposed by the federal government to liquid ate a person's property until the tax and debt owed is fully paid. Tax Lien Certificate A certificate of claim against property that has a lien placed upon it as a result of unpaid property taxes. Tax Lot Accounting A record keeping technique that traces the dates of purchase and sale, cost basis, and transaction size for each security in your portfolio, even if y ou make more than one trade in the same security. Tax Rate

1) The rate at which a business or person is taxed on income. Essentially the percent of income that goes towards taxes. 2) The rate of tax on good and services. Tax Reform Act Of 1986 Federal legislation that modified many significant aspects of the U.S. tax system. Tax Return The tax form used to file income taxes with the Int ernal Revenue Service (IRS). Tax Schedule A scale published by the IRS, it is used for taxpay ers with taxable income over $100,000 Tax Shelter A legal method of minimizing or decreasing an inves tor's taxable income and, therefore, their tax liability. Tax shelters can range from investments or investment accounts that provide favorable tax treatment, to activities or transactions that lower taxable income. The most common type of tax shelter is an employer-sponsored 401(k) plan. Tax Shield The reduction in income taxes that results from tak ing an allowable deduction from taxable income. Tax Swap A method of crystallizing capital losses by selling losing positions and purchasing companies within similar industries that have similar fundamentals. Tax Table A table that shows the amount of tax payable depend ing on an individual's income bracket. Tax Treaty A bilateral agreement made by two countries to reso lve issues involving double taxation of passive and active income. Tax treaties generally determine the amount of tax that a country can apply to a taxpayer's income and wealth. Tax haven countries a re the only countries that typically do not enter into tax treaties. Tax Year The 12-month period for which you are filing your t ax return Tax-Exempt Commercial Paper An unsecured short-term loan, usually issued to fin ance short-term liabilities, that provides the debt holders (bondholders) some level of tax preference on the earnings from their debt investment at a local, state or federal level, or a combination the reof. Tax-Exempt Interest Interest income that is exempt from federal income tax. Although it is not directly taxed, this income may still be required to determine other tax calcul ations such as social security benefits. Tax-Sheltered Annuity A type of annuity that allows an employee to make c ontributions from his or her income into a retirement plan. The contributions are deducted fro m the employee's income and, as a result, the contributions and related benefits are not taxed un til the employee withdraws them from the plan. Because the employer can also make direct contribut ions to the plan, the employee gains the benefit of having additional tax-free funds accruing. Taxable Bond A debt security whose return to the investor is sub ject to taxes at the local, state or federal level, or some combination thereof.

Taxable Estate The total value of a deceased person's assets that are subject to taxation - minus liabilities and minus the prescribed tax-deductible portion of asse ts left behind by the deceased. Taxable Gain The portion of a sale that is liable to taxation. Taxable Income The amount of net income used in calculating income tax. Taxes An involuntary fee levied on corporations or indivi duals that is enforced by a level of government in order to finance government activities. Taylors Rule A guideline for interest rate manipulation. It was introduced by Stanford economist John Taylor in order to set and adjust prudent rates that will sta bilize the economy in the short-term and still maintain long-term growth. This rule is based on 3 factors: 1) Actual versus targeted inflation levels 2) Actual employment versus full employment levels 3) The appropriate short-term interest rate consist ent with full employment. Tear Sheets Slang for the pages from the S&P stock reports summ arizing business and financial information regarding thousands of public companies. Teaser A document circulated to potential buyers of a spec ific security that may be offered for sale in the future. The document, often prepared by the investm ent bank representing the company, details information that is designed to entice potential bu yers to buy the security. Tech Street A term used in the financial markets and the press to refer to the technology sector. Companies like Intel, Microsoft, Apple and Dell are all considered to be part of Tech Street. Technical Analysis A method of evaluating securities by analyzing stat istics generated by market activity, such as past prices and volume. Technical analysts do not attemp t to measure a security's intrinsic value, but instead use charts and other tools to identify patt erns that can suggest future activity. Technical Bankruptcy The state of a company or person who has defaulted on a financial obligation and would be declared bankruptcy if the creditor makes a claim through th e courts. Technical Rally An upward movement in a security's price following a declining trend. The movement is caused by technical as opposed to fundamental factors affecti ng sentiment. Technical Rank This ranks a stock's Technical Rating within its in dustry group. For example, if a stock ranks 1st out of 100, its Technical Rating outscores 99% of stock s in its industry. If 2 or more stocks within a group have the same 1-99 rating, they will receive the same Technical Rank. For example, if 3 stocks have a 99 Technical Rating, they will all three be ranked best in group. The stock with the next best rating will be ranked 4th in group.

Technical Rating This exclusive rating assesses the overall investme nt performance of a stock, relative to all other publicly-traded companies. Ratings are on a 1-99 sc ale, with 99 being highest. For example, a Technical Rating of 90 indicates a stock’s overall technical performance has outpaced 90% of the market. Technical measurements include: • • • • Relative Price Strength Rating • • • • The stock’s current price relative to its 52 week p rice high • • • • Moving Average trends • • • • Recent and past price and volume activity Components are not equally weighted. Technically Strong Market A situation in which the stock market is rising on high volume or falling on low volume. Technically Weak Market A situation in which the stock market is rising on low volume or falling on high volume. Ted Spread The price difference between three-month futures co ntracts for U.S. Treasuries and three-month contracts for Eurodollars having identical expirati on months. Teenie A measure of value representing a sixteenth (1/16 o r .0625) of one point. Since decimalization, many traders have referred to a teenie as a cent. Telecommunications Consumer Protection Act of 1991 - TCPA A U.S. federal law created in response to increased consumer concern and complaints directed at the Federal Communications Commission (FCC) regardi ng the use of telephones for solicitation of business. Telephone Booth A slang term referring to one of the many phone ter minals on the floor of the New York Stock Exchange that is used by floor traders to receive o rders Tenants By Entirety - TBE When a property is owned by two or more tenants. If one owner dies, the survivor takes the whole estate. Tenants In Common - TIC When a property is owned by two or more tenants. If one owner dies, the other does not automatically take the entire estate. Tenbagger A stock whose value increases ten times. Tender 1. To accept a formal offer, such as a takeover bid or tender offer. 2. Means of settlement in a financial transaction. 3. A bid to buy treasury bills. 4. Notice from a futures contract seller to offer m oney or goods for settlement of a futures contract. Tender Offer

An offer to purchase some or all of shareholders' s hares in a corporation. The price offered is usually at a premium to the market price. Tenor The term or life of a contract. Tequila Effect Informal name given to the impact of the 1994 Mexic an economic crisis on the South American economy. The crisis occurred because of a sudden de valuation in the Mexican peso, which then caused other currencies in the region (the Southern Cone and Brazil) to decline. The falling peso was propped up by a US$50-billion loan granted by t hen-U.S. president Bill Clinton. Also referred to as the "Mexican Shock". Term 1. The lifespan assigned to an asset or a liability , over which the value of the asset/liability is expected to either grow or shrink, depending on its nature. 2. The period of time assigned as the lifespan of a ny investment. In the case of debt, the time it tak es for all payments to be made by the borrower and rec eived by the lender. In the case of an equity investment, the time that elapses between the acqui sition of the equity and its sale or removal from holdings for another reason. Term Bond An issue of bonds that all have the same maturity d ate. Term Certain Annuity An insurance product that guarantees a periodic pay ment of a predetermined amount for a fixed term. Once the term has elapsed, these products are spent and offer no possibility of any future payments, even if the annuitant is still alive. Ann uitants may choose to purchase these products gradually by making periodic payments, or they may make a purchase with a single lump sum payment. Usually, lump sum purchases are made at, o r shortly after, the annuitant's retirement. Term Deposit A deposit held at a financial institution that has a fixed term. These are generally short-term with maturities ranging anywhere from a month to a few y ears. When a term deposit is purchased, the lender (the customer) understands that the money ca n only be withdrawn after the term has ended or by giving a predetermined number of days notice. Term Life Insurance A policy with a set duration limit on the coverage period. Once the policy is expired, it is up to the policy owner to decide whether to renew the term li fe insurance policy or to let the coverage terminate. This type of insurance policy contrasts with permanent life insurance, whose duration extends until the policy owner reaches 100 years of age (i.e. death). Term Loan A loan from a bank for a specific amount that has a specified repayment schedule and a floating interest rate. Term loans almost always mature betw een one and 10 years. Term Out The transfer of debt within a company's balance she et without acquiring new debt. This is done through the capitalization of short-term to long-te rm debt. Term Sheet A non-binding agreement setting forth the basic ter ms and conditions under which an investment

will be made. Term Structure of Interest Rates A yield curve displaying the relationship between s pot rates of zero-coupon securities and their term to maturity. Term to Maturity The remaining life of a financial instrument. In bo nds, it is the time between now and when the bond matures (maturity date), when the issuer must redee m the bond by paying the principal (or face value). Terminal Elevator An agricultural elevator that is considered to be t he largest accumulator of the actual. Terminal Value - TV The value of an investment at the end of a period, taking into account a specified rate of interest Terminal Year For income tax and estate planning, this refers to the year in which a person has died. Terminally Ill When a person is not expected to live more than 12 months. Terotechnology A Greek word referring to the study of the costs as sociated with an asset throughout its life cycle, from acquisition to disposal. The goals of this app roach are to try to reduce the different costs incurred at the various stages of the asset's life and to derive methods that will help extend the asset's life span. Also known as "life-cycle costin g". Terotechnology uses tools such as net present value , internal rate of return and discounted cash flow in an attempt to minimize the costs associated with the asset in the future. These costs can include engineering, maintenance, wages payable to operate the equipment, operating costs and even disposal costs. Tertiary Industry The segment of the economy that provides services t o its consumers. This includes a wide range of businesses including financial institutions, school s, transports and restaurants. Also known as "tertiary sector of industry," or "se rvice industry/sector". Test In technical analysis, it is when a stock price app roaches a support or resistance level set by the market. If the stock stays within the support and r esistance levels, the test is passed. However, if t he stock price reaches new lows and/or new highs, the test has failed. Testamentary Trust A trust created as a result of explicit instruction s from a deceased's will. THB In currencies, this is the abbreviation for the Tha i Baht. The Bond Buyer A century-old U.S. newspaper published five times a week covering the municipal bond industry. Banks, underwriters, government agencies, Wall Stre et firms, insurance companies and others read it for municipal bond news, trends and analysis. The Conference Board A not-for-profit research organization for business es that distributes information about management and the marketplace. It is a widely quoted private source of business intelligence.

The Wealth Effect The premise that when the value of stock portfolios rises due to escalating stock prices, investors feel more comfortable and secure about their wealth , causing them to spend more. For example, economists in 1968 were baffled when a 10% tax hike failed to slow down consumer spending. Later this continued spending was attributed to the wealt h effect. While disposable income fell as a result of increased taxes, wealth was rising sharply as th e stock market moved up. Undaunted, consumers continued their spending spree. The World Bank An international organization dedicated to providin g financing, advice and research to developing nations to aid their economic advancement. Theoretical Dow Jones Index A method of calculating a Dow Jones index (most oft en the DJIA) that assumes all index components hit their high or low at the same time d uring the day. Theta A measure of the rate of decline in the value of an option due to the passage of time. Theta can also be referred to as the time decay on the value of an option. If everything is held constant, then the option will lose value as time moves closer to the maturity of the option. Theta is part of the group of measures known as the "Greeks" (other measures include delta, gamma and vega) which are used in options pricing. Thin Market A market with few bid and ask offers. The market is characterized by low liquidity, high spreads, and high volatility. Also known as a narrow market. Third Market Trading by non exchange-member brokers/dealers and institutional investors of exchange-listed stocks. In other words, the third market involves e xchange-listed securities that are being traded over-the-counter between brokers/dealers and large institutional investors. Third Market Maker A third-party firm willing to buy or sell stocks li sted on exchanges at publicly quoted prices. Third-Party Distributor The name given to institutions that sell or distrib ute mutual funds to investors for fund management companies without direct relation to the fund itsel f. Thirty-Year Treasury A U.S. Treasury debt obligation that has a maturity of 30 years. The 30-year Treasury is the benchmark U.S. bond and one of the world's most clo sely watched financial instrument. Three-Year Rule Section 2035 of the tax code, which stipulates that assets that have been gifted through an ownership transfer, or assets for which the origina l owner has relinquished power, are to be included in the gross value of the original owner's estate if the transfer took place within three yea rs of his or her death. If gifted assets do not meet t he necessary requirements, the value of the assets is added to the value of the estate at the time of the original owner's death, increasing its value an d the estate taxes imposed on it. Thrift Bank A bank whose main purpose is to take deposits from consumers and make home mortgages. Tick

The minimum upward or downward movement in the pric e of a security. Tick Index The number of stocks trading on an uptick minus the number of stocks trading on a downtick. Tick-Test Rules Restrictions on when a short sale may be executed. Tick-test rules dictate that a short sale can be made only in two situations: 1. When the price of the particular stock is higher than the last trade price (an uptick). 2. In a case where there is no change in the last t rade price. The previous trade price must be higher than the trade price that preceded it (a zero uptic k or zero plus tick) Ticker Symbol An arrangement of characters (usually letters) repr esenting a particular security listed on an exchange or otherwise traded publicly. When a compa ny issues securities to the public marketplace, it selects an available ticker symbol for its secur ities which investors use to place trade orders. Every listed security has a unique ticker symbol, f acilitating the vast array of trade orders that flo w through the financial markets every day. Ticker Tape A computerized device that relays financial informa tion to investors around the world, including the stock symbol, the latest price, and volume on secur ities as they are traded. Tide A metaphor for a long-term market trend. Tied Selling The illegal practice of a company providing a produ ct or service on condition the customer purchases a product from the same or related compan y. It is mainly used in reference to banks and referred to as coercive tied selling. Tier 1 Capital A term used to describe the capital adequacy of a b ank. Tier I capital is core capital, this includes equity capital and disclosed reserves. Tier 2 Capital A term used to describe the capital adequacy of a b ank. Tier II capital is secondary bank capital that includes items such as undisclosed reserves, genera l loss reserves, subordinated term debt, and more. Tiger Economy A nickname given to the economies of southeast Asia . Some of the tigers are Indonesia, Singapore, Malaysia, Thailand, South Korea and China. Tight Money A situation in which money or loans are very diffic ult to obtain in a given country. If you do have th e opportunity to secure a loan, then interest rates a re usually extremely high. Also known as "dear money". Time Decay The ratio of the change in an option price to the d ecrease in time to expiration. Since options are a wasting asset, their value declines over time. As a n option approaches its expiry date without being in the money, its time value declines since the pro bability of that option being profitable (in the money) is reduced. Also known as "theta" and "time- value decay". Time Deposit

A savings account or CD held for a fixed-term with the understanding that the depositor can only withdraw by giving written notice. Time Horizon The length of time for which an investment is made, or held, before it is liquidated. Time horizons can range from seconds, in the case of a day trader , all the way up to decades for a buy-and-hold investor. There is no "right" time frame - it depen ds on the investor's individual objectives. Time In Force A special instruction used when placing a trade to indicate how long an order will remain active before it is executed or expires. Time-in-force opt ions allow traders to be more specific about the time parameters in which an order is activated. Thi s is especially important for active traders. Time Segmented Volume - TSV A technical analysis indicator, developed by Worden Brothers Inc., that segments a stock's price and volume according to time intervals. The price a nd volume data are then compared to one another in order to uncover periods of accumulation (buying) and distribution (selling). Time Series A sequence of numerical data points in successive o rder, usually occurring in uniform intervals. In plain English, a time series is simply a sequence o f numbers collected at regular intervals over a period of time. Time Value The portion of the option premium that is attributa ble to the amount of time remaining until the expiration of the option contract. Time Value of Money The idea that money available at the present time i s worth more than the same amount in the future, due to its potential earning capacity. This core pr inciple of finance holds that, provided money can earn interest, any amount of money is worth more th e sooner it is received. Also referred to as "present discounted value". Timeliness Rating Proprietary rating system based upon recent earning s changes and price performance indicating possible or potential relative price performance ov er the next 12 months. General market factors are not considered in the stock rating system. Ratings presented are updated daily, from A (highest) to E (lowest). While stocks with ratings of A and B ma y outperform stocks with ratings of C and D in up markets, higher rated stocks can be more volatile a nd may involve added risk. Price stability may be improved by giving preference to stocks with lower betas, no debt or low debt, larger capitalization (common shares outstanding) with more established m arkets, and an extension in price no more than 5% to 10% above a recent consolidation or basi ng area of 8 or more weeks duration. Caution should be used when considering purchase of any A-Rated stocks. High rated stocks frequently involve added volatility and risk, as we ll as added potential. Safety may be improved by selecting A & B rated stocks with lower Betas, lowe r % debt, larger capitalizations and by avoiding stocks extended in price more than 5% to 10% from t he most recent price consolidation zone (or basing area) of 2 to 3 months or more. Smaller capi talization stocks are usually more volatile and speculative in nature, and low priced stocks are of lower quality. General market conditions should also be considered since the best of stocks will be affected by adverse market periods. Times Interest Earned - TIE A metric used to measure the ability of a company t o meet its debt obligations. It is calculated by taking a company's earnings before interest and tax es (EBIT) and dividing by the total interest payable on bonds and other contractual debt. It is usually quoted as a ratio and indicates how many times a company can cover it's interest charges on a pretax basis since failure to meet these obligations could force a company into bankruptcy. Times Interest Earned = EBIT / Total Interest

Tip from a Dip Advice from a person who claims to have inside info rmation, such as substantially higher than expected earnings or government approval of corpora te mergers, that will materially impact a stock's price but actually doesn't. Tip Income Funds received over and above wages for services re ndered. Also known as gratuities. Tipping The act of providing material non-public informatio n about a publicly-traded company to a person who is not authorized to have the information. This is an illegal act. Information is considered non-public until it has been publicly released and the financial markets have had sufficient time to diges t the impact the information may have had on prices. Tirone Levels A series of three sequentially higher horizontal li nes used to identify possible areas of support and resistance for the price of an asset. The position of the center line is plotted by calculating the difference between the highest high and the lowest low for the asset price over a period of time and dividing it by 2. The top and bottom line are drawn 1/3 and 2/3 of the difference, respectively, between the same high and low that are used to calc ulate the center line. Title The right to the ownership and possession of any it em that may be legally recognized as belonging to someone or something. In its most basic sense, t itle is the recognition of ownership. There are three components to the concept of title possession or occupation, the right of possession and apparent ownership. Title Search An examination of public records to determine and c onfirm a property's legal ownership, and find out what claims are on the property. A title search is usually performed by a title company or an attorney, who researches the vested owner, the lien s or other judgments on the property, the loans on the property and the property taxes due. TND In currencies, this is the abbreviation for the Tun isian Dinar. To Be Announced - TBA An underlying contract on a mortgage backed securit y to buy or sell a MBS which will be delivered at an agreed-upon date in the future. Today's High The intraday high trading price. In other words, th is is the highest price at which a stock traded during the course of the day. Today's Low The intraday low trading price. In other words, thi s is the lowest price at which a stock traded durin g the course of the day. Toehold Purchase A purchase of less than 5% of a target company's ou tstanding stock made by an acquiring company. Tokyo Stock Exchange - TSE The stock exchange headquartered in Tokyo, Japan. Toll Revenue Bond A type of municipal bond used to build a public pro ject such as a bridge, tunnel or expressway. The

principal and interest repayments are supplied by r evenues from tolls paid by users of the public project in question. Tombstone A written advertisement placed by investment banker s in a public offering of a security. It gives basic details about the issue and, in order of impo rtance, the underwriting groups involved in the deal. Tomorrow Next - Tom Next In currency transactions, the purchase and sale of a currency made to avoid taking actual delivery of the currency. The current position is closed out at the daily close rate and re-entered at the new opening rate the next trading day. Also referred to as "tomorrow next procedure". Top The highest price level reached by a security, inde x of securities, commodity or economic cycle in a given time period, followed by at least a short-ter m decline. Top 5 Companies In The Industry Group An industry group's top 5 companies based on the Ov erall Rating, listed in order of the best. Stocks under $10 or with an average daily volume under 10, 000 shares are excluded. In the case that 2 or more stocks have the same Overall Rating, a seconda ry sort is implemented. Top Composite Rating Tab The IBD SmartSelect® Composite Rating combines all 5 SmartSelect Ratings into one easy-to-use rating. More weight is placed on EPS and RS Rating, and the stock's percent off its 52-week high is also included in the formula. Results are then comp ared to all other companies, and each company is assigned a rating from 1-99 with 99 being the be st. A 90 rating means that the stock has outperformed 90% of all other stocks in terms of it s combined SmartSelect Ratings. This tab in IBD's "Top Rated Stocks Under $10" product screens stocks for a Composite Rating of 85 and higher. Top Earnings Per Share (EPS) Rating Tab Stocks are rated on a 1 to 99 scale (with 99 being best) comparing a company's earnings per share growth on both a current and annual basis with all other publicly traded companies in the William O'Neil + Co., Inc. database. Stocks with EPS Rating s of 80 or above have outperformed 80% of all publicly traded companies in earnings. The EPS Rati ng combines each company's most recent two quarters of earnings-per-share growth with its thre e- to five-year annual growth rate. This tab in IBD's "Top Rated Stocks Under $10" prod uct screens stocks with an Earnings Per Share Rating of 85 or higher. Top Line A reference to sales or revenue. Top Relative Strength Rating Tab This IBD SmartSelect® Relative Strength Rating measures each stock's pr ice performance over the latest twelve months compared to all other stocks. The rating scale ranges from 1 (lowest) to 99 (highest). Stocks rating below 70 indicate weaker r elative price performance. This tab in IBD's "Top Rated Stocks Under $10" prod uct screens stocks for a Relative Strength Rating of 85 and higher. Top-Down Investing An investment approach where an investor looks at a country's economy before considering an industry to invest in. Next, they determine what in dustries or sectors will return well because of the economic conditions and, finally, they then buy sto cks that are attractive within that industry. Toronto Stock Exchange - TSX The largest stock exchange in Canada, traditionally home to a large number of natural resource companies

Total Cost Of Ownership - TCO In general, the purchase price of an asset plus the additional costs of operation. Total Debt Service Ratio - TDS A debt service measure that financial lenders use a s a rule of thumb to give a preliminary assessment of whether a potential borrower is alrea dy in too much debt. More specifically, this ratio shows the proportion of gross income that is alread y spent on housing-related and other similar payments. Receiving a ratio of less than 40% means that the p otential borrower has an acceptable level of debt. Total Debt To Total Assets A metric used to measure a company's financial risk by determining how much of the company's assets have been financed by debt. Calculated by ad ding short-term and long-term debt and then dividing by the company's total assets. Total Enterprise Value - TEV A valuation measurement used to compare companies w ith varying levels of debt. This is calculated as: TEV = Market Capitalization + Interest Bearing Debt + Preferred Stock - Excess Cash. Total Enterprise Value - TEV A valuation measurement used to compare companies w ith varying levels of debt. This is calculated as: TEV = Market Capitalization + Interest Bearing Debt + Preferred Stock - Excess Cash. Total Expense Ratio - TER A measure of the total costs associated with managi ng and operating an investment fund such as a mutual fund. These costs consist primarily of manag ement fees and additional expenses such as trading fees, legal fees, auditor fees and other op erational expenses. The total cost of the fund is divided by the fund's total assets to arrive at a p ercentage amount, which represents the TER: Total Return When measuring performance, the actual rate of retu rn of an investment or a pool of investments over a given evaluation period. Total return includ es interest, capital gains, dividends and distributions realized over a given period of time. Total Return Swap A swap agreement in which one party makes payments based on a set rate, either fixed or variable, while the other party makes payments based on the r eturn of an underlying asset, which includes both the income it generates and any capital gains. The underlying asset that is used can be anything, but is usually an equities index, loan or a basket of assets. Total Shareholder Return - TSR 1. The total return of a stock to an investor (capi tal gain plus dividends). 2. The internal rate of return of all cash flows to an investor during the holding period of an investment. Total Shareholder Return - TSR 1. The total return of a stock to an investor (capi tal gain plus dividends). 2. The internal rate of return of all cash flows to an investor during the holding period of an investment.

Total Utility The full satisfaction of a consumer's wants or need s through the consumption of specific goods or services. Touchline The highest bid and lowest ask at market for a part icular security during a given time in the trading day. Toxic Waste A slang term referring to securities that are unatt ractive due to certain underlying provisions or ris ks making them generally illiquid with poor pricing sc hemes and transparency. Track Price A chart tool for determining exact historical price /volume information. May also be use to align items with its corresponding date and/or scale. To access the Track-Price tool, place the cursor ov er an item on the chart, then press and hold the right-hand mouse button. The Track-Price Box and Tr ack-Price Lines will appear. The Track-Price Box provides the date, price high/l ow/last/change, and volume details for any market trading day. The Track-Price Lines are a display of horizontal a nd vertical lines that intersect at the cursor. Use this tool to align items on the chart with its corr esponding date or scale. Tracker Fund A type of mutual fund that provides the same return s as an index. The fund invests in all the companies within the index according to a market va lue weighting. Tracking Error A divergence between the price behavior of a positi on or a portfolio and the price behavior of a benchmark. This is often in the context of a hedge that did not work as effectively as intended, creating an unexpected profit or loss instead. Tracking Stock 1. Common stock issued by a parent company that tra cks the performance of a particular division without having claim on the assets of the division or the parent company. Also known as "designer stock". 2. A type of security specifically designed to mirr or the performance of a larger index. Trade 1. A transaction involving the sale and purchase of a security. 2. In general, the buying and selling of goods and services. Trade Date The date on which a security trade occurs Trade Finance The science that describes the management of money, banking, credit, investments, and assets for international trade transactions Trade or Fade Rule An option exchange rule that prevents the occurrenc e of a trade through. Trade Sanction A trade penalty imposed by one nation onto one or m ore other nations. Trade Through The completion of a client's order at a price infer ior to the best posted bid or ask. Trade Volume Index - TVI A technical indicator that measures the amount of m oney flowing in and out of an asset. Unlike many technical indicators, the TVI is generally cre ated using intraday price data. The underlying

assumption of this indicator is that there is buyin g pressure when the price trades near the asking price and selling pressure when it trades near the bid. Trade Working Capital The difference between current assets and current l iabilities directly associated with everyday business operations. Trade-Weighted Dollar A representation of the foreign currency price of t he U.S. dollar or the export value of the U.S. doll ar. Trademark A symbol, word, phrase, logo, or combination of the se that legally distinguishes one company's product from any others. Any infringement on a trad emark is illegal and therefore grounds for the company owning the trademark to sue the infringing party. Trading Account 1. An account similar to a traditional bank account , holding cash and securities, and is administered by an investment dealer. 2. An account held at a financial institution and a dministered by an investment dealer that the account holder uses to employ a trading strategy ra ther than a buy-and-hold investment strategy. Trading Account 1. An account similar to a traditional bank account , holding cash and securities, and is administered by an investment dealer. 2. An account held at a financial institution and a dministered by an investment dealer that the account holder uses to employ a trading strategy ra ther than a buy-and-hold investment strategy. Trading Ahead A trade transacted from a specialist's account even though there is a public order that offsets the trade. Trading Below Cash When a company's total share value is less than its cash minus debts. Trading Book The portfolio of financial instruments held by a br okerage or bank. The financial instruments in the trading book are purchased or sold to facilitate tr ading for their customers, to profit from spreads between the bid/ask spread, or to hedge against var ious types of risk. Trading Channel When charting the price of an asset, this is the sp ace on the chart between an asset's support and resistance levels. The price of the asset will stay within the support and resistance levels until a breakout occurs. Trading Curb A temporary restriction on program trading in a par ticular security or market, usually to reduce dramatic price movements. Also known as a collar or circuit breaker. Trading Desk A desk where transactions for buying and selling se curities occur. Trading desks can be found in most organizations (banks, finance companies, etc.) involved in trading investment instruments such as equities, fixed-income securities, futures, commodities and foreign exchange. A trading desk provides traders with access to instantaneous trade executions. Also known as "dealing desk". Trading Dollars Slang for a company that is spending just as much m oney as it is making on a product that it develops. Trading Halt

A temporary suspension in the trading of a particul ar security on one or more exchanges, usually in anticipation of a news announcement or to correct a n order imbalance. A trading halt may also be imposed for purely regulatory reasons. During a tra ding halt, open orders may be canceled and options may be exercised. Trading Range The spread between the high and low prices traded d uring a period of time. Traditional IRA An IRA that is not a Roth IRA or a SIMPLE IRA. Indi vidual taxpayers are allowed to contribute 100% of compensation (Self-employment income for Sole pr oprietors and partners) up to a specified maximum dollar amount to their Traditional IRA. Con tributions to the Traditional IRA may be tax-deductible depending on the taxpayer's income, tax- filing status, and coverage by an employer-sponsored retirement plan. Traditional Whole Life Policy A type of life insurance contract that provides for insurance coverage of the contract holder for his/her entire life. Unlike term life insurance, wh ich covers the contract holder until a specified ag e limit, a traditional whole life policy never runs o ut. Upon the inevitable death of the contract holde r, the insurance payout is made to the contract's bene ficiaries. These policies also include an investment component, which accumulates a cash valu e that the policyholder can withdraw or borrow against. Trailer Fee A fee that a mutual fund manager pays to a salesper son who sells the fund to investors. Trailing A term used to describe the most recent time period . Trailing EPS The sum of a company's earnings per share for the p revious four quarters. Trailing Price-To-Earnings - Trailing P/E The sum of a company's price-to-earnings, calculate d by taking the current stock price and dividing it by the trailing earnings per share for the past 12 months. This measure differs from forward P/E, which uses earnings Trailing Stop A stop-loss order that is set at a percentage level below (for a long position) the market price. The price is adjusted as the price fluctuates. Trailing Twelve Months - TTM The timeframe of the past twelve months (the past y ear) used for reporting financial figures Tranches A piece, portion or slice of a deal or structured f inancing. This portion is one of several related securities that are offered at the same time but ha ve different risks, rewards and/or maturities. "Tranche" is the French word for "slice". Transaction An agreement between a buyer and a seller for the e xchange of goods or services for payment. Transaction Costs Costs incurred when buying or selling securities. T hese include brokers' commissions and spreads (the difference between the price the dealer paid f or a security and the price at which it can be sold ). Transaction Exposure The risk, faced by companies involved in internatio nal trade, that currency exchange rates will change after the companies have already entered int o financial obligations. Such exposure to fluctuating exchange rates can lead to major losses for firms.

Transaction Risk The exchange rate risk associated with the time del ay between entering into a contract and settling it. The greater the time differential between the e ntrance and settlement of the contract, the greater the transaction risk, because there is more time fo r the two exchange rates to fluctuate. Transfer A tax-free, non-reportable movement of assets betwe en retirement plans. Transfer Agent A trust company, bank or similar financial institut ion assigned by a corporation to maintain records of investors and account balances and transactions, to cancel and issue certificates, to process investor mailings and to deal with any associated p roblems (i.e. lost or stolen certificates). Transfer Payment 1. In the United States, a payment made to individu als by the federal government through various social benefit programs. 2. In Canada, a payment made to the provinces and t erritories by the federal government. Transfer Price The price at which divisions of a company transact with each other. Transactions may include the trade of supplies or labor between departments. Tra nsfer prices are used when individual entities of a larger multi-entity firm are treated and measured as separately run entities. Also known as "transfer cost". Transfer Procedures The procedure by which ownership of a stock moves f rom one party to another. The transfer agent follows a detailed, documented series of steps gove rned by the SEC to ensure that a transaction has been completed. Transfer-On-Death - TOD A way of designating beneficiaries to receive your assets at the time of your death without having to go through probate. This designation also allows yo u to specify the percentage of assets each person or entity (your "TOD beneficiary") will rece ive. Your assets will then be automatically transferred to the designated beneficiaries upon yo ur death. Translation Exposure The risk that a company's equities, assets, liabili ties or income will change in value as a result of exchange rate changes. This occurs when a firm deno minates a portion of its equities, assets, liabilities or income in a foreign currency. Also known as "accounting exposure". Translation Risk The exchange rate risk associated with companies th at deal in foreign currencies or list foreign assets on their balance sheets. The greater the pro portion of asset, liability and equity classes denominated in a foreign currency, the greater the translation risk. Transportation Expenses A business expense incurred by an employee or self- employed taxpayer while away from home in a travel status. Traunch One of many influxes of cash that is part of a sing le round of investment. Travel Expenses Business expenses incurred while an individual is a way from home. These include meals, lodging, and transportation expenses.

Treasury Bill - T-Bill A short-term debt obligation backed by the U.S. gov ernment with a maturity of less than one year. T-bills are sold in denominations of $1,000 up to a m aximum purchase of $5 million and commonly have maturities of one month (four weeks), three mo nths (13 weeks) or six months (26 weeks). T-bills are issued through a competitive bidding pr ocess at a discount from par, which means that rather than paying fixed interest payments like con ventional bonds, the appreciation of the bond provides the return to the holder. Treasury Bond - T-Bond A marketable, fixed-interest U.S. government debt s ecurity with a maturity of more than 10 years. The bonds make interest payments semi-annually and the income that holders receive is only taxed at the federal level. Treasury Index An index based on the auctions of U.S. Treasury bil ls, or on the U.S. Treasury's daily yield curve. It is commonly used in determining mortgage rates for mor tgages with an unfixed component and as a performance benchmark for investors in the capital markets as it represents a rate of return that investors would be able to get from almost any bank , with minimal effort. Treasury indexes are proprietary. The calculations of treasury indexes a nd their components vary by the financial institution calculating the index. Treasury Inflation Protected Securities - TIPS A special type of Treasury note or bond that offers protection from inflation. Like other Treasuries, an inflation-indexed security pays interest every s ix months and pays the principal when the security matures. The difference is that the coupon payments and underlying principal are automatically increased to compensate for inflation as measured by the consumer price index (CPI). Also referred to as "Treasury inflation-indexed sec urities". Treasury Investment Growth Receipts - TIGRs Introduced by Merrill Lynch, TIGRs are stripped tre asury securities offered at a significant discount to face value and backed by the U.S. Government. Treasury Lock A customized derivative security used by investors to lock in the yield or price of a treasury securit y. Treasury Note A marketable, U.S. government debt security with a fixed interest rate and a maturity between one and 10 years. T-notes can be bought either directly from the U.S. government or through a bank. When buying from the government you can either put in a competitive or noncompetitive bid. With a competitive bid you specify the yield you want; how ever, this does not mean your bid will be approved. With a noncompetitive bid is one where yo u accept whatever yield is determined at auction. U A Nasdaq stock symbol specifying that the issue is in units. U.S. Savings Bonds A U.S. government savings bond that offers a fixed rate of interest over a fixed period of time. Many people find these bonds attractive because they are not subject to state or local income taxes. These bonds cannot be easily transferred and are non-nego tiable. U.S. Treasury Created in 1798, the United States Department of th e Treasury is the government (Cabinet) department responsible for issuing all Treasury bon ds, notes and bills. Some of the government branches operating under the U.S. Treasury umbrella include the IRS, U.S. Mint, Bureau of the Public Debt, and the Alcohol and Tobacco Tax Bureau UAH

In currencies, this is the abbreviation for the Ukr aine Hryvnia. UGX In currencies, this is the abbreviation for the Uga nda Shilling. Ulcer Index - UI An indicator developed by Peter G. Martin and Byron B. McCann that is used to measure the riskiness of investments such as securities, commod ities, indexes or mutual funds. It is created by factoring in the depth and duration of drawdowns fr om recent peaks. A large UI value indicates that the security represents undue risk and an investor who holds it will likely need to wait longer for th e investment's price to climb back to its recent high s. Ultimate Oscillator A technical indicator invented by Larry Williams th at uses the weighted average of three different time periods to reduce the volatility and false tra nsaction signals that are associated with many other indicators that mainly rely on a single time period. Unadjusted Basis A basis used for depreciation purposes. Unadjusted basis uses the original cost of property or equipment without regard to salvage value. Unbundling The process of taking over a large company with sev eral different lines of business, and then, while retaining the core business, selling off the subsid iaries to help fund the takeover. Unchanged A situation in which the price or rate of a securit y does not change between two periods. This can be over any time frame including a trading day, week, or even as much as a year. Sometimes seen as "UNCH." Uncommitted Facility A credit facility with no restrictions placed upon the lending institution regarding the amount of funds to be lent. Under Reporting An illegal practice in which a person understates h is or her taxable income Underlying 1. In derivatives, the security that must be delive red when a derivative contract, such as a put or ca ll option, is exercised. 2. In equities, the common stock that must be deliv ered when a warrant is exercised, or when a convertible bond or convertible preferred share is converted to common stock. Underpayment Penalty A tax penalty enacted on an individual for not payi ng enough of his or her total estimated tax and withholding. If an individual has an underpayment o f estimated tax, they may be required to pay a penalty (on Form 2210). Underperform An analyst recommendation that means a stock is exp ected to do slightly worse than the market return. Also known as market underperform, moderate sell, o r weak hold. Undersubscribed A situation in which the demand for an initial publ ic offering of securities is less than the number o f

shares issued. Also known as an "underbooking". Undertakings for the Collective Investment of Trans ferable Securities - UCITS A public limited company that coordinates the distr ibution and management of unit trusts amongst countries within the European Union. Undervalued A stock or other security that is trading below its true value. Underwater 1. The condition a call option is in when its strik e price is higher than the market price of the underlying stock. 2. The condition a put option is in when its strike price is lower than the market price of the underlying stock. Also known as "out of the money." Underweight An situation where a portfolio does not hold a suff icient amount of securities to satisfy the accepted benchmark of the portfolio's asset allocation strat egy. Underwriter A company or other entity that administers the publ ic issuance and distribution of securities from a corporation or other issuing body. An underwriter w orks closely with the issuing body to determine the offering price of the securities, buys them fro m the issuer and sells them to investors via the underwriter's distribution network. Underwriting 1. The process by which investment bankers raise in vestment capital from investors on behalf of corporations and governments that are issuing secur ities (both equity and debt). 2. The process of issuing insurance policies. Underwriting Spread The spread between the amount underwriters pay an i ssuing company for its securities and the amount the underwriters receive from selling the se curities in the public offering. Undivided Account An underwriting system in which each underwriter in the group is responsible not only for selling its alloted amount of the new issue but also for sellin g any excess issue not sold by the underwriting group as a whole. This is also referred to as an "E astern account", and it is the opposite of a divide d account. Unearned Income Any income that comes from investments and other so urces unrelated to employment services. Unearned Revenue When an individual or company receives money for a service or product that has yet to be fulfilled. Unemployment Rate The percentage of the total labor force that is une mployed but actively seeking employment and willing to work. Unencumbered Property that is not subject to any creditor claims or liens.

Unified Managed Account - UMA A professionally managed private investment account that is rebalanced regularly and can encompass every investment vehicle (e.g. mutual fun ds, stocks, bonds and exchange traded funds) in an investor's portfolio, all in a single account . Unified Managed Account - UMA A professionally managed private investment account that is rebalanced regularly and can encompass every investment vehicle (e.g. mutual fun ds, stocks, bonds and exchange traded funds) in an investor's portfolio, all in a single account Uniform Gifts to Minors Act - UGMA An act that allows minors to own property such as s ecurities. The IRS allows persons to give so many thousands of dollars to another person without any tax consequences. If this recipient person is a minor, the UGMA allows the minor to own the as sets without an attorney setting up a special trust fund. Under the UGMA, the ownership of the fu nds works like it does with any other trust except that the donor must appoint a custodian (the trustee) to look after the account. niform Premarital Agreement Act A regulation that allows the parties of a premarita l contract to choose the state's jurisdiction under which their contract will fall. A couple can choose any state in which one of the parties lives or pla ns to live or the state in which the couple will be ma rried. Because this act has not been passed in all states, parties to a prenuptial contract are also l imited to choosing only the states that have passed the Uniform Premarital Agreement Act. Uniform Securities Act An act created as a starting point for state-level securities regulation. The purpose of the Uniform Securities Act is to deal with securities fraud at the state level and to assist the SEC in enforcemen t and regulation. Uniform Transfers to Minors Act - UTMA An extension to the Uniform Gifts to Minors Act tha t allows items other than cash or securities to be considered gifts. Uniform Transfers to Minors Act - UTMA An extension to the Uniform Gifts to Minors Act tha t allows items other than cash or securities to be considered gifts. Unissued Stock When a corporation possesses authorized common and preferred shares, but never actually exchanges them for money or services. Unit Benefit Formula A method of calculating an employer's contribution to an employee's defined benefit plan. The employer calculates the contribution by multiplying an employee's years of service by a percentage of his or her salary. Unit Benefit Formula A method of calculating an employer's contribution to an employee's defined benefit plan. The employer calculates the contribution by multiplying an employee's years of service by a percentage of his or her salary. Unit Trust - UT An unincorporated mutual fund structure that allows funds to hold assets and pass through profits to the individual owners, rather than reinvest prof its back into the fund.

Unit Trust - UT An unincorporated mutual fund structure that allows funds to hold assets and pass through profits to the individual owners, rather than reinvest prof its back into the fund. Universal Banking Banking that includes investment services in additi on to services related to savings and loans. Universal Market Integrity Rules - UMIR A set of rules governing trading practices in Canad a. These rules are set out by an independent regulator. UMIR were established to promote fair, e quitable and efficient markets. Prior to the formation of the UMIR, each individual exchange was responsible for governing its trading practices. By making these practices universal Canadian exchan ges ensure equal fairness and improve investor confidence in all the exchanges. Universe of Securities A set of securities with a common feature whether b y sharing the same market capitalization, industry or index. It can also refer to securities within a defined price range, securities that deal in specific commodities and/or securities with the sam e product line. V A Nasdaq stock symbol specifying that it is when-is sued or when-distributed. Vacation Home A home separate from an individual's primary reside nce that is used for recreational purposes and may also be rented out at unused times. Valuation The process of determining the current worth of an asset or company. There are many techniques that can be used to determine value, some are subje ctive and others are objective. Value Added The enhancement a company gives its product or serv ice before offering the product to customers Value Added Monthly Index - VAMI An index that tracks the monthly performance of a h ypothetical $1000 investment. The calculation for the current month's VAMI is: = Previous VAMI x (1 + Current Rate of Return) Value at Risk - VaR A technique used to estimate the probability of por tfolio losses based on the statistical analysis of historical price trends and volatilities. Value Chain A high-level model of how businesses receive raw ma terials as input, add value to the raw materials through various processes, and sell finished produc ts to customers. Value Date A future date used in determining the value of a pr oduct that fluctuates in price. Typically, you will see the use of value dates in determining the payme nt of products and accounts where there is a possibility for discrepancies due to differences in the timing of valuation. Such products include forward currency contracts, option contracts, and t he interest payable or receivable on personal accounts. Also referred to as "valuta". Value Fund A mutual fund that primarily holds value stocks, st ocks deemed to be undervalued in price.

Value Investing The strategy of selecting stocks that trade for les s than their intrinsic value. Value investors activ ely seek stocks of companies that they believe the mark et has undervalued. They believe the market overreacts to good and bad news, causing stock pric e movements that do not correspond with the company's long-term fundamentals. The result is an opportunity for value investors to profit by buying when the price is deflated. Typically, value investors select stocks with lower -than-average price-to-book or price-to-earnings ratios and/or high dividend yields. Value Line Index An equal-weighted stock index containing 1,700 comp anies from the NYSE, American Stock Exchange, Nasdaq, and over-the-counter market. Also known as the Value Line Investment Survey. Value Stock A stock that tends to trade at a lower price relati ve to it's fundamentals (i.e. dividends, earnings, sales, etc.) and thus considered undervalued by a v alue investor. Common characteristics of such stocks include a high dividend yield, low price-to- book ratio and/or low price-to-earnings ratio. Value Trap A stock that has experienced a large price deprecia tion and is mistaken to be a value stock. Value-Added Tax - VAT A type of consumption tax that is placed on a produ ct whenever value is added at a stage of production and at final sale. Value-added tax is mo st often used in the European Union. The amount of VAT that the user pays is the cost of the produc t less any of the costs of materials used in the product that have already been taxed. Value-Based Pricing A pricing strategy in which a product's price is ac tively dependant upon its demand. Vanguard Index Participation Receipts - VIPERs An ETF whose underlying asset is a Vanguard index f und. VIPERs are traded like any other share on the American Stock Exchange. The performance of the VIPER and the net asset value (NAV) of the Vanguard index fund follow each other closely. The benefit of a VIPER is that an investor receives both the lower cost of index funds, and the liquidi ty of an exchange-traded stock. Vanilla Option A normal option with no special or unusual features . Variability The possible range of outcomes for any given event. Variable Annuity An insurance contract in which, at the end of the a ccumulation stage, the insurance company guarantees a minimum payment. The remaining income payments can vary depending on the performance of the managed portfolio. Variable Cost A cost that changes in proportion to a change in a company's activity or business. Variable Coupon Renewable Note - VCR A renewable fixed income security with variable cou pon rates that are periodically reset. Variable Death Benefit

The amount paid to a decedent's beneficiary that is dependent on the investment performance of an insurance company's separate account. Variable Interest Rate An interest rate that moves up and down based on th e changes of an underlying interest rate index. Variable Life Insurance Policy A form of whole life insurance, variable life insur ance provides permanent protection to the beneficiary upon death of the policy holder. This t ype of insurance is generally the most expensive type of cash-value insurance because it allows you to allocate a portion of your premium dollars to a separate account comprised of various instruments a nd investment funds within the insurance company's portfolio, such stocks, bonds, equity fun ds, money market funds, and bond funds. Although most variable life insurance policies guar antee that the death benefit will not fall below a specified minimum, it is seldom guaranteed. In addi tion, because of investment risks, variable policies are considered securities contracts and th us regulated under the federal securities laws and must be sold with a prospectus. Variable Price Limit A schedule of price variations above or below the a ccepted limits determined by the commodities exchanges for any one trading day. Variance A measure of the dispersion of a set of data points around their mean value. It is a mathematical expectation of the average squared deviations from the mean. Variance Swap A type of volatility swap where the payout is linea r to variance rather than volatility. Therefore, th e payout will rise at a higher rate than volatility Variation Margin A variable margin payment that is made by clearing members to their respective clearing houses based upon adverse price movements of the futures c ontracts that these members hold. Vault Receipt A document frequently used as a delivery instrument to indicate ownership of precious metals stored in a bank, warehouse, or depository. Also kn own as warrant or warehouse receipt for metals. VEB In currencies, this is the abbreviation for the Ven ezuelan Bolivar Vega The amount that the price of an option changes comp ared to a 1% change in volatility. Velocity (of Money) A term used to describe the rate at which money is exchanged from one transaction to another. Vendor Financing The lending of money by a company to one of its cus tomers so that the customer can buy products from it. By doing this, the company increases its s ales even though it is basically buying its own products. Venture Capital Financing for new businesses. In other words, money provided by investors to startup firms and small businesses with perceived, long-term growth p otential. This is a very important source of funding for startups that do not have access to cap ital markets. It typically entails high risk for th e

investor, but it has the potential for above-averag e returns. Venture Capital Funds An investment fund that manages money from investor s seeking private equity stakes in small- and medium-size enterprises with strong growth potentia l. Venture Capitalist An investor who either provides capital to startup ventures or supports small companies that wish to expand but do not have access to public funding. Vertical Integration When a company expands its business into areas that are at different points of the same production path. Vertical Market A focused market that is only able to meet the need of one specific industry. Vertical Merger A merger between two companies producing different goods or services for one specific finished product. Vertical Spread An options trading strategy with which a trader mak es a simultaneous purchase and sale of two options of the same type that have the same expirat ion dates but different strike prices. Vest Fleece A slang term used to describe a situation in which a company's executives accelerate the vesting of their employee stock options. Usually, accelerated vesting is preceded by a period of excessively high employee stock option grants. The result of ve st fleecing is that shareholders' ownership is reduced, and option holders are able to turn their options into stock in a shorter time period than if they had not accelerated vesting. Vested Interest A financial or personal stake one entity has in an asset, security, or transaction. Vesting The process by which employees accrue non-forfeitab le rights over employer contributions that are made to the employee's qualified retirement plan ac count. Viager A (French) real estate agreement where property is sold on a reverse annuity basis. Also known as a Reverse Annuity Mortgage or Charitable Remainder Tr ust. Viatical Settlement An arrangement in which someone with a terminal dis ease sells his or her life insurance policy at a discount from its face value for ready cash. The bu yer cashes in the full amount of the policy when the original owner dies. Also referred to as a Life Settlement. Viator A person with terminal or a life-threatening illnes s who sells their life insurance policy at a steep discount to an insurance firm to pay for their heal th-care costs or improve their quality of life. Visibility The extent to which future projections are probable . Visible Supply The deliverable commodities in licensed warehouses and approved delivery facilities.

VIX - CBOE Volatility Index The ticker symbol for the Chicago Board Options Exc hange (CBOE) Volatility Index, which shows the market's expectation of 30-day volatility. It i s constructed using the implied volatilities of a w ide range of S&P 500 index options. This volatility is meant to be forward looking and is calculated from both calls and puts. The VIX is a widely used measu re of market risk. The index is often referred to as the "investor fea r gauge". VIX Option A type of non-equity option that uses the CBOE Vola tility Index as the underlying asset. This is the first exchange-traded option that gives individual investors the ability to trade market volatility. Trading VIX options can be a useful tool for invest ors wanting to hedge their portfolios against sudden market declines, as well as to speculate on future moves in volatility. VND In currencies, this is the abbreviation for the Vie tnamese Dong. Volatility 1. A statistical measure of the dispersion of retur ns for a given security or market index. Volatility can either be measured by using the standard deviat ion or variance between returns from that same security or market index. Commonly, the higher the volatility, the riskier the security. 2. A variable in option-pricing formulas showing th e extent to which the return of the underlying asset will fluctuate between now and the option's e xpiration. Volatility, as expressed as a percentage coefficient within option-pricing formulas, arises from daily trading activities. How volatility is measured will affect the value of the coefficient u sed. Volatility Quote Trading A method of quoting option contracts whereby bids a nd asks are quoted according to their implied volatilities rather than prices. Volatility Smile A common graphical shape that results from plotting the strike price and implied volatility of a group of options with the same expiration date. Volatility Swap A forward contract whose underlying is the volatili ty of a given product. Volume The number of shares or contracts traded in a secur ity or an entire market during a given period of time. It is simply the amount of shares that trade hands from sellers to buyers as a measure of activity. If a buyer of a stock purchases 100 share s from a seller, then the volume for that period increases by 100 shares based on that transaction Volume % change (intraday) A measure of the relationship between the most rece nt trading activity to the number of shares traded on an average daily basis (over the last 50 trading sessions). When viewing this data item during a trading session, please note two important factors: ••••Volume data is presented on a 20-minute delay basis . ••••Percentage change calculations are based on a proje cted volume figure. The projected volume of a stock is based on the tot al number of shares traded at the time of day. After the market close, this data item is updated u sing reported closing volume numbers. Volume Line, 50-Day Moving Average Presented as a red line, it is an indication of the moving average of shares traded over the last 50 trading sessions. When viewing a daily chart, this line represents a 50-day moving average volume level. This line is derived by summing the volume of the last fifty tra ding days and dividing it by fifty. For a weekly chart, this line represents a 50-week moving average volume level. The weekly chart line is calculated by multiplying the 50-day moving average volume amount by five (the number of

days in a trading week) to approximate the appropri ate volume amount. For Daily Graphs Online subscribers with monthly ch arts, the red moving average volume line represents a 6-month moving average volume level. Volume of Trade The quantity of futures contracts transacted over a specified period of time during a trading day. Volume Percent Change A measure of the relationship between the most rece nt trading activity to the number of shares traded on an average daily basis (over the last 50 trading sessions). When viewing this data item during a trading sessio n, please note two important factors: ••••Volume data is presented on a 20-minute delay basis ••••Percentage change calculations are based on a proje cted volume figure. The projected volume of a stock is based on the tot al number of shares traded and the time of day. After the market close, this data item is updated u sing reported closing volume numbers. Volume Price Trend Indicator - VPT A technical indicator consisting of a cumulative vo lume line that adds or subtracts a multiple of the percentage change in share price trend and current volume, depending upon their upward or downward movements. Volume Scale The numeric interval on a chart used to determine t he placement and thus the value of a Volume Bar or Volume Line. Volume Scale, Arithmetic An arithmetic scale is one of constant numeric inte rval change, that is, the distance between each interval is the same numeric value. This scale is u seful for determining numeric volume changes Volume Scale, Logarithmic A logarithmic scale presents intervals based on per centage or proportional changes. For example, the percentage change from 1 to 2 (100%) is same as the movement from 2 to 4 (100%), 4 to 8 (100%), etc. This scale is useful for comparing rel ative (percentage) change. Volume Weighted Average Price - VWAP A trading benchmark used especially in pension plan s. VWAP is calculated by adding up the dollars traded for every transaction (price multiplied by n umber of shares traded) and then dividing by the total shares traded for the day. Volume, 50-Day Moving Average The average number of shares traded each day, over the last 50 trading days. If a stock has not traded for 50 days, this calculation is based on th e available information. Market holidays are excluded from this calculation. Voluntary Accumulation Plan An investment method where a retail investor period ically invests (at their discretion) relatively sma ll amounts of funds into a mutual fund, building a com paratively large position over an extended period. Voluntary Compliance An assumption or principle that taxpayers will comp ly with tax laws and, more importantly, accurately report their income and deductions hones tly. Voodoo Accounting Any form of accounting that does not follow princip les of conservatism. While there are many methods by which financial statements can be fudged , it always comes down to inflating revenue or hiding expenses. Examples of accounting shenanigans include the big bath, cookie jar accounting and improper recognition of revenue.

Voodoo Economics A slanderous term used by President George H. W. Bu sh in reference to President Reagan's economic policies known as Reaganomics. Volume Scale, Logarithmic A logarithmic scale presents intervals based on per centage or proportional changes. For example, the percentage change from 1 to 2 (100%) is same as the movement from 2 to 4 (100%), 4 to 8 (100%), etc. This scale is useful for comparing rel ative (percentage) change. VUV In currencies, this is the abbreviation for the Van uatu Vatu. Voting Right The right of a stockholder to vote on matters of co rporate policy as well as on who is to compose the board of directors. Voting Shares Shares that give the stockholder the right to vote on matters of corporate policy making as well as who will compose the members of the board of direct ors Vulture Fund A fund that buys securities in distressed investmen ts, such as high-yield bonds in or near default, or equities that are in or near bankruptcy. Vulture Capitalist 1. A slang word for a venture capitalist who depriv es an inventor of control over their own innovations and most of the money they should have made from the invention. 2. A venture capitalist who invests in floundering firms in the hopes that they will turn around. Voucher A document recording a liability or allowing for th e payment of a liability, or debt. A voucher would be held by the person or company who will receive p ayment. Voting Trust Agreement A contractual agreement detailing the specifics of the voting trust, including the name of its trustee , the effective timeframe, and the nature of its form ation. Voting Trust A legal trust created to combine the voting power o f shareholders. With the establishment of the voting trust, the shareholders' legal title (their stock) and voting rights are transferred to a designated trustee for a set duration. W A Nasdaq symbol specifying that a particular securi ty is a warrant. W-2 Form The form that an employer must send to an employee and the IRS at the end of the year. The W-2 form reports an employee's annual wages and the amo unt of taxes withheld from his or her paycheck. W-4 Form A form completed by an employee to indicate his or her tax situation (exemptions, status, etc.) to the employer. The W-4 form tells the employer the corre ct amount of tax to withhold from an employee's paycheck.

W-8 Form An IRS form that grants a foreigner an exemption fr om certain U.S. information return reporting and backup withholding regulations. There are many variations of the W-8 form, such as the W-8BEN and W-8ECI. W-9 Form An IRS form, also known as "Request for Taxpayer Id entification Number and Certification", which is used by an individual defined as a "U.S. person" or a resident alien to verify his or her taxpayer identification number (TIN). An entity that is required to file an information r eturn with the IRS must obtain your correct TIN to report, for example, income paid to you, real estat e transactions, mortgage interest you paid, etc. For example, companies that issue dividends use the W-9 form to verify a shareholder's TIN. Waiting Period 1. The period of time between filing a registration statement with the SEC and the registration statement being declared effective by the SEC. Also known as the "quiet period" and the "cooling-off period". 2. The time between the filing of an insurance clai m and the payments made on the claim. Also known as the "elimination period". Waiver The voluntary action of a person or party that remo ves that person's or party's right or particular ability in an agreement. The waiver can either be i n written form or some form of action. A waiver essentially removes a real or potential liability f or the other party in the agreement. Wall of Worry A phrase used to describe a bullish market trend oc curring in the face of negative uncertainties. Wall Street 1. A street in lower Manhattan that is the original home of the New York Stock Exchange. The street is the historic headquarters of the largest U.S. br okerages and investment banks. Many have since relocated to other areas of Manhattan and the Unite d States. Wall Street was named after the wooden wall Dutch colonists built in this area in 1 653 to defend themselves from the British and Native Americans. 2. The collective name for the financial and invest ment community, which includes stock exchanges and large banks, brokerages, securities and underwr iting firms, and big businesses. Some people believe that the interests of these big firms contr ast those of smaller businesses, or "Main Street". Wallflower A stock that has fallen out of favor with investors and, consequently, tends to trade at a low P/E. Also called orphan stock. Wallpaper The name given to stocks, bonds and other securitie s that have become worthless. Walrasian Market An economic model of a market process in which orde rs are collected into batches of buys and sells and then analyzed to determine a clearing price tha t will decide the market price. Also referred to as "call market".

War Babies A name given to securities in companies that are de fense contractors. Also known as defense stocks. War Bond Debt securities issued by a government for the purp ose of financing military operations during times of war. It is an emotional appeal to patriotic citi zens to lend the government their money because these bonds offer a rate of return below the market rate. War Chest Slang for the reserve of cash a corporation sets as ide to attempt a takeover or to defend against a hostile takeover. Warehouse Receipt A receipt used in futures markets to guarantee the quantity and quality of a particular commodity being stored within an approved facility. Warehousing 1. A procedure whereby a company gradually builds u p a holding of shares in a company it wishes to takeover in the future. 2. The process of storing goods within a storage fa cility. Warrant A derivative security that gives the holder the rig ht to purchase securities (usually equity) from the issuer at a specific price within a certain time fr ame. Warrants are often included in a new debt issu e as a "sweetener" to entice investors. Warrant Coverage An agreement between a company and its shareholders whereby the company issues warrants equal to some percentage of the dollar amount of th e shareholder's investment. Warrant Premium The premium paid for the rights associated with a w arrant. Warren Buffett Known as "the Oracle of Omaha", Buffett is Chairman of Berkshire Hathaway and arguably the greatest investor of all time. His wealth fluctuate s with the performance of the market, but for the l ast few years he has been reported to be worth over $30 billion, making him the second richest man in the world. Wash A situation in which two events or actions have the effect of nullifying each other. In terms of investment, this could be when the gains in a portf olio equal the losses. Wash Sale An illegal transaction an investor makes by simulta neously buying and selling a security through two different brokers, thereby creating the illusio n of activity. Investors do this to try and recogni ze a tax loss without actually changing their position. Wash Trading

An illegal stock trading practice where an investor simultaneously buys and sells shares in a company through two different brokers. Wash-Sale Rule An Internal Revenue Service (IRS) rule prohibiting a taxpayer from claiming a loss on the sale of an investment when the same investment was purchased w ithin 30 days before or after the sale date. Also know as the "30-day wash-sale rule". Wasting Asset A derivative security that loses value due to time decay. Watch List A list of securities being monitored closely by a b rokerage or exchange in order to spot irregularities. Watered Stock Stock that is issued with a value much greater than the value of the issuing company's assets. Watered stock can be caused by excessive stock divi dends, overvalued assets and/or large operating losses. Wave A metaphor for daily market activity that goes agai nst the weekly market tide. Weak Form Efficiency One of the different degrees of efficient market hy pothesis (EMH) that claims all past prices of a stock are reflected in today's stock price. Therefo re, technical analysis cannot be used to predict and beat a market. Weak Hands 1. The intention of futures contract holders not to receive delivery of the underlying. 2. Retail traders in the forex market who abide by the conventional wisdom that when a pattern is broken, get out. Weak Sister A slang term for an undependable or weak link. Wealth Added Index - WAI A metric designed by Stern Stewart & Co consulting firm that attempts to measure wealth created (or destroyed) for shareholders by a company. The WAI t akes into account more variables than just the profits or share growth of a company. According to this theory, wealth is created only if the returns of a company exceed its cost of equity. Wealth Management A professional service which is the combination of financial/investment advice, accounting/tax services, and legal/estate planning for one fee. Weather Derivative An instrument used by companies to hedge against th e risk of weather-related losses. The investor who sells a weather derivative agrees to bear this risk for a premium. If nothing happens, the investor makes a profit. However, if the weather tu rns bad, then the company who buys the derivative claims the agreed amount.

Weather Future A type of weather derivative that obligates the buy er to purchase the value of the underlying weather index - measured in heating degree days (HDD) or co oling degree days (CDD) - at a future date. The settlement price of the underlying weather index is equal to the value of the relevant month's HDD/CDD multiplied by $20. Weather futures can enab le businesses to protect themselves against losses caused by unexpected shifts in weather condi tions. Wedge A technical chart pattern composed of two convergin g lines connecting a series of peaks and troughs. Wedging Technical term referring to how the handle area of a “cup with handle” price pattern moves up over a period of a week, just prior to the “pivot” or buy point. This is not a constructive signal. Proper handles should show a drifting off or a minor downt rend prior to the breakout point. Handles that wedge up tend to indicate a faulty pattern and are prone to failure. Weekend Effect A common occurrence in which stock prices tend to b e negative Friday through Monday. Weighted Figures or components that are adjusted to reflect importance by value or proportion. Weighted Alpha A weighted measure of how much a stock has risen or fallen over a certain period, usually a year. Generally, more emphasis is placed on recent activi ty by assigning higher weights to it than those assigned to earlier movements. This helps to give a return figure that has a greater focus on the most current period and is a more relevant measure for short-term analysis. This technique is popular with technical analysts. Weighted Average An average in which each quantity to be averaged is assigned a weight. These weightings determine the relative importance of each quantity on the ave rage. Weightings are the equivalent of having that many like items with the same value involved in the average. Weighted Average Cost Of Capital - WACC A calculation of a firm's cost of capital in which each category of capital is proportionately weighte d. All capital sources - common stock, preferred stock , bonds and any other long-term debt - are included in a WACC calculation. WACC is calculated by multiplying the cost of each capital component by its proportional weight and then summing: Where: Re = cost of equity Rd = cost of debt E = market value of the firm's equity D = market value of the firm's debt V = E + D E/V = percentage of financing that is equity D/V = percentage of financing that is debt Tc = corporate tax rate Weighted Average Credit Rating The weighted average of all the bond credit ratings in a bond fund. The measure gives investors an idea of how risky a fund's bonds are overall. The l ower the weighted average credit, rating the riskie r the bond fund. The weighted average credit rating i s expressed as a regular letter rating (AAA,BBB, CCC). Weighted Average Life - WAL

The average number of years for which each dollar o f unpaid principal on a loan or mortgage remains outstanding. Once calculated, WAL tells how many years it will take to pay half of the outstanding principal. Weighted Average Market Capitalization A stock market index weighted by the market capital ization of each stock in the index. In such a weighting scheme, larger companies account for a gr eater portion of the index. Most indexes are constructed in this manner, with the best example b eing the S&P 500. Weighted Average Maturity - WAM The weighted average of the time until all maturiti es on mortgages in a mortgage-backed security (MBS). The higher the weighted average to maturity, the longer the mortgages in the security have until maturity. Also known as "average effective ma turity". Well's Notice Notifications issued by regulators to inform indivi duals and companies of completed investigations where infractions have been discovered. West Texas Intermediate - WTI Light, sweet crude oil commonly referred to as "oil " in the Western world. WTI is the underlying commodity of the New York Merchantile Exchange's oi l futures contracts. Western Account An offering agreement in which each underwriter in a consortium of underwriters is responsible only for selling its alloted amount of the new issue. On ce participants have met their previously agreed upon target allotment sale, their liability in the offering is completed. When Issued - WI A transaction which is made conditionally because a security has been authorized, but not yet issued. Whipsaw A condition where an investor's security transactio n is quickly followed by an opposite reaction. Sometimes referred to as "being whipped". Whisper Number 1. Traditionally, the unofficial and unpublished ea rnings per share (EPS) forecasts that circulate among professionals on Wall Street. In this context , whisper numbers were generally reserved for the favored (wealthy) clients of a brokerage. 2. A company's forecasted future earnings or revenu es according to the collective expectations of individual investors. In this sense, a whisper numb er would be compiled by a website polling its visitors. Individuals come up with a whisper number using their own analysis of company financials, market trends, gut feel, etc. Whisper Stock Shares in a company that is rumored to be the targe t of a takeover offer. The source of whisper stocks could be anybody from an investment banker i nvolved in a deal, to the spouse of an executive privy to the information. Whistle Blower An employee who has inside knowledge of illegal act ivities occurring within his or her organization and reports these to the public. White Elephant Any investment that nobody wants because it is unpr ofitable. White Knight A company that makes a friendly takeover offer to a target company that is being faced with a hostile takeover from a separate party.

White Paper An informational document issued by companies tryin g to promote or highlight the significance of a planned product or service. White Squire Very similar to a "white knight", but instead of pu rchasing a majority interest, the squire purchases a lesser interest in the target firm. White-Shoe Firm Slang for broker-dealers who are strongly against h ostile takeover practices Whitemail A strategy that a takeover target uses to try and t hwart an undesired takeover attempt. The target firm issues a large amount of shares at below-marke t prices, which the acquiring company will then have to purchase if it wishes to complete the takeo ver. Whole Life Insurance Policy A life insurance contract with level premiums that has both an insurance and an investment component. The insurance component pays a stated am ount upon death of the insured. The investment component accumulates a cash value that the policyholder can withdraw or borrow against. Whole Loan A term used to distinguish between an original mort gage loan and a pass-through security. Wholesale Banking Banking services between merchant banks and other f inancial institutions. Whoops Slang for the Washington Public Power Supply System (WPPSS), which made the record books with the largest municipal bond default in history. Wide Basis A condition found in futures markets in which the s pot price of underlying commodities is not close to the futures price of the same contract Wide Open The situation at the opening of a trading day when there is a wide spread between the bid and ask prices for a security. Widow-and-Orphan Stock Relatively low-risk stocks from well-known firms th at pay high dividends. Wild Card Option An option associated with treasury bond or treasury note futures contracts that permits the short position to delay the delivery of the underlying. Wild Card Play Having the right to deliver on a futures contract a t the last closing price, even though the contract is no longer trading.

Wildcat Drilling The process of drilling for oil in an area that has been left unexplored. Will Variation A law that allows spouses and children to contest a will if they are not adequately provided for. William O'Neil + Co., Incorporated Institutional research firm established in 1963 tha t created the first daily U.S. equity database base d on models of the greatest stock market winners sinc e 1953. Today it provides computerized stock research to over 400 of the largest world-wide inst itutional investors. Sister company to Investor's Business Daily Williams %R In technical analysis, this is a momentum indicator measuring overbought and oversold levels, similar to a stochastic oscillator. It was develope d by Larry Williams and compares a stock's close to the high-low range over a certain period of time, u sually 14 days. Williams Act A federal act, passed in 1968, that defines the rul es in regards to acquisitions and tender offers. Wilshire 5000 Total Market Index - TMWX A market capitalization-weighted index composed of more than 6,700 publicly-traded companies that meet the following criteria: 1. The companies are headquartered in the United St ates. 2. The stocks are actively traded on an American st ock exchange. 3. The stocks have pricing information that is wide ly available to the public. Windfall Shares Shares given for free to insiders of a society, a f irm or a company when that same society, firm or company is undergoing the process of demutualizatio n. Windfall shares are often given to promote goodwill and to encourage the demutualization proce ss. Windfall Tax A tax levied by governments against certain industr ies when economic conditions allow those industries to experience above-average profits. Win dfall taxes are primarily levied on the companies in the targeted industry that have benefited the mo st from the economic windfall. Winding Up A process that entails selling all the assets of a business entity, paying off creditors, distributing any remaining assets to the principals, and then dissol ving the business. Window Dressing A strategy used by mutual fund and portfolio manage rs near the year or quarter end to improve the appearance of the portfolio/fund performance before presenting it to clients or shareholders. Window Settlement A form of settlement between dealers whereby trades are settled through the physical comparison of transactions and actual money and stocks are transf erred. Winner's Curse A tendency for the winning bid in an auction to exc eed the intrinsic value of the item purchased. Because of incomplete information, emotions or any other number of factors regarding the item being auctioned, bidders can have a difficult time determining the item's intrinsic value. As a result , the largest overestimation of an item's value ends up winning the auction.

Originally, the term was coined as a result of comp anies bidding for offshore oil drilling rights in t he Gulf of Mexico. In the investing world, the term of ten applies to initial public offerings. Winnipeg Commodities Exchange - WCE A commodities exchange in Winnipeg, Manitoba, that serves as Canada's only agricultural futures and options exchange. Canola is the Winnipeg Commod ities Exchange's (WCE) primary commodity, but the WCE also trades contracts on many other com modities and provides the world's only flaxseed futures market. Wire Fraud A situation where a person concocts a scheme to def raud or obtain money based on false representation or promises. This criminal act is do ne using electronic communications or an interstate communications facility. Wire House A company whose different branches are linked by a communications system enabling the sharing of financial information, research, and prices. Wire Transfer An electronic transfer of funds across a network ad ministered by hundreds of banks around the world. With Approved Credit - WAC A condition requiring a purchaser using financing t o have adequate credit - as approved by his or her financial lending institution - for the transac tion to go through. With Discretion A type of limit order that can be modified by a flo or broker according to his or her own judgment, allowing him or her to buy or sell to a set point b eyond the bounds of the original order. This tradin g modifier used along with limit and stop orders allo ws greater customization and flexibility. Withdrawal Removing funds from an account, plan, pension or tr ust. In some cases, conditions must be met in order to withdraw funds without penalization. There are two ways to withdraw money: in cash or in kind. Withdrawal Plan 1) A payment structure arranged with a mutual fund in which the investor receives a set amount of funds from the fund on a periodic basis. This is al so called a "systematic withdrawal plan". 2) Any strategy in which an investor liquidates a p ortion of their portfolio and extracts cash periodically, such as an investor selling equity sh ares every year to help supplement their retirement. Withholding Any tax that is taken directly out of an individual 's wages or other income before he or she receives the funds. Withholding Allowance An allowance an individual claims on a W-4 Form. It is mainly used to assist an employer in calculating the amount of income tax to withhold fr om an employee's paycheck. Withholding Tax 1. Income tax withheld from employees' wages and pa id directly to the government by the employer. 2. A tax levied on income (interest and dividends) from securities owned by a non-resident.

Wolfe Wave In technical analysis, it is a naturally occurring trading pattern present in all financial markets. T he pattern is composed of five waves showing supply an d demand and a fight towards an equilibrium price. These patterns can develop over short- and l ong-term time frames such as minutes or weeks and are used to predict where a price is heading an d when it will get there. Woody Slang to describe when the market has a strong and quick upward movement. Work in Progress - WIP Work that has not been completed but has already in curred a capital investment from the company. Working Capital A measure of both a company's efficiency and its sh ort-term financial health. The working capital ratio is calculated as: Positive working capital means that the company is able to pay off its short-term liabilities. Negativ e working capital means that a company currently is u nable to meet its short-term liabilities with its current assets (cash, accounts receivable, inventor y). Also known as "net working capital". Working Capital Loan A loan whose purpose is to finance everyday operati ons of a company. Working Capital Turnover A measurement comparing the depletion of working ca pital to the generation of sales over a given period. This provides some useful information as to how effectively a company is using its working capital to generate sales. Working Ratio A ratio used to measure a company's ability to reco ver operating costs from annual revenue. This ratio is calculated by taking the company's total a nnual expenses (excluding depreciation and debt-related expenses) and dividing it by the annual gro ss income: Workout Market A market maker prediction as to the trading price r ange that a security will occupy within a reasonable period of time. The characteristics of a workout market are seen prevalently in thin markets Workout Period The period of time in which temporary yield discrep ancies between fixed income securities are adjusted World Gold Council - WGC A nonprofit association of the world's leading gold producers, established to promote the use of, and thus demand for, gold through marketing, resear ch and lobbying. Headquartered in Geneva, Switzerland, the WGC covers the markets which compr ise about three-quarters of the world's annual gold consumption. World Trade Organization - WTO An international organization dealing with the glob al rules of trade between nations. Its main function is to ensure that trade flows as smoothly, predictably, and freely as possible. World Wide Web Address URL Address where a company provides information vi a the World Wide Web. Information from this address often includes company records, press relea ses, financial reports, and information regarding products and/or services. The address is hyper-linked to provide a single mouse-click to

the company's Web site (a new browser window will o pen). WorldCom Formerly known as WorldCom, now known as MCI, this U.S.-based telecommunications company was at one time the second-largest long distance ph one company in the U.S. Today, it is perhaps best known for a massive accounting scandal that le d to the company filing for bankruptcy protection in 2002. WorldCom executives effectively fudged the company's accounting numbers, inflating the company's assets by around $12 billio n dollars. The swift bankruptcy that followed led to massive losses for investors. Wrap Account An account in which a brokerage manages an investor 's portfolio for a flat quarterly or annual fee. This fee covers all administrative, commission, and management expenses. Sometimes this also includes funds of funds. Writ A formal document written by a judge or official re quiring specific action. Writ Of Seizure And Sale A court order that permits a creditor to instruct a sheriff to seize and sell assets/property of a deb tor in order to payoff a debt. Write-Down Reducing the book value of an asset because it is o vervalued compared to the market value. Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are require d to run the business, or have been incurred in the operation of the business and detract from retained revenues. Write-Up An increase made to the book value of an asset beca use it is undervalued compared to market values. Writer The seller of an option who collects the premium pa yment from the buyer. Written-Down Value The book value of an asset after accounting for dep reciation and amortization. WST In currencies, this is the abbreviation for the Sam oan Tala. X 1. A Nasdaq stock symbol specifying that it is a mu tual fund. 2. A symbol used in stock transaction tables found on the internet and in newspapers to indicate that a stock is trading ex-dividends or ex-rights. XD A symbol used to signify that a security is trading ex-dividend. XDIS A symbol used specifically upon the consolidated ta pe to indicate a security trading ex-distribution. Xenocurrency A currency that trades in markets outside of its do mestic borders. "Xeno" is a prefix meaning foreign or strange.

XRT A symbol used specifically upon the consolidated ta pe to indicate a security trading ex-rights. XW A symbol used to signify that a security is trading ex-warrant. Y A Nasdaq stock symbol specifying that a particular stock is an American Depositary Receipt (ADR). Yankee Bond A bond denominated in U.S. dollars and issued in th e United States by foreign banks and corporations. Yankee CD A certificate of deposit (CD) issued in the U.S. ma rket, typically in New York, by a branch of a forei gn bank. Yard Slang for one billion units in currency. Year In taxation, year refers to the calendar year that runs from January 1st to December 31st. However, corporations can generally set the time period for which they report financial results to be different than the calendar year. Year Over Year - YOY A method of evaluating two or more measured events that compares the results of measurement at one time period with those from another time period (or series of time periods), on an annualized basis. Year-over-year comparisons are a popular way to evaluate the performance of investments. Any measurable events that recur annually can be co mpared on a year-over-year basis - from annual performance, to quarterly performance, to daily per formance. Year To Date - YTD The period beginning January 1st of the current yea r up until today's date Yellow Knight A company that was once making a takeover attempt b ut ends up discussing a merger with the target company. Yellow Sheets A U.S. bulletin that gives updated bid and ask pric es as well as other information on OTC bonds. Yield 1. In general, yield is the annual rate of return f or any investment and is expressed as a percentage. 2. With stocks, yield can refer to the rate of inco me generated from a stock in the form of regular dividends. This is often represented in percentage form, calculated as the annual dividend payments divided by the stock's current share price. 3. With bonds, yield is the effective rate of inter est paid on a bond, calculated by the coupon rate divided by the bond's market price: Yield Curve A line that plots the interest rates, at a set poin t in time, of bonds having equal credit quality, bu t differing maturity dates. The most frequently repor ted yield curve compares the three-month, two-year, five-year and 30-year U.S. Treasury debt. Thi s yield curve is used as a benchmark for other debt in the market, such as mortgage rates or bank lending rates. The curve is also used to predict changes in economic output and growth. Yield Elbow The point on the yield curve indicating the year in which the economy's highest interest rates occur.

Yield Equivalence The interest rate on a taxable security that would render a return equivalent to that of a tax-exempt security, and vice versa, calculated as follows: Yield Maintenance A prepayment premium that allows investors to attai n the same yield as if the borrower made all scheduled mortgage payments until maturity. Yield Pickup A gain in yield achieved by selling one bond and bu ying another with a higher yield. Yield Spread The difference between yields on differing debt ins truments, calculated by deducting the yield of one instrument from another. The higher the yield sprea d, the greater the difference between the yields offered by each instrument. The spread can be measu red between debt instruments of differing maturities, credit ratings and risk. Yield To Call The yield of a bond or note if you were to buy and hold the security until the call date. This yield i s valid only if the security is called prior to matur ity. The calculation of yield to call is based on t he coupon rate, the length of time to the call date an d the market price. Yield To Maturity - YTM The rate of return anticipated on a bond if it is h eld until the maturity date. YTM is considered a lo ng-term bond yield expressed as an annual rate. The ca lculation of YTM takes into account the current market price, par value, coupon interest rate and t ime to maturity. It is also assumed that all coupons are reinvested at the same rate. Sometimes this is simply referred to as "yield" for short. Yield to Worst The yield to maturity if the worst possible bond re payment takes place. If market yields are higher than the coupon, the yield to worst would assume no prepayment. If market yields are below the coupon, the yield to worst would assume prepayment. In other words, yield to worst assumes that market yields are unchanged Yield-Based Option A type of debt-instrument-based option that derives its value from the difference between the exercise price and the value of the yield of the un derlying debt instrument. Yield-based options are settled in cash. A yield-based call buyer expects i nterest rates to go up, while a yield-based put buyer expects interest rates to go down. Yo-Yo Slang for a very volatile market. Z A Nasdaq stock symbol specifying that it is a misce llaneous situation such as a depositary receipt, stub, additional warrant, or unit. Z-Score A statistical measure that quantifies the distance (measured in standard deviations) a data point is from the mean of a data set. In a more financial se nse, Z-score is the output from a credit-strength test that gauges the likelihood of bankruptcy ZAR In currencies, this is the abbreviation for the Sou th African Rand. Zero Balance Account - ZBA

A checking account in which a balance of zero is ma intained by automatically transferring funds from a master account in an amount only large enoug h to cover checks presented. Zero Based Budgeting - ZBB A method of budgeting in which all expenditures mus t be justified each new period, as opposed to only explaining the amounts requested in excess of the previous period's funding. Zero Basis Risk Swap - ZEBRA A swap agreement between a municipality and a finan cial intermediary. Also known as a "perfect swap" or "actual rate swap". Zero Cost Collar A type of positive-carry collar that secures a retu rn through the purchase of a cap and sale of a floo r. Also called "zero cost options" or "equity risk rev ersals." Zero Minus Tick A transaction made at the same price as the precedi ng trade, but at a lower price than the last trade at a different price. Also known as a zero downtick . Zero Plus Tick A transaction at the same price as the preceding tr ade, but at a higher price than the last different trade. Also known as a "zero uptick". Zero-Beta Portfolio A portfolio constructed to have zero systematic ris k or, in other words, a beta of zero. Zero-Coupon Bond A debt security that doesn't pay interest (a coupon ) but is traded at a deep discount, rendering profi t at maturity when the bond is redeemed for its full face value. Also known as an "accrual bond". Zero-Coupon Bond A debt security that doesn't pay interest (a coupon ) but is traded at a deep discount, rendering profi t at maturity when the bond is redeemed for its full face value. Also known as an "accrual bond". Zero-Coupon Convertible A zero-coupon bond issued by a corporation that can be converted into that corporation's common stock. Also known as a "split coupon bond". Zero-Sum Game A situation in which one participant's gains result only from another participant's equivalent losses. The net change in total wealth among participants i s zero the wealth is just shifted from one to another. Zig Zag A technical analysis indicator that filters out cha nges in an underlying plot that are less than a specified amount ZMK In currencies, this is the abbreviation for the Zam bian Kwacha. Zombies Companies that continue to operate even though they are insolvent. Also known as living dead. Zoning

Government (usually municipal) laws that control th e use of land within a jurisdiction ZWD In currencies, this is the abbreviation for the Zib abwe Dollar. ZZZZ Best A company owned by Barry Minkow in the 1980s. Throu gh such means as forgery and theft, Minkow appeared to be building a multimillion dollar corpo ration. Zzzz Best went public in December of 1986, eventually reaching a market capitalization o f over US$200 million