Term
|
Definition
| formal statement issued yearly by corp. to its shareholders. It shows assets, liabilities, equity revenues, expenses ect. It's a reflection of corp.'s condition @ the close of business yr. (balance sheet) & earnings performance (income statement). |
|
|
Term
|
Definition
Person who receives an annuity contract's distribution. |
|
|
Term
|
Definition
| Period where contributions are made to an annuity account. |
|
|
Term
|
Definition
To change an annuity contract from the accumulation (pay-in) stage to distribution (payout) stage. |
|
|
Term
|
Definition
| A contract b/twn insurance company & an individual, generally guaranteeing lifetime off income to individual whose life the contract is based in return for either a lump-sum / periodic payment to the insurance company. The contract holder's objective usually retirement income. |
|
|
Term
|
Definition
|
|
Term
|
Definition
A process that allows industry disputes b/twn members, member organizations, their employees, & customers to be heard & settled by either FINRA/a designated arbitration panel. Once process is agreed to by both parties there is no appeal. |
|
|
Term
|
Definition
An indication of a willingness by trader/dealer to sell a security/a commodity; the price @ which an investor can by from a broker/dealer |
|
|
Term
|
Definition
1. Anything that an individual/a corp. owns 2.A balance sheet item expressing what corp owns |
|
|
Term
|
Definition
A MF that splits its investment assets among stocks, bonds, and other vehicles in an attempt to provide a consistent return for the investor. |
|
|
Term
|
Definition
1. A document accompanying / part of a stock certificate that's signed by the person named on the certificate for the purpose of transferring the certificate's title to another persons name. 2. The act of identifiying & notifying an account holder that the option owner has excercised an option held short in that account |
|
|
Term
Associated Person of a Member (AP) |
|
Definition
| Any employee, manager, director, officer,/partner of a member broker/dealer or another entity/person controlling, controlled by, or in common control w/ that member |
|
|
Term
Assumed Interest Rate (AIR) |
|
Definition
Net Rate of investment return that must be credited to VL policy to ensure that @ all times the variable death benefit = the amount of the death benefit. The AIR forms the basis for projecting payments, but it's not guaranteed |
|
|
Term
|
Definition
A market in which buyers & sellers enter competitive market simultaneously ie NYSE |
|
|
Term
|
Definition
# of shares of stock a corp can issue. This # of shares is stipulated in corp.'s state approved charter & may be changed by vote of corp's shareholders |
|
|
Term
|
Definition
Option available to MF shareholders whereby fund dividends & capital gains distributions are automatically reinvested back into fund |
|
|
Term
|
Definition
A step in caluculation bonds yeild to maturity. Face value +price paid for it/2 |
|
|
Term
|
Definition
Failure of OTC market maker to honor firm bid & asked price |
|
|
Term
|
Definition
predating LOI to allow invest to incorporate recent deposits for purpose of qualifying sales load discount (breakpt) on a purchase of open end investment company shares |
|
|
Term
|
Definition
Report of company's financial condition @ specified time |
|
|
Term
|
Definition
Formula stating that corp. assets = sum of liabilities plus shareholder equity |
|
|
Term
|
Definition
MF whose stated investment policy is to have @ all times a portion of its investment assets in bonds & preffered stock as well as in common stock in attempt to provide both growth & income |
|
|
Term
Balanced investment strategy |
|
Definition
Method of portfolio allocation and management aimed at balancing risk and retuen. Balanced portfolio may combine stocks, bonds,packaged products and cash equivalents |
|
|
Term
|
Definition
| A money market instrument used to finance international & domestic trade. It's a check drawn on a bank by an importer/exporter of goods & represent's the bank's conditional promise to pay the face amount of the note @ maturity. (usually less than 3 months) |
|
|
Term
|
Definition
A means of measuring the volitlity of a security/portfolio of securities in comparison w/market as a whole. Beta=1 security's price moves with market Beta>1 security's price more volitile than market Beta<1 security less volitile than market |
|
|
Term
|
Definition
An indication by an investor, trader, / a dealer of a willingness to buy a security the price @ which an investor can sell to broker/dealer |
|
|
Term
|
Definition
Equity issue of financially stable well established compaanies that have demonstrated their ability to pay dividends in good & bad times |
|
|
Term
|
Definition
1. Individuals elcted by stockholders to establish corp. management policies. Decides, among other issues if dividends will be paid to stockholders 2. Body govern NYSE composed of 20 member elected for 2yr. terms by NYSE general membership |
|
|
Term
|
Definition
| An issuing company's/government's obligation to repay principal of a loan to bond investors @ specified future date. Usually issued w/ par/face value of $1000 representing the amount of $ borrowed. The issuer promises to pay % of par value as interest on borrowed funds. The interest payment stated on face of bond @ issue. |
|
|
Term
|
Definition
MF whose investment objective is to provide stable income w/ min. capital risk. Invests in income producing instruments which may include corp., gov., / municipal bonds |
|
|
Term
|
Definition
Any promotional materials designed for use by newspapers, magazines, billboards, radio, tv, phone recordings/other public media where firm has little control over the type of individuals exposed to material |
|
|
Term
|
Definition
Debt security issued by an authorized agency of fed. gov. Such an issue back by agency itself not by full faith & credit of US gov. (except GNMA & Federal Import export bank) |
|
|
Term
Aggressive Investment Strategy |
|
Definition
Method of portfolio allocation & management aimed @ acheiving max. return. High % of investable assets placed in equity securities & lower % in safer debt securities & cash equivalents. They pursue aggressive policies such as margin trading, option trading, arbitrage |
|
|
Term
American Depositary Receipt (ADR) |
|
Definition
A negotiable certificate representing a given # of shares of stock in foreign corp. It's bought & sold in American Securities market |
|
|
Term
|
Definition
| One of a # of quotations listed in financial press which provide representative bid price from previos days bond market. Quotes for corp. & gov. bonds are % of bonds face value (usually $1000). Corp bonds usually quoted in 1/8 where a quote 99_1/8 represents 99.125% of par ($1000) or $991.25 Gov. bonds quoted in 32nds. Municipal bonds quoted on $ basis/yield to maturity |
|
|
Term
|
Definition
Evaluation of the possibility of a bond issuer's default based on analysis of issuer's financial condition and profit potential. |
|
|
Term
|
Definition
Annual rate of return on bond investment. Types of yield nclude nominal, current, & yield to maturity & yield to call. Relationships vary according to whether bond in question is @ discount, premium,/@ par. |
|
|
Term
|
Definition
| Security sold w/out delivery of certificate. Evidence of ownership maintained @ central agency |
|
|
Term
|
Definition
1.individual/firm that charges fee/commission for executing buy/sell orders submitted by another individual or firm 2.role of a firm when it acts as agent for a customer & charges customer commission for its services |
|
|
Term
|
Definition
Person/firm in bus. of buying & selling securities. A firm may act as broker (agent) & delaer (principal) but not in same transaction. Muct register with SEC & appropriate SRO w/in state they do bus |
|
|
Term
|
Definition
A predictable long term pattern of alternating periods of econmic growth & decline. 4 stages: expansion, peak, contraction, & trough |
|
|
Term
|
Definition
1. Option contract giving owner right to buy specified amount of underlying security @ specified price @ specified time 2.Act of exercising call option |
|
|
Term
|
Definition
| Investor who pays premium for an option contract & receives for specified time underlying security @ specified price |
|
|
Term
|
Definition
date specified in prospectus of every callable security after which the security's issuer has option to redeem issue @ par/ @ par plus premium |
|
|
Term
|
Definition
| Provision in bond indenture stating issue not callable for certain time period (ie 5/10yrs) after original issue date |
|
|
Term
|
Definition
written agreement b/twn issuing corp. & bondholders/ preffered stock holders giving corp. option to redeem senior securities @ specified price b/4 maturity & under certain conditions |
|
|
Term
|
Definition
preferred stock issued with provision allowing corp. to call in @ certain price and time |
|
|
Term
|
Definition
| Rise in assets market price |
|
|
Term
|
Definition
Segment of securities market deals in instrument with more than 1yr maturity (ie long term debt & equity securities) |
|
|
Term
|
Definition
Potential for investor to lose all $ due to circumstances unrelated to issuer's financial strength |
|
|
Term
|
Definition
Account in which customer required by SEC Regulation T to pay in full for securities purchased no later than 2 days after standard pay period set by Uniform Practice Code |
|
|
Term
|
Definition
Security that can be readily converted into cash (ie T-bills, certificate of deposit, money market instruments & funds) |
|
|
Term
|
Definition
Excessive trading in a customer account by a registered rep. who ignores customer interests and seeks only to increase commission. |
|
|
Term
|
Definition
| Class of mf issued w/ front-end sales load. mf offers different classes of shares to allow investor to choose what type of sc they will pay |
|
|
Term
|
Definition
Class of mf share with back end sales load |
|
|
Term
|
Definition
Class of mutual fund with level sales load |
|
|
Term
|
Definition
a class of mf issued with both level load and a back end load |
|
|
Term
Closed End Manangement Company |
|
Definition
| investment co issues fixed # of shares in an actively managed portfolio of securities. Shares may be of several classes & traded in secondary market place. Shares' market price determined by supply & demand |
|
|
Term
|
Definition
| FINRA's formal procedure for handling trade practice complaints involving violations of Conduct rule. Dept. of enforcement if 1st body to judge and hear complaints |
|
|
Term
Collateralized Mortgage Obligation |
|
Definition
Mortgage backed security whose yield isn't guaranteed and doesn't have fed. gov. backing. These issues attempt to return interest & principle @ predetermined rate |
|
|
Term
|
Definition
Equity MF that attepmts to combine objective growth and current yeild by dividing portfolio b/twn companies that show long term growth potential & companies that pay high dividends |
|
|
Term
|
Definition
Benefit offered by mf where investor may qualify for sc breakpt. by combining separate investments in 2/more mf under the same management |
|
|
Term
|
Definition
| An unsecured, short term promissory note issued by a corp. for financing accounts receivable and inventories. Usually issued @ discount reflecting prevailing market interest rate. Maturities range up to 270 days. |
|
|
Term
|
Definition
Means for an investment co. to avoid taxation on net investment income distributed to shareholders. If mf acts acts as conduit distributing net investment income it may qualify as regulated investment co and be taxed only on retained income |
|
|
Term
|
Definition
Printed document that states the trade date, settlement date, and $ due from/owed to a customer. It's sent/given to customer on / before settlement date |
|
|
Term
|
Definition
| Defensive investment strategy to which the total sum of $ invested is kept constant regardless of price fluctuation in portfolio. As a result investor sell when market is high and buys when market is low. |
|
|
Term
Consumer Price Index (CPI) |
|
Definition
| Measure of Price changes in consumer goods and services used to identify periods of inflation/deflation |
|
|
Term
|
Definition
period of general economic decline |
|
|
Term
|
Definition
| monetary policy that decreases supply, usually w/ intention of raising interest rates and combating inflation |
|
|
Term
|
Definition
type of accumulation plan where individ. agrees to invest a specific amount of $ in a mf during a specific period |
|
|
Term
Convertible preferred stock |
|
Definition
| equity security that can be exchanged for common stock @ specified price/rate |
|
|
Term
|
Definition
Debt security issued by corporation typically with par value of $1000 is taxable,has term maturity, and traded on major exchange |
|
|
Term
|
Definition
| Price paid for asset including commissions/fees, used to calculate cap. gain/loss when asset is sold |
|
|
Term
|
Definition
| Debt obligation with attached coupons representing semiannual interest payments. Holder submits coupons to trustee to receive interest payments. Issuer keeps no record of purchaser and purchaser name not printed on certficate |
|
|
Term
|
Definition
Degree of probability that bond's issuer will default in the payment of principal/interest |
|
|
Term
Cumulative Preferred Stock |
|
Definition
Equity security offers the holder any unpaid dividends in arrears. These dividends accumulate & must be paid b4 any dividends paid to common stock holder |
|
|
Term
|
Definition
Annual rate of return on a security, calculated by dividing interest/dividends paid by security's current market price |
|
|
Term
|
Definition
| Account in which custodian enters trades on behalf of beneficial owner often a minor |
|
|
Term
|
Definition
An institution/person responsible for making all investment, managment, & distribution decisions in an account maintained in the best interest of another. |
|
|
Term
|
Definition
Fundamental analysis term for an industry sensitive to bus. cycle and price changes. Most cyclical industries produce durable goods such as raw materials and heavy equipment |
|
|
Term
|
Definition
| provision of an annuity allows for the payment to a beneificiary the greater of the value of the contributions/the value of the separate account @ date of death. Provision only effective during accumulation period of annuity |
|
|
Term
|
Definition
A debt obligation backed by corporation's general credit |
|
|
Term
|
Definition
Raising $ for working capital/for capital expenditures by selling bonds, bills, notes to individual/institutional investors. In return for $ lents investors become creditors & receives issuer's promise to repay principal & interest on debt |
|
|
Term
|
Definition
security representing an investor's loan to an issuer such as corp., municipality, fed. government,/ fed. agency. In return for loan the issuer promises to repay debt on specified date & to pay interest |
|
|
Term
|
Definition
Date on which corp. announces upcoming dividend's amount, payment date, and record date |
|
|
Term
|
Definition
Term used for industries relatively unaffected by business cycle. Most defensive industries produce non durable goods for which demand remains steady throughout business cycle ex: food & utilities |
|
|
Term
Defensive Investment strategy |
|
Definition
Method of portfolio allocation & managment aimed @ minimizing risk of losing principal. Investor place large % of investments i bonds, cash equivalents, & stock that are less volatile than avg. |
|
|
Term
|
Definition
annuity contract delays payment of income, installments,/ lump sum until investor elects to receive it |
|
|
Term
Deferred Compensation Plan |
|
Definition
| non qualified retirment plan whereby employee defers receiving current compensation in favor of larger payout @ retirement |
|
|
Term
|
Definition
qualified retirement plan that specifies amount of $ the employee will receive for retirement |
|
|
Term
|
Definition
| change in ownership/ in control of security in exchange for cash. Delivery takes place on settlement date |
|
|
Term
|
Definition
| prolonged period of economic decline |
|
|
Term
|
Definition
| investment vehicle, the value of which is based on another security's value. Futures contracts, forward contracts, and options are among the most common types of derivatives. Institutional investors generally use to increase overall portfolio return/hedge portfolio risk. |
|
|
Term
|
Definition
substantial fall in a currency's value as compared to value of gold/value of another country's currency |
|
|
Term
|
Definition
| reduction in earnings per share of common stock; occurs through issuance of additional shares of common stock & conversion of convertible securities |
|
|
Term
|
Definition
| interest rate charge by the 12 federal reserve banks for short term loans made to member banks |
|
|
Term
|
Definition
| authority given to someone other than the account's beneificial owner to make investment decisions for the account concerning the security, # of shares/units, & whether to buy/sell. The authority to decide price/timing doesn't constitute discretion |
|
|
Term
|
Definition
| account in which customer has given registered rep authority to enter transactions @ rep's discretion |
|
|
Term
|
Definition
| order entered by registered rep. for discretionary account allowing him to use his judgement on customer's behalf with respect to choice of security, quantity of security, & whether the transaction should be a purchase/sell |
|
|
Term
|
Definition
| flow of $ from low yielding accounts in traditional savings institutions to higher yielding investments. Typically happens when fed.tightens money supply and interest rates rise |
|
|
Term
diversified common stock fund |
|
Definition
mf that invests its assets in a wide range of common stocks. Objective may be growth, income, / combination |
|
|
Term
|
Definition
A distribution of corp. earnings. It may take the form of cash, stock, / property. BOD must declare all dividends. |
|
|
Term
|
Definition
| A measure of corp.'s policy of paying out dividends, calculated by dividing dividends paid on common stock by net income available to common stockholders |
|
|
Term
|
Definition
annual rate of return on common/preferred stock. Calculated by dividing annual dividend by the stock's purchase price |
|
|
Term
Doctrine of mutual reciprocity |
|
Definition
| This agreement established fed. tax exemption for municipal bond interest. States & municipalities don't tax federal securities/property, & in turn fed. gov.exempts local gov. securities & property from fed. taxation |
|
|
Term
|
Definition
| system of buying mf shares in fixed dollar amounts @ regular fixed intervals regardless of shares price. The investor purchases more shares when prices are low and fewer shares when prices are high, thus lowering avg. cost per share |
|
|
Term
|
Definition
| a closed end investment co. that offers 2 classes of stock: income & capital shares. Income shares entitle the holder to shares in the net dividends and interest paid in the fund. Capital shares entitle the holder to profit from the capital appreciation of all securities the fund holds |
|
|
Term
|
Definition
| A corporation's net income available for common stock divided by it's # of shares of common stock outstanding |
|
|
Term
|
Definition
| potential for economic developments and domestic events to trigger losses in securities investments |
|
|
Term
|
Definition
| Also known as coverdell education savings accounts (ESAs) may be established for the purpose of paying qualified education expenses for designated benificiary of account. Contributions aren't tax deductible but distributions are tax free as long as they are used to pay for qualified education expenses. Max contribution $2000/beneficiary/yer |
|
|
Term
|
Definition
| responsivness of consumers & producers to changes in prices. A large chane in demand/production resulting from small change in price for a good is considered an indication for elasticity |
|
|
Term
Employee Retirement Income Security Act of 1974 (ERISA) |
|
Definition
| The law that governs the operation of most corporate pension & benefit plans. Corporate retirement plans established under ERISA qualify for favorable tax treatment for employers & participants |
|
|
Term
|
Definition
| common & preferred stockholders' ownership interest in a corp. |
|
|
Term
|
Definition
| raising $ for working capital/4 capital expenditures by selling common/preferred stock to individual/institutional investors. Inreturn for money paid investors receive ownership interest in corp |
|
|
Term
|
Definition
| security representing right to buy/sell common stock @ specified price w/in specified time |
|
|
Term
|
Definition
| Any organization, association, / group of persons that maintain/provide a marketplace in which securities can be bought/sold. Need not be a physical place |
|
|
Term
|
Definition
| Featured offered by MF allowing individual to transfer investments in 1 fund to another fund under same sponser w/out incurring additional SC |
|
|
Term
|
Definition
1st date in which security is traded that the buyer is not entitled to receive distributions previously declared |
|
|
Term
|
Definition
| Security exempted from registration requirments (although not from antifraud requirements) of 1933 Securities Act. EX: gov. securities & municipal securities |
|
|
Term
|
Definition
| Cost per share @ which option/warrant holder may buy/sell underlying security |
|
|
Term
|
Definition
| monetary policy that increases money supply, usually w/intention to lower interest rates & combatting deflation |
|
|
Term
|
Definition
| Ratio for comparing MF efficency by dividing funds expenses buy net assets |
|
|
Term
Face Amount Certificate Co. (FAC) |
|
Definition
investment company that issues certificates obligating it to pay investor a stated amount of money (the face amount) on specified future date. The investor pays into certificate in periodic payments/lump sum. |
|
|
Term
Federal Deposit Insurance CO. (FDIC) |
|
Definition
Gov. agency that provides deposit insurance for member banks and prevents bank and thrift failures |
|
|
Term
Federal National Mortgage Association (FNMA) |
|
Definition
| Publicly held corp.thats buys conventional mortgages & mortgages from gov. agencies |
|
|
Term
Federal Reserve Board (FRB) |
|
Definition
| A 7 member group that directs the operations of the federal reserve system. President appiont board members subject to congress approval |
|
|
Term
|
Definition
| Central bank system of USA. Primary responsibility is to regulate flow of money and credit. 12 regional banks, 24 branch banks, hundreds of national & state banks |
|
|
Term
|
Definition
| person legally appointed and authorized to hold assets in trust for another person & manage assets for that person's benefit |
|
|
Term
|
Definition
| legal document that states new security's price, delivery date, & underwriting spread, as well as other material info.; must be given to every investor who purchases a new issue of registered securities |
|
|
Term
Financial Industry Regulatory Authority (FINRA) |
|
Definition
Fromed July 2007 by merger of NASD & NYSE Regulation inc. It's the self regulatory agency organization for OTC securities market & members of NYSE |
|
|
Term
Firm Commitment Underwriting |
|
Definition
| underwriter buys entire issue from issuer @ an agreed upon price and proceeds to sell issue @ an agreed upon price and then proceeds to sell issue. They have commitment to sell all shares as entire issue was bought by underwriter |
|
|
Term
|
Definition
| federal tax & spend policies set forth by president/congress. Policies effect tax rate, interest rates, and gov. spending to control economy |
|
|
Term
|
Definition
| general guideline for % markup, markdown, & commissions on OTC security transactions. Intended to ensure reasonable and fair treatment of the investing public |
|
|
Term
|
Definition
| insurance contract where insurance co makes fixed $ payments to the annuitant for term of contract, usually until annuitant dies; earings and principal guaranteed |
|
|
Term
|
Definition
| investment co. that invests in portfolio of securities where no changes are permissible |
|
|
Term
|
Definition
valuation process for mf shares, whereby an order to purchase/redeem shares is executed @ the price determined by the portfolio valuation calculated after order is received. Occurs @ least once per day |
|
|
Term
|
Definition
| tax deferred define contribution retirement plan offered by employer |
|
|
Term
|
Definition
| tax deferredd annuity retirement plan available to employees of public schools and certain non profits |
|
|
Term
|
Definition
| letter to mf investor explaining contractual plan's sc & operation. Must be sent w/in 60 days of sale. During free look period investor may terminate plan w/out paying sc |
|
|
Term
|
Definition
| buying and selling securities w/out making payment violates regulation T |
|
|
Term
|
Definition
| Debt issue that prints bond holder's name on certificate. The issuer's transfer maintains the records and send principal and interest payments directly to investr |
|
|
Term
|
Definition
| long term debt financing of corp./municipality ex all outstanding bonds maturing in 5yrs./more |
|
|
Term
|
Definition
| interchangeable, owning to identical characteristics/value; can be substituted/exchanges for another security |
|
|
Term
|
Definition
| Communications w/ public that promote securities as investments but don't refer to particular securities |
|
|
Term
Government National Mortgage Association |
|
Definition
A wholly owned gov. corp. issues pass through mortgage debt certificates back by full faith & credit of gov. |
|
|
Term
|
Definition
| Debt obligation of US gov. back buy its full faith & taxing power and regarded as having no risk default. Gov. issues short term Treasury bills, medium term Treasury notes, & long term treasury bonds |
|
|
Term
|
Definition
diversified common stock fund that has cap appreciation as primary goal. It invest in co. that reinvest most earning for expansion,research, development |
|
|
Term
|
Definition
| speculative issue believed to offer significant potential for cap. gains. Often pays low dividends & sells @ high price earning ratio |
|
|
Term
|
Definition
| equity security, generally preferred stock issued w/ promise of corp to maintain dividend payments. (considered dual security) |
|
|
Term
|
Definition
| MF/investment co hedges market commitments by holding securities it believes likely to increase in value. Ojective is cap. appreciation. This fund is highly aggressive and generally not available to ordinary investors |
|
|
Term
|
Definition
| MF that seeks to provide stable current income by investing in securities that pay interest/dividends |
|
|
Term
Individual Retirement account IRA |
|
Definition
| Retirement investing tool for employed individuals that allow an annual contribution of 100% of earned income up to $5000 max. Some/all contributions may be tax deductible depending on gross income & coverage by employer sponser qualified retirement plans. Persons age 50 orover can make catch up contributions of $1000. |
|
|
Term
Industrial development bond (IDB) |
|
Definition
| Securities issued by state, local gov., / development agency to finance construction/purchase of industrial, commercial,/manfacturing facilities to be purchased by/leased to private user. Not back by credit of private user & not considered liability of gov. issuer |
|
|
Term
|
Definition
Portfolio strategy the allocates investable assets according to investment relative safety. The pyramid base composed of low risk investments, mid portion composed of growth investments, top is speculative investments |
|
|
Term
|
Definition
| reinvestment of assets that indiv. receives as distribution from qualified tax deferred retirement plan into individual retirement account w/in 60 days of receiving distriution individual may reinvest entire sum/a portion but portion not reinvested is taxed @ ordinary income |
|
|
Term
|
Definition
annuity payout option that cover 2/more people with annuity payment continuing as long as 1 of the annuitants remain alive |
|
|
Term
Joint Tenants w/right of Survivorship (JTWROS) |
|
Definition
| form of joint ownership w/account whereby deceased tenant's fractional interest in account pass to surviving tenants |
|
|
Term
|
Definition
| Qualified tax deferref retirement plan for self employed persons and unincorporated/ earn extra income through personal services aside from regular emplyment |
|
|
Term
Life annuity/Straight life |
|
Definition
| An annuity payout option that pays monthly check over lifetime of annuitant |
|
|
Term
Life Annuity W/ Period Certain |
|
Definition
| An annuity payout option guarantees annuitant montly check for a certain time period & thereafter until annuitant's death. If annuitant died b/4 time period expires payment go to beneficiary |
|
|
Term
|
Definition
| Category of mony supply includes all coins, currency, & demand deposits - that is checking accounts and NOW accounts |
|
|
Term
|
Definition
| Category of money supply that includes m1 in addition to all time deposits, savings deposits, & non institutional mm funds |
|
|
Term
|
Definition
| Category of money supply includes m2 in addition to all large time deposits, instutional mm funds, short term repurchase agreements, and certain other large liquid assets |
|
|
Term
|
Definition
| amount paid to investment manager for its services in the supervision of investment co. affairs. This fee is a set %age of co. net assets. |
|
|
Term
|
Definition
| order to be executed immediately @ best available price. The only order that guarantees execution |
|
|
Term
|
Definition
Potential for an investor to experience losses owning to day-to-day flucuations in the prices @ which securities caan be bought/sold |
|
|
Term
|
Definition
| ease with which security can be bought/sold; having readily available market for trading |
|
|
Term
|
Definition
amount payable under variable life insurance policy upon the policyowner's death regardless of the separate account's investment performance. Insurance co. guarantees min. amount |
|
|
Term
|
Definition
Federal Reserve Board's actions that determine size and rate of money supply's growth, which affect interest rate |
|
|
Term
|
Definition
MF that invests in short-term debt instruments. Fund objective to earn interest while maintaining a stable net asset value of $1/share. Generally sold w/ no load |
|
|
Term
|
Definition
Obligations are commonly traded in mm; instruments short term & highly liquid. EX US gov. securities like t-bills - banker's acceptances (BA)
- certificate of deposit (CD)
- commercial paper
- eurodollar deposit
- repurchase agreement / repo
|
|
|
Term
|
Definition
| Total stock of bills, coins, loans, credit, & other liquid instrument of economy. 4 categories - L,M1,M2, and M# according to account type and in which instrument its kept |
|
|
Term
|
Definition
| all annuity contracts have this guarantee. The insurance co. guarantees annuitiant will receive payments as long as he/she lives. There's a charge made against account as an operating expense to cover cost of guarantee. MF DONT HAVE MORTALITY GUARANTEE |
|
|
Term
|
Definition
| the expansion of the money supply that results from fed. reserve system member bank's being able to lend more $ than it takes in. |
|
|
Term
|
Definition
| Debt security issued by a state, municipality,/ another subdivision to finance capital expenditures. Such expenditures may include highways,public works, school buildings |
|
|
Term
|
Definition
| MF that invests in municipal bonds and operates as UIT/open end fund. Funds objective is to maximize federally exempt tax income |
|
|
Term
|
Definition
investment co. offers new equity shares in actively managed portfolio of securities. All shareholders participate in fund gains/losses. Shares redeemable on any bus day at nav. Each mf portfolio invested to match objective stated in prospectus |
|
|
Term
|
Definition
| the nationwide electronic quotation system for up to the minute bid & ask quotations on approx. 5500 otc stock |
|
|
Term
|
Definition
| net total of MF assets & liabilites; used to calculate price of new fund share |
|
|
Term
negotiable certificate of deposit (CD) |
|
Definition
| unsecured promissary note issued w/min. face value of $100k. It evidence a time deposit of funds w/ issuing bank and guaranteed by bank |
|
|
Term
Negotiable Order of W/drawal (NOW) Account |
|
Definition
| Bank account through which customer can write drafts against money helds on deposit; an interestbearing checking account |
|
|
Term
|
Definition
| MF's share value, caluculated once a day, based on closing market price for each security in funds portfolio. It's computed by deducting funds liabilities from total assets and dividing amount by # of outstanding shares |
|
|
Term
|
Definition
| difference b/twn security's closing price on trading day reported and previous day's closing price. In otc transactions it's the difference b/twn closing bids. |
|
|
Term
|
Definition
| form must bbe filled out for each new account opened with a brokerage firm. It specifies @ min., account owner, trade authorization, payment method, types of securities appropriate for customer |
|
|
Term
|
Definition
| mf whose shares are sold w/out commission / sc. The investment co. distrubutes the shares directly. |
|
|
Term
|
Definition
interest rate stated on face of a bond that represents % of interest the issuer pays on bonds face value |
|
|
Term
|
Definition
| portfolio management strategy that seeks to concentrate investments in a particular industry/ geographic region in hopes of achieving higher return |
|
|
Term
|
Definition
annuity doesn't qualify for tax deductibility of contributions under IRS code. Funded w/ after tax dollars but earning in account accrue taxed deferred. @ payout of annuity all distributions in excess of cost basis is taxed as ordinary income |
|
|
Term
|
Definition
Short term dedt accruing in 5 yrs. or less |
|
|
Term
|
Definition
| security that represents right to buy/sell specified amount of an underlying security @ specified price w/in specified time. The purchaser aquires right, and seller assumes obligation |
|
|
Term
|
Definition
| Security exchange system where broker/dealer negotiates directly w/ one another. Trading takes place over computer/telephone network that link broker/dealers around the world. Both listed and OTC securites as well as municipal and US gov. securities trade in OTC market |
|
|
Term
|
Definition
Dollar amount issuer assigns to a security. For an equity security par usually a dollar amount that bears no relationship to market price. For debt security par is amount repaid to investor when bond matures usually $1000. |
|
|
Term
|
Definition
| In exchange market a situation in which all broker bidding have = standing and the winning bid awarded by random drawing. |
|
|
Term
Participating preffered stock |
|
Definition
| preffered stock that's entitled to its stated dividend & also to its additional dividends as a specified % of dividends on common stock, if declared |
|
|
Term
|
Definition
| security representing an interest ina pool of conventional VA farmers home administration/other agency mortgages. The pool receives the principle & interest payments which it passes through to each certificate holder. Payments may/may not be guaranteed |
|
|
Term
|
Definition
| day which declared dividend is paid to all stockholders owning shares on record date |
|
|
Term
|
Definition
As defined by regulation T its the period of time corresponding to the regular waysettlement period administered by FINRA |
|
|
Term
|
Definition
| Settlement option allows annuitant to receive payments for as long as he lives but desgnates a min. guaranteed period for which payment will be received. If death occurs during the period beneficiary receives payment for remaining time period. |
|
|
Term
|
Definition
| mf sales contract in which customer commits to buying shares in fund on periodic basis over long time period in exchange for lower min. investment |
|
|
Term
|
Definition
| defined in securities law as individual, corp, partnership, association, fund, joint stock co., unincorporated organizations, trust, gov., political subdivision of gov. |
|
|
Term
|
Definition
| MF with investment objective of stable income and minimal capital risk; invests in income producing instruments like preferred stock |
|
|
Term
|
Definition
Interest rate commercial banks charge their prime/most credit worthy customers, generally large organizations |
|
|
Term
|
Definition
| transaction where broker/dealer either buys securities from customers and takes them into its own inventory/ sells securities to customers from its inventory |
|
|
Term
|
Definition
| employee benefit plan established and maintained by employer whereby employee receives share of business profits. $ may be paid directly to employees/deferred until retirement |
|
|
Term
|
Definition
- Option contract giving owner right to sella certain amount of an underlying security @ specified price @ specified time
- the act of exercising put option
|
|
|
Term
|
Definition
| investor who pays premium for the option contract and receives for specified time the right to sell underlying security @ a specified price |
|
|
Term
|
Definition
Investor who receives premium and takes on for a specified time the obligation to buy underlying security @ specified price @ buyer's discretion |
|
|
Term
Real Estate Investment Trust (REIT) |
|
Definition
| Corp./trust that uses pooled capital of many investor to invest in direct ownership of either income property/ mortgage loans. These investment offer tax benefits in addition to interest & cap. gains distributions |
|
|
Term
|
Definition
| Established by corp. BOD that determines which stockolders are entitled to dividends/rights distribution |
|
|
Term
|
Definition
The return of investor's principal in a security and by law must occur w/in 7 bus. days of receiing investor's request for redemption |
|
|
Term
|
Definition
| Retiring an outstanding bond issue @ maturity using money from sale of a new offering |
|
|
Term
Regulated investment Company |
|
Definition
| An investment company to which subchapter M grants special status that allows the flow through of tax consequences on a distribution to shareholders. If 90% of income passed through to shareholder the comp. not subject to tax on this income |
|
|
Term
|
Definition
| The Federal Reserve Board regulation the governs cash accounts & the amount of credit brokerage firms & dealers may extend to customers for purchase of securities. Sets the loans value of marginable securities @ 50% & payment deadline @ 2 days beyond regular settlement date |
|
|
Term
|
Definition
| service provided by mosy mf for the automatic reinvestment of shareholder dividends and cap. gain distributions into additional shares |
|
|
Term
|
Definition
| municipal debt issue whose interest & principal are payable only from specific earnings of an income producing public project |
|
|
Term
|
Definition
benefit offered by mf that allows investor to qualify for reduced sales load on additional purchases according to fund accounts total dollar value |
|
|
Term
|
Definition
Provision of Investment Co. act of 1940 allows investor in mf contractual plan to terminate plan w/in 45 days from mailing date of written notice detailing sc will apply over plan's life. The investor entitled to refund of all sc |
|
|
Term
|
Definition
| Benefit of MF front end load plan entitles investor who cancels plan w/in 18 months to receive investment's current value and refund of sc exceeding 15% |
|
|
Term
|
Definition
Risk that business in which you have invested money will not do well |
|
|
Term
|
Definition
Risk that applies to debt securities (bonds). The investor has extended credit to issuer when bonds are bought. This is the risk issuer won't be able to pay investor back |
|
|
Term
|
Definition
Risk onvestment can't be easily liquidated/sold |
|
|
Term
|
Definition
The uncertainty a particular security may flucuate in price solely due to investor sentiment to martket (also called systematic risk) |
|
|
Term
Money Rate/Interest Rate Risk |
|
Definition
| Interest rates and price have inverse relationship for securities sold primarily for fixed income like bonds & preferred stock. This is the risk interest rates rise and prices of the securities fall |
|
|
Term
Purchasing Power/Inflation Risk |
|
Definition
| The uncertainty that the dollar willnot purchase as much in the future as it does not. This risk is found in all fixed dollar securites such as bonds & fixed annuities |
|
|
Term
|
Definition
Risk that the purchaser of a fixed income security incurs that interest rates will be lower when purchaser seeks to reinvest income received from security |
|
|
Term
|
Definition
| IRA that allows tax free distribution after the investor reaches 59.5 and the account is @ least 5 yrs. old |
|
|
Term
|
Definition
| NYSE rule requiring each member of organization exercise due diligence to learn essential facts about every customer |
|
|
Term
|
Definition
| Any written material a firm distributes to customers/ public in controlled manner (i.e. circulars, research reports, form letters, market letters, text for seminars) |
|
|
Term
|
Definition
Gov. Debt security not negotiable/transferable & may not be used as collateral |
|
|
Term
|
Definition
| variable life policy under which insure fixes both amount and timing of premium payments |
|
|
Term
|
Definition
| MF whose investment objective is to capitalize on the return potential provided by investing primarily in a particular industry/sector of economy |
|
|
Term
|
Definition
| Federal leg. requiring full and fair disclosure of all material info. about issuance of new securities |
|
|
Term
Securities Exchange Act of 1934 |
|
Definition
| Federal leg. created SEC. Act aims to protect investors by regulating exchanges, the otc market, the extension of credit by fed.reserve board, broker/dealers, insider transactions, trading activities, client accounts, and net capital |
|
|
Term
Securities Investor Protection corp. (SIPC) |
|
Definition
| Nonprofit member corp created by act of congress to protect clients of brokerage firms forced into bankruptcy. Member composed of all broker/dealers registered under 1934 act, most Finra members, all members of national securities exchange.Provides brokerage firm customers up to $500,000 coverage for cash & securities held by firms(cash coverage limited to $100k). |
|
|
Term
|
Definition
| Associated person engaging in private securities transaction w/out employing broker/dealer knowledge and consent |
|
|
Term
|
Definition
| 1. illegal practice inducing customers to but mf shares by implying that an upcoming distribution will benefit them |
|
|
Term
|
Definition
| nonmarketable interest bearing US gov. savings bond issued @ discount from par. Interest exempt from state and local tax |
|
|
Term
|
Definition
Nonmarketable interest bearing savings bond issed @ par & purchased only by trading in series EE bonds @ maturity. Interest exempt from state & local tax |
|
|
Term
|
Definition
Date on which ownership changes b/twn buyer & seller |
|
|
Term
|
Definition
(Variable/fixed annuity) - Joint and survivorship
- Life only (straight Life)
- Life with period certain)
|
|
|
Term
|
Definition
| selling of a security, contract, commodity, that seller doesn't own (i.e. investor borrows shares of stock from broker/dealer and sells them on open market has a short position in the stock |
|
|
Term
|
Definition
| used when there is a small amount in dispute no more than $25000 |
|
|
Term
Simplified Employee Pension Plan (SEP) |
|
Definition
| Qualified retirement plan designed for employers w/ 25/fewer employees. Contribution's are made to each emplyees individual retirement account grow tax deferred until retirment |
|
|
Term
|
Definition
| MF underwriter's improper practice of dispursing anything of material value (no more than $100)in addition to normal discounts/concessions associated with the sale/distribution of investment co. shares |
|
|
Term
|
Definition
| MF whose objective is to capitalize on the profit potential of corps. in nonrecurring circumstances, such as undergoing reorganizations / being considered as takeover candidates |
|
|
Term
|
Definition
| increase in # of corp. outstanding shares which decreases stock's par value, Market value of total # of shares stays the same |
|
|
Term
|
Definition
| provides special tax treatment for regulated investment como. |
|
|
Term
|
Definition
| debt obligation back by general credit of issuing corp., that has claims to interest and principal subordinated to ordinary debenture and all other liabilities |
|
|
Term
|
Definition
| Rate of return a taxable bond must earn b/4 taxes in order to = the tax exempt earnings on a municipal bond. # varies w/ investor tax bracket |
|
|
Term
Tax Sheltered Annuity (TSA) |
|
Definition
| insurance contract that entitles holder to exclude all contributions from gross income in the yr. they are made. Tax payable on the earnings is deferred until holder w/draws funds @ retirement. Available to employees of public schools, church org., and other tax exempt org |
|
|
Term
|
Definition
| printed advertisement that solicits indications of interest in a securities offering. Text is limited to basic info. such as name of issuer, type of security, name of underwriter, where prospectus is available |
|
|
Term
|
Definition
Person/corp. responsible for recording names and holding of registered security owners, seeing that certificates are signed by appropriate corp. officers, affixing corp. seal, delivering securities to new owners |
|
|
Term
|
Definition
Marketable US gov. debt w/ maturity less than 6 months; issued through competitive bidding process @ discount from par; they have no fixed interest rates |
|
|
Term
|
Definition
marketable fixed interest US gov. debt security with maturity of more than 10 yrs. |
|
|
Term
|
Definition
| marketable fixed interest US gov. debt security with maturity b/twn 1 & 10 yrs |
|
|
Term
|
Definition
| Generic term for zero coupon bond issued by brokerage firm & collateralized by treasury securities a custodian holds in escrow for investor |
|
|
Term
|
Definition
| equity securities that issuing corp has issued and repurchased from public at current market price |
|
|
Term
|
Definition
A written agreement b/twn insurer and creditor by which the terms of debt issue are set forth such as rate of interest, means of payment, maturity date, terms of prior payment principal, collateral, prorities of claims, and trustee |
|
|
Term
|
Definition
| allows mutual fund to collect fee for promotion/sale of/ another activity connected w/ distribution of shares. Fee cant exceed .75% |
|
|
Term
| Unit Investment Trust (UIT) |
|
Definition
| investment co.that sells redeemable shares in a professionally select portfolio of securities; organized under trust indenture not corp.charter |
|
|
Term
|
Definition
| insurance contract in which @ end of accumulation stage insurance co. guarantees min. total payment to annuitant. |
|
|
Term
|
Definition
1.ERISA guideline stipulating an employee must be entitled to their entire retirement benefits w/in certain period of time even if he no longer works for employer 2.amount of time employee must work b/4 benefit plan contribution made by the employer become employee's property w/out penalty |
|
|
Term
Voluntary accumulation plan |
|
Definition
| A mf account into which investor commits to depositing amounts on a regular basis in addition to initial amount invested |
|
|
Term
|
Definition
| security that gives holder right to purchases securities from the warranr issuer # stipulated subscription price. Usually long term instrument with expiration dates yrs. in future |
|
|
Term
|
Definition
| selling security @ loss for tax purposes and w/in 30 days b4 / after purchasing same / a substantially identical security |
|
|
Term
|
Definition
| Benefit offered by mf whereby customer receives the proceeds of periodic systematic liquidation of shares in account. Amounts received based on fixed dollar amount, fixed # of shares, fixed %/ fixed period of time |
|
|
Term
|
Definition
| seller of an option contract. An option writer takes on obligation to buy/sell the underlying security if and when option buyer exercise option |
|
|
Term
|
Definition
| Rate of return on investment often expressed as annual %age rate |
|
|
Term
|
Definition
| The rate of return on a bond that accounts for thd differencce b/twn bond's aquisition cost and its maturity proceeds including interest income |
|
|
Term
|
Definition
| Corporate/municipal debt security traded @ deep discount from face value. Bond pays no interest but may be redeemed @ maturity for face value. It may be issued @ a discount/ stripped of its coupons and repackaged |
|
|
