User talk:Apfinancial73
APFinancial Personal Casualty loss A financial loss caused by damage, destruction, or loss of property as a result of an unexpected or unusual event.
Catastrophe call Early redemption of a municipal revenue bond because a catastrophe has destroyed the project that provided the revenue source backing the bond.
Cats and dogs Speculative stocks with short histories of sales, earnings, and dividend payments.
Caveat emptor, caveat subscriptor Latin expressions for "buyer beware" and "seller beware," which warn of overly risky, inadequately protectedmarkets.
Cease-and-desist order An order issued after notice and opportunity for hearing, requiring a depository institution, a holding company or a depository institution official to terminate unlawful, unsafe or unsound banking practices. Cease-and-desist orders are issued by the appropriate federal regulatory agencies under the Financial Institutions Supervisory Act and can be enforced directly by the courts.
APFinancial investment companies Legal transfer A stocktransaction that requires special documentation in addition to standard stock or bond power to be legally valid.
Legislative risk The risk that new or changed legislation will have a large positive or negative effect on an investment.
Legitimate Used in the context of general equities. Real interest in trading as compared to a profile stance. See: Natural.
Lehman Brothers Adjustable-Rate Mortgage Index A benchmarkindex that includes all agency-guaranteedsecurities with coupons that periodically adjust based on a spread over a published index.
APFinancial Representatives
APFinancial Careers: Maloney Act 1938 legislation amending the Securities Exchange Act that regulates the OTC market.
Managed account An investmentportfolio one or more clients entrusted to a manager who decides how to invest it.
Managed float Also known as "dirty" float, this is a system of floating exchange rates with central bank intervention to reduce currencyfluctuations.
Managed Futures In the context of hedge funds, a style of management that focuses on short-termtrading in the futures market.
Management The people who administer a company, create policies, and provide the support necessary to implement the owners' business objectives. APFinancial Net APFinancial Work places APFinancial Investments
Trading range The difference between the high and low pricestraded during a period of time; for commodities, the high/low price limit an exchange establishes for a specific commodity for any one day's trading.
Trading symbol See: Ticker symbol
Trading unit The number of shares of a particular security that is used as the acceptable quantity for trading on the exchanges.
APFinancial Interests APFinancial Job Offers: Accommodative monetary policy Federal Reserve System policy to increase the amount of money available to banks for lending. See: Monetary policy.
Account In the context of bookkeeping, refers to the ledger pages upon which various assets, liabilities, income, and expenses are represented.
APFinancial mutual funds
Inventory turnover A measure of how often the company sells and replaces its inventory. It is the ratio of annual cost of sales to the lastest inventory. One can also interpret the ratio as the time to which inventory is held. For example a ratio of 26 implies that investory is held, on average, for two weeks. It is best to use this ratio to compare companies within an industry (high turnover is a good sign) because there are huge differences in this ratio across industries.
Inverse floater A derivative instrument whose coupon rate is linked to the market rate of interest in an inverse relationship.
Inverse floating-rate note A variable-rate security whose coupon rate increases as a benchmarkinterest rate declines.
APFinancial Investment System Noise See: Dynamical Noise
Systematic Common to all businesses.
Systematic investment plan An approach involving regular investments in order to take advantage of dollar-cost averaging.
APFinancial traditional bank instruments Surplus management Related: Assetmanagement
Surtax A tax added to the normal tax paid by corporations or individuals who have earned income above a certain level.
Surveillance department of exchanges A department that monitors trading activity on an exchange in order to identify any unusual activity that may indicate illegal practices.
Survivorship bias Usually pertaining to fund manager or individual investor performance. Suppose we examined the performance over the last ten years of a group of managers that exist today. This performance is biased upwards because we are only considering those that survived for 10 years. That is, some dropped out because of poor performance. Hence, in evaluating performance, one has to be careful to include both the current and the managers that dropped out of the sample due to poor performance.
APFinancial investment products
APFinancial traditional bank instruments: Small-firm effect The tendency of small firms (in terms of total market capitalization) to outperform the stock market (consisting of both large and small firms).
Small investor An individual person investing in small quantities of stock or bonds. This group of investors makes up a minimal fraction of total stock ownership.
Small issues exemption Securitiesissues that involve less than $1.5 million are not required to file a registration statement with the SEC. Instead, they are governed by Regulation A, for which only a brief offering statement is needed. APFinancial Seminars & Workshops APFinancial Asociates APFinancial Contact
Off-balance-sheet financing Financing that is not shown as a liability on a company'sbalance sheet.
Off-board Used for listed equity securities. Transacted away from a national securities exchange even though the stock itself is listed, such as on the NYSE, and instead of on the OTC market, a regional exchange, or in the third or fourth markets (between customers directly). After 9:30 a.m., if the stock has not opened due to the exchange's discretion, trading can occur elsewhere, but the trader must assume the role of a quasi-specialist in the process.
Off-budget Federal entities Federally owned and controlled entities whose transactions are excluded from the budget totals under provisions of law. Their receipts, outlays, and surplus or deficit are not included in budget receipts, outlays or deficits. Their budget authority is not included in totals of the budget.
APFinancial Comprehensive Proposals APFinancial Job Offers: Settlement rate The rate suggested in Financial Accounting Standards Board (FASB) 87 for discounting the obligations of a pension plan. The rate at which the pension benefits could be effectively settled if the company sponsoring the pension plan wishes to terminate its pension obligation.
Settlement risk The risk that one party will deliver and the counterparty will not be able to pay and vice versa.
Severally but not jointly An agreement between members of an underwriting group buy a new issue (severally), but not to assume joint liability for shares left unsold by other members.
APFinancial a wide variety of investment
Option agreement A form that an optionsinvestor opening an option account fills out guarantees the investor will follow tradingregulations and has the financial resources to settle possible losses.
Option cycle The cycle of optionexpiration months. The most common cycles are: January, April, July, and October (JAJO); February, May, August, and November (FMAN); and March, June, September, and December (MJSD).
Option elasticity The percentage increase in an option's value, given a 1 percentage point change in the value of the underlying security.
APFinancial Insurance Leasehold An asset providing the right to use property under a lease agreement.
Leasehold improvement An improvement made to leased property.
Lease-purchase agreement An agreement that allows for portions of lease payments to be used to purchase the leased property.
Lease rate The payment per period stated in a leasecontract.
Lease term The life of a lease, including any renewal options.
APFinancial Careers Optimization approach to indexing An approach to indexing that seeks to optimize some objective, such as to maximize the portfolioyield, to maximize convexity, or to maximize expected total returns.
Optimum capacity The amount of manufacturing output that creates the lowest cost per unit.
Optimum Leverage Ratio The borrowing level that maximizes the value of the firm. The cost of capital to the firm is minimized at that same level.
Option Gives the buyer the right, but not the obligation, to buy or sell an asset at a set price on or before a given date. Investors, not companies, issue options. Buyers of call options bet that a stock will be worth more than the price set by the option (the strike price), plus the price they pay for the option itself. Buyers of put options bet that the stock's price will drop below the price set by the option. An option is part of a class of securities called derivatives, which means these securities derive their value from the worth of an underlying investment.
Option account A brokerage account that is approved to hold optionpositions or trades.
Option-adjusted spread (OAS) (1) The spread over an issuer'sspot rate curve, developed as a measure of the yieldspread that can be used to convert dollar differences between theoretical value and market prices. (2) The cost of the implied call embedded in an MBS, defined as additional basis-yield spread. When added to the base yield spread of an MBS without an operative call produces the option-adjusted spread.
APFinancial
APFinancial investment companies: American Association of Individual Investors (AAII) A not-for-profit organization to educate individual investors about stocks, bonds, mutual funds, and other financial instruments.
American Depositary Receipt (ADR) Certificates issued by a US depository bank, representing foreign shares held by the bank, usually by a branch or correspondent in the country of issue. One ADR may represent a portion of a foreign share, one share or a bundle of shares of a foreign corporation. If the ADR's are "sponsored," the corporation provides financial information and other assistance to the bank and may subsidize the administration of the ADR. "Unsponsored" ADRs do not receive such assistance. ADRs are subject to the same currency, political, and economic risks as the underlying foreign share. Arbitrage keeps the prices of ADRs and underlying foreign shares, adjusted for the SDR/ordinary ratio essentially equal. American depository shares (ADS) are a similar form of certification. APFinancial Job Offers APFinancial growth rate APFinancial investment companies
Tombstone Advertisement listing the underwriters of a securityissue.
Ton $100 million in bondtrader'sterms.
too-big-too-fail Government practices that protect large banking organizations from the normal discipline of the marketplace because of concerns that such institutions are so important to markets and their positions so intertwined with those of other banks that their failure would be unacceptably disruptive, financially and economically.
APFinancial Insurance APFinancial mutual funds: Amount outstanding and in circulation All currency issued by the Bureau of the Mint and intended as a medium of exchange. Coins sold by the Bureau of the Mint at premium prices are not included; uncirculated coin sets sold at face value plus handling charge are included.
Amsterdam Exchange (AEX) Exchange that comprises the AEX-Effectenbeurs, the AEX-Optiebeurs (formerly the European Options Exchange or EOE) and the AEX-Agrarische Termijnmarkt. AEX-Data Services is the operating company responsible for the dissemination of data from the Amsterdam Exchange via its integrated Mercury 2000 system.
AMTEL Used in context of general equities. In-house message system entered and displayed through Quotron A page.
APFinancial Interests
Back-to-back financing An intercompany loan channeled through a bank.
Back-to-back loan A loan in which two companies in separate countries borrow each other's currency for a specific time period and repay the other's currency at an agreed-upon maturity.
Backup line A commercial paper issuer's bank line of credit covering maturing notes if, for some reason, selling new notes to cover the maturing notes is not possible.
APFinancial Job Offers Repurchase of stock Technique to pay cash to firm'sshareholders that provides more preferential tax treatment for shareholders than dividends. Treasury stock is the name given to previously issuedstock that has been repurchased by the firm. A repurchase is achieved through either a Dutch auction, open market, purchase, or tender offer.
Required minimum distribution (RMD) The minimum amount that the IRS requires must be withdrawn each year from all tax-advantaged retirement plans starting in the calendar year following the year in which the plan holder reaches age 70-1/2. Roth IRAs are exempt from this rule.
Required Rate of Return (RRR) The minimum expected yield by investors require in order to select a particular investment.
Required reserves The dollar amounts, based on reserve ratios, that banks are required to keep on deposit at a Federal Reserve Bank.
APFinancial investment products Technical analysts Also called chartists or technicians, analysts who use mechanical rules to detect changes in the supply of and demand for a stock, and to capitalize on the expected change.
Technical condition of a market Demand and supply factors affecting price, in particular, the net position, either long or short, of the dealer community.
Technical descriptors Variables that are used to describe the market in terms of patterns in historical data.
Technical forecasting A forecasting method that uses historical prices and trends.
APFinancial Seminars & Workshops
- With rights
Shares sold accompanied by entitlement the buyer to buy additional shares in the company's rights issue.
Withdrawal plan Agreement that a mutual fund will disburse automatic periodic redemptions to the investor.
Withholding Used in the context of securities, the illegal practice of a public offering participant keeping some shares in a private account or with a family member, employee, or dealer to profit from the higher market price of a hot issue. Used in the context of taxes, the withholding by an employer of a certain amount of an employee's income in order to cover the employee's tax liability. Also used to refer to the withholding by corporations and financial institutions of a flat 10% of interest and dividend payments due to security holders.
Withholding tax A tax levied by a country of source on income paid, usually on dividends remitted to the home country of the firm operating in a foreign country.
Without Indicates a one-way market if 70 were bid in the market and there was no offer, the quote would be "70 bid without.". APFinancial Asociates APFinancial growth rate APFinancial a wide variety of investment
Multicurrency loans Gives the borrower the possibility of drawing a loan in different currencies.
Multifactor CAPM A version of the capital asset pricing model derived by Robert Merton that includes extra-market sources of risk referred to as factors. Related: arbitrage pricing theory
Multifamily loans Loans usually represented by conventional mortgages on multi-family rental apartments.
Multilateral Investment Guarantee Agency (MIGA) Agency established by the World Bank that offers various forms of political riskinsurance to corporations.
APFinancial Careers APFinancial mutual funds: After acquired clause A contractual clause in a mortgage agreement stating that any additional mortgageable property attained by the borrower after the mortgage is signed will be regarded as additional security for the obligation addressed in the mortgage.
After-hours dealing or trading Securitiestrading after regular trading hours on organized exchanges.
Aftermarket See: Secondary market.
After-tax basis The comparisonbasis used to analyze the net after-tax returns on a corporate taxable bond and a municipal tax-free bond.
APFinancial Net
Buy-and-write strategy An optionsstrategy that calls for the purchase of stocks and the writing of covered call options on them.
Buy the book An order typically from a large institutional investor to a broker to purchase all the shares available at the market from the specialist and other brokers and dealers at the current offer price. The book refers to the record a specialist kept before the advent of computers.
Buydown A lump sum payment made to the creditor by the borrower or by a third party to reduce the amount of some or all of the consumer's periodic payments to repay the indebtedness.
Buy hedge See: Long hedge
Buy in To cover, offset, or close out a short position. Related: Evening up, liquidation.
APFinancial Comprehensive Proposals Classified stock The division of stock into more than one class of common stock, usually called Class A and Class B. The specific features of each class, which are set out in the charter and bylaws, usually give certain advantages to the Class A shares, such as increased voting power.
Claused Bill of Lading A bill of lading with a notation that indicates damage or shortage. Also called foul bill of lading and are the opposite of clean bills of lading.
Clawback The ability to recover prior project cash flow that may have been distributed or paid away as dividends to sponsors.
APFinancial Representatives Living benefits Life insurance benefits from which the insured can draw cash while still living, usually in the case of some high-cost illness.
Living trust A trust that an individual establishes during the individual's lifetime, enabling the person to control the assets contributed to the trust. Also known as an inter vivos trust.
Living will A document specifying the kind of medical care a person wants-or does not want-in the event of terminal illness or incapacity.
Lloyds of London A marketplace in London for underwriting syndicates.
Load The sales fee charged to an investor when shares are purchased in a load fund or annuity. See: Back-end load; front-end load; level load.
Load fund A mutual fund that sells shares with a sales charge-typically 4% to 8% of the net amount indicated. Some no-load funds also levy distribution fees permitted by Article 12b-1 of the Investment Company Act; these are typically 0. 25%. A true no-load fund has neither a sales charge nor a distribution fee.
Load-to-load Arrangement whereby the customer pays for the last delivery when the next one is received.
APFinancial Contact
- Savings deposits
Accounts that pay interest, typically at below-market interest rates, that do not have a specific maturity, and that usually can be withdrawn upon demand.
Savings element Used in the context of life insurance, the cash value built up in a policy, which equals the amount of premium paid minus the cost of protection. This excess is invested by the insurance company, and the returns are tax-deferred inside the policy. APFinancial Investment APFinancial APFinancial Work places
Clearing Member Trade Agreement (CMTA) An agreement that allows a client to executederivativetrades through different brokers yet consolidate positions for clearing purposes at one brokerage firm.
Clientele effect Describes the tendency of funds or investments to be followed by groups of investors who have similar preferences for a firm which follows a particular financing policy, such as the amount of leverage it uses.
Clone fund A new fund set up in a fund family to emulate another successful fund.
APFinancial Investments APFinancial mutual funds: Multinational restructuring Changing the terms of an MNC'sassets or liabilities by mutual agreement.
Multi-option financing facility A syndicated confirmed credit line with attached options.
Multiperiod immunization A portfoliostrategy in which a portfolio is created that will be capable of satisfying more than one predetermined future liability regardless of interest rate changes.
APFinancial Personal
Aggregation Process in corporate financial planning whereby the smaller investment proposals of each of the firm's operational units are aggregated and effectively treated as a whole.
Aggressive Growth Hedge Fund In the context of hedge funds, a style of management that focuses primarily on equities that are expected to have strong earnings growth.
Aggressive growth mutual fund A mutual fund designed for maximum capital appreciation that places its money in companies with high growth rates.
APFinancial mutual funds Target cash balance Optimal amount of cash for a firm to hold, considering the trade-off between the opportunity costs of holding too much cash and the trading costs of holding too little cash.
Target company Often used in risk arbitrage. Firm chosen as an attractive takeover candidate by a potential acquirer. The acquirer may buy up to 5% of the target'sstock without publicdisclosure, but it must report all transactions and supply other information to the SEC, the exchange the target company is listed on, and the target company itself once the 5% threshold is hit. See: Raider.
Target firm A firm that is the object of a takeover by another firm.
APFinancial traditional bank instruments Net operating margin The ratio of net operating income to net sales.
Net parity Antithesis of gross parity. Convertibles: Price of a convertible security including accrued interest. International: Price of international security including commissions, fees, stamp duty, and other transactioncosts, translated into U.S. dollar amounts.
Net period The period of time between the end of the discount period and the date payment is due.
APFinancial traditional bank instruments
- Tick-test rules
SEC-imposed restrictions on when a short sale may be executed, intended to prevent investors from destabilizing the price of a stock when the market price is falling. A short sale can be made only when either (1) the sale price of the particular stock is higher than the last trade price (referred to as an uptick trade) or (2) if there is no change in the last trade price of the particular stock, the previous trade price must be higher than the trade price that preceded it (referred to as a zero uptick).
Ticker symbol An abbreviation assigned to a security for trading purposes.
Ticker tape Computerized device that relays to investors around the world the stock symbol and the latest price and volume on securities as they are traded.
Ticket An abbreviation of order ticket. APFinancial Representatives APFinancial Investments APFinancial Seminars & Workshops
Net quick assets Cash, marketable securities, and accounts receivable less current liabilities.
Net realized capital gains per share Capital gains realized by an investment companyminus any capital losses divided by the total number of the company's outstandingshares.
Net sales Gross sales less returns and allowances, freight out, and cash discounts allowed.
Net sales transaction Refers to over-the-counter trading. Securities deal in which the quoted prices include commissions (i.e., OTC); looked at another way, the buyer and seller do not pay fees or commissions in addition to the print or quotation prices.
APFinancial Work places APFinancial investment products: Budget A detailed pro forma schedule of financial activity, such as an advertising budget, a sales budget, or a capital budget.
Budget authority Broad responsibility conferred by Congress that empower government agencies to spend federal funds. Congress can specify criteria for the spending of these funds. For example, it may stipulate that a given agency must spend within a specific year, number of years, or any time in the future.
The basic forms of budget authority are; appropriations, authority to borrow, contract authority, and authority to obligate and expend offsettingreceipts and collections. The period of time during which Congress makes funds available may be specified as one-year, multiple years or no year. The available amount may be classified as either definite or indefinite; a specific amount or an unspecified amount can be made available. Authority may also be classified as current or permanent. Permanent authority requires no current action by Congress.
Budget deficit The amount by which government spending exceeds government revenues.
APFinancial
Tax software Computer software designed to assist taxpayers in filling out tax returns and minimizing tax liability.
Tax status election The decision of the status under which to file a tax return. For example, a corporation may file as a C corporation or an S corporation.
Tax straddle Technique used in futures and optionstrading to create tax benefits. For example, an investor with a capital gain takes a position creating an artificial offsettingloss in the current tax year and postponing a gain from the position until the next tax year.
APFinancial Personal Contrarian An investment style that leads one to buyassets that have performed poorly and sell assets that have performed well. There are two possible reasons this strategy might work. The first is a mean-reversion argument; that is, if the asset has deviated from its usual level, it should eventually return to that usual level. The second reason has to do with overreaction. Investors might have overreacted to bad news sending the asset price lower than it should be.
Contrarian investing Ignoring markettrends by buyingsecurities that the investor considers undervalued and out of favor with other investors.
Contributed capital See: Paid-in capital
Contribution Money placed in an individual retirement account (IRA), an employer-sponsored retirement plan, or other retirement plan for a particular tax year. Contributions may be deductible or nondeductible, depending on the type of account.
APFinancial growth rate Quality of earnings Increased earnings due to increased sales and cost controls, as compared to artificial profits created by inflation of inventory or other asset prices.
Quality option Gives the seller choice of deliverables in Treasury bond and Treasury notefutures contracts. Also called the swap option. Related: Cheapest to deliver issue.
Quantitative analysis An assessment of specific measurable securities or investmentfactors, such as cost of capital, value of assets; and projections of sales, costs, earnings, and profits. Combined with more subjective or qualitative considerations (such as management effectiveness), quantitative analysis can enhance investment decisions and portfolios.
APFinancial Insurance
- Blanket certification form
See: NASD form FR-1
Blanket fidelity bond SEC-required insurance coverage that brokerage firms are required to have in order to cover fraudulent trading by employees.
Blanket inventory lien A secured loan that gives the lender a lien against all the borrower'sinventories.
Blanket Mortgage A mortgage that covers at least two pieces of real estate as collateral for the same mortgage.
Blanket recommendation A recommendation by a brokerage firm sent to all its customers advising that they buy or sell a particular stock regardless of investment objectives or portfolio size.
Blind pool A limited partnership that does not announce its intentions as to what properties will be acquired. APFinancial investment companies APFinancial Investment APFinancial Careers
Central bank intervention The buying or selling of currency, foreign or domestic, by central banks in order to influence market conditions or exchange rate movements.
Central Limit Theorem The Law of Large Numbers states that as a sample of independent, identically distributed random numbers approaches infinity, its probability density function approaches the normal distribution. See: Normal Distribution.
Centralized cash flow management Provision of consolidated cash management decisions to all MNCunits from one location, usually at the parent's headquarters.
Cents per share The amount of a mutual fund'sdividend or capital gains distributions that a shareholder will receive for each share owned.
Checkwriting Free checkwriting privileges offered with non retirement accounts for select mutual funds.
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