Home Forums General Knowledge for Law Entrance Exams Glossary of Economic and Financial Terms

  • This topic is empty.
Viewing 1 post (of 1 total)
  • Author
  • #26191
    Law Giri

    Accrued interest:  The interest due on a bond since the last interest payment was made. The buyer of the bond pays and market price plus accrued interest.


    Acquisition:  The acquiring of control of one corporation by another. In “unfriendly” takeover attempts, the potential buying company may offer a price well above current market values, new securities and other inducements to stockholders. The management of the subject company might ask for a better price or try to join up with a third company might ask for a better price or try to join up with a third company.


    Active Market:  This is a term used by stock exchange which specifies the particular stock or share that deals in frequent and regular transactions. It helps the buyers to obtain reasonably large amounts any time.


    Administered Prices:  When the prices of an item or a commodity are decided by the central power, generally the government or any other agency and not on the basis of demand and supply, such types of prices are called Administered Prices.


    Advalorem Tax:   Ad- valorem tax is a kind of indirect tax in which goods are taxed by their values. In the case of ad-valorem tax, the tax amount is calculated as the proportion of the price of the goods. Value Added Tax (VAT) is an ad-valorem tax. In other words when the tax is determined on the basis of value of a commodity, it is known as Ad- valorem tax.


    Amalgamation:  it means ‘merger’. As and when necessity arises two or more companies are merged into a large organization. The old firms completely lose their identity when the merger takes place.


    American Depositary Receipt (ADR):   A security issued by a U.S bank in place of the foreign shares held in trust by that bank, thereby facilitating the trading of foreign shares in U.S markets.


    Amortization: Accounting for expenses or charges as applicable rather than as paid. Includes such practices as depreciation, depletion, write-off of intangibles, prepaid expenses and deferred charges.


    Annual report:  The formal financial statement issued yearly by a firm, composing or corporation. The annual report shows assets, liabilities revenues, expenses and earnings – how the company stood at the close of the business year, how it fared profit- wise during the year, as well as other information of interest to shareowners.


    Appreciation:  Appreciation means an increase in the value of something e.g. stock of raw materials or manufactured goods. It also includes an increase in the traded value of currency. It is an increase in the value of assets over a particular time period. Example: land, building, paintings etc. Appreciation is just opposite to depreciation. When the prices rise due to inflation, appreciation may occur.


    Arbitrage: A technique employed to take advantage of differences in price.  If, for example, ABC stock can be bought in New York for $10 a share and sold in London a t $10.50, an arbitrageur may simultaneously purchase ABC stock here and sell the same amount in London, making a profit of $.50 a share, less expenses. Arbitrage may also involve the purchase of rights to subscribe to a security, or the purchase of a convertible security – and the sale at or about the same time of the security obtainable through exercise of the rights or of the security obtainable through conversion


    Arbitration: Where there is an industrial dispute, the Arbitration comes to the force. The judgment is given by the Arbitrators. Both the parties have to accept and honor the Arbitration. Arbitration is the settlement of labour disputes that takes place between employer and the employees.


    Assets: everything a corporation or an organization owns or that is due to it: cash, investments, money due it, materials and inventories, which are called current assets: buildings and machinery, which are known as fixed assets: and patent and goodwill, called intangible assets.


    Auction: when a commodity is sold by auction, the bids are made by the buyers,. Who so ever makes the highest bid, gets the commodity which is being sold. The buyers make the bid taking into consideration the quality and quantity of the commodity.


    Auction market: The system of trading securities through brokers or agents on an exchange such as the Bombay Stock Exchange. Buyers compete with other buyers while sellers compete with other sellers for the most advantageous price.


    Auditor’s report: Often called the accountant’s opinion, it is the statement of the accounting firm’s work and its opinion and the corporation’s financial statements, especially if they conform to the normal and generally accepted practices of accountancy.


    Autarchy: It means self-sufficiency and self-reliance of an economy. Autarchy is an indicator of self-sufficiency. It means that the country itself can satisfy the needs of its population without making imports from other countries.


    Averages: various ways of measuring the trend of securities prices, one of the most popular of which is the Dow Jones Industrial Average o 30 industrial stocks listed on the New York Stock Exchange. The prices of the 30 stocks are totaled and then divided by a divisor that is intended to compensate for past stock splits and stock dividends, and that is changed from time to time. As a result, point changes in the average have only the vaguest relationship to dollar- price changes in stocks included in the average.


    Balance of Payments:  It is the difference between country’s payments and receipts from other countries during a year. In the words that balance of payment shows the relationship between the one country’s total payment to all other countries and its total receipts from them. Balance of Payment not only includes visible export and import commodities and total value of imports commodities. Thus, balance of trade includes only visible trade i.e. movement of goods (exports and imports of goods). Balance of trade is part of Balance of Payment statement.


    Balance of Trade: it refers to the relationship between the values of country’s imports and its export, i.e. the visible balance. Balance of trade refers to the total of country’ export commodities and total value of imports commodities. Thus, balance of trade includes only visible trade i.e. movement of goods (exports and imports of goods). Balance of trade is part of Balance of payment statement.


    Balance Sheet: Balance sheet is a statement showing the assets and liabilities of a business at certain date. Balance sheet helps in estimating the real financial situation of a firm.


    Bank: Bank is a financial institution. It accepts funds on current account and savings accounts it also lends money. The bank pays the cheques drawn by customers against current or savings bank account. The bank is a trader that deals in money and credit.


    Bank Draft: Banker’s draft (Demand Draft) is a negotiable claim drawn upon a bank. Drafts are as good as cash. The drafts cannot be returned unpaid. Bank Draft is safer than a cheque.


    Bank Rate: It is official rate of interest charged by Reserve Bank of India on loans to other banks. It is the rate at which R.B.I. discounts first class securities including bills of exchange. Thus, it is also known as discount rate.


    Bankruptcy: It is a situation in which a person is unable to discharge his debt obligations.


    Basis point: one gradation on a 100 point scale representing 1% used especially in expressing variations in the yields of bonds. F9ixed income yields vary often and slightly within one percent and the basis point scale easily expresses these changes in hundredths of 1% for example, the difference between 12.83 % and 12.88 % is 5 basis points.


    Basket of Currency: In this system the exchange value of a country’s currency is fixed in terms of some major international currencies. Indian rupee is valued against US Dollar, British Pound, Japanese Yen, French Franc and German Deutsche Mark. India opted for this system in 1975.


    Bear and Bull:  These terms are used in stock exchange. ‘Bear’ is an individual who sells shares in a hope that the stock’s price would fall. ‘Bull’ is an individual who buys shares in a hope that the stock’s price would rise.


    Bearer bond: A bond that does not have the owner’s name registered on the books of the issuer. Interest and principal, when due, are payable to the holder.

    Bid and Asked: Often referred to as a quotation or quote. The bid is the highest price anyone wants to pay for a security at a given time; the asked is the lowest price anyone will take at the same time.


    Bill of Exchange :  It is an unconditional order in writing addressed by one person to another requiring the addressee to pay on demand or at a fixed future time a certain sum of money to the order of the specified person or to the bearer.


    Birth Rate: Birth Rate (or Curde Birth Rate) is number of the births per thousand of the population during a period, usually a year. Only live births are included in the calculation of birth rate.


    Black Money: It is unaccounted money which is concealed from tax authorities. All illegal economic activities are dealt with this black money. Howala market has deep roots with this black money. Black money creates parallel economy. It puts an adverse pressure on equitable distribution of wealth and income in the economy.


    Block: A large holding or transaction of stock – popularly considered to be 10, 000 shares or more.


    Blue Chip: It is the most reliable industrial shares on a stock exchange. It is concerned with such equity shares whose purchase is extremely safe. It is a safe investment. It does not involve any risk.


    Blue Collar Jobs: These Jobs are concerned with factory. Persons who are unskilled and depend upon manual jobs that require physical strain on human muscle are said to be engaged in Blue Collar Jobs. In the age of machinery, such Jobs are on the decline these days.


    Blue Sky Laws: A popular name for laws various states have enacted to protect the public against securities frauds. The term (generally used in the context U.S.A) is believed to have originated when a judge ruled that a particular stock had about the same value as a patch of blue sky.


    Bond: A bond is evidence of a debt on which the issuing company usually promises to pay the bondholders a specified amount of interest for a specified length of time, and to repay the loan on the expiration date.


    Book Value: An accounting term. Book value of a stock is determined from a company’s records, by adding all assets then deducting all debts and other liabilities, plus the liquidation price of any preferred issues. The sum arrived at is divided by the number of common shares outstanding and the result is book value per common share. Book value of the assets of a company or a security may have little relationship to market value.


    Boom: The point at which price and employment are the maximum. The trade is also at its highest point and beyond this no upward movement is possible.


    Bounty: It is a subsidy paid by the government to exporters. It reduces the price of exportable goods and hence acts as incentive to enhance exports


    Brain-Drain: It means the drift of intellectuals of a country to another country. Scientists, doctors and technology experts generally go to other prominent countries of the world to better their to and earn huge sums of money. This brain – drain deprives a country of its genius and capabilities.


    Bridge loan: A loan made by a bank for a short period to make up for a temporary shortage of cash. On the part of borrower, mostly the companies, for example, a business organization wants to install a new company with new equipments etc. while its present installed company or equipments etc. are not yet disposed off. Bridge loan covers this period between the buying the new and disposing of the old one.


    Broad Banding: It means providing more flexibility to manufacturers to produce wider variety of products with same raw material mix so as to ensure optimum capacity.


    Broker: An agent who handles the public’s order to buy and sell securities, commodities or other property. A commission is charged for this service.


    Brokers’ loans: Money borrowed by brokers from banks or other brokers for a variety of uses. It may be used by specialists to help finance inventories of stock they deal in; by brokerage firms to finance the underwriting of new issues of corporate and municipal securities; to help finance a firm’s own investments; and to help finance the purchase of securities for customers who prefer to use the broker’s credit when they buy securities.


    Budget: It is a document containing a preliminary approved plan of public revenue and public expenditure. It is a statement of the estimated receipt and expenses during a fixed period. It is a comparative table giving the accounts of the receipts to be realized and of the expenses to be incurred.


    Budget Deficit: Budget deficit is the difference between the estimated public expenditure and public revenue. The government meets the deficit by way of printing new currency or by borrowing. Budget may take a shape of deficit when the public revenue falls short to public expenditure.


    Buffer stocks: These are the stocks (generally of primary goods) accumulated by a government agency when supply is plentiful. These stocks are released in case of shortage of supply. In India Food Corporation of India (FCI) accumulates food grains as buffer stocks.


    Bullion: It is gold or silver having a specific degree of purity. Generally it is in the form of gold or silver bars.

    Bull Market: it is a market where the speculators buy shares or commodities in anticipation of rising prices. This market enables the speculators to resale such shares and make a profit. The opposite is bear market.


    Buoyancy:  In the inflationary period, the increase in tax revenue is known as buoyancy. When the government fails to check inflation, it raises income tax and the corporate tax. Such a tax is called buoyancy. It concerns with the revenue from taxation in the period of inflation.


    Buyer’s market: when the market is favorable to buyer’s market. This situation occurs when there is a change from boom to recession i.e demand is less than supply.


    Buy side: The portion of the securities business in which institutional orders originate.


    Callable: A bond issue, all or part of which may be redeemed by the issuing firm, institution or organization under specified conditions before maturity. The term also applies to preferred shares that may be redeemed by the issuing organization.


    Call Money: It is a loan that is made for a very short period of a few days only or for a week. It carries a low rate of interest. In case of stock exchange market, the duration of the call money may be for a fortnight.


    Capital: The stock of goods which are used in production and which themselves have been produced. It is one of the major factors of production, the other being land, labour and entrepreneurship.


    Capitalism: The economic system based on free enterprise and private profit. Capitalism is an economic system in which all means of production are owned by private individuals. Self-profit motive is the guiding feature for all the economic activities under capitalism. Under pure capitalist system economic conditions are regulated solely by free market forces. This system is based on ‘laissez- faire system’ i.e., on state intervention. Sovereignty of consumer prevails in this system.


    Capital Market: It is a market for long term loans. Capital market is the market which gives medium term and long term loans. It is different form money market which deals only in short term loans.


    Capital stock: All shares representing ownership of a business, including preferred and common.


    Capitalization: Total amount of the various securities issued by organization or a company. Capitalization may include bonds, debentures, preferred and common stock, and surplus. Bonds and debentures are usually carried on the books of the issuing company in terms of their par or face value. Preferred and common shares may be carried in terms of par or stated value. Stated value may be an arbitrary figure decided upon by the director or may represent the amount received by the company from the sale of the securities at the time of issuance.

    Cash flow : Reported net income of a corporation plus amounts charged off for depreciation, depletion, amortization, and extraordinary charges to reserves, which are book keeping deductions and not pain out in actual  rupees and Paisa or dollars and cents.


    Cash Reserve Ratio (CRR): It refers to that portion of banker’s total cash reserves which they are statutorily required to hold with the R.B.I. the commercial banks are required to keep a certain amount of cash reserves at the central bank i.e. RBI. This percentage amount is called CRR. It influences the commercial bank’s volume of credit because variation in CRR affects the liquidity position of the banks and hence their ability to lend.


    Cash Sale: A transaction on the floor of the stock exchange that calls for delivery of the securities the same day. In “regular way” trade, the seller is to deliver on the third business day, except for bonds, which are the next day.


    Ceiling Prices: This is the maximum limit fixed generally by government or its agency. Beyond it the price cannot rise.


    Certificate: the actual piece of paper that is evidence of ownership of stock in a company or an organization. Watermarked paper is finely engraved with delicate etchings to discourage forgery.


    Certificate of deposit (CD): A money market instrument characterized by its set date of maturity and interest rate. There are two basic types of CDs: traditional and negotiable. Traditional bank CDs typically incur an early withdrawal penalty, while negotiable CDs have secondary market liquidity with investors receiving more or less than the original amount depending on market conditions.


    Cheap Money: It indicates a situation when bank rate and other rates of interest are low.


    Cheque : Cheque is an order in writing issued by the drawer to a bank. If the customer has sufficient amount in his account, the cheque is paid by the bank. Cheques are used in place of cash money.


    Clearing House: Clearing house is an institution which helps to settle the mutual indebtedness that occurs among the members of its organization.


    Closed Economy: Closed economy refers to be economy having no foreign trade (i.e. export and import). Such economies depend exclusively on their own internal domestic resources and have no dependence on outside world.


    Collateral: Securities or other property pledged by a borrower to secure repayment of a loan.


    Commercial Paper: Debt instruments issued by companies to meet short- term financing needs.


    Commission: The broker’s basic fee for purchasing or selling securities or property as an agent.

    Commission broker: An agent who executes the public’s orders for the purchase or sale of securities or commodities.


    Common stock: securities that represent an ownership interest in a company. If the company has also issued preferred stock, both common and preferred have ownership rights. Common stockholders assume the greater risk, but generally exercise the greater control and may gain the greater award in the form of dividends and capital appreciation. The terms common stock and capital stock are often used interchangeably when the company has no preferred stock.


    Competitive trader: A member of the exchange who trades in stocks on the floor for an account in which there is an interest. Also known as a registered trader.


    Conglomerate: a company or an organization that has diversified it s operations usually by acquiring enterprises in widely varied industries.

    Consolidated balance sheet: A balance sheet showing the financial condition of a corporation and its subsidiaries.


    Convertible: A bond, debenture or preferred share that may be exchanged by the owner for common stock or another security, usually of the same company, in accordance with the terms of the issue.


    Core Industries: Core Industries include strategic, basic and critical industries which remain generally under state control, e.g. defense, iron and steel, fertilizers etc.


    Core Sector: Economy needs basic infrastructure for accelerating development. Development of infrastructure industries like cement, iron and steel, petroleum, heavy machinery etc. can only ensure the development of the economy as a whole. Such industries are core sector industries.


    Corporate Tax: It is a direct tax levied on company’s profit. It is calculated on profits after interest and allowance (i.e. capital allowance) have been deducted.


    Correspondent: A securities firm, bank or other financial organization that regularly performs services for another in a place or market to which the other does not have direct access. Securities firms may have correspondents in foreign countries or on exchanges of which they are not members. Correspondents are frequently linked by private wires.


    Cost Price Index (CPI): It is used for measuring cost of living and it covers large number of commodities than Wholesale Price Index (WPI) which is used for measuring rate of inflammation.


    Coupon bond: Bond with interest coupons attached. The coupons are clipped as they come due and presented by the holder for payment of interest.


    Credit Control: It implies the measures employed by central bank of a country to control the volume of credit in the banks.


    Credit Rating: It is the assessed credit worthiness of prospective customer.


    Credit Rationing: Credit rationing takes place when the banks discriminates between the borrowers. Credit rationing empowers the bank to lend to someone and refuse to lend others. In this way credit rationing restricts lending on the part of bank.


    Credit Squeeze: Monetary authorities restrict credit as and when required. This credit restriction is called credit squeeze. In other words when the credit control is very tight and restrict, this situation is known as credit squeeze.


    Cumulative preferred: A stock having a provision that if one or more dividends are omitted, the omitted dividends must be paid before dividends may be paid on the company’s common stock.

    Current assets: Those assets of a company that are reasonably expected to be realized in cash, sold or consumed during one year. These include cash, Government bonds, receivables and money due usually within one year, as well as inventories.


    Current liabilities: Money owed and payable by a company, usually within one year.

    Custom Duty: It implies tax on imports. Custom duty is a duty that is imposed on the products received from exporting nations of the world. It is also called protective duty as it protects the home industries.


    Cyclical Unemployment: It is that phase of unemployment which appears due to the occurance of the downward phase of the trade cycle. Such an employment is reducted or eliminated when the business cycle turns up again.


    Day order: An order to buy or sell that, if not executed, expires at the end of trading day on which it was entered.


    Dealer: An individual or firm in the securities business who buys and sells stocks and bonds as a principal rather than as an agent. The dealer’s profit or loss is the difference between the price paid and the price received for the same security. The dealer’s confirmation must disclose to the customer that the principal has been acted upon. The same individual or firm may function, at different times, either as a broker or dealer.


    Death Rate: Death rate signifies the number of deaths in a year per thousand of the population. It is mostly known as crude death rate. Life expectancy is important determinant of death rate. A country having high life expectancy will have a high crude death rate.


    Debentures: It is a document which enlists the terms or conditions of a loan. The debentures are used by corporate sector (companies). The debenture holders are to be paid a fixed annual rate of interest and they have the first claim on the assets of a company as creditors.

    Debit balance: In a customer’s margin account, that portion of the purchase price of stock, bonds or commodities that is covered by credit extended by the broker to the margin customer.


    Decentralization: Decentralization means the establishment of various units of the same industry at different places. Large scale organization or industry cannot be run at one particular place or territory. In order to increase the efficiency of the industry, various units at different places are located.


    Deed: It is a written contract signed under legal seal.


    Deflation: Deflation is a fall in the general price level over a particular period of time. It is opposite to inflation.


    Demand draft: It is a bill of exchange payable at sight.


    Depletion accounting: Natural resources, such as metals, oil, gas and timber, that conceivably can be reduced to zero over the years, present a special problem in capital management. Depletion is an accounting practice consisting of charges against earnings based upon the amount of the asset taken out of the total a reserve in the period for which accounting is made. A bookkeeping entry, it does not represent any cash outlay nor are any funds earmarked for the purpose.


    Depository Trust Company (DTC): A central securities certificate depository through which members affect security deliveries between each other via computerized bookkeeping entries thereby reducing the physical movement of stock certificates.


    Depression: It is just opposite to “boom”. It implies a state of economy when lack of demand result in heavy unemployment and stagnation in economy.


    Devaluation: It is the reduction in the official rate of a currency in terms of a foreign currency; Indian rupee has been devalued thrice in 1949, 1966 and 1991.


    Director: Person elected by shareholders to serve on the board of directors. The directors appoint the president, vice presidents, and all other operating officers, Directors decide, among other matters, if and when dividends shall be paid.


    Direct Tax: It is a tax whose burden cannot be shifted i.e. the burden of direct tax is borne by the person on whom it is initially fixed, e.g.- personal income tax, social security tax paid by employees, death tax etc.


    Discount: The amount by which a preferred stock or bond may sell below its par value. Also used as a verb to mean “takes into account” as the price of the stock has discounted the expected dividend cut.

    Discretionary account: An account in which the customer gives the broker or someone else discretion to buy and sell securities or commodities, including selection, timing, amount, and price to be paid or received.


    Diversification: Spreading investments among different types of securities and various companies in different fields.


    Dividend: It is earnings on stocks paid to shareholders.


    Dow theory: A theory of market analysis based upon the performance of the Dow Jones Industrial Average and transportation stock price averages. The theory says that the market is in a basic upward trend if one of these averages advances above a previous important high, accompanied or followed by a similar advance in the other. When both averages dip below previous important lows, this is regarded as confirmation of a downward trend. The Dow Jones is one type of market index.


    Dumping: It means selling goods in international market at a price which is lower than in domestic or home market.


    Earnings report: A statement, also called an income statement. Issued by a company showing its earnings or losses over a given period. The earnings report lists the income earned, expenses and the net result.


    Elasticity of demand: The responsiveness of demand of a commodity to the change in its price is known as elasticity of demand.


    Embargo: It means prohibition of entry of goods from certain countries into a particular country.


    Engel’s law: Ernest Engel, the 19th century German statistician, analyzed the budget data of working families and established a relationship between the family’s income and expenditure. According to the Law “When a family’s income increases the percentage of its income spent on food decreases.”


    Equity: The ownership interest of common and preferred stockholders in a company. Also refers to excess of value of securities over the debit balance in a margin account.


    Exchange Rate: The rate at which central banks will exchange one country’s currency for another.


    Excise Tax: Tax imposed on the manufacture, sale or the consumption of various commodities, such as taxes on textiles, cloth, liquor etc.


    Ex-dividend: A synonym for “without dividend.” The buyer of a stock selling ex-dividend does not receive the recently declared dividend. When stocks go ex-dividend, the stock tables include the symbol “x” following the name.


    Ex-rights: Without the rights. Corporations/Companies raising additional money may do so by offering their stockholders the right to subscribe to new or additional stock, usually at a discount from the prevailing market price. The buyer of stock selling ex-rights is not entitled to the rights.


    Extra: The short form of “extra dividend.” A dividend in the form of stock or cash in addition to the regular or usual dividend the company has been paying.


    Face value: The value of a bond that appears on the face of the bond, unless the value is otherwise specified by the issuing company. Face value is ordinarily the amount the issuing company promises to pay at maturity. Face value is not an indication of market value. Sometimes referred to as par value.


    Factor cost: It is the sum total of amount paid to four main factors of production i.e. Land (rent), Labour (compensation of employees), Capital (interest), entrepreneurship (profit). It is exclusive of taxes or subsidies.


    FINRA: The Financial Industry Regulatory Authority (f/k/a National Association of Securities Dealers), is the largest non-governmental regulator for all securities firms doing business in the United States. FINRA was created in July 2007 through the consolidation of NASD and the member regulation, enforcement and arbitration functions of the New York Stock Exchange.


    Fiscal year: A firm’s or company’s or a corporation’s accounting year. Due to the nature of their particular business, some companies do not use the calendar year for their bookkeeping. A typical example is the department store that finds December 31 too early a date to close its books after the Christmas rush. For that reason many stores wind up their accounting year January 31 of the next. The fiscal year of other companies may run from July 2 through the following June 30. Most companies, though, operate on a calendar year basis.


    Fixed charges: A company’s fixed expenses, such as bond interest, which it has agreed to pay whether or not earned, and which are deducted from income before earnings on equity capital are computed.


    Flat income bond: This term means that the price at which a bond is traded includes consideration for all unpaid accruals of interest. Bonds that are in default of interest or principal are traded flat. Income bonds that pay interest only to the extent earned are usually traded flat. All other bonds are usually dealt in “and interest,” which means that the buyer pays to the seller the market price plus interest accrued since the last payment date.


    Floating of a Currency: When the exchange value of a currency in terms of other currencies is not fixed officially, that currency is said to be floating.


    Floor: The huge trading area- about the size of a football field – where stocks, bonds and options are bought and sold on the Stock Exchange.


    Floor broker: A member of the stock exchange who executes orders on the floor of the Exchange to buy or sell any listed securities.


    Foreign Exchange Reserves: Foreign Exchange Reserves of a country includes foreign currency assets and interest bearing bonds held by it. In India it also includes SDR and value of gold.


    Formula investing: An investment technique. One formula calls for the shifting of funds from common shares to preferred shares or bonds as a selected market indicator rises above a certain predetermined point – and the return of funds to common share investments as the market average declines.


    Free and open market: A market in which supply and demand are freely expressed in terms of price. Contrasts with a controlled market average declines.


    Free and open market: A market in which supply and demand are freely expressed in terms of price. Contrasts with a controlled market in which supply, demand and price may all be regulated.


    Free Trade: It implies absence of any protective tariffs or trade barriers by any economy with respect to export and import.


    Fundamental research: Analysis of industries and companies based on such factors as sales, assets, earnings, products or services, markets and management. As applied to the economy, fundamental research includes consideration of gross national product, interest rates, unemployment, inventories, savings, etc.


    Funded debt: Usually interest-bearing bonds or debentures of a company. Could include long-term bank loans. Does not include short-term loans, preferred or common stock.


    General mortgage bond: A bond that is secured by a blanket mortgage on the company’s property but may be outranked by one or more other mortgages.


    Gilt-edged: High-gradebond issued by a company that has demonstrated its ability to earn a comfortable profit over a period of years and pay its bondholders their interest without interruption.


    Give-up: A term with many different meanings. For one, a member of the exchange on the floor may act for a second member by executing an order for him or her with a third member. The first member tells the third member that he or she is acting on behalf of the second member and “gives up” the second member’s name rather than his or her own.


    Good delivery: Certain basic qualifications must be met before a security sold on the Exchange may be delivered. The security must be in proper form to comply with the contract of sale and to transfer title to the purchaser.


    Good ‘til canceled (GTC) or open order: An order to buy or sell that remains in effect until it is either executed or canceled.


    Greshan’s law: “If not limited in quantity; bad money drives good money out of circulation.” This statement was given by economist Sir Thomas Gresham, the economic advisor of Queen Elizabeth.


    Gross Domestic Product (GDP): It is the aggregate of total flow of goods and services produced by an economy in a year.


    Gross National Product (GNP): Gross Domestic Product plus net factor income from abroad is equal to Gross National product.


    Growth stock: Stock of a company with a record of growth in earnings at a relatively rapid rate.


    Holding company: A corporation that owns the securities of another, in most cases with voting control.

    Hot Money: It is volatile money which comes easily but can also go out easily, e.g. portfolio investment.


    Hypothecation: The pledging of securities as collateral – for example, to secure the debit balance in a margin account.


    Income bond: Generally income bonds promise to repay principal but to pay interest only when earned. In some cases unpaid interest on an income bond may accumulate as a claim against the corporation when the bond becomes due. An income bond may also be issued in lieu of preferred stock.


    Indenture: A written agreement under which bonds and debentures are issued, setting forth maturity date, interest rate and other terms.


    Independent broker: Member on the floor of the Stock Exchange who executes orders for other brokers having more business at that time than they can handle themselves, or for firms who do not have their exchange member on the floor.

    Index: A statistical yardstick expressed in terms of percentages of a base stocks is based on 1965 as 50. An index is not an average.


    Indirect Tax: Tax levied on goods purchased by the consumer (and exported by the producer) for which the tax payer’s liabilities vary in proportion to the quantity of particular goods purchased or sold.


    Inflation: It is a sustained increase in general price level over a particular period of time. It reduces the purchasing power of money.


    Institutional investor: An organization whose primary purpose is to invest its own assets or those held in trust by it for others. Includes pension funds, investment companies, insurance companies, universities and banks.


    Interest: Payments borrowers pay lenders for the use of their money. A corporation pays interest on its bonds to its bondholders.


    Interim Budget: It is an addition to the general budget and is presented as a part of it through the financial year.


    International Monetary Fund (IMF): It is a multinational institution set up in 1945. It started working as an independent organization in 1947. It seeks to maintain cooperative and orderly currency arrangements between member countries with the aim of promoting increased international trade and BOP equilibrium.


    Interrogation device : A computer terminal that provides market information – last sale price, quotes, volume, etc. – on a screen or paper tape.


    Investment: The use of money for the purpose of making more money, to gain income, increase capital, or both.


    Investment banker: Also known as an underwriter. The middleman between the corporation issuing new securities and the public. The usual practice is for one or more investment bankers to buy outright from a corporation a new issue of stocks or bonds. The group forms a syndicate to sell the securities to individuals and institutions. Investment bankers also distribute very large blocks of stocks or bonds – perhaps held by an estate.


    Investment counsel: One whose principal business consists of acting as investment advisor and rendering investment supervisory services.


    I.O.U.: It means ‘I owe you’. It is non-negotiable promissory note indicating the debt owed by one party to another.

    IRA: Individual retirement account. A pension plan with tax advantages. IRAs permit investment through intermediaries like mutual funds, insurance companies and banks, or directly in stocks and bonds through stockbrokers.


    Issue: Any of a company’s securities, or the act of distributing such securities.


    Joint Stock Company: It is a form of company in which a number of people contribute funds to finance a firm in return for ‘shares’ in the company.


    Keogh plan: Tax-advantaged personal retirement program that can be established by a self-employed individual.


    Laissez-faire: Literally it means ‘to let people do as they choose’. It is an economic doctrine which emphasizes the superiority of ‘free’ trade and ‘free’ markets over state’s interference in economic affairs. It is of French origin of which British variation is ‘Laissez-faire’.


    Legal Tender: It is the currency (coins and bank notes) which have to be accepted in payment.


    Leverage: The effect on a company when the company has bonds, preferred stock, or both outstanding. Example: If the earnings of a company with 1,000,000 common shares increases from $1 to $1.50, or an increase of 50%. But if earnings of a company that had to pay $500,000 in bond interest increased that much, earnings per common share would jump from $.50 to $1 a share, or 100%.


    Liabilities: All the claims against a corporation. Liabilities include accounts, wages and salaries payable; dividends declared payable; accrued taxes payable; and fixed or long-term liabilities, such as mortgage bonds, debentures and bank loans.


    Limit, limited order, or limited price order: An order to buy or sell a stated amount of a security at a specified price, or at a better price, if obtainable after the order is represented in the trading crowd.


    Liquidation: The process of converting securities or other property into cash. The dissolution of a company, with cash remaining after sale of its assets and payment of all indebtedness being distributed to the shareholders.


    Liquidity: The process of converging securities or other property into cash. The dissolution of a company, with cash remaining after sale of its assets and payment of all indebtedness being distributed to the shareholders.


    Liquidity: The ability of the market in a particular security to absorb a reasonable amount of buying or selling at reasonable price changes. Liquidity is one of the most important characteristics of a good market.


    Listed stock: The stock of a company that is traded on a securities exchange.


    Load: The portion of the offering price of shares of open-end investment companies in excess of the value of the underlying assets. Covers sales commissions and all other costs of distribution. The load is usually incurred only on purchase, there being, in most cases, no charge when the shares are sold (redeemed).


    Locked in: Investors are said to be locked in when they have profit on a security they own but do not sell because their profit would immediately become subject to the capital gains tax.


    Manipulation: An illegal operation. Buying or selling a security for the purpose of creating false or misleading appearance of active trading or for the purpose of raising or depressing the price to induce purchase or sale by others.


    Margin: The amount paid by the customer when using a broker’s credit to buy or sell a security. Under Federal Reserve regulation, the initial margin requirement since 1945 has ranged from the current rate of 50% of the purchase price up to 100%.


    Margin call: A demand upon a customer to put up money or securities with the broker. The call is made when a purchase is made; also if a customer’s account declines below a minimum standard set by the exchange or by the firm.


    Market order: An order to buy or sell a stated amount of a security at the most advantageous price obtainable after the order is represented in the trading crowd.


    Market price: The last reported price at which the stock or bond sold, or the current quote.


    Market value: The market value of an equity share is the price at which it is traded in the market.

    This price can be easily established for a company that is listed on the stock market but traded very infrequently, it is difficult to obtain a reliable market quotation. For a company that is not listed on the stock market, one can merely conjecture as to what its market price would be if it were traded.)


    Maturity: The date on which a loan or bond comes due and is to be paid off.


    Merchant Banking: In Merchant Banking banks act as “underwriter” and do business on behalf of corporate sector. Such banking helps in larger participation of people in capital market e.g. ICICI.


    Merger: Combination of two or more corporations.

          MODVAT: The modified system of value added taxation is based on the idea of tax final products and not inputs that go into production.

          Money Market: It is a market engaged in short-term lending and borrowing of money linking together the financial institutions companies and the government.


    Money market fund: A mutual fund whose investments are in high-yield money market instruments such as federal securities, CDs and commercial paper. Its intent is to make such instruments, normally purchased in large denominations by institutions, available indirectly to individuals.


    Monopoly: It is a type of market structure having one seller and many buyers. There is a lack of substitute products and entry of new firms into market is not possible.


    Mortgage bond: A bond secured by a mortgage on a property. The value of the property may or may not equal the value of the bonds issued against it.


    MoU: The concept of Memorandum of Understanding (MoU) was introduced in 1988. The main objective of MoU is to reduce the quantity of control and increase the quality of accountability. The emphasis is on achieving the negotiated and agreed objectives rather than interfering in the day-to-day. Affairs.


    Mutual Fund: It is a form of collective investment that is useful in spreading risks and optimizing returns.


    Nasdaq: An automated information network that provides brokers and dealers with price quotations on securities traded over-the-counter. Nasdaq is an acronym for National Association of Securities Dealers Automated Quotations.


    National Income: It is equal to the total money value of goods and services produced over the given time period less capital consumption.


    Negotiable: Refers to a security, the title to which is transferable by delivery.


    Net asset value: Usually used in connection with investment companies to mean net asset value per share. An investment company computes its assets daily, or even twice daily, by totaling the market value of all securities owned. All liabilities are deducted, and the balance is divided by the number of shares outstanding. The resulting figure is the net asset value per share.


    Net change: The change in the price of a security from the closing price on one day to the closing price the next day on which the stock is traded. The net change is ordinarily the last figure in the newspaper stock price list.


    Net Domestic Product (NDP): The money value of a nation’s annual output of goods and service, less capital consumption (depreciation) experienced in producing that output.


    Net National Product (NNP): Net National Product is equal to Net Domestic Product plus Net factor income from abroad.


    New York Futures Exchange (NYFE): A subsidiary of the New York stock Exchange devoted to the trading of futures products.


    New York Stock Exchange (NYSE): The largest organized securities market in the United States, founded in 1792. The Exchange itself does not buy, sell, own or set the prices of securities traded there. The prices are determined by public supply and demand. The Exchange is a non-profit corporation of 1,366 individual members, governed by a board of directors consisting of 10 public representatives, 10 Exchange members or allied members and a full-time chairman, executive vice chairman and president.


    Noncumulative: A type of preferred stock on which unpaid dividends do not accrue. Omitted dividends are, as a rule, gone forever.


    NYSEComposite Index: The composite index covering price movements of all common stocks listed on the New York Stock Exchange. It is based on the close of the market December31, 1965, as 50 and is weighted according to the number of shares listed for each issue. The index is computed continuously and printed on the ticker tape. Point changes in the index are converted to average price of listed stocks. The composite index is supplemented by separate indexes for four industry groups: industrial, transportation, utility and finance.


    Octroi: It is an internal tariff system among different region of a country.


    Odd Lot: An amount of stock less than the established 100-share unit.


    Off-board: This term may refer to transactions over-the-counter in unlisted securities or to transactions of listed shares that are not executed on a national securities exchange.


    Offer: The price at which a person is ready to sell. Opposed to bid, the price at which one is ready to buy.


    Overbought: On opinion as to price levels. May refer to a security that has had a sharp rise or to the market as a whole after a period of vigorous  buying which, it may be argued, has left prices ‘too high’.


    Oversold: The reverse of overbought. A single security or a market which, it is believed has declined to an unreasonable level.


    Over-the-counter: A market for securities made up of securities dealers who may or may not be members of a securities exchange. The over-the-counter market is conducted over the telephone and deals mainly with stocks of companies without sufficient shares, stockholders or earnings to warrant listing on an exchange. Over-the-counter dealers may act either as principals or as brokers for customers. The over-the-counter market is the principal market for bonds of all types.


    Paper Profit (loss) : An unrealized profit or loss on a security still held paper  profits and losses become realized only when the security is sold.


    Par: in the case of a common share, par means a dollar amount assigned to the share by the company’s charter. Par value may also be used to compute the dollar amount of common shares on the balance sheet. In the case of preferred stocks it signifies the dollar value upon which dividends are figured. With bonds, par value is the face amount, usually $ 1,000.


    Participating preferred: A preferred stock that is entitled to its stated dividend and to additional dividends on a specified basis upon payment of dividends on the common stock.


    Passed dividend: Omission of a regular or scheduled dividend.


    Penny stocks: Low- priced issues, often highly speculative, selling all less than $1 a share. Frequently used as a term of disparagement, although some penny stocks have developed into investment- caliber issues.


    Per Capita Income: it implies income per person. It is obtained by dividing national income of country by its population.


    Plastic Money: it refers to use of instruments like ‘credit cards’ instead of cash in business transactions. It called so because credit cards are made of plastic. Plastic Money also carries information about its holder in codes form which makes it theft proof. No one, but the holder is able to use the card.


    Point: In the case of shares of stock, a point means $1. If ABC shares rise 3 points, each share has risen $3. In the case of bonds a point means $10, since a bond is quoted as a percentage of $1,000. A bond that rises 3 points gains 3 % in %1,000, or $30 in value. An advance from 87 to 90 would mean an advance in dollar value from $87 to $900. In the case of market averages, the word point means merely that and no more.


    Portfolio: Holdings of securities by an individual or institution. A portfolio may contain bonds, preferred stocks, common stocks and other securities.


    Poverty Line: The poverty line has been fixed by the planning commission on the basis of an average daily intake of 2400 calories per person in rural areas and 2100 calories per capita in urban areas. In monetary terms the poverty line is commented to be Rs. 76 per month in rural and Rs. 88 in urban areas in terms of 1979-80 prices.


    Preferred stock: A class of stock with a claim on the company’s earnings before payment may be made on the common stock and usually entitled to priority over common stock if the company liquidates. Usually entitled to dividends at a specified rate – when declared by the board of directors and before payment of a dividend on the common stock- depending upon the terms of the issue.


    Premium: The amount by which a bond or preferred stock may sell above its par value. May refer, also to redemption price of a bond or preferred stock if it is higher than face value.


    Price-to-earnings ratio: A  popular way to compare stocks selling at various price levels. The P/E ratio is the price of a share of stock divided by earnings per share for a 12- month period. For example, a stock selling for $50 a share and earning $5 a share is said to be selling at a price- to-earnings ratio of 10.


    Primary distribution: Also called primary or initial public offering. The original sale of a company’s securities.


    Prime rate : the lowest interest rate charged by commercial banks to their most credit- worthy customers; other interest rates, such as personal, automobile, commercial and financing loans are often pegged to the prime.


    Principal: the person for whom a broker executes an order or dealers buying or selling for their own accounts. The term ‘Principal’ may also refer to a person’s capital or to the face amount of a bond.


    Profit- taking: Selling stock that has appreciated in value since purchase, in order to realize the profit. The term is often used to explain a downturn in the market following a period of rising prices.


    Prospectus: the official selling circular that must be given to purchasers of new securities registered with the Securities and Exchange Commission. It highlights the much longer Registration Statement file with the Commission.


    Proxy: Written authorization given by a shareholder to someone else to represent him or her and vote his or her shares at a shareholders meeting.


    Proxy statement: Information given to stockholders in conjunction with the solicitation of proxies.


    Recession: Recession cycle characterized by a modest downturn in the level of economic activity means fall up of demand.


    Reflation : It is an increase in the level of  National Income and Output . reflation is often deliberately brought about  by the authorities in order to secure full employment and to increase the rate of economic growth.


    Quote: The highest bid to buy and the lowest offer to sell a security in a given market at a given time. If you ask your financial advisor for a ‘quote’ on a stock, he or she may come back with something like “451/4 to 451/2”. This means that $45.25 is the highest price any buyer wanted to pay at the time the quote was given on the floor of the exchange and that $45.50 was the lowest price that any seller would take at the same time.


    Rally: A brisk rise following a decline in the general price level of the market, or in an individual stock.


    Record date: The date on which you must be registered as a shareholder of a company in order to receive a declared dividend or, among other things, to vote on company affairs.


    Redemption price: The price at which a bond may be redeemed before maturity, at the option of the issuing company, redemption value also applies to the price the company must pay to call in certain types of preferred stock.


    Refinancing: Same as refunding. New securities are sold by a company and the money is used to entire existing securities. The object may be to save interest costs, extend the maturity of the loan, or both.


    Registered bond: A bond that is registered on the books of the issuing company in the name of the owner. It can be transferred only when endorsed by the registered owner.


    Registrar: Usually a trust company or bank charged with the responsibility of keeping record of the owners of a corporation’s securities and preventing the issuance of more than the authorized amount.


    Regulation T: The federal regulation governing the amount of credit that may be advanced by brokers and dealers to customers for the purchase of securities.


    Regulation U: The federal regulation governing the amount of credit that may be advanced by banks to customers for the purchase of listed stocks.


    Rights: when a company wants to raise more funds by issuing additional securities, it may give its stockholders the opportunity, ahead of others, to buy the new securities in proportion to the number of shares each owns. The piece of paper evidencing this privilege is called a right.


    Scheduled bank: It is a bank included in the second schedule of RBI. It has a minimum cash reserve of “Rs. 5 lakh”.

    Scale order: An order to buy (or sell) a security, the specifies the total amount to be bought (or sold) at specified price variations.


    Scripophily : A term coined in the mid-1970s to describe the hobby of collecting antique bonds, stocks and other financial instruments, value are affected by beauty of the certificate and the issuer’s role in world finance and economic development.


    SDRs (Special Drawing Rights) : The SDR is a reverse asset created within the framework of the International Monetary Fund in an attempt to increase intentional liquidity and forming a part of country’s official reserves along with gold, reserve positions in the IMF and convertible foreign currencies. It is also known as “Paper Gold”.


    Seat: A  traditional figure of speech for a membership on an exchange.


    SEBI: It was set up in 1988 by the Government of India to regulate the operations in stock market of India. The SEBI stands for securities and Exchange board of India.


    Self Reliance: Self Reliance, in short, can mean attainment of economic independence which, in turn, implies capability to sustain a higher rate of growth of economy essentially with the help of the domestic resources.


    Seller’s Market: It is market situation which exists for a short time period. During this period there is an excess demand for good and services at current prices which forces price up to the advantage of the seller.


    Sell side: The portion of securities business in which orders are transacted. The sell side includes retail brokers, institutional brokers and traders, and research departments. If an institutional portfolio manager changes jobs and becomes a registered representative, he or she has moved from the buy side to the sell side.


    Sensex : the Stock Exchange Sensitive Index (popularly referred to as the SENSEX) reflects the weighted arithmetic average of the price relative of a group of share included in the index of sensitive shares. For example, Bombay Stock Exchange Sensitive Index is a group of 30 sensitive shares.


    Serial bond: An issue that matures in part at periodic stated intervals.


    Settlement: Conclusion of a securities transaction when a customer pays a broker/ dealer for securities purchased or delivers securities sold and receives from the broker the proceeds of a sale.

                 Shares : These are the equal portions of the capital of a limited company. Shares in a company do not carry fixed rate of interest. The holders of the ordinary shares carry he residual risk of the business’ they rank after debenture holders and preference  shareholders  for the payment of dividends and they are liable or losses, although this liability is limited to the value of the shares and to the limit of guarantee given by their preference  shares  are such shares of a company on which interest is paid before any other, and owners have prior right to repayment of capital if company is wound up.


    Share Capital: Money raised by issuing of shares is called Share Capital.


    Share Index: It is the statistical indicator of overall share values, based on selected group.


    Short covering: Buying stock to return stock previously borrowed to make deliver delivery on a short sale.


    Sinking fund: Money regularly set aside by a company to redeem its bonds. Debentures or preferred stock from time to time as specified in the indenture or charter.


    Speculation: The employment of funds by a speculator. Safety of principal is a secondary factor.


    Speculator: One who is willing to assume a relatively large risk in the hope of gain.


    Spin off: The separation of a subsidiary or division of a corporation from its parent company by issuing shares in a new corporate entity. Shareowners in the parent company receive shares in the new company in proportion to their original holding and the total value remains approximately the same.


    Split: The division of the outstanding shares of a corporation into a larger number of shares. A3- for-1 split by a company with 1 million shares outstanding results in 3 million shares outstanding. Each holder of 100 shares   before the 3- for-1 split would have 300 shares, although the proportionate the equivalent of 300 parts of 3 million. Ordinarily, splits must be voted by directors and approved by shareholders.


    Stock exchange: An organized marketplace for securities featured by the centralization of supply and demand for the transaction of orders by member brokers for institutional and individual investors.


    Stock dividend: A dividend paid in securities rather than in cash. The dividend may be additional shares of the issuing company, or in shares of another company (usually a subsidiary) held by the company.

    Stockholder of record. A stockholder whose name is registered on the books of the issuing corporation.

    Stop limit order: A stop order that becomes a limit order after the specified stop price has been reached.

    Stop order: an order the buy at a price above or sell at a price below the current market.  Stop buy orders are generally used to limit loss or protect unrealized profits on a short sale.  Stop sell orders are generally used to protect unrealized profits or limit loss on a holding.  A stop order becomes a market order when the stock sells at or beyond the specified price and, thus, may not necessarily be executed at that price.


    Street name: Securities held in the name of a broker instead of customer’s name are said to be carried in “street name”.  This occurs when the securities have been bought on margin or when the customer wishes the security to be held by the broker.


    Swapping: Selling one security and buying a similar one almost at the same time to take a loss, usually for tax purposes.


    Syndicate: A group of investment bankers who together underwrite and distribute a new issue of securities or a large block of an outstanding issue.


    Technical research: Analysis of the market and stocks based on supply and demand. The technician studies price movements, volume, trends and patterns, which are revealed by charting these factors, and attempts to assess the possible effect of current market action on future supply and demand for securities and individual issues.


    Tender offer: A public offer to buy shares from existing stockholders of one public corporation by another public corporation under terms good for a certain time period. Stockholders are asked to “tender” (surrender) their holdings for stated value, usually at a premium above current market price, subject to the tendering of a minimum and maximum number of shares.


    Third market: Trading of stock exchange-listed securities in the over-the- counter market by a non-exchange member brokers.


    Ticker: A telegraphic system that continuously provides the last sale prices and volume of securities transactions on exchanges. Information is either printed or displayed on a moving tape after each trade.


    Trader: Individuals who buy and sell for their own accounts for short- term profit. Also, an employee of a broker/ dealer or financial institution who specializes in  handling purchases and sales of securities for the firm and/ or its clients.



    Transfer: This term may refer to two different operations. For one, the delivery of a stock certificate from the seller’s broker to the buyer’s broker and legal change of ownership, normally accomplished within a few days. For another, to record the change of ownership on the books of the corporation by the transfer agent. When the purchaser’s name is recorded, dividends, notices of meetings, proxies, financial reports and all pertinent literature sent by the issuer to its securities holders are mailed directly to the new owner.


    Transfer agent: A transfer agent keeps a record of the name of each registered shareowner, his or her address, the number of shares owned, and sees that certificates presented  for transfer  are properly  canceled and new certificates issued in the name of the new owner.


    Treasury stock: Stock issued by a company but later reacquired, it may be held in the company’s treasury indefinitely, reissued to the public or retired. Treasury stock receives no dividends and has no vote while held by the company.


    Turnover rate: The volume of shares traded in a year as a percentage of total shares listed on an exchange, outstanding for an individual issue or held in an institutional portfolio.


    Unlisted stock: A security not listed on a stock exchange.

     Up tick : A term used to designate a transaction made at a price higher than the preceding    transaction. Also called a “plus” tick. A “zero- plus” tick is a term used for a transaction at the same price as the preceding trade but higher than the preceding different price. Conversely, a down tick, or “minus” tick, is a term used to designate a transaction made at a price lower than the preceding trade. A plus sign, or a minus sign, is displayed throughout the day next to the last price of each stock at the trading post on the floor of the New York Stock Exchange.


    Variable annuity: A life insurance policy where the annuity premium (a set amount of dollars) is immediately turned into units of a portfolio of stocks, upon retirement, the policyholder is paid according to accumulated units, the dollar value of which varies according to the performance of the stock portfolio. Its objective is to preserve, through stock investment, the purchasing value of the annuity which otherwise is subject to erosion through inflation.


    VAT: It seeks to tax the value added at every stage of manufacturing and sale with a provision refunding the amount of Vat already paid at earlier stages to avoid double taxation.


    Volume: The number of shares or contracts traded in a security or an entire market during a given period. Volume is usually considered on a daily basis and a daily average is computed for longer periods.

    Voting right: Common stockholders’ right to vote their stock in affairs of a company. Preferred stock usually has the right to vote when preferred dividends are in default for a specified period. The right to vote may be delegated by the stockholder to another person.

    Warrants: Certificates giving the holder the right to purchase securities at a stipulated price within a specified time limit or perpetually. Sometimes a warrant is offered with securities as an inducement to buy.

     Working control: theoretically, ownership of 51% to a company’s voting stock is necessary to exercise control. In practice –  and this is particularly true in the case of a large corporation – effective control sometimes can be exerted through ownership, individually or by a group acting in concert, of less than 50%.

    Yield: Also known as return. The dividends or interest paid by a company expressed as a percentage of the current price.

    Yield to maturity: The yield of a bond to maturity takes into account the price discount from or premium over the face amount. It is greater than the current yield when the bond is selling at a discount and less than the current yield when the bond is selling at a premium.

    Zero coupon bond: A bond that pays no interest but is priced, at issue, at a discount from its redemption price.















Viewing 1 post (of 1 total)
  • You must be logged in to reply to this topic.
error: Content is protected !!