Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
81 Cards in this Set
- Front
- Back
|
acceptance, waiver, and consent
|
A process for settling a charge or complaint that is quicker and less formal than the regular complaint procedure.
Related item(s): Code of Procedure |
|
|
acceptance ratio or placement ratio
|
A ratio compiled by The Bond Buyer indicating the number of new municipal issues that have sold within the last week.
|
|
|
account executive (ae)
See registered representative (RR). |
An associated person engaged in the investment banking or securities business. This includes any individual who supervises, solicits, or conducts business in securities or who trains people to supervise, solicit, or conduct business in securities.
Anyone employed by a brokerage firm who is not a principal and who is not engaged in clerical or brokerage admnistration is subject to registration and exam licensing as a registered representative. Syn. account executive; stockbroker. Related item(s): associated person of a member. |
|
|
accredited investor
|
As defined in Rule 502 of Regulation D, any institution or individual meeting minimum net worth requirements for the purchase of securities qualifying under the Regulation D registration exemption.
An accredited investor is generally accepted to be one who: - has a net worth of $1 million or more not including net equity in a primary residence, or - has had a annual income of $200, 000 or more during each of the two most recent years (or $300,000 jointly with a spouse) and who has a reasonable expectation of reaching the same income level during the current year. |
|
|
accretion of bond discount
|
An accounting process whereby the initial cost of a bond purchased at a discount is increased annually to reflect the basis of the bond as it approaches maturity.
|
|
|
accrual accounting
|
A method of reporting income when earned and expenses when incurred, as opposed to reporting income when received and expenses when paid.
|
|
|
accrued interest
|
The interest that has accumulated since the last interest payment up to, but not including, the settlement date and is added to a bond transaction's contract price.
There are two methods for calculating accrued interest: The 30-day-month (360-day-year) method for corporate and municipal bonds and the actual-calendar-days (365-day-year) method for government bonds. Income bonds, bonds in default and zero-coupon bonds trade without accrued interest (flat). Related item(s): flat |
|
|
accumulation account
|
An account establisted to hold securities pending their deposit into a municipal securities unit investment trust.
|
|
|
accumulation stage
Related item(s): accumulation unit, distribution state. |
The period during which contributions are made to an annuity account. Related item(s): accumulation unit, distribution state.
|
|
|
accumulation unit
Related item(s): accumulation stage; annuity unit; separate account |
An accounting measure used to determine an annuitant's proportionate interest in the insurer's separate account during an annuity's accumulation (deposit) stage.
|
|
|
acid-test ratio
Related item(s): cash assets ratio; current ratio |
A measure of a corporation's liquidity, calculated by adding cash, cash equivalents, and accounts and notes receivable, and dividing the result by total current liaabilities. It is a more stringent test of liquidity than current ratio. Syn. quick ratio.
|
|
|
Automated Confirmation Transaction service (ACT)
|
The post-execution, online transaction reporting and comparison system.
|
|
|
Act of 1933 (Securities Act of 1933)
Syn. Act of 1933; Full Disclosure Act; New Issues Act; Prospectus Act; Trust in Securities Act; Truth in Securities Act. |
Federal legislation requiring the full and fair disclosure of all material information about the issuance of new securities.
|
|
|
Act of 1934
Securities Exchange Act of 1934; Exchange Act |
Federal legislation that established the Securities and Exchange Commission. The act aims to protect investors by regulating the exchanges, the over-the-counter market, the extension of credit by the Federal Reserve Board, broker/dealers, insider transactions, trading activities, client accounts, and net capital.
|
|
|
adjacent acreage
|
Producing or nonproducing oil or gas leases located within the area of an existing well site. Adjacent acreage may prove valuable for continued development of the original oil or gas prospect.
|
|
|
adjusted basis
|
The value attributed to an asset or security that reflects any deductions taken on, or capital improvements to, the asset or security. Adjusted basis is used to compute the gain or loss on the sale or other disposition of the asset or security.
|
|
|
adjusted gross income (AGI)
Related items(s): tax liability |
Earned income plus net passive income, portfolio income, and capital gains.
|
|
|
administrator
|
(1) A person authorized by a court of law to liquidate an intestate decedent's estate. (2) An official or agency that administers a state's securities laws.
|
|
|
ADR (American Depositary Receipt)
American Depositary Share |
A negotiable certificate representing a given number of shares of stock in a foreign corporation. It is bought and sold in the American securities markets, just as stock is traded.
|
|
|
ad valorem tax
Related item(s): assessed value |
A tax based on the value of real or personal property. Property taxes are the major source of revenues for local governing units.
|
|
|
advance/decline line
Related item(s): breadth-of-market theory |
A technical analysis tool representing the total of difference between advances and declines of security prices. The advance/decline line is considered the best indicator of market movement as a whole.
|
|
|
advance refunding
Related item(s): defeasance; refunding. |
Refinancing an existing municipal bond issue before its maturity or call date by using money from the sale of a new bond issue. The proceeds of the new bond issue are used to purchase government securities, and the municipality puts the principal and interest received from these securities into an escrow account; it then uses these funds to pay off the original bond issue at the first call date.
Syn. pre-refunding |
|
|
defeasance
Related item(s): advance refunding |
The termination of a debt obligation. A corporation or municipality removes debt from its balance sheet by issuing a new debt issue or creating a trust that generates enough cash flow to provide for the payment of interest and principal.
|
|
|
affiliate
Related item(s): control person; insider |
(1) A person who directly or indirectly owns, controls or holds with power to vote 10% or more of the outstanding voting securities of a company. (2) With respect to a direct participation program, any person who controls, is controlled by , or is under common control with the program's sponsor and includes any person who beneficially owns 50% or more of the equity interest in the sponsor. (3) Under the Investment Company Act of 1940, a person who has any type of control over an investment company's operations, which includes anyone with 5% or more of the outstanding voting securities of the investment company or any corporation of which the investment company holds 5% or more of outstanding securities.
|
|
|
control person
Related item(s): Affiliate; insider. |
(1) A director, an officer, or another affiliate of an issuer. (2) A stockholder who owns at least 10% of any class of a corporation's outstanding securities.
|
|
|
cost basis
|
The price paid for an asset, including any commissions or fees, used to calculate captial gains or losses when the asset is sold.
|
|
|
cost depletion
|
A method of calculating tax deductions for investments in mineral, oil, or gas resources. The cost of the mineral-, oil-, or gas- producing property is returned to the investor over the property's life by an annual deduction, which takes into account the number of known recoverable units of mineral, oil, or gas to arrive at a cost-per-unit figure. The tax deduction is determined by multiplying the cost-per-unit figure by the number of units sold each year.
|
|
|
annuitant
|
A person who receives an annuity contract's distribution.
|
|
|
annuitize
|
To change an annuity contract from the accumulation (pay-in) stage to the distribution (pay-out) stage.
|
|
|
annuity
Related item(s): deferred annuity; fixed annuity; immediate annuity; variable annuity |
A contract between an insurance company and an individual, generally guaranteeing lifetime income to the individual on whose life the contract is based in return for either a lump-sum or a periodic payment to the insurance company. The contract holder's objective is usually retirement income.
|
|
|
annuity unit
Related item(s): accumulation unit; annuity; distribution stage |
An accounting measure used to determine the amount of each payment during an annuitys distribution stage. The calculation takes into account the value of each accumulation unit and such other factors as assumed interest rate and mortality risk.
|
|
|
arbitrage
|
The simultaneous purchase and sale of the same or related securities to take advantage of a market inefficiency.
|
|
|
arbitrageur
|
One who engages in arbitrage.
|
|
|
asset-backed security
|
One whose value and income payments are backed by the expected cash flow from a specific pool of underlying assets. Pooling the assets into financial instruments allows them to be sold to investors more easily than selling them individually. This process is called securitization.
|
|
|
asset allocation fund
|
A mutual fund that splits its investment assets among stocks, bonds, and other vehicles in an attempt to provide a consistent return for the investor.
|
|
|
ask
Related item(s): bid; public offering price; quotation |
An indication by a trader or a dealer of a willingness to sell a security or a commodity; the price at which a investor may buy from a broker/dealer. Syn. offer
|
|
|
block trade
|
In general, 10,000 shares of stock would be considered a block trade.
|
|
|
blue-chip stock
|
The equity issues of financially stable, well-established companies that have demonstrated their ability to pay dividends in both good and bad times.
|
|
|
bond
|
An issuing company's or government's legal obiligation to repay the principal of a loan to bond investors at a specified future date. Bonds are usually issued with par, or face, values of $1,000, representing the amount of money borrowed. The issuer promises to pay a percentage of the par value as interest on the borrowed funds. The interest payment is stated on the face of the bond at issue.
|
|
|
bond anticipation note (BAN)
|
A short-term municipal debt security to be paid from the proceeds of long-term debt when it is issued.
|
|
|
Bond Buyer indexes
|
Indexes of yield levels of municipal bonds published daily by The Bond Buyer. The indexes are indicators of yields that would be offered on AA and A rated general obiligation bonds with 20-year maturities and revenue bonds with 30-maturities
|
|
|
bond counsel
Related item(s): legal opinion of counsel |
An attorney retained by a mnicipal issuer to give an opinion concerning the legality and tax-exempt status of a municipal issue. Syn. bond attorney.
|
|
|
buy stop order
|
An order to buy a security that is entered at a price above the current offering price and that is triggered when the market price touches or goes through the buy stop price.
|
|
|
call
Related item(s): put |
(1) An option contrct giving the owner the right to buy a specified amount of an underlying security at a specified price within a specified time. (2) The act of exercising a call option.
|
|
|
put
Related item(s): call |
(1) An option contract giving the owner the right to sell a certain amount of an underlying security at a specified price within a specified time. (2) The act of exercising a put option.
|
|
|
put bond
|
A debt security requiring the issuer to purchase the security at the holder's discretion or within a prescribed time. Syn. tender bond
|
|
|
reallowance
|
A portion of the concession available to firms that sell shares in an offering but are not syndicate or seling group members.
|
|
|
private placement
Related item(s): Regulation D |
An offering of new issue securities that complies with Regulation D of the Securities Act of 1933. According to Regualtion D, a security generally is not required to be registered with the SEC if it is offered to no more than 35 nonaccredited investors.
|
|
|
Public Offering Price (POP)
Related item(s): ask; bid; mutual fund; net asset value |
(1) The price of new shares that is established in the issuing corporation's prospectus. (2) The price to investors for mutual fund shares, equal to the net asset value plus the sales charge.
|
|
|
Rule 144
Related item(s): control security; restricted security |
SEC rule requiring that persons who hold control or restricted securities sell them only in limited quantities, and that all sales of restricted stock by control persons must be reported to the SEC by filing a Form 144, "Notice of Proposed Sale of Securities."
|
|
|
Rule 145
Related item(s): reclassification |
SEC rule requiring that, whenever the stockholders of a publicly owned corporation are solicited to vote on or consent to a plan for reorganizing the corporation, full disclosure of alol material facts must be made in a proxy statement or prospectus that must be in the hands of the stockholders before the announced voting date.
|
|
|
Rule 147
|
SEC rule that provides exemption from the registration statement and prospectus requirements of the 1933 Act for securities offered and sold exclusively intrastate.
|
|
|
short
Related item(s): long |
The term used to describe the selling of a security, contract, or commodity that the seller does not owen. For example, an ivestor who borrows shares of stock from a broker/dealer and sells them on the open market is said to have a "short position" in the stock.
|
|
|
spread
|
In a quotation, the difference between a security's bid and ask prices.
|
|
|
Rule 415
|
An SEC provision allowing an issuer to register a new issue security without selling the entire issue at once. The issuer may sell limited portions of the issuer over a three-year period without reregistering the security or incurring penalties.
|
|
|
stabilizing
|
Bidding at or below the public offering price of a new issue security. Underwriting managers may enter stabilizing bids during the offering period to prevent the price from dropping sharply.
|
|
|
stop limit order
|
A customer order that becomes a limit order when the market price of the security reaches or passes a specific price.
|
|
|
stop order
|
(1) A directive from the SEC that suspends the sale of new issue securities to the public when fraud is suspected or filing materials are deficient. (2) A customer order that becomes a market order when the market price of the security reaches or passes a specific price.
|
|
|
takedown
|
The discount from the public offering price at which a syndicate member buys new issue securities from the syndicate form sale to the public.
|
|
|
long
|
The term used to describe the owning of a security, contract, or commodity. For example, a common stock owener is said to have a long position in the stock.
|
|
|
market order
|
An order to be executed immediately at the best available price. A market order that guarantees execution.
|
|
|
naked
|
The position of an option investor who writes a call or a put on a security he does not own.
|
|
|
yield
|
The rate of return on an investment, usually expressed as an annual percentage rate.
|
|
|
yield to call (YTC)
|
The rate of return on a bond that accounts for the difference between the bond's acquisition cost and its proceeds, including interest income, calculated to the earliest date that the bond may be called by the issuing corporation.
|
|
|
workable indication
|
The price at which a municipal secuirities dealer is willing to purchase securities from another municipal dealer. The price may be revised if market condiditons change.
|
|
|
Tenants in Common (TIC)
|
A form of joint ownership of an account whereby a decesed tenant's fractional interest in the account is retained by his estate.
|
|
|
Treasury bill
|
A marketable US governement debt security with a maturity of less than one year. Treasury bills are issued through a competitive bidding process at a discount from par; they have no fixed interest rate.
|
|
|
Treasury stock
|
Equity securities that the issuing corporation has issued and repurchased from the public at the current market price.
|
|
|
underlying securities
|
The securities that are brought or sold when an option, right, or warrant is exercised.
|
|
|
sector fund
|
A mutual fund whose investment objective is to capitalize on the return potential provided by investing primarily in a particular industry or sector of the economy.
|
|
|
Secondary offering
|
A sale of securities in which one or more major stockholders in a company sell all or a large portion of their holdings; the underwriting proceeds are paid to the stockholders rather than to the corporation. Typically, such an offering occurs when the founder of a business (and perhaps some of the original financial backers) determines that there is more to be gained by going public than by staying private. The offering does not increase the number of shares of stock outstanding.
|
|
|
secondary market
|
The market in which securities are bought and sold subsequent to their being sold to the public for the first time.
|
|
|
seller's option
|
A settlement contract that calls for delivery and payment according to a number of days specified by the seller.
|
|
|
buyer's option
|
A settlement contract that calls for delivery and payment according to a number of days specified by the buyer.
|
|
|
Regular Way
|
A settlement contract that calls for delivery and payment within a standard payment period from the date of the trade. The Uniform Practice Code sets the standard payments period. The type of security being traded determines the amount of time allowed for regular way settlement.
|
|
|
listed option
|
An option contract that may be bought and sold on a national securities exchange in a continuous secondary market. Listed options carry standardized strike prices and expiration dates.
|
|
|
lised security
|
A stock, a bond, or another security that satisfies certain minimum requirements and is traded on a regional or national securities exchange such as the New York Stock Exchange.
|
|
|
loss carryover
|
A capital loss incurred during one tax year that is carried over to the next year or later years for use as a capital loss deduction.
|
|
|
margin
|
The amount of equity contributed by a customer as a percentage of the current market value of the securities held in a margin account.
|
|
|
margin account
|
A customer account in which a brokerage firm lends the customer part of the purchase price of securities.
|
|
|
margin call
|
The Federal Reserve Board's demand that a customer deposit a specified amount of money or securities when a purchase is made in a margin account; the
|
