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C-Share
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In a family of multi-class mutual funds, the class that has a constant load structure throughout the life span of the fund.
The class C fund usually has a higher management Expense ratio because of its lower load fee when compared to other mutual funds...
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Cabinet Crowd
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Members of the NYSE that typically trade in inactive bonds. Also known as the inactive Bond crowd or book crowd.
Members of the New York Stock Exchange who trade in infrequently traded bonds. The name cabinet crowd arises from the fact that these members...
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Cafeteria Plan
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An employee benefit plan that allows employees to choose from a variety of benefits to formulate a plan that best suits their needs.
Also known as 'cafeteria employee benefit plan' or 'flexible benefit plan'. Similar to a cafeteria where individuals can...
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Cage
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A term describing the department of a brokerage firm that receives and distributes physical securities.
A reference mainly used by industry workers, the cage is like a vault where all certificates and bonds are held in physical form. It is also the section...
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Calculation Agent
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A person who calculates the value of a Derivative or the amount owing from each party in a Swap agreement.
In most cases, a calculation Agent Will be a professional market maker. If more than one calculation Agent has been chosen, they are referred to...
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Call Center
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Centralized customer service and sales facility through which a majority (and sometimes all) of customer calls are routed.
A call centre or call center (see spelling differences) is a centralized office used for the purpose of receiving and transmitting...
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Callable bond
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A Bond that can be redeemed by the issuer prior to its maturity.
Usually a Premium is paid to the Bond owner when the Bond is called. Also known as a redeemable Bond.
The main cause of a call is a decline in Interest rates. If Interest rates have declined...
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CAMELS Rating
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A rating system that measures of the relative soundness of a bank.
The components of the CAMELS rating- stand for Capital, Assets, Management, Earnings, Liquidity and Sensitivity to Market risk. They are calculated on a 1-5 scale, and are used by bank...
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Canary Call
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A step-up Bond that cannot be called after completing its first-step period.
The issuer of the Bond reserves the Option to call back the Bond until the first step is reached. A canary call may only be exercised on predetermined dates.
The canary call...
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Cancel Former Order - CFO
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An order given by an investor instructing his/her Broker to cancel a previously placed order.
CFO's are typically followed by new orders placed on the same securities. For example, if you placed a Limit order to sell Cory's Tequila Corporation (CTC) at...
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Cancellation
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A notice informing a customer of the cancellation of an erroneous trade that has been credited to his or her account by the Broker.
Even stock brokers are subject to human error. When an error is made, set guidelines must be followed to rectify the situation.
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Candlestick
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A price chart that displays the High, Low, Open, and close for a Security each day over a specified period of time.
There are many trading strategies based upon patterns in candlestick Charting. A candlestick chart is a style of bar-chart used primarily...
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Capital Gain
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The increase in the value of an asset or investment above the original purchase cost.
It is an increase in the value of shares or assets in a fund. An investor looking for capital growth means that all dividends and Interest are automatically reinvested...
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Capital Market
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The market in which Long-term Debt instruments are traded.
The capital market is the market for securities, where companies and governments can raise Long-term funds.
The capital market includes the stock market and the Bond market. Financial regulators,...
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Capital requirement
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The amount of money a business needs for its normal operations.
It is also the amount of Cash and easily liquidated assets that a Broker/dealer or bank needs to meet SEC regulations, usually expressed as a proportion of total liabilities. In general, the...
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CAPM-Capital Asset Pricing Model
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An investment theory according to which investors require higher returns for higher risks.
More specifically, CAPM argues that the expected return on a Security is equal to the Risk-free rate of return plus a Risk Premium. It also suggests that all unsystematic...
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Captive Fund
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A fund that provides investment services solely to the one firm holding ownership.
A captive fund is funded entirely by one Institution or the clients of an Institution holding ownership. Institutions that hold captive funds include investment banks, insurance...
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Carbon Trade
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An idea presented in response to the Kyoto Protocol that involves the trading of greenhouse gas (GHG) emission rights between nations.
For example, if Country A exceeds its capacity of GHG and Country B has a surplus of capacity, a monetary agreement could...
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Card Board index
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An index used by some investors to gauge industrial production by using the output of cardboard boxes to predict the purchases of non-durable consumer goods.
This is considered to be a relatively good measure. It is estimated that nearly 75 to 80 percent...
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Carrot Equity
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Equity which allows for the opportunity to purchase more Equity if the company reaches certain financial goals.
This term is British slang. It likely originated from the practice of urging an animal onwards by attaching a carrot on a stick to its head.
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Cartel
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A small group of producers of a good or services who agree to regulate supply in an effort to control or manipulate prices.
The best known example of a cartel is probably the Organization of Petroleum Exporting Countries (OPEC).
Cartel members may...
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Cash
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Legal Tender or coins that can be used in Exchange goods, Debt, or services or money in the form of Notes and coins.
Cash also include the value of assets that can be converted into cash immediately, as reported by a company. This usually includes bank...
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Cash reserves
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Cash deposits, Short-term bank deposits, Money Market instruments, and Treasury Bills.
It is a bank regulation that sets the minimum reserves each bank must hold to customer deposits and Notes. These reserves are designed to satisfy withdrawal demands,...
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Cashier's check
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A check which cannot bounce because its face amount is paid to the bank when it is issued, and the bank then assumes the obligation.
A cashier's check (also known as a cashier's cheque (check), bank check, official check, teller's check, bank draft or...
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Cease-and-Desist Order
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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...
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Central assets account
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A single account at a brokerage or bank which includes both banking and brokerage services.
Most asset management accounts allow checking, a debit or credit card, automatic transfer of excess funds into a money management account, and Margin loans. It...
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Central Bank
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The generic name given to a country's primary monetary authority, such as the Federal Reserve System in the U.S.
Usually has responsibility for issuing Currency, administering monetary policy, holding member banks' deposits, and facilitating the nation's...
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Certificate of deposit (CD)
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A Debt instrument from a financial Institution.
When you purchase a CD from your credit union (usually some multiple of $500 or $1,000), you're lending it that amount for a specific period, for which you'll earn a specific amount of Interest. If you want...
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Channel Check
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A method of independent stock analysis whereby company information is supplied by third parties.
Many times, when stock analysts provide ratings upon specific companies the information used is supplied by the company being analyzed. When doing a channel...
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Charitable Donation
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A Gift made by an individual or an organization to a nonprofit organization, charity or private Foundation.
Charitable donations are commonly in the form of Cash, but can also take the form of Real Estate, motor vehicles, appreciated securities, clothing...
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Charter
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Government authorization to do business.
A credit union or other financial Institution must have a charter with a state or the federal government
A charter is the Grant of authority or rights, stating that the granter formally recognizes the prerogative...
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Chartered Financial Consultant (ChFC)
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A professional financial planning designation granted by The American College to individuals who complete a comprehensive curriculum in financial planning.
Prerequisites include passing a series of written examinations, meeting specified experience requirements...
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Check Cashing Outlet (CCO)
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Businesses that Cash government, payroll, and unsecured personal checks for consumers.
Additional services may include payday loans, money orders, and wire transfers. CCO growth has taken place in primarily lower-income neighborhoods where traditional...
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Check clearing
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In banking and finance, clearing denotes all activities from the time a commitment is made for a transaction until it is settled. Clearing is necessary because the speed of trades is much faster than the cycle time for completing the Underlying transaction.
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Checkbook register
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An informal record of all deposits to and withdrawals from a given checking account.
A checkbook register is used to perform bank Reconciliation.
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China Investment Corporation (CIC)
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A government-sponsored entity of the People's Republic of China that seeks to invest in securities and commodities abroad.
The CIC was initially funded with around $200 billion, which originated from the issuance of Long-term treasury bonds by the People's...
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Chinese wall
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The ethical (not physical) barrier between different divisions of a financial (or other) Institution to avoid conflict of Interest.
A Chinese Wall is said to exist, for example, between the corporate-advisory area and the brokering department to separate...
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CHIPS
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Clearing House Interbank Payments System
The Clearing House Interbank Payments System (CHIPS) is the main privately held clearing house for large-value transactions in the United States, settling well over US$1 trillion a day in around 250,000 interbank...
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Churning
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Churning is often used as a generic term for buying and selling stocks rapidly.
Churning also refers to unconscious or conscious over-trading by an advisory stockbroker in a customer's account in order to generate Commission from the account.The consideration...
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Classified Shares
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The separation of company Equity into more than one class of common shares, usually called "Class A" and "Class B."
Also known as "classified stock".
The specific features of each class are set out in the corporate Charter and bylaws. Voting privileges...
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Clearinghouse funds
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Funds represented by a personal or business check that pass between Federal Reserve System banks prior to approval of credit.
Clearinghouse funds are in the process of being transmitted and reconciled through a central processing mechanism. Since these...
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Clearstream
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An electronic Clearinghouse that allows financial institutions to settle securities transactions. Along with Euro Clear, it is the principal Clearinghouse for Euro market transactions.
It is based in Luxembourg, of Deutsche Börse.
It was created in...
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Cleave
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The breaking of a gem stone into two or more pieces during the cutting or polishing process. Naturally occurring impurities in the stones increase the likelihood that a stone Will break apart.
Large gem stones are very rare. When large gemstones are found,...
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Closing Cost
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Expenses (over and above the price of the property) incurred by buyers and sellers in transferring ownership of a property. Also called "settlement cost."
The point in time at which the contract is actually executed and the title to the property is conveyed...
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Closing Price
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The final price at which a Security is traded on a given trading day.
The Closing Price represents the most up-to-date Valuation of a Security until trading commences again on the next trading day.
Most financial instruments are traded after hours...
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Co-Housing
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A hybrid form of housing that combines private and communal forms of living.
Residents occupy individual, complete housing units and share additional kitchen, dining, and recreational facilities with other residents. Ownership and design may take a variety...
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Cockroach Theory
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A market theory that suggests that when a company reveals bad news to the public, there may be many more related negative events that have yet to be revealed.
The term comes from the common belief that seeing one cockroach is usually evidence that there...
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COFI-Cost of Funds Index
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A Yield index based upon the cost of funds to savings & loan institutions in the San Francisco Federal Home Loan Bank District. It is one of the indexes commonly used to set the rate of adjustable rate mortgages.
Cost of Funds Index or COFI is a regional...
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Collateral
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An asset such as an automobile or a piece of property that a person uses to take out a loan, promising to give the asset to the lender if loan payments cannot be met.
Collateral also refers to the collection of receivables, such as mortgages, which are...
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Commercial bank
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An Institution which accepts deposits, makes business loans, and offers related services.
Commercial banks also allow for a variety of Deposit accounts, such as checking, savings, and time Deposit. These institutions are run to make a profit and owned...
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Common Stock
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A unit of ownership in a Corporation.
A Security representing partial ownership, also called Equity, in a Corporation, and which entitles shareholders to participate in stockholder meetings and to vote for the board of directors is called a common stock....
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Community Reinvestment Act (CRA)
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A law that requires banks and other financial institutions to meet the credit needs of their communities including Low and moderate income sections of the community. The act also requires banks to submit reports.
Community Reinvestment Act is a United...
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Compound Annual Growth Rate - CAGR
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The year-over-year growth rate of an investment over a specified period of time.
The compound annual growth rate is calculated by taking the nth root of the total percentage growth rate, where n is the number of years in the period being considered.
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Compounding
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The ability of an asset to generate Earnings, which are then reinvested in order to generate their own Earnings. In other words, compounding refers to generating Earnings from previous Earnings.
Also known as "compound Interest".
Suppose you invest...
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Conditional Prepayment Rate - CPR
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Conditional Prepayment Rate or CPR is a measure of the rate of payments from a Bond that pays principal payments in excess of scheduled payments (so-called prepayments).
CPR is defined as the annualized rate of principal payments beyond the regularly scheduled...
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Condominium
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A large property complex that is divided into individual units and sold.
Ownership usually includes a non-exclusive Interest in certain "common properties" controlled by the condominium management. The management is usually made up of a board of unit owners...
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Condotel
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A Condominium project that is operated as a hotel with a registration desk, cleaning service and more.
The units are individually owned. Unit owners also have the Option to place their unit in the hotels rental program where it is rented out like any other...
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Conglomerate
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A Corporation that is made up of a number of different, seemingly unrelated businesses.
In a conglomerate, one company owns a controlling Stake in a number of smaller companies, which conduct business separately. Each of a conglomerate's Subsidiary businesses...
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Consumer bank
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An Institution which accepts deposits, makes personal loans, and offers related services
Consumer bank can also refer to a bank or a division of a bank that mostly deals with deposits and loans from corporations or large businesses, as opposed to normal...
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Consumer Credit
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The general term for loans given to persons usually on an unsecured Basis and providing for monthly repayment.
Installment loans and personal loans are also referred to as consumer credit (unless the loan is used for business purposes or to purchase commercial...
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Contrarian
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An Investment Style that invests against prevailing market trends and does not follow the prevailing consensus view.
A Contrarian buys assets that are performing poorly and then selling when they perform well.
A contrarian investor believes that the...
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Controller
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In most organizations the controller is the top managerial and financial accountant.
The controller supervises the accounting department and assists management in interpreting and utilizing managerial accounting information. Also known as the comptroller....
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Cook The Books
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A buzzword describing fraudulent activities performed by corporations in order to falsify their financial statements.
Usually, cooking the books involves augmenting financial data to Yield previously non-existent Earnings.
Examples of techniques used...
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Cooling Degree Day - CDD
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The number of degrees that a day's average temperature is above 65o Fahrenheit, the temperature at which people Will start to use air conditioning to cool their buildings.
Heating degree day (HDD) and cooling degree day (CDD) are quantitative indices designed...
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Corporate Cannibalism
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An act of self-infringement upon market share by corporations through the issuance of new products.
Also known as "market cannibalization".
Corporate cannibalism occurs when companies introduce new products into a market where these products are already...
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Corporate Governance
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The relationship between all the stakeholders in a company.
This includes the shareholders, directors, and management of a company, as defined by the corporate Charter, bylaws, formal policy, and rule of law. Ethical companies are said to have excellent...
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Corporation
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A legal business entity created under federal or provincial statutes.
Being a legal entity that is separate and distinct from its owners, shareholders have no legal liability for its debts. Corporations enjoy most of the rights and responsibilities that...
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Correlation
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Statistical measure of the degree to which the movements of two variables are related.
A Correlation coefficient is a number between -1 and 1, which measures the degree to which two variables are linearly related. If there is perfect linear relationship...
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Correspondent
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The name given to a bank, Broker, dealer, or financial Institution that acts on behalf of another financial Institution with limited or restricted access to the financial markets where a transaction must occur.
Commonly done by smaller financial corporations...
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Coskewness
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A statistical measure that calculates the symmetry of a variable's probability Distribution in relation to another variable's probability Distribution symmetry.
All else being equal, a positive coskewness means that the first variable's probability Distribution...
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Cost of Deposit Index (CODI)
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The Cost of Deposit Index (CODI) is one of several indexes commonly used to set the adjustment amount of an adjustable rate mortgage (ARM).
CODI is typically calculated as a 12-month moving average of three-month certificate of Deposit, or CD, yields as...
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Cost of Goods Sold - COGS
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A figure reflecting the cost of the product or good that a company sells to generate revenue, appearing on the income Statement as an Expense unto itself. Also referred to as "cost of sales."
COGS is the costs that go into creating the products that a...
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Cost Per Click - CPC
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Cost Per click (CPC) is the amount that you pay search engines and other internet publishers for one click on your ad that brings one visitor to your website.
A web site which uses CPCs would bill by the number of times a visitor clicks on a banner, instead...
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Cost-of-Living Adjustment (COLA)
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Adjustment of wages designed to Offset changes in the cost of living, usually as measured by the Consumer Price Index.
COLAs are key bargaining issues in labor contracts and are politically sensitive elements of social Security payments and federal pension...
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Cost-Push Inflation
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When Inflation increases because of a rise in the costs of production.
This is a phenomenon in which the general price levels rise (Inflation) due to increases in the cost of wages and raw materials.
Cost-push Inflation develops because the higher...
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Counterfeit
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Fake, usually referring to phony Currency.
The Secret Service is in charge of investigating counterfeit money in the US and can tell you a lot about its history and what it looks like. A counterfeit is an imitation (often of Currency, documents, or manufactured...
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Coupon
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The Interest rate on a Security that the issuer promises to pay to the Holder until maturity which is expressed as an annual percentage of face value.
It is the Interest rate on a Bond. It's expressed as an annual percentage of the face value. A Bond that...
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Coupon Bond
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A Debt obligation with coupons attached that represent semiannual Interest payments. Also known as a "bearer Bond".
No record of the purchaser is kept by the issuer, and the purchaser's name is not printed on the certificate. The Coupon or Coupon rate...
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CPI
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Short for consumer price index.
A measure of the cost of living determined by the Bureau of Labor Statistics. A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food and medical care....
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Credit Life and Disability Insurance
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A contract binding an insurance company to pay the principal plus Interest on a loan in the event of the insured's death or insurance to make payments in the event of disability.
This insurance is offered to applicants on most loans but is not a requirement...
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Credit Rating
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A formal evaluation of an individual's or company's credit history and capability of repaying obligations.
Formal evaluation of a company's ability to pay Interest and repay principal on borrowed money, as published by a credit rating agency or service.
...
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Cross Calling
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A method of redeeming bonds using surplus funds provided from an unrelated Bond issue.
Cross calling occurs when a lender, which repackages its loans into new securities, uses prepayments from Low Interest rate loans to repay principal on the High-Yield...
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Crossed Check
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Any check that is crossed with two parallel lines, either across the whole check or through the top left hand corner of the check.
This symbol means that the check can only be deposited directly into a bank account and cannot be immediately cashed by a...
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Crown Corporation
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Any Corporation that is established and regulated by a country's government.
In the Commonwealth realms, a Crown Corporation is a state-controlled company or enterprise. Equivalent names in other jurisdictions include government trading enterprises, government-owned...
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Currency
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A currency is a unit of Exchange, facilitating the transfer of goods and/or services.
It is one form of money, where money is anything that serves as a medium of Exchange, a store of value, and a standard of value. A currency is the dominant medium of...
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Currency trading
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The act of buying and selling world currencies.
Currency trading is most often engaged in by banks and other institutions, for the purposes of international trade. Individual investors may engage in Currency trading as well, attempting to benefit from...
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Custodial account
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An account which is created for the benefit of a minor, usually at a bank, Mutual Fund, or brokerage, with an adult as the Custodian.
Custodial account is a financial account set up for a minor, but administered by a responsible adult, known as a Custodian,...
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Custodian
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An Agent, bank, Trust company, or other organization which holds and safeguards an individual's, Mutual Fund's, or investment company's assets for them.
Custodian bank, is an organization responsible for safeguarding a firm's or individual's financial assets.
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Custodian Services
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This is a service whereby a person or entity agrees to hold and manage assets on behalf of another person or entity.
It can be a financial Institution that has the legal responsibility for a customer's securities. This implies management as well as safekeeping.
...
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Cyberspace
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A term used to describe the Range of information resources available through computer networks such as the Internet.
The term was coined by science fiction author William Gibson. Cyberspace is a domain characterized by the use of electronics and the electromagnetic...
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Cyclical Unemployment
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A factor of overall unemployment that relates to the cyclical trends in growth and production that occur within the Business Cycle.
When business cycles are in their High, cyclical unemployment Will be Low because total economic output is being maximized....
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