| Term |
 |
|
| Meaning |
|
|
| Bonds |
A long-term debt instrument |
| Certificate of deposit |
Interest-earning time deposit at bank or other financial intermediary |
| Money market mutual fund |
Pools of funds managed by investment co. that are primarily invested in short term assets |
| Par Value |
The normal or face value of a stock or bond |
| Federal funds |
Overnight loans from one bank to another |
| T-Bills |
Discounted debt instruments issued by the govt. |
| Discounted securities |
Securities selling for less than par value. |
| Common equity |
The sum of the firms common stock paid in capital and retained earnings. |
| Negotiable CD |
CD that can be traded to other investors prior to maturity |
| Bonds |
A long-term debt instrument |
| Certificate of deposit |
Interest-earning time deposit at bank or other financial intermediary |
| Money market mutual fund |
Pools of funds managed by investment co. that are primarily invested in short term assets |
| Par Value |
The normal or face value of a stock or bond |
| Federal funds |
Overnight loans from one bank to another |
| T-Bills |
Discounted debt instruments issued by the govt. |
| Discounted securities |
Securities selling for less than par value. |
| Common equity |
The sum of the firms common stock paid in capital and retained earnings which equals the common stockholders total investment in the firm stated at book value. |
| Negotiable CD |
CD that can be traded to other investors prior to maturity |
| Additional paid in capital |
The difference between the value of newly issued stock and its par value. |
| Call option |
An option to buy shares of stock at a certain price within a specified period of time. |
| Call provision |
a provision in a bond contract that gives the issuer the right to redeem the bonds under specified terms prior to the normal maturity date. |
| Additional paid in capital |
The difference between the value of newly issued stock and its par value. |
| Call option |
An option to buy shares of stock at a certain price within a specified period of time. |
| Call provision |
a provision in a bond contract that gives the issuer the right to redeem the bonds under specified terms prior to the normal maturity date. |
| Commercial paper |
a discounted instrument that is a type of promisory note, or legal IOU, issued by large, financially sound firm. |
| Convertible security |
A security, usually a bond or preferred stock, that is exchangable at the option of the holder for the common stock of the issuing firm. |
| Debenture |
A long term bond that is not secured by a mortgage on specific property |
| Financial asset |
An asset that reprresents a promise to distribute cash flows at some time in the future. |
| Floating rate bond |
A bond whose interest rate fluctuates with shifts in the general level of interest rates. |
| Growth stocks |
Stocks that generally pay little or no dividends so as to retain earnings to help fund growth opportunities. |
| Indenture |
A formal agreement or contract between the issuer of a bond and the bond holders. |
| Investment grade bond |
A bond rated A or tripple-B; many banks and other institutional investors are permitted by law to hold only bonds rated investment grade or better. |
| Junk bond |
A high-risk, high-yield bond used for finance mergers, leveraged buyouts, and troubled companies. |
| Mortgage bond |
A bond backed by fixed assets. First mortgage bonds are senior in priority to claims of second mortgage bonds. |
| Municipal bonds |
A bond issued by state or local governments. |
| Proxy |
A document giving the authority for one person to act for another, typically the power to vote shares of common stock. |
| Put option |
A option to sell shares of stock at specified price during a particular time period. |
| Real asset |
A physically obsevable or touchable item |
| Restrictive covenant |
A provision in a debt contract that constrains the actions of the borrower. |
| Sinking fund |
A required annual payment designed to amoritize a bond or preferred stock issue. |
| Striking (exercise) price |
The price that must be paid(buying or selling) for a sharer of common stock when an potion is exercised. |
| Subordinated debenture |
A bond that has a claim on assets only after the senior debt has been paid off in the event of liquidation. |
| Term loan |
A loan generally obtained from a bank or insurance company, on which the borrower agrees to make a series of payments consisting of interest and principal. |
