| Call |
An option contract that gives the holder the right to buy a certain quantity of an underlying security
from the writer of the option, at a specified price (the strike price) up to a specified date (the
expiration date).
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| Capital gain |
The amount by which an asset's selling price exceeds its initial purchase price. A realized capital gain
is an investment that has been sold at a profit.
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| Cash flow |
A measure of a company's financial health. Equals cash receipts minus cash payments over a given period of
time; or equivalently, net profit plus amounts charged off for depreciation, depletion, and amortization.
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| CD (certificate of deposit) |
Short- or medium-term, interest-bearing debt instrument offered by banks and savings and loans. Low risk,
low return.
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| Clean price |
The present value of a bond net of accrued interest - i.e. interest accrued since the last coupon date.
Most markets quote bonds on a clean price basis, except when the bond is into its final coupon period, when
it may be quoted dirty.
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| Clearing |
The process of calculating market participants' obligations towards each other and executing cash
transfers as part of the settlement process.
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| Closed investment fund |
A fund with a fixed number of shares outstanding, and one which does not redeem shares the way a typical
mutual fund does. Such funds are often listed on a major stock exchange and trade like other securities.
Unlike a typical mutual fund, a closed-end fund's share price can trade above or below its net asset value.
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| Closing price |
The price of the last transaction for a given security at the end of a given trading session. |
| Collateral |
Assets pledged by a borrower to secure a loan or other credit, and subject to seizure in the event of
default.
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| Commission |
A fee charged by a broker or agent for his/her service in facilitating a transaction, such as the buying
or selling of securities.
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| Common stock |
Securities representing equity ownership in a corporation, providing voting rights, and entitling the
holder to a share of the company's success through dividends and/or capital appreciation.
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| Compounding |
A process whereby the value of an investment increases exponentially over time due to compound interest.
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| Convertible bond |
A corporate bond that can be exchanged, at the option of the holder, for a specific number of shares of
the company's preferred stock or common stock.
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| Corporate actions |
The term referring to any action involving a company's issued security other than market trading.
Corporate actions can be intitatied by the company or by the holder of the securities. (Rights issues,
takeovers, debt repayments, announcements of annual or extraordinary general meetings, dividends, etc.)
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| Corporate bond |
A bond issued by a corporation. |
| Counterpart |
One party of the transaction. A trade takes place between two counterparties. |
| Coupon |
The interest rate on a fixed income security, determined upon issuance, and expressed as a percentage of
par. Also, the term for each interest payment made to the bondholder.
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| CP |
An unsecured obligation issued by a corporation or bank to finance its short-term credit needs, such as
accounts receivable and inventory.
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| CPI |
An inflationary indicator that measures the change in the cost of a fixed basket of products and services,
including housing, electricity, food, and transportation.
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| Credit card |
A bankcard which allows card transactions to be done within the extent of the credit limit established in
the agreement.
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| Credit rating |
A published ranking, based on detailed financial analysis by a credit bureau, of one's financial history,
specifically as it relates to one's ability to meet debt obligations.
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| Credit risk |
The likelihood of non-payment of credit. |
| Creditworthiness |
The ability of the customer to receive credit on the basis of the previous and present credit
activities.
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| Currency option |
The right, but not the obligation, to buy (for a call option) or sell (for a put option) a specific amount
of currency at a specified price (the strike price) during a specified period of time.
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| Current account |
An account on which all current settlements are reflected. |
| Current assets |
A balance sheet item which equals the sum of cash and cash equivalents, accounts receivable, inventory,
marketable securities, prepaid expenses, and other assets that could be converted to cash in less than one
year.
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| Current rate |
A rate quoted separately for every transaction. |
| Current yield |
The annual rate of return on an investment, expressed as a percentage. For bonds, it is the coupon rate
divided by the market price.
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| Custodian |
An entity, often a bank, that safekeeps and administers securities for its customers and that may provide
various other services, including clearance and settlement, cash management, foreign exchange and securities
lending.
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| Custody |
There are generally three types of custody arrangements: domestic custody, global custody and master
custody.
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| Day order |
A buy or sell order which automatically expires if it is not executed during that trading session. |
| Debit card |
A bank card which allows card transactions to be done within the amount of the money on the account. |
| Default interest |
A sanction for failure to fulfil monetary obligations in time. |
| Deflation |
A decline in general price levels, often caused by a reduction in the supply of money or credit. Opposite
of inflation.
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