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Definition of Security
Piece of paper that proves ownership of stocks, bonds and other investments.
Either the collateral on a loan, or some type of equity ownership or debt, such
A share or an interest in a property or an enterprise such as a stock certificate or a bond.
Collateral offered by a borrower to a lender to secure a loan.
A security that is collateralized by loans, leases, receivables, or installment contracts
A debt or equity security not classified as a held-to-maturity security or a trading security. Can be classified as a current or noncurrent investment depending on the intended holding period.
A security that can be converted into common stock at the option of the security holder,
A security representing a debt relationship with an enterprise, including a government
A financial security, such as an option, or future, whose value is derived in part from the
A federal Act that sets minimum operational and funding standards for employee benefit
An ownership interest in an enterprise, including preferred and common stock.
security that grants the security holder the right to exchange the security for the
A nonnegotiable debt security that can be redeemed at some fixed price or according to
A security that pays a specified cash flow over a
security paying dividends or interest that vary with short-term interest rates.
A debt security for which the investing entity has both the positive
The security to which a warrant is attached.
A convertible security whose optioned common stock is trading in a middle range, causing
An easily traded investment, such as treasury bills, which is
Monthly income preferred security (MIP)
Preferred stock issued by a subsidiary located in a tax haven.
Mortgage pass-through security
Also called a passthrough, a security created when one or more mortgage
A debt or equity security for which there is no posted price or bidand-
An instrument such as a stock or bond for which payments depend only on the financial
Security characteristic line
A plot of the excess return on a security over the risk-free rate as a function of
Security deposit (initial)
Synonymous with the term margin. A cash amount of funds that must be deposited
Security deposit (maintenance)
Related: Maintenance margin security market line (SML). A description of
Security market line
Line representing the relationship between expected return and market risk.
Security Market Line
A graph illustrating the equilibrium relationship between the
security market line
Relationship between expected return and beta.
Security selection decision
Choosing the particular securities to include in a portfolio.
The monetary value placed on security by a lender in determining the extent to which it can make loans against such security.
Social Security Act of 1935
A federal Act establishing Old Age and Survivor’s
A debt or equity security bought and held for sale in the near term to generate income on short-term price changes.
Options: the security subject to being purchased or sold upon exercise of an option
Variable price security
A security, such as stocks or bonds, that sells at a fluctuating, market-determined price.
Accidental Dismemberment: (Credit Insurance)
Provides additional financial security should an insured person be dismembered or lose the use of a limb as the result of an accident.
The amount of interest accumulated on a debt security between
An arrangement whereby a security issue is canceled if the underwriter is unable
Cost of a security adjusted for the amortization of any purchase premium or
The simultaneous buying and selling of a security at two different prices in two different markets,
A dealer's price to sell a security; also called the offer price.
Loans granted usually by a financial institution where the asset being financed constitutes the sole security given to the lender.
The receipt of an exercise notice by an options writer that requires the writer to sell (in the case
An option is at-the-money if the strike price of the option is equal to the market price of the
1) When bond yields and prices fall, the market is said to back-up.
Regarding a futures contract, the difference between the cash price and the futures price observed in the
Benchmark interest rate
Also called the base interest rate, it is the minimum interest rate investors will
A measure of the riskiness of a specific security compared to the
This is the quoted bid, or the highest price an investor is willing to pay to buy a security. Practically
A firm or person that wants to buy a firm or security.
security that obligates the issuer to make specified payments
Usually a fixed interest security under which the issuer contracts to pay the lender a fixed principal amount at a stated date in the future, and a series of interest payments, either semi-annually or annually. Interest payments may vary through the life of bond.
A debt security issued by a government or company. You receive regular interest payments at specified rates while you hold the bond and you receive the face value when it matures. Short-term bonds mature in less than five years; medium-term bonds mature in six to ten years; and long-term bonds mature in eleven years or greater.
Fixed interest security issued by a corporation or government, having a specific maturity date.
With respect to convertible bonds, the value the security would have if it were not convertible
security issue where one or two underwriters buy the entire issue.
A rise in a security's price above a resistance level (commonly its previous high price) or drop
security prices sometimes move wildly above their true values.
Bond whose principal repayment is linked to the price of another security. The bonds are
Buy limit order
A conditional trading order that indicates a security may be purchased only at the designated
A financial security such as a bond with a call option attached to it, i.e., the issuer has the right to
A financial chart usually used to plot the high, low, open,
Capital asset pricing model (CAPM)
An economic theory that describes the relationship between risk and
capital asset pricing model (CAPM)
Theory of the relationship between risk and return which states that the expected risk
The difference between the net cost of a security and the net sale price, if that security is sold at a loss.
Cash and carry
Purchase of a security and simultaneous sale of a future, with the balance being financed
A short-term security that is sufficiently liquid that it may be considered the financial
Also called spot markets, these are markets that involve the immediate delivery of a security
The market model applied to a single security. The slope of the line is a security's beta.
Cheapest to deliver issue
The acceptable Treasury security with the highest implied repo rate; the rate that a
A pledge of property or other assets by a customer who is borrowing from a financial institution. Financial institutions require collateral as security in the event that the customer defaults on his/her loan.
Collateral trust bonds
A bond in which the issuer (often a holding company) grants investors a lien on
Collateralized mortgage obligation (CMO)
A security backed by a pool of pass-throughs , structured so that
The combination of all of the individual opinions about a stock's or security's value.
Are equity instruments that take no security against assets, have no fixed terms of repayment and pay no fixed dividends.
These are securities that represent equity ownership in a company. Common shares let an
A financial security that represents an ownership claim on the
Common stock equivalent
A convertible security that is traded like an equity issue because the optioned
Complete capital market
A market in which there is a distinct marketable security for each and every
Also called private-label pass-throughs, any mortgage pass-through security not
The percentage by which the conversion price in a convertible security exceeds the
The number of shares of common stock that the security holder will receive from
Also called parity value, the value of a convertible security if it is converted immediately.
Are debt instruments that are convertible into common or preferred shares, take secondary or no security against assets, have flexible terms of repayment and charge fixed or floating interest rates.
The contractually specified price per share at which a convertible security can be
Coupon / Coupons
The periodic interest payment(s) made by the issuer of a bond
The rate of interest paid on a debt security. Generally stated on an
Creditor Proof Protection
The creditor proof status of such things as life insurance, non-registered life insurance investments, life insurance RRSPs and life insurance RRIFs make these attractive products for high net worth individuals, professionals and business owners who may have creditor concerns. Under most circumstances the creditor proof rules of the different provincial insurance acts take priority over the federal bankruptcy rules.
An entity that stands ready and willing to buy a security for its own account (at its bid price) or sell
Failure to make timely payment of interest or principal on a debt security or to otherwise comply
The rate of change of the price of a derivative security relative to the
An instrument with a value that is derived from the value of the
Similar to the reverse repurchase agreement - a simultaneous agreement to sell a security held in a
A classic negative change in ratings for a stock, and or other rated security.
The weighted average of the time until maturity of each of the
The expected life of a fixed-income security considering its coupon
Effective annual yield
Annualized interest rate on a security computed using compound interest techniques.
Effective Annual Yield
Annualized rate of return on a security computed using compound
efficient capital markets
Financial markets in which security prices rapidly reflect all relevant information about asset values.
Efficient Market Hypothesis
In general the hypothesis states that all relevant information is fully and
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