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Definition of Stock market
Also called the equity market, the market for trading equities.
The market for trading equities, not including preferred stock.
A term of French origin used to refer to stock markets.
A type of active international management that measures the contribution to performance
An agreement in which one party, for an upfront premium, agrees to compensate the other at
An agreement in which one party agrees to pay the other at specific time periods if a specific
A call or put option based on a stock market index.
A money manager who assumes he or she can forecast when the stock market will go up and down.
Assets that can be traded in a public market, such as the stock market.
The tendency of small firms (in terms of total market capitalization) to outperform the
The common recurrent low or negative average return from Friday to Monday in the stock market.
This key ratio equals the current market price
Portfolio of all assets in the economy. In practice a broad stock market index, such as the Standard & Poor's Composite, is used to represent the market.
Economywide (macroeconomic) sources of risk that affect the overall stock market. Also called systematic risk.
A prolonged period of falling stock market prices.
A prolonged period of rising stock market prices.
Units of ownership, also called shares, in a public corporation. Owners of such units, called shareholders, share in the earnings of the company through dividends. The price of a stock is determined by supply and demand in the stock market.
A measurement of the extent to which the returns on a given stock move with stock market.
DLOM (discount for lack of marketability)
an amount or percentage deducted from an equity interest to reflect lack of marketability.
QMDM (quantitative marketability discount model)
model for calculating DLOM for minority interests r the discount rate
Acquisition of stock
A merger or consolidation in which an acquirer purchases the acquiree's stock.
Adjustable rate preferred stock (ARPS)
Publicly traded issues that may be collateralized by mortgages and MBSs.
American Stock Exchange (AMEX)
The second-largest stock exchange in the United States. It trades
markets in which the prevailing price is determined through the free interaction of
Auction rate preferred stock (ARPS)
Floating rate preferred stock, the dividend on which is adjusted every
Any market in which prices are in a declining trend.
Beta equation (Stocks)
The beta of a stock is determined as follows:
An illegal market.
A market where an intermediary offers search services to buyers and sellers.
Any market in which prices are in an upward trend.
The foreign market in the United Kingdom.
The market for trading long-term debt instruments (those that mature in more than one year).
Capital market efficiency
Reflects the relative amount of wealth wasted in making transactions. An efficient
Capital market imperfections view
The view that issuing debt is generally valuable but that the firm's
Capital market line (CML)
The line defined by every combination of the risk-free asset and the market portfolio.
Also called spot markets, these are markets that involve the immediate delivery of a security
An agreement between two or more countries that permits the free movement of capital
These are securities that represent equity ownership in a company. Common shares let an
Common stock/other equity
Value of outstanding common shares at par, plus accumulated retained
Common stock equivalent
A convertible security that is traded like an equity issue because the optioned
Common stock ratios
Ratios that are designed to measure the relative claims of stockholders to earnings
Complete capital market
A market in which there is a distinct marketable security for each and every
Conflict between bondholders and stockholders
These two groups may have interests in a corporation that
Convertible exchangeable preferred stock
Convertible preferred stock that may be exchanged, at the
Convertible preferred stock
Preferred stock that can be converted into common stock at the option of the holder.
Corner A Market
To purchase enough of the available supply of a commodity or stock in order to
Cumulative preferred stock
Preferred stock whose dividends accrue, should the issuer not make timely
A market where traders specializing in particular commodities buy and sell assets for their
The market for trading debt instruments.
markets for derivative instruments.
Direct search market
Buyers and sellers seek each other directly and transact directly.
Direct stock-purchase programs
The purchase by investors of securities directly from the issuer.
Dividend yield (Stocks)
Indicated yield represents annual dividends divided by current stock price.
Part of a nation's internal market representing the mechanisms for issuing and trading
Efficient capital market
A market in which new information is very quickly reflected accurately in share
Efficient Market Hypothesis
In general the hypothesis states that all relevant information is fully and
In the interbank Eurodollar deposit market, an either-way market is one in which the bid
The financial markets of developing economies.
Employee stock fund
A firm-sponsored program that enables employees to purchase shares of the firm's
Employee stock ownership plan (ESOP)
A company contributes to a trust fund that buys stock on behalf of
Equilibrium market price of risk
The slope of the capital market line (CML). Since the CML represents the
The money market for borrowing and lending currencies that are held in the form of
Excess return on the market portfolio
The difference between the return on the market portfolio and the
Exchange of stock
Acquisition of another company by purchase of its stock in exchange for cash or shares.
Also referred to as the international market, the offshore market, or, more popularly, the
Fair market price
Amount at which an asset would change hands between two parties, both having
Federal funds market
The market where banks can borrow or lend reserves, allowing banks temporarily
An organized institutional structure or mechanism for creating and exchanging financial assets.
The market for trading bonds and preferred stock.
Foreign banking market
That portion of domestic bank loans supplied to foreigners for use abroad.
Foreign bond market
That portion of the domestic bond market that represents issues floated by foreign
Foreign equity market
That portion of the domestic equity market that represents issues floated by foreign companies.
Part of a nation's internal market, representing the mechanisms for issuing and trading
Foreign market beta
A measure of foreign market risk that is derived from the capital asset pricing model.
A market in which participants agree to trade some commodity, security, or foreign
Direct trading in exchange-listed securities between investors without the use of a broker.
A market in which contracts for future delivery of a commodity or a security are bought or sold.
Purchases and sales of eurobonds that occur before the issue price is finally set.
Common stock of a company that has an opportunity to invest money and earn more than the
Common stock with a high dividend yield and few profitable investment opportunities.
Index and Option Market (IOM)
A division of the CME established in 1982 for trading stock index
spread The spread between the interest rate offered in two sectors of the bond market for
Intermarket spread swaps
An exchange of one bond for another based on the manager's projection of a
The mechanisms for issuing and trading securities within a nation, including its domestic
Internally efficient market
Operationally efficient market.
Related: See external market.
International Monetary Market (IMM)
A division of the CME established in 1972 for trading financial
Intramarket sector spread
The spread between two issues of the same maturity within a market sector. For
A futures market in which the nearer months are selling at price premiums to the more
Privately placed common stock, so-called because the SEC requires a letter from the purchaser
stocks that are traded on an exchange.
A market is locked if the bid = ask price. This can occur, for example, if the market is
stocks that are traded on an exchange.
Make a market
A dealer is said to make a market when he quotes bid and offered prices at which he stands
Margin account (Stocks)
A leverageable account in which stocks can be purchased for a combination of
The process whereby the book value or collateral value of a security is adjusted to reflect
An arrangement whereby the profits or losses on a futures contract are settled each day.
The total dollar value of all outstanding shares. Computed as shares times current
Market capitalization rate
Expected return on a security. The market-consensus estimate of the appropriate
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