APFinancial a wide variety of investment

Real income
The income of an individual, group, or country adjusted for inflation.

Real interest rate
The rate of interest excluding the effect of expected inflation; that is, the rate that is earned in terms of constant-purchasing-power dollars. Interest rate expressed in terms of real goods, i.e. nominal interest rate adjusted for expected inflation.

Real market
The bid and offer prices at which a dealer could execute the desired quantity of shares. Quotes in the brokersmarket.

Real option
An option or option-like feature embedded in a realinvestment opportunity.

APFinancial Interests

Spot futures parity theorem
Describes the theoretically correct relationship between spot and futures prices. Violation of the parity relationship gives rise to arbitrage opportunities.

Spot interest rate
Interest rate fixed today on a loan that is made today. Related: Forward interest rates.

Spot lending
Originating mortgages by processing applications taken directly from prospective borrowers.

APFinancial Seminars & Workshops

APFinancial mutual funds: Self-tender offer
A company that tenders for its own shares.
Sell the book
Used for listed equity securities. Order to a broker by the holder of a large quantity of shares of a security to sell all that can be absorbed at the current bid price. The term derives from the specialist's book - the record of all the buy and sell orders members have placed in the stock one handles. In this scenario, the buyers potentially include those in the specialist's book, the specialist for its own account, and broker-dealers.

Sell hedge
Related: short hedge.

Sell limit order
Conditional trading order that indicates that a security may be sold at the designated price or higher. Related: Buy limit order.

Sell off
Sale of securities under pressure. See: Dumping.
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Toxic Convertible
Used by companies that are in such bad shape, that there is no other way to get financing. This instrument is similar to a convertible bond, but convertible at a discount to the share price at issuance and for a fixed dollar amount rather than a specific number of shares. The further the stock falls, the more shares you get. Popular in the mid to late 1990s. Also known as death spiral convertibles or floorless convertibles.

Tracers
Refers to investment trusts which are populated by corporate bonds. In October 2001, Morgan Stanley's Tradable Custodial Receipts (Tracers) was launched. Tracers contain a number of coporate bonds and credit default swaps which are selected for liquidity and diversity. Lehman Brothers launched a similar product, Targeted Return Index Securities (Trains) in January 2002. Both contain investment grade bonds. If a bond falls out of the investment grade category, it is either liquidated from the trust or delivered to the investor. Both Tracers and Trains are 144a trust structures and are only available to qualified buyers because they are considered private securities due to the trust structure.

Tracking error
In an indexingstrategy, the standard deviation of the difference between the performance of the benchmark and the replicating portfolio.

APFinancial Job Offers
APFinancial: Treasuries
Related: Treasury securities

Treasury
US Department of the Treasury, which issues all Treasury bonds, notes, and bills as well as overseeing agencies. Also, the department within a corporation that oversees its financial operations including the issuance of new shares.

Treasury bills
Debtobligations of the US Treasury that have maturities of one year or less. Maturities for T-bills are usually 91 days, 182 days, or 52 weeks. Treasury bills are sold at a discount from face value and do not pay interest before maturity. The interest is the difference between the purchase price of the bill and the amount that is paid to you either at maturity (this amount is the face value) or when you sell the bill prior to maturity.

APFinancial growth rate

Stop-out price
The lowest auction price at which Treasury bills are sold.

Stop payment
An order given a depository institution not to pay out cash for a check; often used when the check has been stolen or lost.

APFinancial Investment

Ask
This is the quoted ask, or the lowest price an investor will accept to sell a stock. Practically speaking, this is the quoted offer at which an investor can buyshares of stock; also called the offer price.

Asked price
In context of general equities, price at which a security or commodity is offered for sale on an exchange or in the OTCMarket.

Asked to bid/offer
Used in context of general equities. Usually a seller (buyer) looking to aggressively sell (buy) stock, usually asking for a capital commitment from an investment bank.

Aspirin
Australian Stock Price Riskless Indexed Notes. Zero-coupon four-year bonds repayable at face value plus the percentage increase by which the Australian stock index of all ordinaries (common stocks) rises above a predefined level during the given period.

Assay
Metal purity test to confirm that the metal meets the standards for trading on a commodities exchange (commodities exchange center).

APFinancial Net

Burn rate
Used in venture capital financing to refer to the rate at which a startup company expends capital to financeoverheadcosts prior to the generation of positive cash flow.

Burnout
Depletion of a tax shelter's benefits. In the context of mortgage backed securities it refers to the percentage of the pool that has prepaid their mortgage.

Business combination
See: Merger

Business Combination laws
These laws impose a moratorium on certain kinds of transactions (e.g., asset sales, mergers) between a large shareholder and the firm for a period usually ranging between three and five years after the shareholder's stake passes a pre-specified (minority) threshold. These laws are in place in more than half the U.S. states.

Business cycle
Repetitive cycles of economic expansion and contractions. The official peaks and troughs of the US cycle are determined by the National Bureau of Economic Research in Cambridge, MA.

Business day
A day in which financial markets are open for trading.

APFinancial traditional bank instruments

APFinancial Net: Stock ticker
A letter designation assigned to securities and mutual funds that trade on US financial exchanges.

StockWatch
A stock surveillance program offered by proxy solicitation firms, and selected transfer agents, to track and monitor sales and purchases of a corporation's shares and provide valuable information at the beneficial owner level.

Stock watcher (NYSE)
A computerized service that monitors and investigates trading activity on the NYSE in order to identify any unusual activity or security movement that might be caused by rumors or illegal activities.

Stockholder
See: Shareholder.
APFinancial Comprehensive Proposals
APFinancial Investments
APFinancial Work places

Shell corporation
An incorporated company with no significant assets or operations, often formed to obtain financing before beginning actual business, or as a front tax evasion.

Shenzhen Stock Exchange
One of two major securities markets in China.

Shipper's Export Declaration (SED)
Document required by the U.S. Department of Commerce for exports of certain controlled items, and/or shipments to certain countries, and/or shipments anywhere that exceed certain dollar amounts. This document is used to monitor shipments of controlled goods.

APFinancial Representatives
APFinancial: Common stock market
The market for trading equities, not including preferred stock.

Common stock/other equity
Value of outstandingcommon shares at par, plus accumulatedretained earnings. Also called shareholders' equity.

Common stock ratios
Ratios that are designed to measure the relative claims of stockholders to earnings (cash flow per share), and equity ( book value per share) of a firm.

Commonwealth Development Corp
A British development finance institute.

Comnmunity Bank
A smaller bank that is regulated by the Office of the Comptroller of Currency (OCC).Currently, there is no official definition of Community Bank, i.e. in terms of asset size.

APFinancial Contact

Municipal bond insurance
An insurance policy which guarantees payment on municipal bonds in the event of default .

Municipal bond fund
A mutual fund that invests in bondsissued by state, city, and/or local governments. The interest obtained from these bonds is passed through to shareholders and is generally free of federal (and sometimes state and local) income taxes.

Municipal improvement certificate
A certificate used to finance local government projects and services which is financed by a special tax assessment and provides tax-free interest .

Municipal Investment Trust (MIT)
A unit investment trust that buys municipal bonds and usually holds them until maturity, passing the bond income on to shareholders, usually tax-free.

Municipal notes
Short-termnotesissued by municipalities in anticipation of tax receipts, proceeds from a bond issue, or other revenues.

Municipal revenue bond
A bondissued to finance a public project that is funded by the revenues of the project.

APFinancial investment products

Risk lover
A person willing to accept lower expected returns on prospects with higher amounts of risk.
Risk management
The process of identifying and evaluating risks and selecting and managing techniques to adapt to risk
Risk-neutral
Insensitive to risk.

Risk-prone
Willing to pay money to assume risk from others.

Risk premium
The reward for holding the riskymarketportfolio rather than the risk-free asset. The spread between Treasury and non-Treasury bonds of comparable maturity.

APFinancial mutual funds

Air Freight Consolidator
An air freight carrier that does not own or operate its own aircraft but ships its cargo with actual equipment operating carriers. Consolidators issue house air waybills to their customers and receive master air waybills from the actual carriers.

Air pocket stock
A stock whose price drops precipitously, often on the unexpected news of poor results.

APFinancial Careers

APFinancial Interests: Seasoned
In the case of equity, having gained a reputation for quality with the investingpublic and enjoying liquidity in the secondary market; in the case of convertibles, having traded for at least 90 days after issue in Europe, and thus available for sale legally to U.S. investors.

Seasoned datings
Extended credit for customers who order goods in periods other than peak seasons.

Seasoned issue
Issue of a security for which there is an existing market. Related: Unseasoned issue.
APFinancial
APFinancial investment companies
APFinancial Representatives

Top-heavy
At a price level where supply is exceeding demand. See: Resistance level.

Topline growth
Growth in revenues. Also see: Bottomline growth.
Topping out
Denoting a market or a security that is at the end of a period of rising prices and can now be expected to stay on a plateau or even to decline.

Toronto Stock Exchange (TSE)
Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options.

Total

APFinancial traditional bank instruments
APFinancial Seminars & Workshops: Product cycle theory
Theory suggesting that a firm initially establish itself locally and expand into foreign markets in response to foreign demand for its product; over time, the MNC will grow in foreign markets; after some point, its foreign business may decline unless it can differentiate its product from competitors.

Product Differentiation
A source of competitive advantage that depends on producing some item that is regarded to have unique and valuable characteristics.

Product risk
A type of mortgage pipeline risk that occurs when a lender has an unusual loan in production or inventory but does not have a salecommitment at a prearranged price.

Production
In the context of project financing, a defined portion of the proceeds of production up to a dollar amount.

APFinancial Job Offers

BAN
See: Bank anticipation notes

BAR
See: Builders' All Risk

BB
The two-character ISO 3166 country code for BARBADOS.

BBD
The ISO 4217 currency code for Barbadian Dollar.

BD
The two-character ISO 3166 country code for BANGLADESH.

BDT
The ISO 4217 currency code for Bangladeshi Taka currency.

BE
The two-character ISO 3166 country code for BELGIUM.

APFinancial Personal

Plan for reorganization
A plan for reorganizing a firm during the Chapter 11bankruptcy process.

Plan sponsors
The entities that establish pension plans, including private business entities acting for their employees; state and local entities operating on behalf of their employees; unions acting on behalf of their members; and individuals representing themselves.

Planned amortization class (PAC)
(1) The class of CMO that has the most stable cash flows and the lowest prepaymentrisk of any class of CMO. Because of a stable cash flow, it is considered the least risky CMO. (2) A CMO bond class that stipulates cash flowcontributions to a sinking fund. A PAC directs principal payments to the sinking fund on a priority basis in accordance with a predetermined payment schedule, with prior claim to the cash flows before other CMO classes. Similarly, cash flows received by the trust in excess of the sinking fund requirement are also allocated to other bond classes. The prepayment experience of the PAC is therefore very stable over a wide range of prepayment experience.

APFinancial Insurance

Country beta
Covariance of a national economy's rate of return and the rate of return of the world economy divided by the variance of the world economy.

Country diversification
Investment of a global or international portfolio'sassets in securities of various countries.

Country economic risk
Developments in a national economy that can affect the outcome of an international financial transaction.

APFinancial Interests

: Portfolio
A collection of investments, real and/or financial.

Portfolio allocation by region
The distribution, by geographic region, of a portfolio'sholdings.

Portfolio asset allocation
The distribution, by type of asset, of a portfolio'sholdings.

Portfolio beta
Used in the context of general equities. The beta of a portfolio is the weighted sum of the individual asset betas, According to the proportions of the investments in the portfolio. E.g., if 50% of the money is in stock A with a beta of 2.00, and 50% of the money is in stock B with a beta of 1.00,the portfolio beta is 1.50. Portfolio beta describes relative volatilityof an individual securitiesportfolio, taken as a whole, as measured by the individual stockbetas of the securities making it up. A beta of 1.05 relative to the S&P 500 implies that if the S&P'sexcess return increases by 10% the portfolio is expected to increase by 10.5%.
APFinancial Investment
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APFinancial Asociates

Tax liability
The amount in taxes a taxpayer to the government.

Tax lien
The right of the government to enforce a claim against the property of a person owing taxes.

Tax and loan account
An account at a private bank, held in the name of the district Federal Reserve Bank, which holds operating cash for the business of the US Treasury.

Tax loss carryback, carryforward
A tax benefit that allows business losses to be used to reduce tax liability in previous and or following years.

Tax-neutrality
Characteristic that taxes do not interfere with the natural flow of capital toward its most productive use.

APFinancial investment companies
APFinancial Seminars & Workshops: Barrier options
Option contracts that remain dormant until a trigger point (the barrier price) is reached, at which point the call or put option is activated, and results either in a long or short options position, or in the automatic exercise of an options position. One example is an up-and-in call. Assume an exercise price of $50 and a barrier price of $53. If the stock stays below $53, the call option cannot be exercised. If the stock price reaches the $53 barrier price, the holder then has a call option on the shares at $50. These are exotic options.

Barron's confidence index
Index measuring the ratio of the averageyield on 10 top-grade bonds to the average yield on 10 intermediate-grade bonds. The discrepancy between high-rated top-grade bonds and low-rated bond yields establishes a measure that is indicative of investor confidence.

Barter
The trading/exchange of goods or services without using currency.

APFinancial investment products

Acid test ratio
Also called the quick ratio, the ratio of current assetsminusinventories, accruals, and prepaid items to current liabilities.

Acquired surplus
The surplus acquired when a company is purchased in a pooling of interests combination, i.e. the net worth not considered to be capital stock.

Acquiree
A firm that is being acquired.

APFinancial growth rate

Subordinated
A claim ranked lower in priority than other claims. Common stock claims are always subordinated to debt.

Subordinated bonds
Securities that fall after others in priority of claims on the entity in the case of financial distress.

Subordinated debenture bond
An unsecured bond that ranks after secured debt, after debenture bonds, and often after some general creditors in its claim on assets and earnings. Related: Debenture bond, mortgage bond, collateral trust bonds.

Subordinated debt
Debt over which senior debt takes priority. In the event of bankruptcy, subordinated debtholders receive payment only after senior debt claims are paid in full.

APFinancial Careers

National Foundation for Consumer Credit
A nonprofit organization that seeks to help consumers who have taken on too much debt by helping them work out payment plans and supplying credit counseling.

National Futures Association (NFA)
The futuresindustryself-regulatory organization established in 1982.

National market
Related: Internal market

APFinancial Contact

: Window contract
A guaranteed investment contract purchased with deposits over some future designated time period (the "window"), usually between 3 and 12 months. All deposits made are guaranteed the same credit rating. Related: Bullet contract.

Window dressing
Trading activity near the end of a quarter or fiscal year that is designed to improve the appearance of a portfolio to be presented to clients or shareholders. For example, a portfolio manager may sell losing positions so as to display only positions that have gained in value.

Winnipeg Commodity Exchange
Canada's only agricultural futures and optionsexchange, located in Manitoba.
APFinancial Work places
APFinancial mutual funds
APFinancial Comprehensive Proposals

Nominal cash flow
A cash flow expressed in nominalterms if the actual dollars to be received or paid out are given.

Nominal dollars
Dollars that are not adjusted for inflation.

Nominal exchange rate
The actual foreign exchangequotation in contrast to the realexchange rate, which has been adjusted for changes in purchasing power.

Nominal exercise price
The exercise price of a GNMAoptioncontract, which equals the unpaid principal balance multiplied by the adjusted exercise price.

APFinancial
APFinancial Seminars & Workshops: Price give
Used in the context of general equities. Willingness of a buyer or seller to negotiate on price, within reason, from the price at the last sale or the indicated level. See: Takes price.

Price immunization
Portfolio protection strategy that focuses on the market value of assets and liabilities.

Price impact costs
Related: Market impact costs

Price indexes
See: Consumer price index and producer price index

APFinancial a wide variety of investment

Constant ratio plan
Maintaining a predetermined ratio between stock and fixed income investments through regular adjustments of distribution of funds into different investments. See: formula investing.

Constant yield method
Allocation of annual interest on a zero-coupon security for income tax use.

Construction loan
A short-termloan to finance building costs.

APFinancial Seminars & Workshops

Self-liquidating loan
Loan to financecurrent assets. The sale of the current assets provides the cash to repay the loan.

Self-regulatory organization (SRO)
Organizations that enforce fair, ethical, and efficient practices in the securities and commodityfutures industries, including all national securities and commoditiesexchanges and the NASD.

Self-selection
Consequence of a contract that induces only one group to participate.

APFinancial Net

Clearing House Interbank Payments System (CHIPS)
An international wire transfer system for high-value payments operated by a group of major banks.

Clearinghouse
An adjunct to a futures exchange through which transactionsexecuted on its floor where trades are settled by a process of matching purchases and sales. A clearing organization is also charged with the proper conduct of delivery procedures and the adequate financing of the entire operation.

Clearing member
A member firm of a clearing house. Each clearing member must also be a member of the exchange. Not all members of the exchange, however, are members of the clearing organization. All trades of a non-clearing member must be registered with, and eventually settled through, a clearing member.

APFinancial Investments

: Multicurrency loans
Gives the borrower the possibility of drawing a loan in different currencies.

Multifactor CAPM
A version of the capital asset pricing model derived by Robert Merton that includes extra-market sources of risk referred to as factors. Related: arbitrage pricing theory

Multifamily loans
Loans usually represented by conventional mortgages on multi-family rental apartments.

Multilateral Investment Guarantee Agency (MIGA)
Agency established by the World Bank that offers various forms of political riskinsurance to corporations.
APFinancial Job Offers
APFinancial Interests
APFinancial Net

Multiple listing
An agreement used by a broker who is a member of a multiple-listing organization, providing the exclusive right to sell with an additional authority and obligation on the part of the listing broker to distribute the listing to the other brokers.

Multiple peril insurance
Insurance policy which covers a wide variety of property damage.

Multiple rates of return
More than one rate of return from the same project that make the net present value of the project equal to zero. This situation arises when the IRR method is used for a project in which negative cash flows follow positive cash flows. For each sign change in the cash flows, there is a different rate of return.

Multiple regression
The estimated relationship between a dependent variable and more than one explanatory variable.

APFinancial Insurance
APFinancial Work places: Bank Investment Contract (BIC)
Interestguaranteed by the bank in a portfolio over a specific time frame with a specific yield.

Bank line
Line of credit that a bank grants to a customer.

Bank Letter of Credit Policy
Standards allowing banks to confirm letters of credit by foreign banks supporting the purchase of US exports.

Bank note
A term used synonymously with paper money or currency issued by a bank. Notes are, in effect, a promise to pay the bearer on demand the amount stated on the face of the note. Today, only the Federal Reserve Banks are authorized to issue bank notes, i.e. Federal Reserve notes, in the United States.

APFinancial a wide variety of investment

Contango
A market condition in which futures prices are higher in the distant delivery months.

Contingency
An additional amount or percentage added to any cash flow item (ie. Capex). Care is needed to ensure it is either to be spent or to remain as a cushion.

Contingency graph
A plot of the net profit to a speculator in currency options under various exchange rate scenarios.

APFinancial Contact

Spousal remainder trust
A fixed-term trust from which income is distributed to the beneficiary (such as a child of the grantor) to take advantage of a lower tax bracket, and that at the end of the term passes to the grantor's spouse.

Spread
(1) The gap between bid and askprices of a stock or other security. (2) The simultaneous purchase and sale of separate futures or options contracts for the same commodity for delivery in different months. Also known as a straddle. (3) Difference between the price at which an underwriterbuys an issue from a firm and the price at which the underwriter sells it to the public. (4) The price an issuer pays above a benchmark fixed-income yield to borrowmoney.

Spread income
Also called margin income, the difference between income and cost. For a depository institution, the difference between the assets it invests in (loans and securities) and the cost of its funds (deposits and other sources).

APFinancial Personal

Offshore finance subsidiary
A wholly owned affiliate incorporated overseas, usually in a tax haven country, whose function is to issuesecurities abroad for use in either the parent's domestic or foreign business.

Offshore fund
A mutual fund whose headquarters is based outside the United States.

"O.K. to cross"
Used for listed equity securities. "Legal to cross the buy and sell orders on the exchange floor because transactor is not a principal in the transaction."

Old-line factoring
Factoring arrangement that provides collection, insurance, and finance for accounts receivable.

Oligopoly
A Market characterized by a small number of producers who often act together to control the supply of a particular good and its market price.

Oligopsony
A Market characterized by a small number of large buyers who control all purchases and therefore the market price of a good or service.

APFinancial growth rate

: 25% rule
The guidelines that bondeddebt over 25% of a municipality's annualbudget is excessive.

Twisting
Convincing a customer that trades are necessary in order to generate a commission. This is an unethical practice.
APFinancial Representatives
APFinancial Careers
APFinancial investment products

Uniform securities agent state law examination
A test required in some states for registered representatives who are employees of member firms of the NASD or over-the-counterbrokers.

Uniform Transfers to Minors Act (UTMA)
A law similar to the Uniform Gifts to Minors Act that extends the definition of gifts to include real estate, paintings, royalties, and patents.

Unilateral transfers
Items in the current account of the balance of payments of a country's accounting books that correspond to gifts from foreigners or pension payments to foreign residents who once worked in the particular country.



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