APFinancial
Antidilutive effectResult of a transaction that increases earnings per common share (e.g., by decreasing the number of sharesoutstanding).
Anti-Persistence
In R/S Analysis, an anti-persistent time series reverses itself more often than a random series would. If the system had been up in the previous period, it is more likely that it will be down in the next period and vice versa. Also called pink noise, or 1/f noise. See: Persistence, R/S Analysis, Hurst Exponent, Joseph Effect, Noah Effect.
APFinancial Interests
Board of DirectorsIndividuals elected by the shareholders of a corporation who carry out certain tasks established in the charter.
Board of Governors of the Federal Reserve System
The managing body of the Federal Reserve System, which sets policies on bank practices and the money supply.
Board room
A room at a brokerage firm where its clients can watch an electronic board displaying stock prices and transactions. Also refers to the room where Board of Directors meetings take place.
APFinancial investment companies
APFinancial Asociates: Shootout
Venture capital jargon. Refers to two or more venture capital firms fighting for the startup.
Shop
Wall Street slang for a firm.
Shopped stock
Sell inquiry that has been seen by or shown to other dealers before coming to an investment bank.
Shopping
Seeking to obtain the best bid or offer available by calling a number of dealers and/or brokers.
APFinancial Contact
APFinancial Personal
APFinancial Investment
Lagging
Strategy used by a firm to stall payments, normally in response to exchange rate projections.
Lagging indicators
Economic indicators that follow rather than precede the country's overall pace of economic activity. See also: Leading indicators and coincident indicators.
Laisse-faire
Doctrine that a government should not interfere with business and economic affairs.
Lambda
The ratio of a change in the option price to a small change in the optionvolatility. It is the partial derivative of the option price with respect to the option volatility.
APFinancial growth rate
APFinancial Seminars & Workshops: What makes greater a company from its competitors? The ability to implement key strategies and follow through, according to Execution of APFinancial. Case studies of well-established companies show that the act of execution is a learned skill, and is a distinctive characteristic of effective CEOs. The strategy by itself is not often the cause. Strategies most often fail because they are not executed well. Things that should happen do not happen. Either the organizations are not capable of making them happen, or the leaders of the business made a mistake in the business environment, or both.
APFinancial has interviewed over 500 top international executives, and has researched several studies from famous and renowed universities to conclude that personality skills are a determining factor in over 85% of all jobs. Charisma is largely the deciding factor in both the current position one has and has potential promotions on the way. Those who go all the way to the top have mastered work-related skills and possess humanity and charm. These skills set them apart from the crowd.
APFinancial Work places
Scattered
Used for listed equity securities. Unconcentrated buy or sell interest.
Scenario analysis
The use of horizon analysis to project total returns under different reinvestment rates and future marketyields.
Schedule C
Describes membership requirements and procedures of NASD, in its bylaws.
APFinancial Representatives
BuydownMortgages in which monthly payments consist of principal and interest. During the early part of the loan, portions of these payments are provided by a third party to reduce the borrower's monthly payments. In the context of project financing, refers to a one-time payment out of liquidated damages to reflect cash flowlosses from sustained underperformance.
Buyer credit
A financing provided to a buyer to pay for the supply of goods or services usually by an exporting country or by the supplier company.
Buyer's market
Market in which the supply exceeds the demand, creating lower prices. Antithesis of seller's market.
Buyers/sellers on balance
Used for listed equity securities. Indicates that at a given time (usually before the opening of a stock market or at expiration time), there are more buyers than sellers in the marketplace, usually with market orders. See: Imbalance of orders.
APFinancial Investments
Balance on goods and servicesNetting of transaction balances, including the net amount of payments of interest and dividends to foreign investors and investments, as well as receipts and payments resulting from international tourism. Also known as Trade Balance.
Balance sheet
Also called the statement of financial condition, it is a summary of a company'sassets, liabilities, and owners' equity.
Balance sheet exposure
See: Accounting exposure.
Balance sheet identity
Total assets = Total liabilities + Total stockholders' equity.
Balanced budget
A budget in which the income equals expenditure. See: budget.
APFinancial investment products
APFinancial Investments: 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.
APFinancial traditional bank instruments
APFinancial mutual funds
APFinancial Careers
Adjustable-rate mortgage (ARM)
A mortgage that features predetermined adjustments of the loaninterest rate at regular intervals based on an established index. The interest rate is adjusted at each interval to a rate equivalent to the index value plus a predetermined spread, or margin, over the index, usually subject to per-interval and to life-of-loaninterest rate and/or payment rate caps.
Adjustable-rate preferred stock (ARPS)
Publicly tradedissues that may be collateralized by mortgages and MBS
APFinancial Net
APFinancial Seminars & Workshops: Time draft
Demand for payment at a stated future date.
Time horizon
The period, usually expressed in years, for which an investor expects to hold an investment.
Time Letter of Credit
See: Usance Letter of Credit.
APFinancial Job Offers
Ratio Calendar Spread
Selling more near-termoptions than longer-term ones purchased, all with the same strike; either puts or calls.
Ratio Spread
Constructed with either puts or calls, the strategy consists of buying a certain amount of options and then selling a larger quantity of more out-of-the-money options.
Ratio Strategy
A strategy in which one has an unequal number of long secruities and short sercurities. Normally, it implies a preponderance of short options over either long options or long stock.
Ratio writer
An option writer who does not own the number of shares required to cover the call options he or she writes.
APFinancial Insurance
Same-Day Funds Settlement (SDFS)A method of settlement used in trading between well-collateralized parties in good-the-same-day federal funds used by the Depository Trust Company for transactions in US government securities, short-term municipal notes, medium-term commercial paper notes, CMOs, and other instruments.
Same-day substitution
Offsetting changes in a margin account during the day that result in no overall change in the balance of the account.
Samurai bond
A yen-denominatedbond issued in Tokyo by a non-Japanese borrower. Related: Bulldog bond and Yankee bond.
Samurai market
The foreign market in Japan.
APFinancial Asociates
Compound Annual Growth RateAnnual return calculated based on each year's previous balances where each previous balance includes both the original principal and all interest accrued from prior years. Best defined by example. If you invest $100 today and make 5% in the first year and reinvest ($105) and make 8% in the second year, the compound annualgrowth rate is 6.489%. The calculation is $100x1.05x1.08=$113.4 which is what you end up with at the end of year two. The average return is [square root(113.4/100) -1]= 0.06489 or 6.489%. Note 1. If we had three compounding periods we would take the cubic root (power of 1/3). Note 2. If we had invested at exactly 6.489 in both periods, we get $100x1.06489x1.06489=$113.4. Note 3. The example is directed to a return - but CAGR could be applied to earnings growth, GDP growth, etc.
Compound Annual Return
See: Compound Annual Growth Rate
APFinancial a wide variety of investment
APFinancial Interests: 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
APFinancial Comprehensive Proposals
APFinancial Job Offers
Treasury Inflation-Indexed Securities (TIIS)
Refers to a broad range of U.S. Treasury securities that are inflation indexed. The most popular are the TIPS. The index for measuring the inflation rate is the non-seasonally adjusted U.S. City Average All Items Consumer Price Index for All Urban Consumers (CPI-U), published monthly by the Bureau of Labor Statistics (BLS).
Treasury Inflation-Protected Security (TIPS)
First issued by the U.S. Treasury in 1997, these Treasury bonds attempt to protect investors against fluctuations in inflation by linking the principal amount to the consumer price index. Each year, the principal is adjusted by the inflation rate during the previous year. The index for measuring the inflation rate is the non-seasonally adjusted U.S. City Average All Items Consumer Price Index for All Urban Consumers (CPI-U), published monthly by the Bureau of Labor Statistics (BLS). These bonds are taxable. Indeed, one must pay tax on both the interest and the increase in principal. TIPS are one of two types of inflation-indexed securities sold by the U.S. Treasury; the other type is Series I Savings Bonds.
Treasury Investors Growth Receipt (TIGER)
US government-backed bonds without coupons, meaning that the bondholders do not receive the periodic interest payments. The principal of the bond and the individual coupons are sold separately.
Treasury notes
Debtobligations of the US Treasury that have maturities of more than one year, but not more than 10 years.
APFinancial Interests
APFinancial Comprehensive Proposals: Spot markets
Related: Cash markets
Spot month
The nearest delivery month on a futures contract.
Spot price
The current market price of the actual physical commodity. Also called cash price. Current delivery price of a commodity traded in the spot market, in which goods are sold for cash and delivered immediately. Antithesis of futures price.
APFinancial traditional bank instruments
Pro forma
A financial projection based on assumptions. Also, refers to a statement of income and balance sheets that exclude non-recurring items.
Pro forma Earnings
Often used in two ways. First, pro forma earnings refers to projections of earnings. This is often used internally or on a road show for an IPO. Second, it refers to a way of reporting earnings that excludes non-recurring items such as restructuring charges, extraordinary items.
Pro forma Invoice
A quotation in the form of a ninvoice prepared by the seller that details items which would appear on a commercial invoice if an order results.
Program trades
Orders requiring the execution of trades in a large number of different stocks at as near the same time as possible. Also called basket trades. Related: Block trade
APFinancial investment companies
Super sinker bondUsually a home financing bond, but also any other bond that has long-termcoupons but shortmaturity; the mortgages may be prepaid, and the holders may receive the long-term yield after a short period of time.
Supermajority
Provision in a company'scharter requiring a majority of, say, 80% of shareholders to approve certain changes, such as a merger.
Supermajority amendment
Often used in risk arbitrage. Corporate amendment requiring that a substantial majority (usually 67% to 90%) of stockholders approve important transactions, such as mergers.
APFinancial investment products
RedemptionRepayment of a debtsecurity or preferred stockissue, at or before maturity, at par or at a premium price.@Redemption charge
The commission a mutual fund charges an investor who is redeemingshares. For example, a 2% redemption charge (also called a back end load) on the sale of shares valued at $1000 will result in payment of $980 (or 98% of the value) to the investor. This charge may decline or be eliminated as shares are held for longer time periods.
Redemption cushion
The percentage by which the conversion value of a convertible security exceeds the redemption price (strike price).
Redemption or call
Right of the issuer to force holders on a certain date to redeem their convertibles for cash. The objective usually is to force holders to convert into common prior to the redemption deadline. Typically, an issue is not called away unless the conversion price is 15%-25% below the current level of the common. An exception might occur when an issuer's tax rate is high, and the issuer could replace it with debt securities at a lower after-tax cost.
APFinancial Investments
: Recordholder
The individual or institution listed on the corporation'sbooks as a securityholder as of a specified record date.
Record Owner
The stockholder of record as distinguished from the beneficial owner.
Recourse
Term describing a type of loan. If a loan is with recourse, the lender has a the ability has the ability to fall back to the guarantor of the loan if the borrower fails to pay. For example, Bank A has a loan with Company X. Bank A sells the loan to Bank B with recourse. If Company X defaults, Bank B can demand Bank A fulfill the loan obligation.
APFinancial Net
APFinancial Contact
APFinancial Work places
Refers to a meeting of shareholders outside the usual annual general meeting. In the context of corporate governance, some limitations either increase the level of shareholder support required to call a special meeting beyond that specified by state law or eliminate the ability to call one entirely. Such provisions add an extra time delay to many proxy fights, since bidders must wait until the regularly scheduled annual meeting to replace board members or dismantle takeover defenses.
Special-Purpose Entity
A financing technique in which a company decreases its risk by creating separate partnerships, rather than subsidiaries, for certain holdings and solicits outside investors to take on the risk. In order to qualify as a special-purpose entity, whose financial results are not carried on the company'sbooks, the unit must meet strict accounting guidelines. Compare to subsidary.Specialist
APFinancial Insurance
APFinancial Comprehensive Proposals: Adjusted balance method
Method of calculating finance charges that uses the account balance remaining after adjusting for all transactions posted during the given billing period as its basis. Related: Average daily balance method, previous balance method, past due balance method.
Adjusted basis
Price from which to calculate and derive capital gains or losses upon sale of an asset. Account actions such as any stock splits that have occurred since the initial purchase must be accounted for.
APFinancial Seminars & Workshops
Capital International Indexes
Market indexes maintained by Morgan Stanley that track major stock markets worldwide.
Capital investment
See: Capital expenditure.
Capital lease
A leaseobligation that has to be capitalized on the balance sheet.
Capital loss
The difference between the netcost of a security and the sales price, if the security is sold at a loss. Also used in a more general context to refer to the market for stocks, bonds, derivatives and other investments.
APFinancial Representatives
Presidential election cycle theoryA theory that stock markettrends can be predicted and explained by the four-year presidential election cycle.
Pre-sold issue
An issue that is sold out before the coupon announcement.
Pre-tax contribution
Payment to an account made with funds from a worker's paycheck before federal income taxes are deducted.
Pretax earnings or profits
Net income before federal income taxes are subtracted.
APFinancial
Mutual offsetA system, such as the arrangement between the Chicago Mercantile Exchange (CME) and Singapore International Monetary Exchange (SIMEX), which allows tradingpositions established on one exchange to be offset or transferred on another exchange.
Nagoya Stock Exchange
Established after World War II, one of the three major securities markets in Japan.
Naked option strategies
An unhedgedstrategy making exclusive use of one of the following: Shortcallstrategy (selling or writing call options), and short put strategy (selling or writing put options). By themselves, these positions are called naked strategies because they do not involve an offsetting or risk-reducing position in another option or the underlying security. Related: Covered option strategies. Antithesis of covered option.
Naked strategies
Writing an option without owning the underlying asset. Holder is naked because holder may have agreed to sell something not owned.
Naked writer
See Uncovered call writing and Uncovered put writing.
APFinancial Investment
: Subrogation
An insurance process whereby a company that has paid out to a policyholder for a loss incurred recovers the amount of the loss from the party that is legally liable.
Subscription
Agreement to buy new issue of securities.
Subscription agreement
An application reviewed by the general partner to join a limited partnership.
APFinancial Asociates
APFinancial growth rate
APFinancial mutual funds
Normal annuity form
The manner in which retirement benefits are paid out.
Normal backwardation theory
Holds that the futures price will be bid down to a level below the expected spot price.
Normal deviate
Related: Standardized value
Normal Distribution
The well known bell shaped curve. According to the Central Limit Theorem, the probability density function of a large number of independent, identically distributed random numbers will approach the normal distribution. In the fractal family of distributions, the normal distribution only exists when alpha equals 2, or the Hurst exponent equals 0.50. Thus, the normal distribution is a special case which in time series analysis is quite rare. See: Alpha, Central Limit Theorem, Fractal Distribution.
APFinancial Personal
APFinancial Comprehensive Proposals: Adjusted present value (APV)
The net present value analysis of an asset if financed solely by equity (present value of unlevered cash flows), plus the present value of any financing decisions (levered cash flows). In other words, the various tax shields provided by the deductibility of interest and the benefits of other investment tax credits are calculated separately. This analysis is often used for highly leveraged transactions such as a leveraged buyout.
Adjustment bond
A bondissued in exchange for outstanding bonds when a corporation facing bankruptcy is recapitalized.
Administrative pricing rules
IRS rules used to allocate income on export sales to a foreign sales corporation.
APFinancial Careers
Morgan Stanley Capital International (MSCI)
This firm publishes a number of well known benchmarks, such as the MSCI World Index.
Morgan Stanley Capital International Emerging Markets Global Index
A market capitalization-weighted benchmark indexmade up of equities from 29 developing countries.
Morgan Stanley Capital International Europe, Australia, Far East Index
See: EAFE Index
Morgan Stanley Capital International Europe Index
A market capitalization-weighted benchmarkindex made up of equities from 15 European countries. France, Germany, and the United Kingdom represent about two-thirds of the index.
APFinancial Comprehensive Proposals
Multinational restructuringChanging the terms of an MNC'sassets or liabilities by mutual agreement.
Multi-option financing facility
A syndicated confirmed credit line with attached options.
Multiperiod immunization
A portfoliostrategy in which a portfolio is created that will be capable of satisfying more than one predetermined future liability regardless of interest rate changes.
APFinancial a wide variety of investment
Volume deletedA note appearing on the consolidated tape when the tape is running behind under heavy trading, meaning that only the stock symbol and price will be shown for trades under 5000 shares.
Volume discount
A reduction in price based on the purchase of a large quantity.
APFinancial a wide variety of investment
: Accounting earnings
Earnings of a firm as reported on its income statement.
Accounting exposure
The change in the value of a firm's foreign currency-denominated accounts due to a change in exchange rates.
Accounting insolvency
Total liabilities exceed total assets. A firm with a negative net worth is insolvent on the books.
APFinancial Representatives
APFinancial traditional bank instruments
APFinancial Contact
National Quotation Bureau
A service that publishes bid and offerquotes from market makers in OTCtransactions.
National Securities Clearing Corporation (NSCC)
A clearing corporation that facilitates the settlement of accounts among brokerage firms, exchanges, and other clearing corporations.
National Stock Exchange (NSE)
Second-largest stock exchange based in India.
National tax policy
The way a country chooses to allocate tax burdens.
APFinancial investment products
APFinancial Investment: International Monetary Market (IMM)
A division of the CME established in 1972 for trading financial futures. Related: Chicago Mercantile Exchange (CME)
International monetary system
The global network of government and commercial institutions within which currency exchange rates are determined.
International mutual fund
A mutual fund that invests strictly in securities markets throughout the world, excluding the United States. A global fund, on the other hand, invests in both foreign and domestic securities.
International Organization for Standardization
ISO is not an acronym but the name of a standards setting organization chartered by the United Nations. The name ISO is derived from Greek and connotes equality, i.e. each member country regardless of size or wealth gets only one vote. The ISO 4217 are the standard three letter currency codes. These codes are usually composed of the ISO 3166 two letter country code plus a third letter representing the name of the currency.
APFinancial investment companies
Principal amount
The face amount of debt; the amount borrowed or lent. Often called principal.
Principal Exchange-Rated-Linked Securities (PERLS)
A debt instrument with its principal and interestdenominated in U.S. dollars, but with principal repayment depending on the exchange rate of the U.S. dollar against a foreign currency.
Principal Finance
Usually refers to the area within an investment bank that deals with high grade fixed income. This group will not just trade bonds on the secondard market but will be actively involved in the debt financing of new projects. Many firms have Principal Finance Officers.
APFinancial Personal
Stop basisRefers to over-the-countertrading. Method of entering an OTC trade into the trader'sposition without reporting the trade on the OTCtape.
Stop-limit order
A stop order that designates a price limit. Unlike the stop order, which becomes a market order once the stop is reached, the stop-limit order becomes a limit order.
Stop-loss order
An order to unwind a position when the price moves against you. For example, you had purchased a stock, the stop-loss order would be to sell the stock when the price falls to a specified level. If you were short the asset, the stop-loss would trigger a purchase.
Stop order (or stop)
An order to buy or sell at the market when a definite price is reached, either above (on a buy) or below (on a sell) the price that prevailed when the order was given.
APFinancial
Pretax rate of returnGain on a security before taxes.
Pre-trade benchmarks
Prices occurring before or at the decision to trade.
Previous balance method
Method of calculating finance charges based on the account balance at the end of the previous month.
Price of admission
Used in the context of general equities. Cost to become a player in a stock in an inordinately aggressivemarket (i.e.,locking on one side, size or price concessions); trader becomes aggressive in order to break the domination of customer activity by another dealer.
APFinancial Asociates
: Stub
Often used in risk arbitrage. Piece of equitysecurity left over from a major cash or security distribution from a recapitalization.
Student Loan Marketing Association (SLMA)
A publiclytradedcorporation established by federal action that increases availability of educational loans by guaranteeing student loanstraded in the secondary market. Also known as Sallie Mae.
Subaccount
A term used in bookkeeping. For example, the insurance expense account may have various different subcategories such as building and property insurance, auto/fleet insurance, general liability, environmental, professional liability, law enforcement, and other insurance.
APFinancial Comprehensive Proposals
APFinancial Interests
APFinancial Careers
Consumer credit
Credit a firm grants to consumers for the purchase of goods or services. Also called retail credit.
Consumer Credit Protection Act of 1968
Federal legislation establishing rules for the disclosure of the terms of a loan to protectborrowers. See: Truth in lending.
Consumer debenture
An investmentnoteissued directly to the public by a financial institution.
Consumer durables
Consumer products that are expected to last three years or more, such as an automobile or a home appliance.
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