Financial Glossary |
| Financial Glossary |
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Adjustable Rate: An interest rate that changes periodically in relation to an index. Payments may increase or decrease accordingly.
All-or-None: This prevents a broker from filling an order in bits and pieces, which can lead to higher commissions because of a minimum cost for each transaction. The transaction must be for the exact number of shares specified.
American Depositary Receipts (ADR): Shares of foreign companies that trade in the United States. Banks hold the shares and issue certificates that give the holder a right to take possession. However, the stock of these foreign companies often is not registered through a U.S. stock exchange. This arrangement can allow a multinational company to have an international shareholder base without being listed on several stock exchanges.
Amortization: A repayment method in which the amount borrowed is repaid gradually though regular monthly payments of principal and interest. During the first few years, most of each payment is applied toward the interest owed. During the final years of the loan, payment amounts are applied almost exclusively to the remaining principal.
Analysts: Brokerage firms employ researchers to follow corporate sectors and report on prospects for companies within those groups. Their reports provide the basis for buy or sell recommendations by the firm and for the advice that registered representatives provide to clients.
Annual Information Form (AIF): Contains information that must by law be disclosed. Insider shareholdings and executive compensation are among the topics covered in the AIF.
Annual Membership: An amount that may be charged annually for having a line of credit available. Often charged regardless of whether or not you use the line.
Annual Percentage Rate (APR): The cost of credit on a yearly basis, expressed as a percentage. Includes up-front costs paid to obtain the loan, and is, therefore, usually a higher amount than the interest rate stipulated in the mortgage note.
Annual Reports: This once-a-year accounting to shareholders contains the formal financial statements for the latest fiscal year and a report on operations from management.
Any Part: The opposite of an All-or-None order.
Application Fee: Fees that are paid upon application for a mortgage. An application fee may frequently include charges for property appraisal and a credit report.
Appraisal: A fee charged by an appraiser to render an opinion of market value as of a specific date. Required by most mortgage.
Asset-Backed Security (ABS): A security comprised of bundled pools of assets that are sold as units and are backed by an asset. Examples include mortgage pools, bundled credit card receivables and car loans. The general theory is bundled assets provide a steady flow of income, usually interest income, while losses from defaults are spread across the pool.
Assumption of Mortgage: The agreement of a purchaser to become primarily liable for the payments on a mortgage loan. Unless otherwise specified by the lender, the seller may remain secondarily liable for payments.
At-The-Market: Buy or sell a specific number of shares at the best available price. If no buyer or seller is willing to move off the current bid-ask spread, these orders go through at the bid or ask price. Usually, these orders are executed quickly if a stock trades actively.
Average Work Week: A leading economic indicator. When companies have employees working overtime, it's a good sign for economic expansion.
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