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Glossary |
Glossary 0-9|A|B|C|D|E|F|G|H|I|J|K|L|M|N|O|P|Q|R|S|T|U|V|W|Y|Z - R -Raiders Investors who attempt to acquire other firms in an unfriendly takeover. Rally An increase in the price of a stock or the level of the market. Rating Agency Companies that rate the likelihood of a firm to default on its debt obligations.
Real Assets Tangible assets include: plant and equipment; intangible include: technical expertise, trademarks & patents. Real Interest Rate Interest Rate that is adjusted for inflation. Record Date Date set by the company when dividends are declared. Owners who are registered on this date receive dividends. Also see ex-dividend date. Red Herring A preliminary prospectus. Refunding Replacement of existing debt with a new issue of debt. Regression Analysis A statistical technique for fitting best line through data. Regular Dividend Dividend that is expected to be maintained at regular time intervals. Reorganization Financial restructuring of a firm under bankruptcy. Both the firm's assets and its financial structure are modified. Repo (Repurchase Agreement) Purchase of Treasury securities from a securities dealer with an agreement that the dealer will repurchase them at a specified price. Required Return Minimum return required by investors to compensate them for assuming risk. Residual Dividend An approach to dividends that suggests a firm pay dividends if and only if acceptable investment opportunities for those funds are currently unavailable. Retained Earnings Earnings not paid out as dividends. Return on Equity See ROE Risk Premium Additional return, over the risk-free rate, to compensate investors for accepting (holding) risk.
Risk Aversion The dislike of risk. For risk averse investors, the pain from losing $1 is greater than the pleasure of winning $1. Thus, such investors have to be compensated with additional return to induce them to hold risky assets. ROE (Return on Equity)
Round Lot The purchase or sale of a quantity of stocks that is in multiples of 100, such as 200, 1,000, etc. Russell 2000 An equity index comprising 2000 mid-capitalization U.S. listed stocks. |0-9|A|B|C|D|E|F|G|H|I|J|K|L|M|N|O|P|Q|R|S|T|U|V|W|Y|Z| - S -S&P 500 Standard and Poor's stock price index comprising the 500 largest companies in the US Sallie Mae See Student Loan Marketing. Salvage value Scrap value of a plant or equipment. Seasoned New Issue Additional issue of shares. Seat A figure of speech for a membership on an exchange. SEC (Securities and Exchange Commission) The federal agency created by the Securities Exchange Act of 1934 to enforce federal securities laws. Secondary Market Where trading (exchange of ownership) of financial assets takes place. Seesaw Finance Issues related to daily movements in stock prices. "The market went down yesterday due to profit taking," or "The market did not go up yesterday despite US invasion of Mars." Selling Group A collection of investment bankers who participate in the distribution of new issues to potential investors. Senior Debt Debt which, in the event of liquidation, must be repaid before subordinated debt receives any payment. Also see Junior Debt. Settlement Date In US financial markets, an investor must pay for the purchase of shares by the third business day after securities are bought. An investor is also obligated to deliver an investment that he or she has sold by the third business day after the transaction. Share A unit of measuring ownership in a company (i.e., if a firm has 1,000 shares outstanding and if you own 100 of them, then you have a 10% claim on the firm's net income (NI) and assets). Shareholder Activism
Shark Repellents Legal anti-takeover mechanisms devised by management to deter potential takeovers. Shelf Registration A procedure that allows firms to file one registration statement covering several future issues of the same security. Shogan Bond Dollar-denominated bond issued in Japan by a non-resident. Short Interest The total number of shares of a security that have been sold short by customers and securities firms. (See Short Selling) Short Sale Sale of an asset that the investor does not own or any sale that is completed by the delivery of a security borrowed by the seller. Short selling is a legitimate trading strategy. Short sellers assume the risk that they will be able to buy the stock at a more favorable price than the price at which they sold short. Short Term Gain (Loss) The gain (loss) realized from the sale of securities or other capital assets held six months or less. Sinking Fund A requirement specified in a bond indenture that obligates the firm to annually retire a specified portion of the debt. SML (Security Market Line) Line representing the relationship between required return and beta.
Small Cap Stocks Stocks of companies that have small capitalization, i.e., those that are small in terms of market value. Sole Proprietorship A business owned by a single individual. The sole proprietor pays no corporate income tax but has unlimited liability for business debt and obligations. SPDRs "Spiders" The acronym for Standard & Poor's Depository Receipts. It is a basket of the 500 stocks in the S&P 500 index. Special Dividend See extra dividend. Spin-Off A newly created company that used to be part of a parent company. Parent company shareholders receive a pro rata ownership in the new company. Stock Split An accounting transaction that increases the number of shares held by existing shareholders in proportion to the number of shares currently held.
Stocks Equity claims on the net income (NI) and assets of a corporation. Stock Symbol A unique four- or five-letter symbol assigned to a Nasdaq security. If a fifth letter appears, it identifies the issue as other than a single issue of common stock or capital stock. Stock Ticker This is a lettered symbol assigned to securities and mutual funds that trade on US financial exchanges. Strike Price Exercise price of an option. Student Loan Marketing A privately owned, government-sponsored corporation that provides a secondary market for government-guaranteed student loans. It issues bonds to raise funds necessary for the purchase of student loans from financial institutions. Subordinated Debt (Junior debt) Debt whose holders, in the event of liquidation, get paid only after senior debt is paid off in full. (Also see senior debt) Sunk Cost Cost that has been incurred and cannot be recoverable. Sushi Bond Eurodollar bonds issued by Japanese corporation. Syndicate A group of investment bankers who together underwrite and market a new issue of securities or a large block of an outstanding issue. Systematic Risk. See market risk
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