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.1MTX Glossary: BONDS...
ANALYSIS Glossary
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Above Water The condition of an asset's actual value when it is greater than the asset's book value.
Absolute
Advantage The ability of a country, individual, company, or region to produce a good or service at a lower cost per unit than the cost at which any other entity produces that good or service.
Accounting
Period 1. In general, the time period reflected by a set of financial statements.
2. In terms of taxation, it is the 12-month period a taxpayer uses to determine their income tax.
Accretion 1. Growth through addition or expansion.
2. In reference to discount bonds, the term is used to specifically describe the accumulation of value until maturity.
Accretive
Acquisition An acquisition that will increase the acquiring company's EPS.
...EPS (Earnings per share)
Acid-Test
Ratio A stringent test that indicates if a firm has enough short-term assets to cover its immediate liabilities without selling inventory. The acid-test ratio is far more strenuous than the working capital ratio, primarily because the working capital ratio allows for the inclusion of inventory assets.
Calculated by:
(Cash + Accounts Receivable + Short-term Investments) / Current Liabilities
Active
Investing An investment strategy involving ongoing buying and selling actions of the investor. Active investors will purchase investments and continuously monitor their activity in order to exploit profitable conditions.
Active
Management An investing strategy that seeks returns in excess of a specified benchmark.
Actual
Return The actual gain or loss of an investor. This can be expressed in the following formula: expected return (ex-ante) plus the effect of firm-specific and economy-wide news.
Actuarial
Analysis The analysis of an investment's risk done by an actuary.
Advance /
Decline Line -
A/D A technical analysis tool representing the total of differences between advances and declines of security prices. The advance/decline line is considered the best indicator of market movement as a whole. Stock indexes such as the DJIA only tell us the strength of 30 stocks where as the A/D line provides much more insight.
Advisor A person or company responsible for making investments on behalf of and/or giving advice to investors.
After The Bell After the close of the stock market. »...After-Hours Trading: Understanding the Risks (SEC)
Aging A method used by accountants and investors to evaluate and identify any irregularities within a company's account receivables. Aging is achieved by sorting and inspecting the accounts according to their length outstanding.
Air Pocket
Stock When the price of a stock plunges unexpectedly, similar to an airplane when it hits an air pocket.
Airbag Swap An interest rate swap whose notional value adjusts according to rising interest rates by indexing the floating portion to a Constant Maturity Swap (CMS).
Alligator
Spread A term referring to an unprofitable spread regardless of favorable market movements. This loss is due entirely to large commissions charged upon the transactions.
Alternative
Assets A term referring to non-traditional assets with potential economic value.
Altman
Z-Score A predictive model created by Edward Altman in the 1960s. This model combines five different financial ratios to determine the likelihood of bankruptcy amongst companies.
...website (EDWARD I. ALTMAN)
Amortization 1. The paying off of debt in regular installments over a period of time.
2. The deduction of capital expenses over a specific period of time. Similar to depreciation, it is a method of measuring the consumption of the value of long-term assets like equipment or buildings.
Analyst A financial professional who has expertise in evaluating investments and puts together buy, sell, and hold recommendations on securities. Also known as a financial analyst or security analyst. »...Analyst Recommendations (SEC)
Ankle Biter Stock issues that are worth less than $500 million in terms of market capitalization. They are known as "small cap" stocks.
Annual
Report A corporation's annual statement of financial operations. Annual reports include a balance sheet, income statement, auditor's report, and a description of the company's operations. »...more (SEC)
APICS
Business
Outlook Index A national manufacturing index that surveys several manufacturing firms on a monthly basis. If the index is above 50 it signals expansion, if it dips below 50 it indicates contraction.
Appraisal
Ratio A ratio between the Alpha and "Residual Standard Deviation" of a product. This is mainly used by analysts.
Arithmetic
Mean
Average The average return from a series of returns over a period of time. Calculated by dividing the sum of the series by the number of observations.
Arms Index
(TRIN) A short-term technical analysis breadth indicator calculated as the following:
TRIN = (Advancing Issues/Declining Issues)/(Volume of Advancing Issues/Volume of Declining Issues)
Ascending
Tops This refers to a series of peaks, each peak higher than the previous one on the stock's chart pattern.
Ask Size The number of shares a seller is selling at a quoted ask price.
Aspirin
Count
Theory A market theory that states stock prices and aspirin production are inversely (opposite) related.
Asset Class A specific category of assets or investments.
Asset Play An incorrectly valued stock that is attractive because its combined asset value is greater than its market capitalization.
Asset
Stripper An individual who determines if the value of a company is worth more purchased as a whole or divided into separate assets which are sold off. This is usually done in order to fulfill debt agreements.
Asset
Turnover The amount of sales generated for every dollar's worth of assets. It is calculated by dividing sales in dollars by assets in dollars.
Asset
Valuation The process of determining the current worth of a portfolio, company, investment, or balance sheet item.
Atlanta
Fed Index A manufacturing survey that covers prominent manufacturing states like Georgia, Alabama, Florida, Tennessee, and Louisiana.
Available
Seat
Miles
(ASM) This refers to how many seat miles were actually available for purchase on an airline. If all of the seats on the plane are not sold, then the ASM indicates the overall capacity the airline is operating at.
Average
Annual
Growth Rate
(AAGR) The average increase in the value of a portfolio over the period of a year.
Average
Down The process of buying additional shares in a company at lower prices than you originally purchased. This brings the average price you've paid for all your shares down.
Average Up The process of buying additional shares in a company at higher prices than you originally purchased. This brings the average price you've paid for all your shares up.
Average
Qualitative
Opinion
(AQO) AQO is a number that summarizes analysts' ratings for a particular company.
Average
True Range
(ATR) A measure of volatility introduced by Welles Wilder in his book:
New Concepts in Technical Trading Systems.
Away from
the Market When the bid on an order is lower (or the ask price is higher) than the current market price for the security.
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Sources: Yahoo.com; Nasdaq.com; Boerse-Frankfurt.com; SEC.gov; Wikipedia.org; thefreedictionary.com; Others;
1MTX 2008
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