Glossary-of-Investment-Terms - Glossary of Investment Terms...

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1 Active Management An investment management approach that seeks to outperform the market through the application of informed, independent investment judgement. The opposite of passive management, or indexing which seeks to replicate market performance through the construction of a portfolio mirroring the composition of the market. Accrued Interest Interest that has accumulated on a debt security since the last coupon (interest payment). Annual Report In the context of the New Zealand sharemarket, the annual report is a financial report or statement issued by a company to its shareholders. The annual report contains a profit and loss statement, a balance sheet and a statement of cash flow, as well as notice of the Annual General Meeting (AGM) and business resolutions to be discussed. Arbitrage The buying and selling of an asset or security, usually on two separate exchanges, to take advantage of any variance in price that may exist. Ask The price at which someone is prepared to sell shares. Sometimes referred to as Offer . Asset Allocation The selection and weighting of shares, bonds, property and cash equivalents and other assets in which your money is invested creating your investment portfolio. Asset Class When talking about investment, an asset class refers to one of four general types of investment: shares, bonds, property or cash. At Market An instruction with a buying or selling Order indicating that the order should be carried out immediately at the best possible price. Bear Market A period of market weakness. Bid The price at which someone is prepared to buy a security. Bid-Ask Spread The bid ask spread is the difference between buying and selling price. (The bid is the price offered; the ask price is the price requested). Blue Chip Shares Shares, in a high quality company with a record of steady or growing profits and dividend payments. Bonds Bonds are certificates of debt issued by companies,governments and other organisations in order to raise funds. Bonds have a fixed repayment date and pay a fixed rate of interest. The price of bonds fluctuates as interest rates move. Bonds can be traded on the debt market. Bond Premium When the price of a bond exceeds its face value. Buy on Margin An investor may use money borrowed from a broker or bank to purchase securities. Bonus Shares/Bonus Issue Additional shares issued by the company to existing shareholders for free, usually in a pre-determined ratio to the number of shares already held. Glossary of Investment Terms Like many industries, the terms used within the investment industry can be quite confusing. We have developed the following glossary of terms to help you navigate your way.
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2 Glossary of Investment Terms 09/10 Brokerage The fee paid to a sharebroking firm for buying or selling shares and fixed interest securities. Bull Market
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This note was uploaded on 05/20/2011 for the course ECON 5128 taught by Professor Ram during the Spring '11 term at Cambridge College.

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Glossary-of-Investment-Terms - Glossary of Investment Terms...

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