Glossary Terms & Definitions
Glossary Terms & Definitions

AlphaA measure of a fund's risk-adjusted return. Alpha measures the difference between a fund's actual returns and its expected performance given its level of risk (as measured by beta). A positive alpha indicates the fund has performed better than expected, given its beta; while a negative alpha indicates the fund has underperformed. The usefulness of the Alpha measure is entirely dependent upon the quality of the beta measure.
All Or None (AON)"AON" is a type of restricted order where the entire order must be filled at one time or nothing will be filled at all. If you do not specify your order as "All Or None" when placing a limit order, there is a possibility that your order will be filled partially. Full commission fees and charges apply for each partial fill, except those transacted within the same business day.
American Depositary Receipt (ADR)A security created by a U.S. bank that evidences ownership to a specified number of shares of a foreign security held in a depository in the issuing company's country of domicile. The certificate, transfer and settlement practices for ADRs are identical to those for U.S. securities. U.S. investors often prefer ADRs to direct purchase of foreign shares because of the ready availability of price information, lower transaction costs and timely dividend distribution.
AMEXAmerican Stock Exchange is the largest floor-based stock exchange in the U.S.
ArbitrageA technique of buying and selling a stock at two different prices in two different markets, resulting in profit without risk.
Ask / Offer PriceThe price at which someone is willing to sell shares. An ask can also be known as an offer.
Ask SizeThe quantity of shares offered at a specific ask price.
Authorized CapitalThe amount of equity capital, measured at par value, that a company is allowed to raise by issuing shares, as set out in its memorandum of association. A company does not necessarily issue shares to the limit of its authorized capital; its authorized capital might be $10 million and its paid-up capital $5 million. On the other hand, by issuing shares at a premium, a company can raise considerably more cash than its authorized capital. The authorized capital may be increased by the vote of a general meeting of the company's shareholders, provided this is permitted by the articles of association.
Automatic Order Matching and Execution System (AMS)The automated trading platform the Stock Exchange of Hong Kong uses for matching and executing transactions.
Average VolumeThe total volume for the previous three months divided by the number of trading days of the previous three months. Compare this number to the daily volume to see if investor interest in the stock has increased or decreased.

Back-end loadIt is a mutual fund series that has no commission to purchase but is subject to a fund company charge upon redemption. Typically deferred load charges start at around 5% to 7% in the first year, and will decline towards 0% over the next 5 to 7 years. Also known as DSC funds, back end funds or rear load funds.
Basis PointJust one hundredth of one percentage point or 0.01%. Basis points make for a handy way to state small differences in yield. For example, it is much easier to say one bond yields 10 basis points more than another than it is to say it yields one-tenth of one percentage point more.
Bear MarketA market where trading confidence is low and where share prices are generally falling. The opposite of a Bull Market.
BetaA measure of an asset's volatility relative to its benchmark. Beta is calculated using monthly returns for the past three years. The beta of the benchmark, or index, is 1.00. So a fund with a beta coefficient of 1.00 has experienced up and down movements of roughly the same magnitude as the market. Generally, a fund with a beta of 1.25 is expected to do 25% better than its benchmark in an up market and 25% worse in a down market. Conversely, a fund with a beta of .75 is expected to do 25% worse than its benchmark in a rising market and 25% better in a falling market. A low beta, however, does not necessarily mean lower volatility -- just that the fund does not have a high correlation with its benchmark.
Bid PriceTraders also speak of a bid price, the price offered. This usually indicates the top price a purchaser will pay.
Bid SizeThe quantity of shares offered at a specific bid price.
Bid-Ask SpreadThe difference between the bid and ask prices for a stock.
Blue ChipThe shares from a leading company that is known for excellent management and a strong financial structure. Generic term used to refer to a quality security.
Board LotA standard trading amount that has been agreed upon by stock exchanges.
BondA certificate of debt issued by a borrower that usually pays a set rate of interest for a specific period of time and featuring a guarantee of repayment of principal in full at maturity.
Bonus IssueShares in a company that are issued free to existing shareholders, sometimes called a 'scrip issue'. A company might make a bonus or scrip issue as an alternative to increasing its dividend payout. New shares are issued to shareholders in proportion to their holdings, for example, one bonus share for every five shares held.
Book ValueFor an individual investor, book value is the amount you originally invested plus any interest or dividends you earned that have been reinvested.
BrokerAn intermediary; someone who buys and sells on behalf of clients. In the world of financial intermediaries there are sharebrokers, money brokers, fixed-interest brokers and futures brokers.
Brokerage FeeFee paid to stockbroking firm for the buying or selling of shares. Also referred to as a commission.
Bull MarketA market where trading confidence is high and where share prices are generally rising. The opposite of a Bear Market.

Call OptionA derivative that gives the buyer the right to buy 100 shares of the underlying security at a fixed price, before a specified date, usually three, six, or nine months in the future. For this right, the buyer pays a premium.
Callable BondsA bond which the issuer can decide to redeem before its stated maturity date. A call date and a call price are always given. You face a risk with a callable bond that it will be redeemed if its stated coupon is higher than prevailing rates at the time of its call date. If that happens, you won't be able to reinvest your capital in a comparable bond at as high a yield.
Capital GainThe result of selling a capital asset at a higher price than it cost. Whether an investor makes a capital gain or not depends on the purchase price of an asset compared to its selling price, the effect of depreciation on its value and whether inflation has bitten into the investor's profit margin. Capital gain has different meanings for the tax department, the economist and the accountant. See capital gains tax. Capital gains tax a tax on income (gain) arising from changes in the market value of assets.
Central Clearing and Settlement System (CCASS)The central automated system for clearing and settlement of securities transactions in Hong Kong.
Closed-end FundA type of fund that has a fixed number of shares usually listed on a major stock exchange. Unlike open-end mutual funds, closed-end funds do not issue and redeem shares on a continuous basis.
CollateralAssets pledged by a borrower until a loan is repaid. These assets are subject to seizure if the loan is in default.
CommissionThe fee you pay for buying or selling investments.
Common ShareAn investment that gives you part ownership of a company and allows you to vote on major decisions affecting the company.
ContraThe automated trading platform the Stock Exchange of Hong Kong uses for matching and executing transactions.
Contract NoteA document sent by a broker to clients, outlining details of a share transaction such as the price of the shares and brokerage.
ConvertibleA type of investment, usually a bond, debenture or preferred share, which you may exchange for common shares usually of the same company, at a set price and usually by a set date. The company may force you to exchange if the price of its common shares goes above the value of your preferred shares.
Corporate BondThese are debt instruments companies issue that are considered financial obligations of a corporation. Generally, corporate bonds are broken down into four sectors: industrial, financial, transportation, and utility. They can be issued in both callable and non-callable formats.
CouponThe stated interest rate on a bond when it's issued. A $1,000 bond with a coupon of 6% will pay you $60 a year.
Coupon RateThe interest rate specified on a bond when it is originally issued.

Day OrderAn order you give your broker to buy or sell an investment, good only on a specific day.
DebentureAnother name for a bond. With a debenture, your money is secured by the credit of the company or government issuing it, rather than by specific assets.
Default RiskThe risk that a borrower may be unable to make timely principal and interest payments.
DepreciationDepreciation is a non-cash charge that represents a reduction in the value of fixed assets due to wear, age, or obsolescence. This figure also includes amortization -- or expensed portion -- of leased property, intangibles, goodwill, and depletion.
DerivativesContracts or instruments whose value stems from that of some underlying asset, such as commodities, equities or currencies, or from an index such as the stock-exchange index, or from an indicator such as an interest rate.
Discount BondOne that sells at a current market price that is less than its face value. Bonds sell at a discount when the coupon on the bond is lower than prevailing rates. For example, you might have to pay only $812 for a bond with a 6.5% coupon if new issues yielding 8% are available for $1,000.
DistributionThe regular payment of dividends and other income and realized capital gains from fund investments.
DiversificationThe spreading of investment funds among classes of securities and localities in order to distribute and control risk. Investors can increase their potential return for a given level of risk by combining several investments within or across asset classes.
DemutualisationThe process of changing a mutual or cooperative association into a public company by converting the interests of members into shareholdings, which can then be traded through a stock exchange.
Dividend Yield/ DividendsThis is the cash payment, per share, made by the company to its shareholders. It is usually the part of profits that was not reinvested in the company. Dividends are taxed as income, not capital gains.
DJIADow Jones Industrial Average is a price-weighted average of 30 actively traded blue chip stocks, primarily industrials but including American Express Co. and American Telephone and Telegraph Co. Prepared and published by Dow Jones & Co. It is the oldest and most widely quoted of all the market indicators. The components, which change from time to time, represent between 15% and 20% of the market value of NYSE stocks. The DJIA is calculated by adding the closing prices of the component stocks and using a divisor that is adjusted for splits and stock dividends equal to 10% or more of the market value of an issue as well as substitutions and mergers. The average is quoted in points, not in dollars.
Due DateThe business day on which you need to settle your trades - i.e. make payment for shares purchased or deliver shares sold.
DurationA way to measure part of the risk in a bond or bond fund. Duration tells you how long it will take to recoup your principal. It's a complicated calculation, so you'll have to get the number from your fund company or bond dealer, but it makes for a handy way to judge interest rate risk. If a bond or a bond fund has a duration of seven years, a 1% drop in interest rates will raise its value by 7%, while a 1% rise in interest rates will lower its price by 7%.

Earning Per Share (EPS)The earnings per share is calculated by dividing the company's net operating profit after tax by the number of shares in issue.
Earnings Before Interest and Taxes (EBIT)Total earnings before provisions are deducted. This measures a company's performance and is often used in preference to net profit as it excludes the effects of borrowings and tax benefits and adjustments.
Earnings YieldThe earnings yield is achieved by dividing earnings per share by the share price and multiplying by 100 over 1. It shows the relationship of earnings per share to the current share price and is the inverse of price-earnings ratio.
Enhanced limit order (ELO)This puts orders in up to two price queues for matching. The price of the trade is executed at or better than the limit price. Unfilled orders after matching are converted to limit orders at the input limit price.
EquityThe part of something - asset, house or company - which you own. What the professionals call shares. If you lend a company money, you have made a loan and rank as a creditor who, under normal circumstances, would expect repayment of the loan plus interest at a future date. If you buy ordinary shares in a company you become an equity-holder in that company, which means you share in its profits (and losses) and have a less clear-cut idea of your future returns than does a lender. As an ordinary shareholder, you stand in line behind debenture-holders for settlement, should the company be wound up. You can't rely on a fixed return, and run the risk of loss, but in return for this you have a share in the company's surplus during good times. You also have equity in that part of the value of your house above the amount borrowed from the lender that has the mortgage over your house. Economists, as well as other people, use 'equity' in its original sense of fairness or impartiality.
Ex-Dividend (XD)"XD" identifies a quoted share or security as one on which the current dividend is earmarked for the seller, not the buyer.
Ex-Dividend DateThe date on or after which a security begins trading without the dividend (cash or stock) included in the contract price.
Ex-RightsA stock exchange term meaning that the price quoted for a share does not include the right to take up new stock offered or about to be offered. The opposite is cum rights, which is stock sold with the rights to a new issue.

Face ValueThe value of a bond or debenture that is printed on the face of the certificate. Face value is usually the amount the issuer will pay at a certain date. Face value is no indication of market value.
Fill and KillA market order with a Fill and Kill (FAK) order duration is only available for the Singapore market. It shall be matched with as much quantity as possible and the remainder shall be cancelled.
Fill or KillA market order with a Fill or Kill (FOK) order duration is only available for the Singapore market. It shall be matched with the entire quantity or will be completely cancelled.
Fixed-Income SecuritiesInvestments such as bonds or money market instruments, which pay a fixed yield (coupon or interest rate) and feature a guarantee of repayment of principal at maturity.
Futures ContractAn agreement to buy or sell an investment or asset at a specified price on a specified date. The price is set through a futures exchange, a trading market like a stock exchange.

Good-For-DayA Good for Day order is a limit order good for that business day only. If the order is not filled by the end of the trading day, the order will expire. A Good for Day order placed after the market is closed is good for the next business day, unless it is placed specifically for after-hours trading.
Good Till DateA Good till Date order is a limit order good for the next 30 calendar days after the order is placed. The order will be cancelled on the morning following the 30th day. When you cancel and replace a good for 30 days order, the order will be given a new 30 calendar days expiration period.
Government BondBonds issued by governments (federal or provincial), crown corporations, or government agencies. Backed by the taxation powers of governments, these bonds typically have the highest credit ratings.
GearingGearing relates to the measure of indebtedness, where the debt is balanced against the value of the equity held by a person or company in an asset.
Growth Enterprise Market (GEM)An alternative stock exchange operated by The Stock Exchange of Hong Kong. GEM provides fund-raising opportunities for those growth enterprises which may not have achieved a record of profitability as a condition of listing.

Hang Seng China Enterprises IndexThis index includes all H-Share companies listed on the Stock Exchange of Hong Kong. It reflects the price performance of companies incorporated in mainland China and listed in Hong Kong.
Hang Seng Index (HSI)The index is constituted of 33 companies listed on the Stock Exchange of Hong Kong. It is a capitalisation-weighted index that represents about 70 per cent of the total market cap of the Exchange.
HedgingHedging is the practice of purchasing one investment in order to protect the potential loss in another investment.
Hong Kong Inter-Bank Offered Rate (HIBOR)The lending rate that many creditworthy banks charge each other for large Hong Kong dollar loans in the Hong Kong market.
Hong Kong Monetary Authority (HKMA)The statutory body in Hong Kong that maintains currency stability, manages the Exchange Fund, and regulates banks and other authorized institutions.
H-ShareThe shares of a company incorporated in mainland China and listed on the Stock Exchange of Hong Kong.

Interest Rate RiskThis is the danger that prevailing interest rates will rise significantly higher than the rate paid on bonds you are holding. This drives down the price of your bonds, so if you sell you'll lose money. This is a serious risk for anyone investing in long-term bonds, including Treasury, because the longer the maturity, the higher the interest rate risk.
IndexingInvestment style, which seeks to replicate index benchmarks in equity and bond markets.
Initial Public Offering (IPO)The first sale of shares of a company to the public.
Insider TradingBuying or selling shares for profit where the person dealing has privileged information not available to the general market. The practice, generally held to be harmful to the interests of other shareholders, is unlawful but not unknown. Legislation embodying strict disclosure rules has improved shareholder protection.

Junk BondThese are the lowest quality bonds. Since they are riskier, they yield more. Other, more flattering names for them are "high yield" or "non-investment-grade" bonds.

LeverageMaking an investment by borrowing money to cover part of the purchase cost.
Limit OrderA Limit Order is an order to buy or sell a stock at a customer specified price.
LiquidityLiquidity is the ability of an asset to be converted into cash quickly and easily, with little or no loss of capital. A bank bill is highly liquid, where a house is relatively illiquid. When a market has enough participants to make buying and selling reasonably easy, it is said to be liquid.
Listed CompanyA company that is listed is one that has performed an Initial Public Offering and has its shares traded on a stock exchange.

Management FeeThe compensation paid to the mutual fund manager by the fund company for managing the mutual fund and for supervision of the day-to-day administration and operations of the mutual fund.
MarginThe amount of money you are contributing when you borrow some of the money (against collateral) to buy an investment.
Margin AccountAn account enabling a trader to use funds advanced by his or her stockbroker, futures broker or bank.
Market CapitalizationThe measure of a company's market value, which is calculated by multiplying the number of shares on issue, by the market price of those shares.
Market MakerFirms that use their own capital, research, retail and/or systems resources to represent a stock and compete with each other to buy and sell the stocks they represent. There are over 500 member firms that act as NASDAQ Market Makers. One of the major differences between The NASDAQ Stock Market and other major markets in the U.S. is NASDAQ's structure of competing Market Makers. Each Market Maker competes for customer order flow by displaying buy and sell quotations for a guaranteed number of shares. Once an order is received, the Market Maker will immediately purchase for or sell from its own inventory, or seek the other side of the trade until it is executed, often in a matter of seconds.
Market OrderAn instruction to buy or sell a commodity or share at the current market price.
Market PriceThe last reported price at which a security was sold on a stock exchange. It can also be the highest price which a buyer would pay, and the lower a seller would sell, assuming that neither of these traders are compelled to buy or sell.
Market ValueWhat you would get for an asset were you to offer it for sale. The value might be quite different from what it cost you, what you have recorded as its book value, its insured value or its replacement cost.
Maturity DateThe date on which the principal amount of a bond is to be paid in full.
Money MarketThe money market links investors who want to earn competitive rates on their money, with governments and companies that need short-term loans. Money market investments include short-term bonds and debentures, and treasury bills.
Money Market FundOpen-ended mutual fund that invests in commercial paper, banker's acceptances, repurchase agreements, government securities, certificates of deposit and other highly liquid and safe securities, and pays money market rates of interest. The fund's net asset value often remains a constant $1 a share; only the interest rate goes up or down.
Mutual FundFund operated by an investment company that raises money from shareholders and invests it in stocks, bonds, options, commodities or money market securities.

NASDAQNational Association of Securities Dealers Automated Quotation. This is a major U.S. and international stock market that uses computer and telecommunications networks for trading.
Net Asset Value (NAV)Net Asset Value, also known as price per share. The value of a fund's assets divided by the number of its outstanding shares.
Net ChangeThe difference between today's last trade and the previous day's last trade. The difference between today's closing Net Asset Value (NAV) and the previous day's closing Net Asset Value (NAV).
No-Load Mutual FundA No Load fund is a fund that typically can be purchased without commission. Brokers will usually have the right to charge a commission on the purchase similar to a front load fund. No Load funds can be charged a redemption fee at the discretion of the broker.
Nominal ValueThe stated (face) value of an asset as against its market price. See face value. A parcel of securities that does not conform to the stock market's conventional round numbers (usually multiples of 100).
NYSENew York Stock Exchange.

Odd LotA number of shares which is less than a board lot.
Offer / AskThe price at which someone is willing to sell shares. An offer can also be known as an ask.
Out of the MoneyAn option that cannot be exercised at a profit. An out-of-the-money option is a call option whose strike price is higher than the current market level, or a put option whose strike price is below market. A call option on December bonds at 100 would be out of the money if December bonds are at 99 or less; a put option would be out of the money if they were at 101 or more.
Open OfferAn order to sell a security that remains in effect until either it is canceled by the customer or executed.
Open-End Mutual FundAn open-end mutual fund continuously issues and redeems units. If an investor wishes to buy or sell units of an open-end mutual fund, they will do so directly from the fund (as opposed to using a stock exchange). Most mutual funds are open-ended.
OptionsAn agreement which gives the holder the right, but not the obligation, to buy (receive) or sell (deliver) a particular security at a stipulated price within a stipulated time. The money paid for the option will be forfeited if the option is not exercised by the specified time.
Ordinary SharesFully paid shares which carry voting rights but rank after debentures and preference shares for dividend payments. If the company is wound up, ordinary shareholders rank as unsecured creditors, behind secured creditors such as debenture-holders.

Par ValueThe face value of a security. If a share is trading at $102 and it was issued at $100 then it is trading 'above par', i.e., at a premium. Conversely, if the $100 share were sold for $98 then it would be at a discount or 'below par'. The par value of a share is set by the issuing company and often is quite different from the share's market price.
Payout RatioThe percent of earnings-per-share (EPS) that was paid out as a dividend. It is calculated by dividing the quarterly dividend by the quarterly EPS and multiplying by 100.
Penny StockLow-priced, generally risky shares selling at less than $1 per share
PortfolioA collection of various company shares, fixed interest securities or money market instruments. It should show a spread of investments to minimize risk - brokers and investment advisers warn against 'putting all your eggs in one basket'.
Preferred ShareA security in a company, which entitles the owner to certain specified rights (notably the right to receive dividends) "in preference" to the rights of holders of common shares.
PremiumShares or securities bought at a premium are bought for more than their par or face value. In the context of options, the premium is the cost of buying an option; it represents the maximum amount the option-buyer can lose (and is likened to an insurance premium) and is income for the option seller. Premium is also the opposite of discount.
Premium BondA bond with a price above par value.
Price-Earning Ratio (P/E)A yardstick for measuring the value of a company's shares. It shows the relationship between the market price of a company's shares and the earnings per share. Divide the annual earnings per share of, say, $2 into the market value of, say, $12 and the price-earnings ratio is 6.
PrincipalWhen the firm buys from or sells to a client from the firm's own account, they are acting as principal. Principal also refers the initial amount you invested, and the face value of a bond.
Private PlacementIn equity markets, this occurs where a company issues new capital which is placed, usually through a broker, direct to a small panel of institutions.
ProspectusThe document issued by a company or fund which sets out the complete history and current status of its public equity issue or debt raising, and which provides the background and financial and management status of the company or fund.
ProxyOne person acting on another's behalf, usually in the context of company meetings. A shareholder in a company can give another person the authority to represent him or her (and is usually required to notify the company of the appointment).
Put OptionGive the buyer the right to sell 100 shares of the underlying security at a fixed price, before a specified date, usually three, six, or nine months in the future. For his right, the buyer pays a premium.

Rate of ReturnSimple Rate of Return is the profit realized from an investment, calculated as percentage of the cost of the investment. It is most often not compounded and expressed on a periodic basis. Total Rate of Return is the measure of a fund's/stock's performance that encompasses all elements of return: dividends, capital gains distributions, and changes in net asset value. Total return is the change in value of an investment over a given period, assuming reinvestment of any dividends and capital gains distributions, expressed as a percentage of the initial investment.
Redemption PriceThe price you are paid if an investment you own is called in (redeemed) by the issuer early. Issuers generally must pay you a premium if they call an investment in early.
Return on Asset (ROA)The rate of investment return a company earns on its assets. ROA is determined by dividing net income from the past 12 months by total assets. The result is shown as a percentage. Unlike Return on Equity, ROA ignores a company's liabilities.
Return on Equity (ROE)The rate of investment return a company earns on shareholder's equity. An indicator of profitability, ROE is determined by dividing net income from the past 12 months by shareholders' equity. This statistic shows how effectively a company is using its investors' money.
Return on Investment (ROI)The rate of return a company gets from its own investment. It is calculated by dividing the company's net income by its net assets.
Rights IssueAn offer of additional shares to existing shareholders, in proportion to their holdings, to raise money for the company. Unlike a bonus issue, a rights issue is not free. The shareholder is not obliged to take up a rights issue - the offer can be allowed to lapse - but rights issues are renounceable, which means the shareholder can sell or transfer his or her right to the shares.
RiskThe likelihood of a gain or loss from any investment.

Standard and Poor's 500 (S & P 500)more formally known as the S&P 500 Composite Stock Price Index, is a European-style, capitalization-weighted index (shares outstanding multiplied by stock price) of 500 stocks that are traded on the New York Stock Exchange, American Stock Exchange and NASDAQ National Market. The advantage of "cap-weighting" is that each company's influence on index performance is directly proportional to its relative market value. It is this characteristic that makes the S&P 500 such a valuable tool for measuring the performance of actual portfolios.
Senior BondA senior debt issue ranks ahead of other bonds in terms of claims of assets in the event of default or company dissolution.
Settlement DateThe date by which you must pay for an investment, or your certificate must be delivered to us. For most investment, this is the second or the third business day after the date of the transaction.
Short SellingSelling a security or commodity that you do not yet own, believing it will fall in price and can be bought later at a lower price producing a profit for you when you deliver it to the purchaser.
Special Limit OrderA market order with a limit price to avoid errors. Prior to the order being fully matched or the limit price being exceeded, it matches with orders at or better than the limit price. The number of price queues allowed for matching is determined by the Stock Exchange of Hong Kong. Unfilled orders are rejected.
Stamp DutyDuty payable to government on particular types of property and share transaction.
Stock DividendsPayment of a corporate dividend in the form of stock rather than cash. The stock dividend may be additional shares in the company, or it may be shares in a subsidiary being spun off to shareholders. Stock dividends are often used to conserve cash needed to operate the business. Unlike a cash dividend, stock dividends are not taxed until sold.
Stock ExchangeThe marketplace for trading equities (shares) and equity-related instruments.
Stop OrderA sell stop order is an order placed below the current market price and is triggered if the stock reaches at or below the stop price. Once a sell stop order is triggered, your order will become a market order. A buy stop order is an order placed above the current market price and will be triggered if the stock reaches at or above the stop price. Once a buy stop order is triggered, your order will become a market order.
Stop-Limit OrderA sell stop limit order is an order placed below the current market price and will be triggered if the stock reaches at or below the stop price. Once a sell stop limit order is triggered, your order will become a limit order. A buy stop limit order is an order placed above the current market price and will be triggered if the stock reaches at or above the stop price. Once a buy stop limit order is triggered, your order will become a limit order.
Stop-Loss OrderAn order to sell a stock when the price falls to a specified level.
STIStraits Times Index.
SwapAgreement between two or more parties to exchange the income of streams of two (or more securities) without exchanging the underlying securities.

TakeoverThe acquisition of a controlling interest in a company by another company through the purchase of its shares. The acquired company's identity is often absorbed into that of the company taking it over.
Time HorizonThis refers to the length of time you should expect to keep your money in a fund in order to enjoy a good return. Aggressive funds, which are volatile, require a longer time horizon because the risk of losing money over the short-term is great. We divide our time horizons into three periods - 0-5 years, 3-7 years and 5 years or more.
Time ValueIn the context of options trading, the difference between an option premium and the intrinsic value of an option (the amount by which the option is in the money). Time value is affected by implied market volatility as well as the time remaining before the option expires.
Treasury Bill (T-Bills)Commonly called T-Bills. These are short-term money market instruments issued by the federal government to meet near term borrowing needs. Provincial T-Bills are less common. T-Bills are sold at a discount and mature at par. The difference between the cost and maturity value represents the purchaser's income in lieu of interest. Like other money market instruments, T-Bills can typically be purchased with terms of 30 days, 60 days, 90 days, six months and one year. They are well suited to very conservative investors who opt to obtain higher rates than cash offers for a short period of time.
Treasury Notes (T-Notes)Mature in two to 10 years. Interest is paid twice a year and they can be purchased in denominations of $1,000.

Unit Investment Trust (UIT)A portfolio of securities held in trust. Units in the trust are sold to investors who receive a share of interest payments and a share of the principal, as the securities in the portfolio mature or are called.

VolatilityFluctuation in share prices. Volatility is a measure of risk, as the higher the volatility, the less certain an investor can be of a return.
VolumeThe total number of shares traded of a stock during a specific time period. (In this case, it is the latest trading day.) Unusually high volume days typically correspond with the announcement of company news, either positive or negative. In the absence of news, high volume can indicate institutional (or professional) buying and selling.

WarrantA certificate that gives its holder the right to purchase equities at a particular price, and usually within a particular time span.

Yield (Internal Rate of Return)The annual rate of return on a stock as paid in dividends. Yield can be calculated by dividing the latest dividend rate by the latest closing price and multiplying by 100. The latest dividend rate is the total dividends paid in the past 12 months. As a stock's price rises, its yield will go down. As a stock's price decreases, its yield will go up.
Yield CurveThis is a graph showing the yields for different bond maturities. It can be used, not only to show where the best values in bonds are, but also as an economic indicator.
Yield to MaturityYield to maturity is similar to current yield, but it also takes into account any gain or loss of principal at maturity. For example, if a $1,000 par bond was bought at a discount of $900, at maturity there would be a $100 gain. Likewise, if a $1,000 par bond is purchased for $1090, there will be a $90 loss in principal at maturity. Yield to maturity is a precise measure that allows you to compare bonds with different maturities that sell for more or less than par. The trouble is, it is a complex calculation that isn't printed in the paper, so you'll have to get it from your broker or bond dealer.

Zero Coupon BondThis type of bonds provide no periodic payments of interest. Rather, they offer you the opportunity to purchase a bond at a discount, which is redeemable for face value at maturity.