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Glossary

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
  • AAR

    Against all risks.
  • Abandoned Baby Pattern

    A rare candlestick pattern in which an upside gap doji star (where the shadows do not touch) is followed by a downside gap black candlestick where the shadows also do not touch; considered a major top reversal signal.
  • Abatement

    A reduction in the assessment of tax, penalty or interest when it is determined the assessment is incorrect
  • Abatement notice

    A notice served on the owner(s) or occupier(s) of a property from which a private nuisance arises, warning them of the intention to enter on the land in order to abate the nuisance.
  • ABC

    Elliott wave terminology for a three-wave countertrend price movement. Wave A is the first price wave against the trend of the market. Wave B is a corrective wave to Wave A. Wave C is the final price move to complete the countertrend price move. Elliott wave followers study A and C waves for price ratios based on numbers from the Fibonacci series.
  • Abridged Prospectus

    Abridged Prospectus means the memorandum as prescribed in Form 2A under sub-section (3) of section 56 of the Companies Act, 1956. It contains all the salient features of a prospectus. It accompanies the application form of public issues.
  • Absolute title

    The right of ownership of a mortgage deed, which gives the right, in certain specified circumstances, to demand repayment in full, of the outstanding debt than the due date. Or a clause in a deed or contract, which provides for the early termination of an exciting interest in land, in certain specified circumstances, thereby advancing the future interest.
  • Abstract

    A brief history of title to land
  • Abuse of law

    The doctrine which allows the tax authorities to disregard a civil law form used by the taxpayer which has no commercial basis
  • Accelerated death benefit

    A percentage of the policy?s face amount, discounted for interest, that can be paid to the insured prior to death, under specified circumstances. This is in lieu of a traditional policy that pays beneficiaries after the insured?s death. Such benefits kick in if the insured becomes terminally ill, needs extreme medical intervention, or must reside in a nursing home. The payments made while the insured is living are deducted from any death benefits paid to beneficiaries.
  • Accelerated depreciation

    Method of depreciation under which taxpayers may allocate larger depreciation deductions to the first year or first few years of useful business assets, such as plant and machinery
  • Acceptance (also, acc.)

    The agreement written on a draft and signed by the drawee - who becomes the acceptor - to pay the specified amount on the due date. The term is also applied to the accepted time draft itself. See also ‘Bill of exchange’.
  • Acceptance credit

    A documentary credit which requires, amongst the documents stipulated, provision of a term bill of exchange. The bill is then generally accepted by the bank on which it is drawn or discounted. The practical result is that the beneficiary is paid promptly at a discount.
  • Acceptance Letter

    After you collect your sanction letter, you should, if you accept the terms of contract, communicate your willingness to accept the loan by way of an acceptance letter. You should do it within a particular time-frame which may vary between 1-3 months from the date of the sanction letter.
  • Acceptor

    The person who accepts a bill of exchange drawn on them. Until they accept, they are called the drawee. By accepting the bill the acceptor undertakes to pay the person presenting the bill the face value of that bill. On payment the acceptor retires the bill. Where the acceptor is the initial provider of the credit, by arrangement, on maturity of the bill, they require the borrower to place their funds on an amount equivalent to the face value of the bill.
  • Accident & Accidental Death Benefit

    In the context of life insurance, accident or accidental death is defined as a sudden and unforeseen happening that causes disability or death of the policyholder.
  • Accident and health insurance

    Coverage for acci-dental injury, accidental death, and related health expenses. Benefits will pay for preventative services, medical expenses, and catastrophic care, with limits.
  • Accidental death benefit

    An endorsement that pays the beneficiary an additional benefit if the insured dies from an accident.
  • Accidental Death Insurance

    Accidental Death Insurance provides coverage in the event of death due to accidental injuries, but not illness. In the event of death, payment is made to the insured\'s beneficiary. And most of these covers provide for cases for bodily injury (e.g., the loss of a limb), where the insured receives a specificed sum.
  • Accounting basis

    Method of calculating amounts subject to income tax and VAT. In respect of VAT, tax would be computed as a percentage levy on the excess of sales over purchases. This is a theoretical concept and no country uses it.
  • Accounting period

    A period of time used by taxpayer for the determination of tax liability
  • Accounting records

    All documents and books used in the preparation of the tax return and all financial statements, including general ledger, subsidiary ledgers, sales slips, and invoices.
  • Accounts payable

    A list of the debts currently owed by a person or business, mainly for the purchase of services, inventory, and supplies
  • Accounts receivable

    A list of the money owed on current account to a creditor, which is kept in the normal course of the creditor's business and represents unsettled claims and transactions
  • Accounts receivable (debtors) insurance

    Indemnifies for losses that are due to an inability to collect from open commercial account debtors because records have been destroyed by an insured peril.
  • Accrual Basis

    A method of accounting that allows revenues and expenses to be accrued, even if cash had not been received or paid during the accrual period.
  • Accrual basis (accrual method)

    An accounting method whereby income and expense items are included in taxable income or expense as they are earned or incurred, rather than when they are received or paid
  • Accrued Interest

    Interest earned between the most recent interest payment and the present date but not yet paid to the lender.
  • Accumulation

    Process by which, over a period of time, a large or excess supply of stock or futures contracts is absorbed by increasing demand from buyers. Generally, there is little price action until the sellers have been exhausted. Then buyers dominate and price tends to rise.
  • Accumulation Period

    The time interval between the commencement of the policy and the time when benefits are paid out. It is established by the insured.
  • Accumulation/distribution

    The Accumulation/Distribution is a momentum indicator that associates changes in price and volume. The indicator is based on the premise that the more volume that accompanies a price move, the more significant the price move. Accumulation/Distribution attempts to confirm changes in prices by comparing the volume associated with prices. When the Accumulation/Distribution moves up, it shows that the security is being accumulated, as most of the volume is associated with upward price movement. When the indicator moves down, it shows that the security is being distributed, as most of the volume is associated with downward price movement. Divergences between the Accumulation/Distribution and the security’s price imply a change is imminent. When a divergence does occur, prices usually change to confirm the accumulation/distribution. For example, if the indicator is moving up and the security’s price is going down, prices will probably reverse. If the days price change is positive then the difference in the daily high and low price is added to the total, and conversely if the daily change is negative then the daily range is subtracted from the total.
  • Acid Test Ratio

    It is the ratio indicated by dividing a company\'s current assets by current liabilities. It reflects the financial strength of a company and hence called Acid test ratio.
  • Activities of daily living

    Activities-such as eating, bathing, toileting, dressing, and continence-that trig-ger payment in a long-term care insurance policy, if at least some of them cannot be performed by the insured.
  • Acts of god

    Perils that cannot reasonably be guarded against, such as floods and earthquakes.
  • Actual cash value

    A form of insurance that pays damages equal to the replacement value of damaged property minus depreciation.
  • Actual loss ratio

    The ratio of losses incurred to premiums earned actually experienced in a given line of insurance activity in a previous time period.
  • Actuals

    Refers to actual physical commodities, as distinguished from futures.
  • Actuarial cost assumptions

    Assumptions about rates of investment earnings, mortality, turnover, salpatterns, probable expenses, and distribution or actual ages at which employees are likely to retire.
  • Actuarial Cost Method

    A method that determines contributions that would be made under an insurance plan.
  • Actuary

    An insurance professional skilled in the analysis, evaluation, and management of statistical information. Evaluates insurance firms? reserves, determines rates and rating methods, and determines other business and financial risks.
  • AD&D

    Accidental Death and Dismemberment Benefits
  • Adaptive Filter

    Smoothing and/or forecasting prices with continuously updated weighting of past prices.
  • Add on offering

    When a publicly traded company issues additional shares to the public.
  • Add-On Card

    As the term suggests, an add-on card is a privilege offered to the spouse, parents or children of the primary credit card holder. The fee for an add-on card varies between Rs. 125 to Rs. 1,000 depending on the type of card and all expenses incurred on an add-on card are billed to the primary cardholder.
  • Add-on Method

    A method of paying interest where the interest is added onto the principal at maturity or interest payment dates.
  • Additional insureds

    Persons who have an insurable interest in the property/person covered in a policy and who are covered against the losses outlined in the policy. They usually receive less coverage than the pri-mary named insured.
  • Additional living expenses

    Extra charges covered by homeowners policies over and above the policy-holder?s customary living expenses. They kick in when the insured requires temporary shelter due to damage by a covered peril that makes the home temporarily uninhabitable.
  • Adjustable Life Insurance

    A facility allowing a life insurance policy owner to change the insurance plan, increase or decrease the premium and make changes in the protection period.
  • Adjusted Futures Price

    The cash-price equivalent reflected in the current futures price. This is calculated by taking the futures price times the conversion factor for the particular financial instrument (e.g., bond or note) being delivered.
  • Adjusted Gross Income

    An interim calculation used in computing income tax liability. It is computed by subtracting certain allowable adjustments from gross income.
  • Adjuster

    An individual employed by a property/cas-ualty insurer to evaluate losses and settle policyholder claims. These adjusters differ from public adjusters, who negotiate with insurers on behalf of policyhold-ers, and receive a portion of a claims settlement. Inde-pendent adjusters are independent contractors who adjust claims for different insurance companies.
  • Administrative expenses

    Expenses that are not as easily associated with a specific function as are the direct costs of manufacturing and selling. It typically includes expenses of the headquarters office and accounting expenses.
  • Administrative Fee

    The fee you pay for meeting the overheads of the administrative work handled by the housing finance firm. Usually to be paid while giving the acceptance letter.
  • Admitted company

    An insurance company licensed and authorized to do business in a particular state or country.
  • ADR

    An acronym for American Depository Receipt. Currently popular because of the rush of Indian firms to issue ADRs. Technically, it is an instrument traded at exchanges in the US representing a fixed number of shares of a foreign company that is traded in the foreign country. By trading in ADRs, U.S. investors manage to avoid some of the problems of dealing in foreign securities markets. The ADR route enables companies to raise funds in the U.S. financial markets, provided they meet the stringent regulatory norms for disclosure and accounting.
  • Advance EMI

    Number of equated installment(s) paid in advance at the time of disbursement in the form of post dated cheques.
  • Advance payment guarantee/bond

    This is a guarantee that advance payments will be returned if the party having received such payments does not perform its part of the contract.
  • Advance pricing arrangement (apa)

    An arrangement that determines, in advance of controlled transactions, an appropriate set of criteria (e.g. method, comparables and appropriate adjustments thereto, critical assumptions as to future events) for the determination of the transfer pricing for those transactions over a fixed period of time. An advance pricing arrangement may be unilateral involving one tax administration and a taxpayer or multilateral involving the agreement of two or more tax administrations.
  • Advance ruling

    A letter ruling, which is a written statement, issued to a taxpayer by tax authorities, that interprets and applies the tax law to a specific set of facts
  • Advance-Decline Line

    Each day's number of declining issues is subtracted from the number of advancing issues. The net difference is added to a running sum if the difference is positive or subtracted from the running sum if the difference is negative.
  • Advance/Decline Data

    The number of stocks or bonds or commodities which have advanced in a given time period compared to the number which have declined. The difference (breadth) is considered important in gauging the strength or weakness of the market. Daily observations are the most common.
  • Advance/Decline Line

    Each day's declining issues are subtracted from the day's advancing issues. The difference is added to (subtracted from if negative) a running total or sum.
  • Advances vs. Declines

    (A/D) This is a measure of the number of stocks that have advanced in price and the number that have declined in price within a given time span. The A/D is generally expressed as a ratio and can help indicate the general direction of the market; when a higher number of stocks advance rather than decline on a single trading day, the market is thought to be bullish. The A/D will function best as a confirming indicator and it is often used with other types of analysis as a guide to the trend of the overall market. It is also used occasionally for specific stock/industry groups. The most common way to display A/D data is with a chart showing the cumulative difference between the advances and the declines on the NYSE. The period can be one week, one month, or any other common time frame but since it is best used to identify new or developing trends, it must be relative to the positions in your portfolio. Compare the A/D chart with that of the DJIA. If the Dow is moving higher but the A/D line is flat or dropping, that is a negative signal and may indicate a future slump. Watch for new highs and lows on the A/D chart. Near market peaks, the A/D line will generally top-out and begin a gradual decline before the overall market. As with all technical indicators, make sure that it confirms other signals.
  • Adverse Excursion

    The loss attributable to price movement against the position in any one trade.
  • Adverse selection

    The tendency of those exposed to a higher risk to seek more insurance coverage than those at a lower risk. Insurers react either by charging higher premiums or not insuring at all. In the case of natural disasters, such as earthquakes, adverse selection concentrates risk instead of spreading it. Insurance. works best when risk is shared among large numbers of policyholders.
  • Advice of fate

    A request for advice of payment/non-payment (acceptance/non-acceptance) of a bill of exchange.
  • Advising bank

    The bank that notifies or advises the exporter that a credit has been opened in the exporter’s favour. The advising bank, usually located in the exporter’s country, fully informs the exporter of the conditions of the documentary credit without itself making a payment commitment.
  • ADX- directional movement index

    The Directional Movement Index provides an indication of how much a stock is trending. Since stocks tend to only trend 30% of the time and move sideways the remainder of the time this indicator can prove very useful. There are three lines that make up this indicator. The +DI (Directional Indicator), the – DI (Directional Indicator), and the ADX (Average Directional Indicator). The +DI line measures upward movement, the -DI meansures downward movement. The ADX measures the strength of the prevailing trend. For example: If the +DI crosses over the -DI, or the -DI crosses over the +DI the ADX MUST be rising in order to confirm the signal.
  • Affiliation privilege

    Tax relief or exemption accorded to dividend distributions made by a resident subsidiary company to its parent company which owns a certain minimum percentage of shares, in order to mitigate double taxation of such dividends.
  • Affinity sales

    Selling insurance through groups such as professional and business associations.
  • Affirmative warranty

    An agreement between an insurance company and an agent, granting the agent authority to write insurance from that company. It specifies the duties, rights, and obligations of both parties.
  • After date

    Payment on a negotiable instrument, such as a bank draft, becomes due a specified number of days after presentation of the draft.
  • After Tax Rupees

    This refers to the disposable income that the policy holder has in his hands after paying all tax dues during a particular financial year under the Income Tax Act.
  • Aftermarket

    Trading in the IPO subsequent to its offering is called the aftermarket. Trading volume in IPOs is extremely high on the first day due to aftermarket purchases. Trading volume can decline subsequently in the following days.
  • Age Limits

    The maximum and minimum ages above or below which an insurance company will not accept applications for insurance from or will not renew a policy with a person.
  • Age Rule

    Rule regarding eligibility to contribute to a Traditional IRA. An individual must be under age 70˝ for the entire year to make a regular contribution to an IRA.
  • Agency

    A business that provides a particular service to a company (that are outside of the country where the agency is located). Dependent agency constitutes a permanent establishment for the other company and the income achieved through the agency is taxed on the income earned from the country where the agency is located whereas independent agency does not.
  • Agent

    Insurance is sold by two types of agents: inde-pendent agents, who are self-employed, represent several insurance companies and are paid on commission, and exclusive or captive agents, who represent only one insurance company and are either salaried or work on commission. Insurance companies that use exclusive or captive agents are called direct writers.
  • Agent (Life Advisor)

    A representative of an insurance company authorized to sell insurance policies.
  • Agent/agency agreement

    An agent is an independent person or legal entity which acts on behalf of another (the ‘principal’). In international transactions, generally refers to a sales representative who prospects on behalf of a foreign principal, earning commission on sales eventually concluded between the principal and the ultimate client (see also ‘Foreign sales agent’). To be distinguished from sales through employees and subsidiaries - who are not independent, or through distributorship relations, which involve the distributor’s buying and re-selling in their own name. Sales agents should also be distinguished from buying or purchasing agents, as the respective rights and obligations are quite different.
  • Aggregate deductible

    A type of deductible that applies for an entire year in which the insured absorbs all losses until the deductible level is reached, at which point the insurer pays for all loses over the specified amount.
  • Aggregate limits

    A yearly limit, rather than a ?per occurrence? limit. Once an insurance company has paid up to the limit, it will pay no more during that year.
  • Aggregation

    Term used to denote the adding together of the taxpayer's income from all sources in order to determine the applicable tax rate for income tax purposes.
  • Aggressor

    A trader dealing on an existing price in the market.
  • Agreement for lease/sale

    A contract to enter into a lease (or sale), which in order to be enforceable either must be evidenced in writing and signed by the person against whom action is taken for the breach of the alleged contract and there must be a sufficient act of part performance.
  • Air Accident Insurance

    Air accident insurance is insurance coverage geared specifically to the operation of aircraft and the risks involved in aviation. Air accident insurance policies are distinctly different from those for other areas of transportation and tend to incorporate aviation terminology, as well as terminology, limits and clauses specific to air accident insurance.
  • Air Miles

    \'Miles\' as they are popularly known, log up each time a card is used in the card holder\'s account and can be redeemed for free flights.
  • Aleatory contract

    A legal contract in which the outcome depends on an uncertain event. Insurance contracts are aleatory in nature.
  • Alien, tax treatment of

    A person who is not a citizen of the country in which he or she lives. In general, most countries do not distinguish between nationals and aliens for tax purposes; rather tax liability is based on residence and/or domicile.
  • Alienation of income

    Term generally used to describe the transfer of the right to receive income from a source while not necessarily transferring the ownership of that source to the same person.
  • All risks (AR)

    A type of insurance coverage providing somewhat more than the minimum coverage, at a premium above the base amount paid under a particular policy. Unfortunately, all risks coverage does not in fact cover all risks -thus, for example, coverage of war, riots and strikes is not usually included; moreover, there is no standard nomenclature for all risks coverage. Traders should understand what exactly is covered in all risks coverage, and decide whether or not they need additional coverage, before agreeing to such a term.
  • All-risk agreement

    A property or liability insur-ance contract in which all risks of loss are covered except those specifically excluded; also called ?open perils policy.?
  • Allotment

    The acceptance of an application subscribing to the shares of a company. Establishes a contract that underlies an investment through public subscription.
  • Allowance

    Deduction or exemptions generally made in computing income taxes, inheritance and gift taxes and some forms of sales taxes.
  • Alpha

    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 figure indicates the fund has performed better than its beta would predict. In contrast, a negative alpha indicates a fund has underperformed, given the expectations established by the fund\'s beta. Some investors see alpha as a measurement of the value added or subtracted by a fund\'s manager. There are limitations to alpha\'s ability to accurately depict a manager\'s added or subtracted value. In some cases, a negative alpha can result from the expenses that are present in the fund figures but are not present in the figures of the comparison index. Alpha is dependent on the accuracy of beta: If the investor accepts beta as a conclusive definition of risk, a positive alpha would be a conclusive indicator of good fund performance. Of course, the value of beta is dependent on another statistic, known as R-squared.
  • Alternative dispute resolution (ADR)

    Alternative to going to court to settle disputes. Methods include arbitration, where disputing parties agree to be bound to the decision of an independent third party, and mediation, where a third party tries to arrange a settlement between the two sides.
  • Alternative markets

    Mechanisms used to fund self-insurance. This includes captives, which are insurers owned by one or more non-insurers to provide owners with coverage. Risk-retention groups, formed by members of similar professions or businesses to obtain liability insurance, are also a form of self-insurance.
  • Alternative user value

    The value of land and buildings which reflects a prospective use which is different from that of the current use.
  • American Depository Receipts (ADRs)

    Certificates that are issued by a bank of US origin and traded in the U.S. as domestic shares. The certificates represent the foreign securities that the bank holds in that security's country of origin.
  • American-Style Option

    An option contract that may be exercised at any time between the date of purchase and the expiration date. Most exchange-traded options in the United States are American-style.
  • Amortisation

    Reduction of an amount at regular intervals over a certain time period. Usually, refers to the reduction of debt by regular payment of loan installments during the life of a loan. Also describes the accounting process of writing off an intangible asset.
  • Amortization

    Process of writing off the cost of an intangible asset over its useful life.
  • Amortization method

    Method of computing a credit under a VAT regime where investment goods are purchased which have a useful life in the business for a period exceeding one year. The tax embodied in the price paid for the assets may be credited to the trader over a period of years corresponding to the life of the assets.
  • Analysis of Variance

    The partitioning of total sum of squares into the sum of squares explained by the model and the remaining sum of squares unexplained.
  • Anaume

    An exceptional exhaustion pattern (meaning "gap filling") composed of five candles. The anaume occurs when the gap is filled in after a market price has changed directions. This pattern coupled with the other patterns indicate a strong potential for a bullish reversal and price advance.
  • Anchor tenant

    One or more department or variety chainstores, or supermarkets, introduced into a shopping centre in key positions to attract the shopping public into the centre for the purpose of encouraging other retailers to lease shops en route. The larger the developments the more anchors required.
  • Anchoring-and-Adjustment

    The tendency to evaluate current decisions in the context of past events.
  • Ancillary charges

    In hospital insurance, covered charges other than room and board.
  • Andrews Method

    A technique whereby a technician will pick an extreme low or high to use as a pivot point and draw a line, called the median line, from this point that bisects a line drawn through the next corrective phase that occurs after the pivot point. Lines parallel to the median line are drawn through the high and low points of the corrective phase. The parallel lines define the resistance and support levels for the price channel.
  • Annealing (Simulated)

    Generally a metallurgical process, in artificial intelligence a process in which a neural net work searches for a set of weights to minimize errors; the search constantly shrinks as the weights find better values, analogous to the rearrangement of the molecules in a heated metal bar as the bar cools.
  • Annual Earnings Change

    The historical earnings change between the most recently reported fiscal year earn ings and the preceding.
  • Annual Fee

    This is payable in advance, but not paid for in cash. It is billed into the first billing
  • Annual Fund Operating Expenses

    The expenses incurred, during a particular year, by Asset Management Company for managing the funds.
  • Annual General Meeting (AGM)

    The shareholders meeting, usually held at the end of each financial year, to discuss the previous performance and future outlook.
  • Annual Net Profit Margin

    The percentage that the company earned from gross sales for the most recently reported fiscal year.
  • Annual Percentage Rate (APR)

    The interest rate that reflects the yearly cost of the interest the outstandings on your card is called the annual percentage rate. This rate is charged to the card holder on the amounts carried forward beyond the due date for the payment of balances. Most card issuers will tell you their monthly rate of interest. It might sound low at 3%, but when you look at the interest rate over the year, it turns out to be as high as 43%.
  • Annual Reducing Method

    A method of calculating interest on the reduced principal at the end of every year. However as repayments for all loans are EMI, though the principal is reduced every month, the interest is calculated on the original loan amount for twelve months after which the repayments towards principal are taken into account. Basically, this method will benefit you the least.
  • Annual Rest

    A method of calculating EMI in which the appropriation towards interest and principal is made at the end of the financial year.
  • Annual Sales Change

    The percentage change in sales between the most recently reported fiscal year and the preceding.
  • Annual statement

    Summary of an insurer?s or rein-surer?s financial operations for a particular year, including a balance sheet.
  • Annual Yield

    Is the effective annual rate of return taking into account the effect of compounding interest. Its utility lies in its ability to standardize varying interest-rate arrangements into an annualized percentage number for comparison.
  • Annual-premium annuity

    An annuity whose purchase price is paid in annual installments.
  • Annualized

    Translating the figures for a given year into an annual rate.
  • Annuitant

    : An individual receiving benefits under an annuity.
  • Annuity

    An investment where the investor provides cash to the vendor, typically an insurance company, in exchange for the promise to pay a series of periodic, usually monthly, payments in return. An immediate annuity begins to pay back right away, other annuities might not pay back for many years. The money invested in an annuity grows tax-deferred.
  • Annuity Certain

    An insurance contract that provides an annuity for a certain number of years, irrespective of whether the insured is alive or dead.
  • Annuity Consideration

    The payment that an annuitant makes for an annuity.
  • Annuity Investment

    That generates a stream of equal cash flows.
  • Annuity units

    A measure used in valuing a variable annuity during the time it is being paid to the annui-tant. Each unit?s value fluctuates with the performance of an investment portfolio.
  • Antithetic Forecasts

    Two forecasts whose errors are negatively correlated.
  • Apex

    The point of intersection of two trendlines. A new trend may develop as prices approach the intersection.
  • Applicant

    In the documentary credit process, normally the buyer or importer, who applies (thus, the applicant) for a documentary credit in favour of the beneficiary, the seller.
  • Apportionment

    The dividing of a loss proportion-ately among two or more insurers that cover the same loss.
  • Appraisal

    A survey to determine a property?s insura-ble value, or the amount of a loss.
  • Appreciation

    The increase in the value of an asset.
  • Arbitrage

    A transaction which generates a risk-free profit.
  • Arbitrage

    The simultaneous purchase and sale of two different, but closely related, securities to take advantage of a disparity in their prices.
  • Arbitrage, tax

    Process of entering into a tax motivated transaction (i.e. to obtain profit from the application of tax rules).
  • Arbitration

    Procedure in which an insurance company and the insured or a vendor agree to settle a claim dispute by accepting a decision made by a third party.
  • Arms index

    Also known as a trading index (TRIN)= (number of advancing issues)/ (number of declining issues) (Total up volume )/ (total down volume). An advance/decline market indicator. Less than 1.0 indicates bullish demand, while above 1.0 is bearish. The index often is smoothed with a simple moving average.
  • Arson

    The deliberate setting of a fire
  • Artificial Intelligence

    The field of computer science dedicated to producing programs that attempt to mimic the processes of the human brain.
  • Ascending Triangle (or Rising Triangle)

    A chart pattern containing a series of lows, each successively higher than the last, and a series of highs that are at approximately the same level. It is considered a bullish formation when volume increases on the ascending legs. When a breakout through the level of the highs is made, the pattern is completed.
  • Ask

    The price at which a currency pair or security is offered for sale; the quoted price at which an investor can buy a currency pair. This is also known as the \"offer\", \"ask price\", and \"ask rate\".
  • Assessable policy

    A policy subject to additional charges, or assessments, on all policyholders in the company.
  • Assessment

    Act of computing the tax due
  • Asset Allocation

    The process of determining how investment funds will be apportioned among different asset classes, such as stocks, bonds, and cash reserves. Many financial advisers believe that the mix of asset classes has a greater impact on long-term portfolio results than does the performance of any individual investment.
  • Asset Allocation

    The process of diversifying the investments in different kinds of assets such as stocks, bonds, real estate, cash in order to optimize risk.
  • Asset Allocation Fund

    A fund that spreads its portfolio among a wide variety of investments, including domestic and foreign stocks and bonds, government securities, gold bullion and real estate stocks. Some of these funds keep the proportions allocated between different sectors relatively constant, while others alter the mix as market conditions change.
  • Asset Management Company (AMC)

    A Company registered with SEBI, which takes investment/divestment decisions for the mutual fund, and manages the assets of the mutual fund.
  • Asset valuation

    In the property market this expression is applied to the valuation of land and buildings or plant and machinery. The term is often used to describe an expert opinion of the worth of a property which may be incorporated into company accounts, where the ownership of the asset is not necessarily to be transferred but the valuation is required for the company takeovers, share flotation or mortgages.
  • Asset-backed securities

    Bonds that represent pools of loans of similar types, duration and interest rates. Almost any loan with regular repayments of principal and interest can be securitized, from auto loans and equipment leases to credit card receivables and mortgages.
  • Assign

    To use life insurance policy benefits as collat-eral for a loan.
  • Assignee

    Assignee is the person to whom the title, rights and benefits under a life policy are assigned.
  • Assignment

    The transfer of a property interest, especially a lease, from one party to another.
  • Assignor

    Assignor is the policyholder who transfers the title, beneficial interest and rights under the policy to another individual.
  • Associate Membership

    A Chicago Board of Trade membership that allows an individual to trade financial instrument futures and other designated markets.
  • Associated Person (AP)

    An individual who solicits orders, customers, or customer funds (or who supervises persons performing such duties) on behalf of a Futures Commission Merchant, an Introducing Broker, a Commodity Trading Adviser, or a Commodity Pool Operator.
  • Astrophysical Cycle

    Any earthly cycle, such as a market cycle, that has been scientifically related to the physics of the planetary system.
  • Asymmetric information

    An insured?s knowledge of likely losses that is unavailable to insurers.
  • At-The-Money

    An option is at-the-money if the strike price of the option is equal to the market price of the underlying security.
  • At-the-Money Option

    An option with a strike price that is equal, or approximately equal, to the current market price of the underlying futures contract.
  • Atrium

    An entrance hall of a building, often rising through a number of storeys and containing lifts, reception areas and plants. Originally the hall or chief apartment of a Roman house.
  • Attained Age

    It is your current age.Your attained age is one of the factors life insurance companies use to determine your premiums. As the older you are, the probability of death during the period of insurance cover i.e life insurance risk increases and so does the premium. Higher the risk, higher the premium.
  • Attenuation

    The fractional part of reduced energy or lost power due to smoothing or filtering.
  • Audit

    Examination and verification carried out by an outside agency (such as an accountancy firm or the tax authorities) of a taxpayer’s books and accountants and/or the general accuracy of returns and declarations, either as a routine operation, or where evasion is suspected.
  • Auditor

    An auditor is an individual who conducts an examination and verification of a company's financial and accounting records and supporting documents.
  • Authorised Capital

    The maximum equity capital a company can raise, which is mentioned in the Memorandum of Association and Articles of Association of the Company. However, share premium is excluded from the definition of authorized capital.
  • Authority

    The Insurance Regulatory and Development authority, IRDA established under sub-section (1) of section 3 of the Insurance Regulatory and Development Authority Act, 1999 is the regulator for the insurance sector.
  • Auto insurance premium

    The price an insurance company charges for coverage, based on the frequency and cost of potential accidents, theft and other losses.
  • Autocorrelation

    The correlation between the values of a time series and previous values of the same time series.
  • Automatic coverage

    An insurer agrees to cover accidents from all machinery of the same type as that specifically listed in the endorsement.
  • Automatic Investment Plan

    A plan offered by most mutual funds where a small fixed amount is automatically deducted monthly from an investor\'s bank account and invested in the mutual fund of their choice.
  • Automatic Investment Plan (AIP)

    An automatic investment plan (AIP) allows for the easy execution of a dollar cost averaging strategy by enabling the investor to save a set amount over a specific time interval. Examples: You can set up an AIP with your custodian whereby you invest $50 every week in a specific mutual fund.
  • Automatic Reinvestment

    An investment option for mutual fund unit holders in which the proceeds from either the fund\'s dividends or capital gains, or both, are automatically used to buy more units of the funds.
  • Automatic treaty

    An agreement whereby the ceding company is required to cede some certain amounts of business and the reinsurer is required to accept them.
  • Autoregressive

    Using previous data to predict future data.
  • Auxiliary activities

    A fixed place of business through which an enterprise exercises solely an activity which has, for the enterprise, a preparatory or auxiliary character, is, under tax treaties generally, deemed not to be a permanent establishment. The decisive criterion is whether the activity of the fixed place of business in itself forms an essential and significant part of the activity of the enterprise as a whole.
  • Auxiliary company

    Company which is part of a group of companies and which supplies auxiliary services to group companies.
  • Average adjusters

    A name applied to claims adjusters in the field of marine insurance.
  • Average Balance Volume Line

    A simple moving average applied to the tick volume based on a comparison of the current and previous period's closes.
  • Average Tax Rate

    The rate calculated by dividing the total tax liability by the entity's taxable income.
  • Aviation insurance

    Commercial airlines hold prop-erty insurance on aeroplanes and liability insurance for negligent acts that result in injury or property damage to passengers or others. Damage is covered on the ground and in the air. The policy limits the geographical area and individual pilots covered.
  • Avoidance

    A term that is difficult to define but which is generally used to describe the arrangement of a taxpayer's affairs that is intended to reduce his tax liability and that although the arrangement could be strictly legal it is usually in contradiction with the intent of the law it purports to follow. Cf. evasion

Investing Logic FAQs

  • Is grading optional?

    No, IPO grading is not optional. A company which has filed the draft offer document for its IPO with SEBI, on or after 1st May, 2007, is required to obtain a grade for the IPO from at least one CRA.
  • When should I insure?

    When your family members become dependent on your earning income, you should insure yourself. The advantage of starting insurance at an early age is that the premium will be lower at early stages. Even if you are single, earning and planning to get married, you should think of buying a policy now, as it costs less now than it will when you marry.
    Even if you are 45, and not insured, you could still choose insurance plans that provide benefits to your family and provide income during your retirement period.
  • What is Basis of Allocation/Basis of Allotment?

    After the closure of the issue, the bids received are aggregated under different categories i.e., firm allotment, Qualified Institutional Buyers (QIBs), Non-Institutional Buyers (NIBs), Retail, etc. The oversubscription ratios are then calculated for each of the categories as against the shares reserved for each of the categories in the offer document. Within each of these categories, the bids are then segregated into different buckets based on the number of shares applied for. The oversubscription ratio is then applied to the number of shares applied for and the number of shares to be allotted for applicants in each of the buckets is determined. Then, the number of successful allottees is determined. This process is followed in case of proportionate allotment. In case of allotment for QIBs, it is subject to the discretion of the post issue lead manager.
  • What is an Introduction?

    The introduction covers a summary of the industry and business of the issuer company, the offering details in brief, summary of consolidated financial, operating and other data. General Information about the company, the merchant bankers and their responsibilities, the details of brokers/syndicate members to the Issue, credit rating (in case of debt issue), debenture trustees (in case of debt issue), monitoring agency, book building process in brief and details of underwriting Agreements are given here. Important details of capital structure, objects of the offering, funds requirement, funding plan, schedule of implementation, funds deployed, sources of financing of funds already deployed, sources of financing for the balance fund requirement, interim use of funds, basic terms of issue, basis for issue price, tax benefits are covered.
  • Kindly suggest if arbitrage funds are ok for earning high returns with low risk.

    Don’t be under the wrong impression that arbitrage funds are equity funds, which will give you high returns and also protect your downside.

    Arbitrage funds are a unique fund in the sense that:
    As far as the risk profile and returns are concerned, they are like a debt fund i.e. low risk and low returns
    However, as far as the tax laws are concerned they are treated on par with equity funds and as such the long term capital gains tax is nil (however note that a few arbitrage funds have a debt structure and will be taxed as debt funds).

    Therefore, with arbitrage funds you can expect 6-9% p.a. returns like any debt fund. But the advantage is that here the tax could be less, thus improving your post-tax returns.

    However, a small drawback with these funds is the redemption — it is not possible redeem them as and when you want, but only on the last Thursday of the month.
  • What is a loan against fixed deposit?

    Banks offer short term loans against the fixed deposits. The tenure of these loans are typically less than the tenure of fixed deposits and charge 1% or 2% more rate of interest than the rate of interest at which the fixed deposit is made. Banks also offer overdraft facility against fixed deposits.
  • What is an Insurance Repository?

    An Insurance Repository is a facility to help policy holders buy and keep insurance policies in electronic form, rather than as a paper document. Insurance Repositories, like Share Depositories or Mutual Fund Transfer Agencies, will hold electronic records of insurance policies issued to individuals and such policies are called "electronic policies" or "e Policies".
  • What is Deferment Period?

    Period between the subscription date of an insurance-cum-pension policy and the time at which the first installment of pension is received is called as deferment period.
  • How many days is the issue open?

    As per Clause 8.8.1, Subscription list for public issues shall be kept open for at least 3 working days and not more than 10 working days. In case of Book built issues, the minimum and maximum period for which bidding will be open is 3–7 working days extendable by 3 days in case of a revision in the price band. The public issue made by an infrastructure company, satisfying the requirements in Clause 2.4.1 (iii) of Chapter II may be kept open for a maximum period of 21 working days. As per clause 8.8.2., Rights issues shall be kept open for at least 30 days and not more than 60 days.
  • How much health insurance I should opt?

    Looking to the present medical cost we should take min sum assured of 3 lacks. We should also keep in mind that once we will be suffered from and disease then sum assured will not increase so, we should consider higher sum assured to cover inflationary medical cost for future.

Sensex down 1000 points in 2 days post govts demonetisation move do you see more down side ?

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