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GLOSSARY |
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Bankruptcy |
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Company has filed for bankruptcy
under Federal Statute. Seeks the protection of the courts
pending the reorganization or liquidation of the company. |
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Broker |
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A person who acts as an agent for
others in selling or buying securities, real estate, insurance,
or other services or products. |
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Calls |
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A company, agency, or municipality
has called for redemption all of the outstanding securities
of an issue of bonds or a company's preferred stock. |
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A company, agency, or municipality
has called for redemption only a part of the outstanding securities
of an issue of banks or a company's preferred stock. |
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Call
Date |
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Date upon which the securities
are to be redeemed. |
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Call
Option |
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The option to buy a given amount
of a commodity at a specified price during a specified period
of time. |
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Class
Action |
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Legal action taken through a United
States District Court by a group (class) of investors against
a defendant, which could be the management of a company, an
agent, brokerage firm or investment banker. |
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Clearinghouse
Funds (CHF) |
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Funds which are available for use
(good funds) one business day after payable date. |
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Conversion |
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One type of a company's securities
are exchanged for another type of the company securities,
e.g. preferred stock converted to common stock, convertible
debentures converted to preferred stock or common stock. |
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CUSIP
Number |
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A standard security identification
number that is universally recognized in the securities industry.
For every security, there is a unique, nine-digit CUSIP. |
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Custodian |
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Banks that are responsible for:
- Processing all
security transactions
- Safekeeping
all portfolios
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Default |
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Failure on the part of an obligor
to meet a financial obligation in the payment of principal
or interest. |
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DF |
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Delivery of an asset vs. no money (free).
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DTC
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Depository Trust Company |
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DVP |
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Delivery of an asset vs. payment |
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Exchange |
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An issue of a company is being
exchanged for another type of security, usually the result
of a merger. Stock/Bonds of the old company are exchanged
for Stock/Bonds of the new company or cash. |
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Expiration
Date |
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The final day that one can exercise
a right (such as a voluntary tender offer). |
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Fails |
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A trade that "fails"
to settle. |
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The buyer does not receive the
security on the pre-specified settlement date. |
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The seller does not deliver on
the pre-specified settlement date. |
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Fed
Funds (FF) |
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Funds which are available for use
(good funds) on payable date. |
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Liquidation |
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A company reports its intention
to liquidate its business and commences an action or series
of actions which eventually results in the company's dissolution. |
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Merger |
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Absorption by a corporation of
one or more others. Also, any of various methods of combining
two or more entities. Shareholders may have one, or several
options to choose from in the exchange of shares of the old
company, or there may be no option. |
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Money
Market |
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The common term for the mechanism
whereby loanable funds are traded in the form of short-term
debt securities. |
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Mortgage-Backed
Security |
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A bond-type investment security
representing an undivided interest in a pool of mortgages. |
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Nominee
Name |
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In order to facilitate the transfer
of registered physical securities, investors and safekeeping
facilities create nominee partnerships with the Securities
and Exchange Commission by registering a security in the name
of the nominee. The amount of paperwork required to transfer
the owner of record is greatly reduced. |
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Open
Trade |
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Refers to a trade that has not
yet settled. The time period between the trade date and settlement
date. |
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Payable
Date |
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Date on which principal or income
on securities, or new securities, are due from paying agents.
(Provided that the issuer is not in default.) |
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Portfolio |
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The security holdings of a financial
institution. |
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RF |
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Receipt of an asset vs. no money
(free). |
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RVP |
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Receipt of an asset vs. payment. |
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Switch |
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An internal transfer of an asset
between two safekeeping accounts. |
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