“Nick Renton`s new dictionary of stock exchange and investment terms has been extensively revised and expanded and I am sure it will provide a useful reference for all those investors who want to demystify the jargon and understand the terminology”
This dictionary and Almanac is an essential reference tool for stock and property investors at all levels, from beginners to professionals and from students to retired persons. It cuts through the jargon so often used by stockbrokers, estate agents, financial planners and the media.
This new enlarged edition has been updated to the middle of 2008 and now contains about 3300 terms. Abbreviations - an area of great puzzlement to many investors - are also extensively covered. The dictionary now contains many terms not found in similar works.
The author, N E Renton, is a consulting actuary and a practicing writer, well known for his skill in explaining technical aspects in readily understood language.
Introduction
Assorted Definitions from Hell
TWO USEFUL RULES OF THUMB
DID YOU REALISE?
SEVEN REASONS NOT TO INVEST
About the Author
Preface
JARGON
ABBREVIATIONS AND ACRONYMS
NEW INVESTORS
LANGUAGE DEVELOPMENTS
THE RESOURCES SECTOR
CHAPTER 1
The Return On Equity
CHAPTER 2
What Does the Term “Guaranteed” Really Mean?
BANKS
INVESTMENT BONDS
ADVERTISEMENTS
SUBSIDIARIES
SPECULATIVE INVESTMENTS
OTHER ASPECTS
CHAPTER 3
What Does the Term “Value” Really Mean?
CHAPTER 4
What is a Stock Exchange Index?
CHAPTER 5
What Does the Term “Margin Lending” Mean?
CHAPTER 6
A “Plain English” Guide to the Concept of Derivatives
DICTIONARY
APPENDIX A
Some Internet Links of Interest to Investors
APPENDIX B
Selected Currency Symbols
Tailpiece
THE OTHER SIDE OF THE COIN: DO INVESTORS USE METAPHORS?
COMMERCE
MONEY
MINING AND OIL
DECIMAL CURRENCY
^ Top
index options: index option gives a person the right but not the obligation to buy or sell something. An option is a contract between two parties wherein the buyer receives a privilege for which he pays a fee (premium) and the seller accepts an obligation for which he receives a fee. The premium is the price negotiated and set when the option is bought or sold. A person who buys an option is said to be long in the option. A person who sells an option is said to be short in the option.
India Index Services & Products Ltd. (IISL): is a joint venture between the National Stock Exchange of India Ltd. (NSE) and CRISIL. IISL has been formed with the objective of providing a variety of indices and index-related services and products for the capital markets. IISL has a licensing and marketing agreement with Standard and Poor's (S&P), the world's leading provider of equity indices, for co-branding IISL's equity indices.
indicator lending rate (ILR): the base lending rate set by a bank from which interest rates on its variable interest loans are derived.
indicator mineral: a mineral which is not sought itself, but if followed may lead to a deposit of the sought mineral.
indirect taxation: broadly speaking, taxes levied on money spent - the sale, purchase, production or use of goods or services - for example, sales tax, customs duties, excise duties and the goods and services tax. The impact of such taxes is usually passed on to the end consumer. Contrast direct taxation.
induced polarisation: a method of geophysical prospecting.
industrial minerals: non-metallic minerals used in industry.
industrial property: warehouses and factories.
industrial stocks: stocks other than mining and oil.
inelastic supply and demand: the supply of and demand for goods or services which do not increase or decrease markedly with changes to price.
infant mortality rate: the number of deaths to infants under one year of age per 1000 live births in a given year.
inflation: the state of affairs when the value of money falls and the prices of goods and services increase, other things being equal.
infrastructure: the non-mining utilities required to bring a project into production - for example, roads, a township, water supply, electricity, etc.
initial potential: the rate at which a well produces during first production tests.
initial public offering (IPO): a float; the raising of capital through an offer of shares to investors who apply for them under a prospectus, with a view to the issuing company becoming listed on the stock exchange shortly after the new shares have been allotted to the successful applicants.
input tax credits (GST): the goods and services tax paid on their inputs by suppliers of goods and services which those suppliers are able to claim back. Such claims can be made in respect of both taxable and GST-free items. However, input tax credits are not allowed for the GST paid by businesses on inputs used in activities that are input taxed. Nor are input tax credits allowed for GST paid on goods and services for the personal use of proprietors.
input taxed (GST): goods and services which are only partly exempt from the goods and services tax because, while that tax is not payable directly by consumers, the suppliers of those goods and services are not able to claim back the tax paid on their inputs and thus have to reflect that in their price structure. Examples include financial services and residential rents. Other countries use the term “exempt” to describe this type of activity. Contrast GST-free.
inquorate: not constituting a quorum (an inquorate conference is one lacking a quorum).
INR: symbol for the Indian rupee.
inscribed stock: see Commonwealth bonds.
inside information: information, ultimately from company sources, which is not publicly available.
insider trading: buying or selling shares on the basis of inside information. This is illegal.
insolvency: the inability to meet debts as they fall due.
instalment: a part of the issue price of a security. Companies sometimes make share or debenture issues which are payable by a series of two or more instalments rather than requiring the total application money to be paid by the applications closing date.
instalment receipt: an instrument traded on the stock exchange and resembling a contributing share. Typically, it arises when existing fully-paid shares in a company are offered to the public under a prospectus with the vendor agreeing to accept payment for them in stages.
instalment warrant: a form of derivative, designed to resemble a contributing share.
institutional adviser: an adviser in a stockbroker’s office who specialises in dealing with institutional clients.
institutional investors: organisations with vast sums of money to be invested on behalf of clients. Largely made up of superannuation funds, unit trusts, investment companies and life insurance companies.
instrument: a legal document in writing. In a financial context it refers to a debt which may or may not be negotiable.
insurance bonds: life insurance company or friendly society policies, usually subject to single premiums and usually without death benefits, which are backed by professionally managed fixed interest and/or equity portfolios. They can be either capital guaranteed or investment-linked and either superannuation or non-superannuation. They do not involve cash distributions, but pass on the investment returns either through bonuses added to the nominal sum insured or, in the case of unit-linked contracts, through a rising unit value. In some ways they resemble unit trusts, but income tax is paid by the institution and not the investor. Withdrawals within the first ten years also attract tax in the policyholder’s hands in respect of the net gain, but this is subject to a special rebate.
intangible assets: a class of assets which is generally a right rather than a physical object. Examples of intangibles include: goodwill, patent rights, copyrights, trademarks, trade names, licences, newspaper mastheads, concessions, preliminary and share issue expenses. It is common for these assets to be written off over time. See also assets.
intellectual property (IP): intangible assets derived from original thought and protected by law - ideas, discoveries and inventions. The protection comes about from laws covering patents, copyright (literature, music, art, software and so on) and trademarks.
inter alia: among other things.
inter se: among themselves.
inter vivos: during a person’s lifetime.
inter vivos trust: a trust set up by a living person, as distinct from a trust set up by will.
inter-company market: the short term borrowing and lending of surplus cash at interest between major companies.
interest (financial transactions): the periodical payment by a borrower to a lender for the use of money. See also compound interest, simple interest, yield (investments generally).
interest (legal transactions): a right, claim or share in property.
interest cover: the number of times that earnings before interest and tax (EBIT) cover interest. It is one measure of the security of those payments. The interest cover ratio is calculated by dividing EBIT for the year by the annual interest payments.
interest indexed bonds: Commonwealth treasury bonds involving quarterly interest payments under which the investors get a low coupon, but with the amount of interest paid each three months representing the sum of the quarterly coupon and the consumer price index (CPI) movement for that quarter. The capital at maturity remains unaltered at its original face value.
interest rate: the percentage of par value paid out per annum as interest. Sometimes called the coupon rate. It is distinct from yield.
interest rate swap: an exchange where one party is obliged to pay a fixed interest rate to the other party in return for a floating interest rate. A net interest payment flows one way or the other in each interest period, depending on the relative levels of the two rates.
interest withholding tax: a flat rate of tax deducted at source from interest paid to non-residents of the country concerned.
interim: relating to the first six months of a financial year, as in interim profit report and interim dividend announcement.
internal rate of return (IRR): the interest rate which equates the present value of the amounts invested in a project with the present value of the expected future cash flows. It is a measure of the return from an investment.
International Financial Reporting Standards (IFRS): a set of accounting standards which aim at international harmonisation. They are “principles-based” standards, in that they establish broad rules rather than dictating specific treatments.
International Monetary Fund (IMF): an international organisation which draws on a pool of funds contributed by its member countries in order to assist developing countries having balance of payments problems.
International Standard Book Number (ISBN): a unique 10-digit code for the identification of printed books and pamphlets and various other material (but not serial publications - see next item). ISBNs are scheduled to consist of 13 digits as from 1 January 2007.
International Standard Serial Number (ISSN): a unique 8-digit code for the identification of serial publications, including periodical newsletters produced by organisations.
Internet: a co-operative public network of shared information stored on computers.
Internet service provider (ISP): an organisation controlling appropriate computers, modems and other equipment which for a fee provides access to the Internet to its subscribers.
intersection: the length of mineralisation encountered in a drill hole.
intestacy: the state of dying without leaving a valid will.
intra vires: within the power.
intrinsic value (options): the market price of the underlying share less the exercise price of the option, but not less than zero. See also time value.
intrinsic value (shares): a fundamentalist’s valuation of a share. See fundamental analysis.
^ Top
