The period during which days in a period varies in different countries.

A financial and contractual relationship whereby an investor is allowed to use the services of a bank or an deals on a stock exchange are done for settlement on the due account day. The number of exchange dealer for investment or speculative purposes and agrees to a set maximum amount off credit and possibly a defined period.

The interest accruing on a security since the previous coupon payment date. Coupons are paid to the holder of the security on the payment date so if it is sold between times the buyer must usually compensate the seller for the interest accrued until the value date, either calculated within the price or as a separate payment. A bond can trade with negative accrued interest from the ex dividend date until the next coupon payment (in the case of a new buyer). See Simple Interest

Land measurement used in the U.S. and the U.K. which equals 43,560 square feet. One square mile has 940 acres. A hectare measures 2.471 acres.

In tariff negotiations this involves uniform percentage reductions or increases in duties on major categories of items. The opposite position is item by item tariff negotiation.

Investors working together to achieve the same goal, e.g. to buy all the stock they need to take over a company or purchase sufficient shares to hold a majority or to buy the minimum needed where they can legitimately make an open bid to shareholders to buy outstanding shares. Sometimes acting in concert can be considered illegal. Also known colloquially as concert party. See Warehousing.

Also called physicals. Refers to the physical commodities available for shipment, storage and manufacture. Physicals which are available for delivery are traded for cash on a spot or forward basis as opposed to futures contracts which are traded on margin.

Latin, meaning "according to value". A tax or duty levied as a fixed percentage of an item's value as opposed to a fixed unitary levy such as a stamp duty.

ARMs. Interest rates are adjusted periodically at predetermined intervals in accordance with changes that occur in an agreed index. Can have a rate cap from one period to the next and a rate cap through to maturity. Also known as a floating or variable rate mortgage.

A type of preferred share whose dividend is not fixed but set periodically to reflect changes in interest rates. The rate is normally fixed at a slight premium to a benchmark rate, often as the result of a Dutch auction by investors. When adjusted more regularly it is fixed against a shorter term rate and is called a Money Market Preferred Stock.

Funds managed by a fund manager who has permission from the investor to take decisions without consultation. The manager can have control completely or within set limits.

Two companies are affiliated when one owns less than a majority of the voting stock of the other or if both are subsidiaries of a third company.

Takes place after the official close of business on the trading floor of a stock exchange. No set length of time is allocated for after hours dealing, particularly with the advent of electronic screen trading.

The equivalent of the old style stock-broker. Transacts business on a customer's behalf, passing through the securities at cost price and makes profits on commissions charged.

Bank appointed by members of an international lending syndicate to protect the lenders' interests during the life of a loan.

Total demand for goods and services in the economy. Comprises demand from firms and government for investment goods, demand from local and central government for goods and services, demand from consumers and firms in other countries for goods and services such as exports.

Total exposure of a bank to any single customer for both spot and forward contracts.

Total supply of goods and services in the economy available to meet aggregate demand. It is made up of domestically produced goods and imports.

Difference in value between two currencies. Also used as a term to describe the percentage charged on changing paper into cash or moving from a weak into a strong currency. In gold, it represents the added value of a coin over its gold content.

Annual General Meeting. Called sometime after the financial year-end inviting shareholders to vote acceptance of the company's annual report, balance sheet and final dividend and to vote on any resolutions. By law, the shareholders receive details of all the foregoing within a set period before the meeting. On the day of the meeting, shareholders usually hear comments on the company's business prospects in early months of the new financial year.

Asociacion Latino-American de Integracion (Latin American Integration Association). Wide ranging inter-governmental body. Basic purpose is to establish reciprocal trade arrangements in the region and to set up a Latin American common market. Formed in 1980 to replace its precursor body, the Latin American Free Trade Association (LAFTA) which was founded in 1960. Member nations are Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru, Uruguay and Venezuela. Based in Montevideo.

Asociacion Latinoamerican de Instituciones Financieras de Desarrolla. Latin American Association of Development Financing Institutions. Promotes cooperation among regional development financing bodies. Has 144 members from 25 nations. Based in Lima.

Limit order requiring that no part of an order be executed unless all of it can be done at the specified price.

Allocation of securities from a new issue. Shares can be fully allotted, i.e. everyone receives what they applied for, or a sliding scale of pro rata allotments is made when an issue id very popular.

An option granting the holder the right to settle in one of two currencies (but not both) against a base currency at preselected strike prices.

Limit order to do either of two alternatives, e.g. either sell or buy a particular financial instrument at a limited price.

Usually issued by a bank in the U.S. to facilitate trading in a foreign share. The original shares are held by the bank and the ADR certificate is bought and sold as a bearer document. The ADR holder is entitled to all dividends and capital gains but not to voting rights. Also known as an American Depository Share (ADS). See European Depository Receipt.

See American Depository Receipt.

Compiled by the American Stock Exchange. A price weighted average of 20 blue chip industrial shares which have their listings on the New York Stock Exchange and 17 of which are in the Dow Jones Industrial Average. The index follows the pattern of the DJIA in portraying the price trend of major industrial shares. In this price weighted index the high price issues exert more influence than lower price shares. Calculated in real time, i.e. as share prices change. The Chicago Board of Trade deals in futures on the index.

The reduction of principal or debt at regular intervals. This can be effected by a Purchase Fund or Sinking Fund. Can also be used, for instance, on depreciation and write-offs of intangibles. Opposite to Accretion.

A swap whereby the notional principal on which interest payments are based decreases over the life of the swap. See Accreting Principal Swap.

A group originally of five Latin American nations formed to found a free trade area. In 1978 the group set up an Andean Reserve Fund to help nations with balance of payments problems. The group widened in 1988 and the fund became a Latin American Reserve Fund. Aims to develop economic and social integration. Member nations are Bolivia, Colombia, Ecuador and Venezuela. Peru is an observer member. Based in Lima.

Compares the average level in the current year with the average in the previous year. The benefit of this measure is that it smoothes out usually large or small changes that may have occurred for a short while during the year.

A status report on the current condition of a company. Issued once a year before the Annual General Meeting for shareholders' examination.

Plots the changes in an indicator over the whole year if the latest monthly or quarterly figure is presumed to persist for the rest of the year.

An investment that pays a given stream of interest for a fixed period of time.

An interest rate swap whereby spasmodic payments are exchanged for a flow of regular payments of equivalent present value.

U.S. federal legislation to prevent restraint of trade and act against monopolies.

Asia-Pacific Economic Cooperation. Aims to develop regional trade and cooperation. Members are Australia, Brunei, Canada, China, Hong Kong, Indonesia, Japan, Malaysia, Mexico, New Zealand, Papua New Guinea, the Philippines, Singapore, South Korea, Thailand, Taiwan and the U.S. Chile is scheduled to join in 1994

Arbitrage

Simultaneous purchase and sale or vice versa of the same or similar financial instruments in the markets with the view to making profits from the difference in prices.

A weighted index that takes each component and calculates a mathematical average.

Foreign exchange term used in the forward market when the Points are quoted either side of par; one side of the quotation being at a discount, the other side at a premium. "One around par" (-1/+1) would mean one point to be deducted from, and one point to be added to, the spot price.

Association of South East Asian Nations. Seeks enhanced economic progress and increased stability in the region. Members are Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand. Formed in 1967. Based in Jakarta.

A market makers' price to sell a commodity, security, currency or any financial instrument. A two-way price comprises the bid and ask. The difference between the two quotations is the spread. Also known as offer.

A bond whereby the borrower pledges an asset, such as a property mortgage or the interest and repayments from a loan, to enhance the credit quality of a bond. See CMO.

Securities collateralised by assets, not mortgages, such as car loans and credit card receivables.

Assets are tangible items of value such as factories, machinery, financial instruments and intangibles such as goodwill, the title only of a newspaper of a product's brand name. Liabilities are items of a negative value that cover tangibles such as assets which hold a high risk factor and intangibles such as a financial obligations. Asset management, also known as liability management, is the function of controlling cash flows or the duration and maturity of assets and liabilities so as to reduce interest rate risk and aim for optimum return.

The notice given to an option writer that an option has been exercised by the option holder. See Exercise.

Formed when two or more companies engage in partnership or joint venture projects.

A buy or sell order indicating it should be carried out at the best possible price available at that moment.

A public sale of a security whereby the issuer invites authorised dealers to make bids in price or yield until the full amount of the issue is sold. See English Auction, Dutch Auction.

A share which is similar to a money market preferred stock in that the dividend is set at regular intervals (on a very short term basis) but the dividend rate has to be accepted by the shareholders. If the shareholders reject the dividend rate, the issuing company has either to increase the rate to one acceptable by the shareholders or repurchase the shares at par value.

The company's balance sheet report, as presented to shareholders, carries a report from a firm of auditors which states that in their opinion (if it is so) the accounts give a true and fair view of the state of affairs of the company (on the date given on the balance sheet). See Qualified Accounts.

The maximum number of shares that can be issued under the firm's articles of incorporation. This can only be increased with the shareholder's approval.

The average time which the principal amount on a loan remains outstanding. The average life on a bullet bond is equal to its maturity, whereas on a bond with a Sinking Fund feature, the average life will be shorter.

A figure, calculated from the rates of a series of deals, that indicates the price level required to create a zero profit and loss on closing out an existing position.

An option whose settlement value is based on the difference between the strike and the average of the spot rates over the life of the option. The averaging can be agreed to be taken at any point in the life of the option and readings can be at any specified interval and frequency. Also known as Asian option.

A weighing system where one ounce avoirdupois equals 28 grammes. There are 16 ounces avoirdupois to the pound (weight). See Troy Ounces.