Payroll & Accounting Glossary

Free Online Glossary & Definitions For Accountancy Jargon

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Understanding all the complicated terminology involved in payroll, accounting and Law can be difficult, but we don't think it should be.

In this spirit, we've compiled this handy guide to the most commonly used accounting terms for your reference.

Accounting Terms Beginning With "A"

A Fortiori

(ah-for-she-ory) prep. Derived from Latin, meaning for a still stronger reason; all the more.

A Mensa Et Thoro

Latin, From table and bed, but more commonly translated as “from bed and board.” This phrase designates a divorce which is really akin to a separation granted by a court whereby a husband and wife are not legally obligated to live together, but their marriage has not been dissolved. Neither spouse has the right to remarry

A Posteriori

[Latin, From the effect to the cause.] A posteriori describes a method of reasoning from given, express observations or experiments to reach and formulate general principles from them. This is also called inductive reasoning.

A Priori Assumption

(ah-pree-ory) n. Derived from Latin, meaning an assumption that does not require further proof that it is true. For example: one assumes that the sun will rise every morning. Mental laziness may occur if the a priori assumption is made without questioning the basis that no analysis or study is required.

A Shares

In the USA, the most important class of ordinary shares.

A/S Ratio

Abbreviation of advertising to sales ratio and indicates the money which is allocated to advertising as a percentage of product sales revenue at either wholesale or retail level.


A description of property or a person that is in the best condition.

AAA Rating

AAA is the highest possible rating that may be assigned to an issuer’s bonds by any of the major credit rating agencies. AAA-rated bonds have a high degree of creditworthiness because their issuers are easily able to meet financial commitments and have the lowest risk of default.

Ab Initio

From Latin, meaning from the beginning. Applicable to original documents that do not comprise experimental data.

AB Trust

A trust that allows couples to reduce or avoid estate taxes. Each spouse puts his or her property in an AB trust. When the first spouse dies, his or her half of the property goes to the beneficiaries named in the trust — commonly, the grown children of the couple — with the crucial condition


An ancient device used for performing arithmetic calculations; by sliding beads along rods or within grooves.


To intentionally surrender one’s claim to, right to, or interest in; give up entirely. Used in situations where a tenant has left property in a residence and does not intend to return. The landlord can take over the abandoned residence but must store the property, providing notice to the tenant before selling the possessions that were left behind. Also can be used when support has not been provided to children for a year or more.

Abandoned Property

Property whose claim to was intentionally surrendered, or given up entirely by the owner. May also apply to contract rights if one of the parties does not do what is required by the contract. For example: the possessions left by a tenant in a home that they have moved out of, or an inventor’s patent


The act of abandoning something or someone. Abandonment is when an owner gives up all rights to an asset. This term can be used to describe the voluntary non-renewal of a patent or trademark, or the loss of rights to an asset when the owner can no longer be found.


(of something perceived as hostile, threatening, or negative) become less intense or widespread.


Noun: the action of being abated or abating: subsiding or ending.

Law: the removal or reduction of a nuisance.

Abatement Cost

The abatement cost is a cost that is paid by a business when they have been asked to reduce or remove any negative by products or negative nuisances that are created during, at or after the time of production.


Anything diminished

Abbreviated Accounts

Shortened but audited financial statement that a qualifying small or medium firm was allowed to file with registrar of companies in the UK.


Abduction is the crime of leading away a person by force or by a wrongful means of persuasion. Abduction is similar to the crime of Kidnapping, without the necessary element of the taking of a person against their will across a state line boundary.


This error message refers to a system crash or other abnormal termination of a computer program, caused by a memory conflict or some other (usually unidentifiable) glitch.


The economic policies advocated by Japanese Prime Minister Shinzo Abe, associated with monetary and fiscal stimulus and economic reforms.

Ability To Pay

Ability to pay is a borrower’s ability to meet certain financial demands, such as interest payments and principle, on long-term borrowings.

Ability-To-Pay Principle

The ability-to-pay principle envisages that taxation should be levied according to an individual’s ability to pay; that is, individuals with higher incomes should be charged higher taxes. Individuals with higher incomes are charged more taxes not because they use more government goods and services but because they have the ability to pay more. The primary

Abnormal Loss

A loss arising from a manufacturing or chemical progress in excess of normal loss.

Abnormal Losses

Losses arising in business that should have been avoided.

Abolition of Quantitative Restrictions

One of the primary purposes of the original EEC was to encourage free trade between member states. the treaty of Rome provided three strategies by which this was to be accomplished: An abolition of duties on importation and exportation between member states (covered by what are now articles 23-25; a prohibition of discriminatory internal taxation that would encourage consumers to


The spontaneous or artificially induced expulsion of an embryo or fetus. As used in a legal context, usually refers to induced abortion. History English common law generally allowed abortion before the “quickening” of the fetus (i.e., the first recognizable movement of the fetus in the uterus), which occurred between the sixteenth and eighteenth weeks of

Above The Line

The “line” generally refers to gross profit. Above that line on the income statement, typically, are sales and COGS (cost of goods sold) or COS (cost of sales or cost of services). Below the line are operating expenses, interest, and taxes.

Above The Line Deduction

An above the line deduction is a tax deduction allowed by the IRS that is taken into account prior to the calculation of Adjusted Gross Income (AGI), and therefore occurs “above the line.” Since AGI is used to determine a taxpayer’s overall tax liability, an above the line deduction can have more of an impact

Above The Market

An order to buy or sell at a price set higher than the current market price of the security. Examples of above the market orders include: a limit order to sell, a stop order to buy, or a stop-limit order to buy.

Abridged Accounts

Abridged accounts are general purpose financial statements intended for both company members and publication.   


repeal or do away with (a law, right, or formal agreement).


In financial terms, ABS stands for asset-backed securities. ABS are types of securities (i.e debt securities) that are collateralized by a group of assets. When you invest in ABS, your investment is backed by this group of assets. Those assets can be account receivables, leases, or loans. Although mortgage-backed securities (MBS) are not considered an

Absolute Advantage Theory

Absolute advantage theory was introduced by the Scottish economist Adam Smith (1723-1790). Absolute advantage theory asserts that a nation benefits from manufacturing more output than others since it is in the possession of a particular resource or commodity. This particular resource can also be a certain method or knowledge that increases the production efficiency and thus

Absolute Breadth Index

The Absolute Breadth Index (ABI) is a market activity indicator developed by Norman G. Fosback. The ABI is used to determine market volatility levels by showing how much activity, volatility, and change is taking place on the New York Stock Exchange without considering price direction. High ABI readings indicate market activity and change, while low readings

Absolute Income Hypothesis

The Absolute Income Hypothesis wqs proposed by English economist John Maynard Keynes (1883-1946), and has been refined extensively during the 1960s and 1970s, notably by American economist James Tobin (1918-2002). The theory examines the relationship between income and consumption and asserts that the consumption level of a household depends on its not relative but absolute level of income.

Absolute Return

Absolute return measures the actual percentage return of an asset over a specific period of time. Absolute return also refers to an investment strategy that attempts to achieve positive performance under varying market conditions by engaging in long and short positions. Absolute return differs from the relative return in that an absolute return strategy may


in political philosophy, the view that absolute rule is the most desirable, or the least inadequate.


To assimilate or incorporate amounts in an account or group of accounts so that they are absorbed and lose their identity.

Absorbed Overhead

Absorbed overhead is manufacturing overhead that has been applied to products or other cost objects. Overhead is usually applied based on a predetermined overhead allocation rate.


An accounting process used in absorption costing in that the overhead of an organisation is borne by the production of that organisation by the use of absorption rates.

Absorption Account

1. Ledger account absorbed into other accounts in the preparation of a financial statement. 2. Account that shows the amount of overhead borne by (charged against) the volume of production.

Absorption Costing

A method of calculating the cost of a product or enterprise by taking into account indirect expenses (overheads) as well as direct costs.

Absorption Rate

In absorption costing, production may be expressed in a number of different ways; the way chosen to express production will ultimately determine the absorption rate to be used. The seven main methods of measuring production, together with their associated absorption rates, are detailed below. The absorption rate is used in the accounting period to obtain

Absorptive Capacity

A limit to the rate or quantity of scientific or technological information that a firm can absorb. If such limits exist they provide one explanation for firms to develop internal R&D; capacities. R&D; departments can not only conduct development along lines they are already familiar with, but they have formal training and external professional connections

Abstinence Theory Of Interest

Abstinence Theory of Interest asserts that the money used for lending purposes is the money not used for consumption – which means, earning interest by abstaining from spending makes the funds possible and available for borrowers.

Abstract Of Judgement
Abstract Of Title

A compilation of the recorded documents relating to a property, from which an attorney may judge the condition of this title. Still in use in some states, but giving way to the use of title insurance.

Abstract Of Trust

Abstraction is doing away with unimportant facts to arrive at an economic principle.

Abuse Of A Dominant Position

Intentional anti-competitive acts by persons/companies substantially in control of a market, that has had, is having, or is likely to have the effect of preventing or lessening competition.

Abuse of Discretion

A standard applied by appellate courts when reviewing the exercise of discretion by trial courts, administrative agencies and other entities.

Abuse Of Process
Abusive Language

Abusive language is defined as the use of language in a way which insults, taunts, or challenges another.

Abusive Tax Shelter

Abusive Tax Shelter is an investment scheme that claims to reduce income tax without changing the value of the user’s income or assets

Accelerated Depreciation

Method that records greater depreciation than straight-line depreciation in the early years and less depreciation than straight-line in the later years of an asset’s holding period.


The action of a lender in demanding early repayment when a borrower defaults on a debt.

Acceleration Clause

An acceleration clause is put into a loan agreement to require the borrower to pay the unpaid balance for specific reasons if a default occurs.

Accelerator Principle

The accelerator principle defines the growth in output that would induce a continuation in net investment. In other terms, net investment is a function of the alteration in output. The accelerator principle has played an important role in defining the fluctuations in investment, which is an integral part of business cycle theories that are still used today. The accelerator principle often assumes that the


The taking and receiving of anything in good faith with the intention of retaining it.

Acceptance Credit

A means by which international trade is financed. Under this arrangement, a bank (or an acceptance House) in the exporter’s country set up an acceptance credit facility (similar to a checking account) on behalf of a credit-worthy importer. The exporter may then draw on this account up to its limit. Also known as acceptance financing.

Acceptance In Ignorance

For a Contract to be valid, the offer it contains must be accepted (see: Acceptance of offer). If I lose my wallet, for example, and post a message in the newspaper that I will pay £100 for its safe return, then anyone who sees the message and returns the wallet is entitled to the reward. I will be

Acceptance Of Offer

In English Law, for an agreement (see: Contract) to be valid, there must be mutuality: an offer and a corresponding acceptance’. The acceptance must be effected by communication to the offerer, either verbally or in writing and or in some cases, by conduct. Under certain circumstances, silence can be accepted as a means of communication. A

Acceptance Of Offer By Post

When an Offer is made with the intention of entering into a contract, the acceptance must be communicated to the offerer, unless the acceptance is by conduct (see: Unilateral contract). Acceptance by post (rather than delivery by hand) is usually acceptable, but there are some legal complexities. In particular, at what point does the law deed the acceptance to

Acceptance Of Service
Acceptance Supra Protest

In contracts, is a third person, who, after protest for non-acceptance by the drawee, accepts the bill for the honour of the drawer, or of the particular endorser.

Accepting House

An accepting house specialises in guaranteeing bills of exchange.


The party that signs accepted on a draft or obligation, agreeing to pay the stated sum at maturity.

Access Provider

A company providing services to enable an organisation or individual to access the Internet.


A person who voluntarily aids the principal person responsible for committing a crime.

Accident Forgiveness

Accident forgiveness is a feature of an auto insurance policy that protects your driving record from being affected by the insurance company’s rating system for an at-fault accident, thus preventing your insurance premium from going up because of an at-fault accident.

Accident Insurance

Accident Insurance provides cover for injury and/or death resulting from an accident.

Accident Proneness

The apparent propensity of some individuals to suffer (or cause) more than an average volume of accidents. This is of particular interest in industrial and organisational psychology, which is anxious to analyse the causes of accidents in the workplace in order to reduce their occurrence and their inevitable costs. There is, however, some doubt as

Accidental Death

An accidental death is a death which results from an unusual event which could not be foreseen and was not intended by any person involved. If you have a life insurance policy to cover accidental death the amount of the policy is generally paid to the beneficiary, but the policy will have certain restrictions, such

Accidental Death Benefit

An accidental death benefit is an amount paid to a beneficiary or beneficiaries named in an insurance policy if and only if the insured dies in an accident, or as a result of injuries suffered in an accident. Often, the accidental death benefit is purchased as a rider on the policy. A person might choose

Accidental Death Insurance

Insurance which pays a lump sum in the event of death of the insured being caused by an accident.

Accommodation Bill

A bill of exchange endorsed by a reputable third party acting as a guarantor, as a favour and without compensation.

Accommodation Party

An Accommodation Party is a person who signs a negotiable instrument or commercial paper or agreement for the purpose of being a surety for another party (known as the accommodated party) to the instrument to help the accommodated party obtain a loan or an extension of credit.

Accommodative Monetary Policy

An accommodative monetary policy is an effort by the U.S. Federal Reserve Board or another central bank to stimulate its nation’s economy. Lower interest rates are the hallmark of an accommodative monetary policy. An interest rate is a cost of borrowing money; when money becomes cheaper through an accommodative monetary policy, it costs businesses and


Someone who helps another person (known as the principal) commit a crime. Unlike an accessory, an accomplice is usually present when the crime is committed. An accomplice is guilty of the same offense and usually receives the same sentence as the principal. For instance, the driver of the getaway car for a burglary is an accomplice and will be guilty of the burglary even though he may not have entered the building.

Accord And Satisfaction

Accord and Satisfactions refer to the discharge of an obligation arising under Tort law.


In accountancy, an account is a label used for recording and reporting a quantity of almost anything. Most often it is a record of an amount of money owned or owed by or to a particular person or entity, or allocated to a particular purpose. It may represent amounts of money that have actually changed

Account Aggregation

Account Aggregation is the name given to a facility which lets you view various bank account or credit card balances online, on the same screen, with only one login needed. To make it work you need to give the aggregation provider your login details for each account, and then once you log in to the

Account Balance

Account balance is a net figure that refers to the dollar amount of credits and debits at the time the reporting period ends. The term account balance is frequently used to describe a personal bank account balance, as well as other financial accounts. When it comes to banks, an account balance is simply an amount

Account Code

An account designator, especially one that is not numeric.

Account Holder

The account holder is the person whose name is on the account usually as verified by Social Security number. In the case of a bank account, an investment account, a savings account, etc. the account holder is responsible for paying income taxes on interest paid or other profits. In the case of a credit account such as a credit card, or a store account, the account holder is responsible for

Account Management Profile System

In the US, this system provides access to information helpful to the NYSE staff in managing day-to-day relationships with listed companies, member firms, and institutions.

Account Reconciliation

The reviewing and adjusting of the balance in a personal chequebook to match your bank statement.

Account Reference Data

Reference Data is any type of data related to financial transactions that does not change in realtime, including identifier information, pricing data, issuing company (of a security), and outstanding corporate actions (related to an instrument). It is used to reduce counter-party risk as well as to facilitate brokerage account setup. This reference data is collected from various sources including submitted financial statements, 3rd party vendors, market feeds, post-trade reporting, as well as investment publications.

Account Sale

A statement by a commodity broker to a client when a futures transaction is closed out. Sometimes referred to as a P&S; (Purchase and Sale Statement), it shows the net profit or loss on the transaction, with commissions and other charges detailed and taken.

Account Stated
Account Statement

An account statement is a document that provides information about a specified account for a given period of time. An account statement may be issued by a bank, a mutual fund, a brokerage firm, or any other financial institution. A bank account statement, for instance, reflects a record of transactions, which includes all the debits


Accountability is the obligation to give an account.

Accountancy Firm

A business partnership (or possibly a limited company) in which the partners are qualified accountants. The firm undertakes work for clients in respect of audit, accounts preparation, tax and similar activities.

Accountancy Profession

The collective body of persons qualified in accounting, and working in accounting-related areas. Usually they are members of a professional body, membership of which is attained by passing examinations.


A practitioner of ACCOUNTING as a profession after having attained a level of financial knowledge. A person whose work is to inspect, keep and adjust accounts.


The process of identifying, measuring and communicating financial information about an entity to permit informed judgements and decisions by users of the information.

Accounting Council

A body established in 2012 to take over certain functions of the former Accounting Standards Board. The main role of the council is to advise its parent body, the Financial Reporting Council (FRD), on matters of accounting and financial reporting policy. The responsibility for issuing Financial Reporting Standards now belongs to the FRC, although the

Accounting Equation

The relationship between assets, liabilities and ownership interest.

Accounting Event

A transaction or change (internal or external) recognised by the accounting recording system.

Accounting Information System

An accounting information system (AIS) is the system of records a business keeps to maintain its accounting system. This includes the purchase, sales, and other financial processes of the business. The purpose of an AIS is to accumulate data and provide decision-makers (investors, creditors, and managers) with information to make decision While this was previously

Accounting Liquidity

Accounting liquidity (liquidity) is a measure of the ability of a debtor to pay their debts as and when they fall due. It is usually expressed as a ratio or a percentage of current liabilities. Calculating Liquidity For a corporation with a published balance sheet, there are various ratios used to calculate a measure of

Accounting Methods

Cash Basis Cash-basis accounting is a method of bookkeeping that records financial events based on cash flows and cash position. Revenue is recognized when cash is received and expense is recognized when cash is paid. In cash-basis accounting, revenues and expenses are also called cash receipts and cash payments. Cash-basis accounting does not recognize promises

Accounting Period

Time period for which financial statements are prepared (e.g. month, quarter, year).

Accounting Policies

Accounting methods which have been judged by business enterprises to be most appropriate to their circumstances and adopted by them for the purpose of preparing their financial statements.

Accounting Reform

Accounting reform is an expansion to accounting rules that goes beyond the realm of financial measures for both individual economic entities and national economies. It is advocated by those who consider the focus of the present standards and practices wholly inadequate to the task of measuring and reporting the activity, success, and failure of modern

Accounting Scandals

Accounting Scandals are instances when corporations have been found responsible for serious breaches of Accounting Ethics.

Accounting Series Release

In the USA, the former name for a Financial Reporting Release.

Accounting Standards

Definitive statements of best practice issued by a body having suitable authority.

Accounting Standards Board

The authority in the UK which issues definitive statements of best accounting practice.

Accounting Standards Committee

Membership of the Accounting Standards Committee was both part-time and unpaid. In 1990 and as a result of serious doubts concerning the effective of the committee’s effectiveness – the committee was replaced by the Accounting Standards Boards. Within it’s lifetime the ASC issued a total of 25 Statements Of Standard Accounting Practice (SSAPs), a number

Accounting System

An accounting system is the system used to manage the income, expenses, and other financial activities of a business.

Accounting Technician

Another name for a book-keeper.


Financial statements prepared at the end of a period to reflect the profit of loss or the period and financial position at the end of the period.

Accounts Payable

Amounts due for payment to suppliers of goods or services, also described as trade creditors.

Accounts Receivable

Amounts due from customers, also described as a trade debtors. Accounts receivable are obligations due to the company from customers. Suppose a company sells a customer $50 in merchandise. The sales account increases by $50 and accounts receivable increases by $50. When the customer pays, cash increases $50 and accounts receivable decreases $50, reducing the accounts receivable for this obligation to $0. Since the company continually makes new sales, however, accounts receivable ordinarily has a positive balance. Accounts receivable are normally due within 90 days or less and are highly liquid. Indeed, in certain industries, accounts receivable are regularly sold or “factored” to receive immediate cash. Accounts receivable are therefore listed on the balance sheet as a current asset, below (completely liquid) cash and above (relatively less liquid) inventory. Accountants assume that the longer an account receivable is outstanding, the less likely it will be paid. Thus accounts receivable are regularly “aged” and written down to reflect the likely portion of accounts receivable that are uncollectible. Rising accounts receivable could mean customers are paying more slowly, but it can also indicate higher sales.

Accounts Receivable Turnover

Accounts Receivable Turnover is a ratio that indicates the number of times average receivables are turned over during a year. A popular variation of the Accounts Receivable Turnover Ratio is called Days Sales Outstanding.  It is determined by converting the ratio into an average collection period in terms of days. Accounts Receivable Turnover is calculated by

Accredited Investor

Refers to an individual whose net worth, or joint net worth with a spouse, exceeds $1,000,000; or whose individual income exceeded $200,000 or whose joint income with a spouse exceeded $300,000 in each of the 2 most recent years and can be expected to meet that income in the current year. More details of the

Accredited Personal Financial Planning Specialist

Accredited Personal Financial Planning Specialist is a professional title available to Certified Public Accountants. A certified public accountant can become an accredited personal financial planning specialist by completing a set of personal financial planning (PFP) courses, meeting PFP experience requirements, passing a qualifying exam from the American Institute of Certified Public Accountant’s (AICPA), and being

Accreting Swap

A swap in which the principal increase over time.


In accounting, accretion is the change in the price of a bond bought at a discount to the par value of the bond.


Accretive is an adjective used to describe mergers or acquisitions that increase the earnings per share of the acquirer.


The accruals process allows a business to adjust the monthly accounts for payments made in arrears. This process is the reverse of prepayments.

Accrual Accounting

An accounting method that tries to match the recognition of revenues earned with the expenses incurred in generating those revenues. It ignores the timing of the cash flows associated with revenues and expenses.

Accrual Accounting Formula

Accounting is a profession that requires its practitioners to abide by a strict set of rules. Each journal entry must be done using the double-entry accounting system. This system uses a series of journal entries consisting of debits and credits that must equal each other before the journal entry can be posted to the general

Accrual Bond

A bond on which interest accrues but is not paid to the investor during the time of accrual. The amount of accrued interest is added to the remaining principal of the bond and is paid at maturity.

Accrual Method

Accrual accounting is an accounting method where revenue or expenses are recorded when a transaction occurs rather than when payment is received or made.

Accrual Rate

The rate of build-up of a pension in a scheme where the calculation is based on salary. The accrual rate is generally expressed as some fraction – for example, sixtieths – of final pay.

Accruals Basis

The effects of transactions and other events are recognised when they occur (and not as cash or its equivalent is received or paid) and they are recorded in the accounting records and reported in the financial statements of the periods to which they relate (see also matching).


make provision for (a charge) at the end of a financial period for work that has been done but not yet invoiced.

Accrued Benefits

Benefits earned by an employee in respect of his/her pension based on years of service with his/her employer.

Accrued Dividend

An accrued dividend is remuneration owed by a company to its shareholders. Forms of an accrued dividend can be either cash or additional shares of stock. From the declaration date, an accrued dividend is recorded on the company’s balance sheet as a liability, where the accrued dividend remains until the payment date. Between declaration and

Accrued Expenses

An accrued expense is one that is incurred during a given accounting period for which payment has not yet been made.

Accrued Income

Represents income earned in the year for which an invoice has not been received at the year end.

Accrued Interest

In finance, accrued interest is the interest that has accumulated since the principal investment. For a financial instrument such as a bond, interest is calculated and paid in set intervals.

Accrued Liabilities

Accrued Liabilities are liabilities which have occurred, but have not been paid or logged under accounts payable during an accounting period; in other words, obligations for goods and services provided to a company for which invoices have not yet been received. Examples would include accrued wages payable, accrued sales tax payable, and accrued rent payable. There are two general types of Accrued

Accumulated Depreciation

Total depreciation of a non-current (fixed) asset, deducted from original cost to give net book value.

Accumulated Dividend

A dividend which is due to holders of cumulative preference shares but which has not yet been paid. The amount is carried forward on the company’s books as a liability until it is paid.

Accumulated Earnings Tax

Accumulated earnings tax is one on earnings retained by a business to avoid paying the higher income taxes that would be due if the earnings were paid out to the owners as dividends.


Regular investment of a fixed dollar amount in a mutual fund with dividends reinvested. In charting, the period before a sustainable price rise when the so-called smart money starts to buy stock. Purchase of a large number of shares over a period of time in a manner designed to avoid pushing the price up.

Accumulation And Maintenance Trust

A tax-efficient trust, used to pass assets to your children while still retaining some control over those assets. Money is only paid out to the beneficiaries when certain conditions are met.

Accumulation Distribution Line

The Accumulation Distribution Line (ADL), also known as Volume Accumulation Distribution Line, is a momentum indicator developed by Marc Chaikin. The Accumulation Distribution Line attempts to gauge supply and demand by calculating whether the stock is being accumulated (bought) or distributed (sold). The indicator is based on the assumption that the higher the volume that accompanies

Accumulation Swing Index

The Accumulation Swing Index is a cumulative total of the Swing Index. The Accumulation Swing Index was developed by Welles Wilder. Wilder noted the following characteristics of the Accumulation Swing Index: It provides a numerical value that quantifies price swings. It defines short-term swing points. It cuts through the maze of high, low, and close prices and indicates

Accumulation Trust

A trust in which the income is retained and not paid out to beneficiaries until certain conditions are met. For example, if Uncle Pierre creates a trust for Nick’s benefit but stipulates that Nick will not get a penny until he gets a PhD in French; Nick is the beneficiary of an accumulation trust.

Accumulation Units

Units in a unit trust where the income from the trust’s investments is reinvested in the trust rather than being paid out to its investors as dividends. This is either through enhancing the unit price or issuing additional units.

Unitholders get the benefit of the dividends through the increased value of the fund’s assets (and their share of those assets).


A charge of wrongdoing that is made against a person or other party. In legal terms, refers to being officially charged by a Grand Jury with a crime, or a District Attorney filing charges.


ACH, an abbreviation for Automated Clearing House, is a networked system of over 10,000 financial institutions used to process electronic fund transfers. The ACH network is overseen by NACHA, the Electronic Payments Association, which since 1974 has been running ACH. ACH transactions are used frequently for payroll transactions, direct deposits, bill payment, tax payments and

Acid Test
Acid Test Ratio

The ratio of liquid assets to current liabilities.

Acknowledged Child

A child that is recognised by the parent as their own.


A formal statement or document recognizing the fulfilment or execution of a legal requirement or procedure.


Company that becomes controlled by another.


Company that obtains control of another.


An acquisition takes place where one company – the acquirer – acquires control of another – the acquiree – usually through purchase of shares.

Acquisition Cost

The amount of money expended to obtain title to property, usually relating to fixed assets.

Acquisition Method

Production of consolidated financial statements for an acquisition.

Acquisition Of Beneficial Interests In Land

Situations often arise in which a person, or persons, attempt to claim an equitable interest in property owned by (i.e, registered in the name of) someone else. In this explanation, I refer to such a person as the `claimant’ for brevity; although of course, he might not be the claimant in a court action. Such


to pronounce not guilty of criminal charges


A judgment that a person is not guilty of the crime with which the person has been charged.

Across The Board

All the months of a particular futures contract or futures option contract, for example, if all the gold contracts open limit up, they were limit up ‘across the board’.

Act Of God

A reason for an insurance company not to pay your claim. An unpreventable and unpredictable event which could cause loss or damage to buildings, land, vehicles etc.

Act Of Settlement 1700

The Act of Settlement extended the earlier Bill of Rights by providing further separation of the roles of the Crown, House of Commons and the Judiciary, and also by making the monarch’s powers conditional on the approval of Parliament. An important provision that is still in effect in the higher courts provides that judges, once appointed, hold office ‘during good behaviour’;

Act Of Union With Scotland 1707

This Act represented the ratification of the Treaty of Union, and made England, Wales and Scotland one state with the name ‘Great Britain’. The Treaty was the result of negotiation to recombine the governments of England and Scotland after the collapse of the joint monarchy. It provides assurances for the continuation of many Scottish instruments

Acte Claire

Acte claire is a term used in the context to indicate that the answer is obvious. See preliminary reference procedure for discussion.

Acting In Concert

A group of investors are said to be acting in concert when they work together to achieve the same goal, often the purchase of a certain amount of a company’s stock with a view to launching a takeover. They can be said to be working as a concert party.


The property of radiation that enables it to produce photochemical effects

Actio Bone Fidei

An action of good faith or a group of actions where the judge is authorised to take into account equitable considerations.


An action or “legal action” is the process an individual or corporation can take against another party in court to protect their rights. Legal actions can include filing a lawsuit for civil matters, agreeing to mediation or arbitration or filing criminal charges. The most common types of civil legal actions include wrongful death claims for

Action Case

Cause, suit, or controversy disputed or contested before a court of justice.

Action On The Case

Historically much of the law of tort was concerned with Trespass of one form or another. A trespass was, and is, an interference with the rights of another person, either in person, land, or chattels. Trespass could generally only be found where the harm resulted from the direct action of the defendant – a blow, for


Giving sufficient reason to take legal action.

Active Income

Active income is a form of income for which labour services were performed, such as for self-employment or for another entity. This form of income includes wages, salaries, tips, fees, commissions, and any income from self-employment in which services were performed. The opposite of active income is passive income, in which no labour is performed

Activist Shareholders

An activist investor is an individual or group that purchases large numbers of a public company’s shares and/or tries to obtain seats on the company’s board with the goal of effecting a major change within the company.

Activity Analysis

In activity-based costing, the identification and description of activities in an organisation.

Activity Based Budgeting

Activity-based budgeting is a budgeting method that evaluates business processes in terms of the results they achieve. In activity-based budgeting, companies analyze the full range of activities they perform, assess the impact of those activities on cost and revenue, and adjust their spending decisions to favour those that are the most beneficial. Activity-based budgeting differs

Activity-Based Costing

In a business organization, Activity-Based Costing (ABC) is a method of assigning the organization’s resource costs through activities to the products and services provided to its customers. It is generally used as a tool for understanding product and customer cost and profitability. As such, ABC has predominantly been used to support strategic decisions such as

Actual Controversy
Actual Notice
Actual Occupation

In registered conveyancing, the fact that a person is in actual occupation of land that he does not own serves to make his rights stronger against a person to whom the owner wishes to sell the land. His occupation does not, in itself create rights where none existed before (although in cases of adverse possession it can appear


Commodities that can be purchased and used, as opposed to goods traded on a futures contract. (or) Expenses or receipts that have actually occurred, as opposed to targets, budgets, or other projections.

Actuarial Assumptions

An actuarial assumption is an estimate of an uncertain variable input into a financial model, normally for the purposes of calculating premiums or benefits.

Actuarial Method

Actuarial Method is the process of distributing payments made on a debt between the amount provided as fund and also to the finance charge in accordance to which a payment is used first to the appended finance charge.


An actuary makes assessments about the likelihood an event may happen and the associated costs. Actuaries may work for investment firms, where they research pricing and manage investments, particularly how to mitigate risks, and life insurance companies where they are responsible for providing data so the company can create policies and pricing schedules which ensure the insurance company has enough money to cover their claims. They also can work at pension funds, where they are responsible for placing a value on accumulated pension commitments, and management, banking and capital project companies.

Actus Reus

blameworthy act – it is used to denote the event on which a criminal offence is based.

Ad Hoc
Ad Hoc Committee

An Ad Hoc Committee is a temporary committee formed for a specific task or objective and dissolved after the completion of the task or achievement of the objective.

Ad Litem

Ad Litem, also known as guardian ad litem, is a Latin term used to refer to the appointed person to protect the interests of a minor in a personal injury or divorce case. For example, in a divorce case, the guardian ad litem (GAL) is a court-appointed person to protect the interests of a child

Ad Testificandum

A subpoena ad testificandum is a court summons for one to appear and give verbal testimony for use at a hearing or trial.

Ad Valorem

In proportion to the estimated value of the goods or transaction concerned.

Ad Valorem Duties

Taxes which are charged as a percentage of the value of an asset. Stamp Duty, which is charged on transfers of shares and property is an example.

Ad Valorem Tax

An ad valorem tax is a tax based on a calculated percentage of the value of property or goods. The “ad valorem” in ad valorem tax is a Latin term meaning “according to value.” Many local governments derive a majority of their revenue from various ad valorem taxes. Legislatures set the size of the ad

Adam Smith

Adam Smith (1723-1790) is the Scottish-born “father of economics.” Smith deals with the free market system and the resulting system of goods, services, and prices. His magnum opus was The Wealth of Nations, wherein is found Smith’s theory of the invisible hand that guides individuals working in their own interest to improve society as a whole, even though

Adaptive Expectations Principle

Adaptive Expectations Principle also referred to as the error learning hypothesis, was first used by the American economist Irving Fisher (1867-1947). However, it became popular during the 1950s in the study of hyperinflation. Adaptive expectations principle holds that the future values of economic variables, such as future interest rates or inflation, can be predicted on

Adaptive Filter

Continuously updating the weighting of past prices for smoothing or forecasting purposes.

Added To Loan

Added to loan relates to the costs borrowers face when arranging a mortgage. Often these are added to the mortgage amount being borrowed, hence the term. The costs may include items such as mortgage indemnity fees and/or arrangement fees and/or administration fees as examples.


A person who is addicted, especially to a harmful drug.


An addiction is an obsession, either psychological or physiological, to a specific action or a habit-forming substance. Alcohol addiction is one of the most common addictions for adults in the United States. Excessive or prolonged use of alcohol can lead to severe liver damage. Crimes involving alcohol addiction include spousal abuse, child abuse and other

Additional Child Tax Credit

The additional child tax credit is available for individuals whose child tax credit is greater than their federal income tax liability. The additional child tax credit is a refundable tax credit allowing taxpayers, if eligible, to get the non-refundable portion of the child tax credit. For example, if an individual has a non-refundable child tax

Additional Paid-In Capital

Additional Paid-In Capital (APIC) is the value of share capital above its stated par value and on the balance sheet is an accounting item under Shareholders’ Equity.

Additional Security Fee

An additional security fee may be required when the mortgage exceeds a certain percentage of the value of the property (usually 75%). The form of additional security used is normally a Mortgage Indemnity Policy. Occasionally the lender may require a parent to be a guarantor or for other security such as shares or insurance policies

Additional Voluntary Contributions

Additional payments to a tax deferred savings account or an occupational pension scheme by an employee to boost a pension at retirement. ‘Free-Standing AVCs’ or ‘FSAVCs’ are essentially a private version of an AVC and can be used to top up contributions independently of the employer.


The augmentation by a judge of damages awarded by a jury.


Ademption is the situation, where a property bequeathed to a person at the time of writing of a will, cannot be transferred to him or her upon the death of the will-maker (testator) because it is no longer belongs to the testator’s estate. Ademption may be a result of the destruction, loss, or sale of the bequest in the intervening period.

Adequate Remedy
Adhesion Contract

Adhocism is an organisational philosophy/style characterised by: an aversion to planning, a tendency to respond only to the urgent, as opposed to the important, a focus on ‘fire fighting,’ than on establishing systems and procedures through goal setting and long term planning.

Adjective Law

Also, procedural law. That body of law which governs the process of protecting the rights under substantive law.


To adjudicate means to hear and settle a case, conflict or dispute through a judicial procedure. The adjudication process is a legally-binding judgment, and the stipulations and demands of the judgment are legally upheld by a local or federal governing body. Adjudication generally is used to resolve disputes over money or non-violent violations. Adjudication is


Adjudication refers to the judgement or decision of a court; especially concerning bankruptcy proceedings.

Adjustable Life Insurance

Adjustable life insurance is a form of life insurance that allows the policyholder to manipulate the coverage plan in various ways. Adjustable life insurance enables the owner to raise or lower the face amount, as well as increase or decrease the insurance premium. As such, the accumulated cash value of the adjustable life insurance policy

Adjustable Rate

An adjustable-rate is an interest rate that fluctuates periodically in relation to an index. Payments linked to an adjustable-rate increase or decrease accordingly. A mortgage loan will often have an adjustable rate, permitting the interest rate to change at specified intervals over the term of the loan. Adjustable rates work to transfer part of the

Adjustable Rate Mortgage

A mortgage loan with an interest rate that fluctuates in accordance with a designated market indicator — such as the weekly average of one-year U.S. Treasury Bills — over the life of the loan. To avoid constant and drastic fluctuations, ARMs typically limit how often and by how much the interest rate can vary.

Adjusted Basis

Adjusted basis is the original cost of a property, plus the value of any capital expenditures for improvements, minus any depreciation.

Adjusted Gross Income

In the US, a person’s income on which federal income tax is calculated. This is gross income less adjustments such as Individual Retirement Account, Simplified Employee Pension Plan, Keogh Plan and alimony payments but before itemised deductions such as state and local income taxes, interest expenses and medical expenses.


An individual whose job it is to assess losses and settle policyholder claims.


An insolvency procedure, in which a company is in severe trouble, but still with some hope of recovery, may be put into the charge of a court-appointed administrator. Going into administration means the company cannot be wound up without the court’s permission.

Administration Of An Estate

The management and settlement of an estate left by a person who did lot leave a will or an executor of estate.

Administrative Agencies

Agencies created by the legislative branch of government to administer laws pertaining to specific areas such as taxes, transportation, and labour.

Administrative Expenses

Costs of managing and running a business.

Administrative Hearing
Administrative Law

In the UK this term relates to the body of law that regulates the responsibilities of the individual to the apparatus of the state. The term is also used to refer to the law governing the operation of tribunals (see: Tribunal) and quasi-judicial bodies.

Administrative Law Judge
Administrative Procedure Act

An outdated term for a female administrator — the person appointed by a court to handle probate on behalf of someone who died without a will. Now, whether male or female, this person is called the administrator.

Admiralty Law

Also, maritime law. That body of law relating to ships, shipping, marine commerce and navigation, transportation of persons or property by sea, etc.

Admissibility Of Evidence

In general, any Relevant Evidence is admissible. In criminal cases, in particular, certain metas of evidence are inadmissible, except where there are exceptions in common law or statute. Each of these has its own entry in this glossary. The general exceptions include: ‘hearsay’, that is, spoken or documentary evidence that is a report of someone else’s

Admissible Evidence

Evidence that can be legally and properly introduced in a civil or criminal trial.

Admission Against Interest
Admission Of Guilt
Admission To Bail

To advise or caution. For example the court may caution or admonish counsel for wrong practices.

Adopted Child

adoption – a legal proceeding that creates a parent-child relation between persons not related by blood; the adopted child is entitled to all privileges belonging to a natural child of the adoptive parents (including the right to inherit)


A court procedure by which an adult becomes the legal parent of someone who is not his or her biological child. Adoption creates a parent-child relationship recognized for all legal purposes — including child support obligations, inheritance rights and custody.


Extra-marital sex between a male and female, at least one of whom is married to another person. In most countries, adultery is a legal ground for divorce.

Advance Corporation Tax

Advance Corporation Tax is the amount of tax paid by a company on the amount of profit distributed as dividend payments. Companies pay their dividends net of this tax. Some institutions, charities and tax-free PEPs are able to reclaim the tax. However, Chancellor Gordon Brown abolished the payment of tax credits for pension schemes and

Advance Decline Index

The Advance-Decline Index is an indicator that represents the total difference between the number of advancing and declining security prices for a given stock exchange. Typically, the advance-decline figures come from the NYSE (or Nasdaq) on a daily basis (see Yahoo advance decline).  When plotted on a chart this indicator is known as the Advance-Decline Line. The Advance/Decline

Advance Decline Ratio

The Advance/Decline Ratio is the ratio of the number of advancing issues to declining issues for a given stock exchange such as the NYSE or Nasdaq. The Advance/Decline Ratio is similar to the Advance/Decline Index in that it displays market breadth. But, where the Advance/Decline Index calculates the difference between the number of advancing and declining

Advance Directive

A written statement expressing a person’s wishes for medical treatment should that person become incapacitated due to illness or serious injury and is no longer able to make his or her own decisions. Advance directives, which are governed on a state-by-state basis, fall into two categories: Living Will and Durable Power of Attorney.

Advance Sheets

Paperback pamphlets published by law book publishers weekly or monthly which contain reporter cases, including correct volume number and page number. When there are sufficient cases, they are replaced by a bound volume.

Advance/Decline Line

The Advance/Decline Line is possibly the most popular market breadth indicator. It is a cumulative total of the Advancing-Declining issues for a given stock exchange (usually the NYSE). Note that the number of stocks trading on a particular market varies over time. Thus there is no consistent maximum or high value. When compared to the market

Adversary Proceeding

One having opposing parties such as a plaintiff and a defendant. Individual lawsuit(s) brought within a bankruptcy proceeding.

Adverse Credit

Adverse Credit is the term used within the finance industry for a bad credit rating. Having adverse items on your credit file such as defaults, arrears, CCJs etc can make it much more difficult to be approved for loans, credit cards, mortgages or other finance, especially for people who don’t have their own home to

Adverse Interest

n. a right or concern that is contrary to the interest or claim of another.

Adverse Opinion

An Adverse Opinion is issued when the auditor determines that the financial statements of an auditee are materially misstated and, when considered as a whole, do not conform with GAAP. It is considered the opposite of an unqualified or clean opinion, essentially stating that the information contained is materially incorrect, unreliable, and inaccurate in order to assess

Adverse Party
Adverse Possession

Method of acquiring real property under certain conditions by possession for a statutory period. A means by which one can legally take another’s property without paying for it. The requirements for adversely possessing property vary between states, but usually include continuous and open use for a period of five or more years and paying taxes on the property in question.

Adverse Remortgage

An adverse remortgage or adverse credit remortgage is a mortgage refinance contract to a mortgage borrower with adverse credit. An adverse remortgage allows these borrowers to refinance even with an adverse credit rating. An adverse remortgage borrower can have court judgements, defaults, or mortgage arrears and still obtain refinancing with an adverse remortgage. Adverse remortgage

Adverse Selection

If insurance is available at the same price to people facing widely varying risks, then those with the greatest risks are more likely to buy insurance. This adverse selection works to the detriment of insurers. Unchecked, it would make underwriting unprofitable. Insurers protect themselves from adverse selection by attempting to measure risk and either charging more from

Adverse Witness
Advice Note

A document issued by a supplier of goods that advises the customer that the goods have been sent.

Advisory Broker
Advisory Opinion

A general term for a legal professional who represents a client’s legal interests in the courtroom. This term has no particular standing in English law, but is used in Scotland as the equivalent of ‘barrister’.


A person who makes a voluntary declaration of facts in a written statement and signs it under oath.


A written statement confirmed by oath or affirmation, for use as evidence in court. An affidavit is a voluntary statement or written compilation of the facts of a case under oath. The affidavit relates specifically to the issue to be decided and should be the person’s own account of events. The affidavit can be used in court as evidence.


A person or organisation officially attached to a larger body. In online retail, a website that will steer traffic to an alternative site for a percentage of sales.

Affinity Card

A kind of credit card linked to an organisation other than the issuing bank An affinity card is a kind of credit card which is co-branded by both the issuing bank and another company, charity or organisation, and with some sort of loyalty or rewards program relevant to the co-branding. Affinity cards operate like ordinary credit

Affinity Marketing

Marketing targeted at a specific audience that shares common interests connected to a product. Also, a campaign sponsored through cooperation between different companies.


A solemn and formal declaration that an affidavit is true. This is substituted for an oath in certain cases.

Affirmation Of Fact

An affirmation of fact is a statement of fact or promise made as part of a bargain.

Affirmative Action

A principle underlying policies in employment and education aimed at ensuring equal opportunities for all.

It extends non-discrimination on the grounds of race, ethnic origin, gender identity, religion and sexual orientation, to the objective of achieving, over the course of time, a profile of the workforce or organisational body that reflects the representation of various groups in the pool from which the institution or enterprise recruits it’s workers or members.

Affirmative Defence

A defence raised in a responsive pleading (answer) relating a new matter as a defence to the complaint; affirmative defences might include contributory negligence or estopped in civil actions; in criminal cases, insanity, duress, or self-defence might be used.

Affirmative Defense

An explanation for a defendant’s actions that excuses or justifies his behavior. For example, acting in self-defense is a common affirmative defense to a charge of battery or homicide. Other affirmative defenses include insanity, duress and intoxication.


In the practice of appellate courts, the word means that the decision of the trial court is correct.


A new disease that is sweeping modern Britain, thanks to business success, inheritance, rising property valuations, and the Lottery. It refers to the sense of confusion and disorientation that the newly rich when they find they are suddenly multimillionaires.

According to one psychologist, the feel ‘shame, guilt, anger, rampant materialism and all manner of compulsive/addictive behaviour’.

One of the worst aspects of the disease is the inability of sufferers to take the one obvious step that will alleviate their condition: donate their wealth to charity.

Affordable Housing

Affordable housing is a term used to describe dwelling units whose total housing costs are deemed “affordable” to a group of people within a specified income range. Although the term is often applied to rental housing that is within the financial means of those in the lower-income ranges of a geographical area, the concept is

After-Acquired Property
After-Acquired Title
After-Discovered Evidence
After-Hours Trading

After-hours trading is stock trading which takes place after the traditional 4:00 p.m. close of the New York markets. While after-hours trading has been available to institutional investors for quite some time, after-hours trading is now permissible for all traders. After-hours trading is conducted via an Electronic Communication Network (an ECN), which electronically matches buyers


The sale of goods, services or securities by another company after the original manufacture or original issue.

Against The Will

The statement that says something was done without a person’s consent. Such as rape, robbery or an assault.

Age Discrimination
Age Discrimination In Employment Act

A federal law that prohibits arbitrary discrimination against workers over the age of 40 in any employment decision, especially firing. The ADEA also provides that no worker can be forced to retire.

Age Of Majority

Adulthood in the eyes of the law. After reaching the age of majority, a person is permitted to vote, make a valid will, enter into binding contracts, enlist in the armed forces and purchase alcohol. Also, parents may stop making child support payments when a child reaches the age of majority. In most states the age of majority is 18, but this varies depending on the activity. For example, in some states people are allowed to vote when they reach the age of eighteen, but can’t purchase alcohol until they’re 21.

Aged Debtors

Debtors who have owed money to the business for a defined period of time.

Aged Debtors Analysis

A report that analyses amounts owed by customers according to the length of time that those amounts have remained unpaid. For example, all customers who have outstanding invoices that are over a month old.


A relationship between a principal and an agent. In the case of a limited liability company, the shareholder is the principal and the director is the agent.

Agency By Estoppel

The concept of agency by estoppel arises where one person acts in such a way that the other believes that a third person is authorised to act on his behalf and enters into a transaction with the third person, the person whose act induced him to do so, is liable for that agreement as if

Agency Securities

Historically, debt financing of the US Federal Government has occurred at two levels. Direct spending authorized by Congress was financed by the US Treasury through the issuance of Treasury securities. Entities formed by Congress might also issue debt. These entities fall into two categories: Federal agencies are a part of the Federal Government and include

Agency Theory

A theoretical model, developed by academics, to explain how the relationship between a principal and an agent may have economic consequences.


An agent is a person appointed by another person, known as the principle, to act on his or her behalf.

Agent For Acceptance Of Service
Aggravated Assault
Aggravated Burglary

Aggravated burglary is an offence under section 10 of the Theft Act (1968) and is made out when a person commits a Burglary and at the time has with him any firearm, imitation firearm, any offensive weapon or an explosive.

Aggravated Trespass

An offence under s.69 of the Criminal Justice and Public Order Act (1994). A person is guilty of aggravated trespass if he trespasses on another’s land (see: Trespass to land) and carries out any act with the intention of disrupting a lawful activity being carried out on or adjacent to that land.

Aggravating Circumstances

Circumstances that increase the seriousness or outrageousness of a given crime, and that in turn increase the wrongdoer’s penalty or punishment. For example, the crime of aggravated assault is a physical attack made worse because it is committed with a dangerous weapon, results in severe bodily injury or is made in conjunction with another serious crime. Aggravated assault is usually considered a felony, punishable by a prison sentence.

Aggregate Demand

Aggregate demand is the total demand in an economy for a given length of time. The phrase “aggregate demand” can be also be understood as “aggregate expenditure,” as it is always expressed in terms of expenditure on services and products. The aggregate demand for any economy is expressed in the function: Y = C +

Aggregate Demand Curve

The aggregate demand curve is a concept from neoclassical microeconomics that symbolizes the total demand for goods and services from all participants in an economy. A line sloping downward from left to right represents the aggregate demand curve, and each point on the aggregate demand curve represents a specific level of demand at a specific

Aggregate Supply

Aggregate supply is the total supply in an economy for a given length of time. Aggregate supply is expressed as the relationship between a general price level and the value of production (usually GDP or GNP). Aggregate supply is graphed either to represent the short-run aggregate supply curve (i.e. SRAS) whereas prices increase, companies are

Aggregate Supply Curve

The aggregate supply curve is a concept from economics that symbolizes all of the goods and services an economy produces in a given time period. Either a vertical line (i.e. long-run aggregate supply curve or LRAS) or a line sloping upward from left to right (i.e. short-run aggregate supply curve or SRAS) pictorially represents the


An aggregator is a firm that collates and presents information about an individual’s financial activities and assets.

Aggressive Growth Fund

An aggressive growth fund is a mutual fund whose investment goal is the highest possible appreciation of value. An aggressive growth fund invests in stocks of companies that show great growth potential. Such companies are often small and relatively new. As such, their stock may be quite volatile. An investor who chooses an aggressive growth

Agreed Bid

A takeover bid that is supported by a majority of the shareholders of the target company.

Agreed Cost

Regarding auto insurance, the price agreed to by the claimant’s chosen auto repair shop and the insurance adjuster to complete the work necessary to fix the damage to a vehicle.

Agreed Notice

Under the LRA 2002 an agreed notice is used to protect an interest in land which is not registerable in its own right, and which is recognized by the owner of the registered title. Under the LRA 1925, this was just called a `notice’. A notice does not prove that the interest claimed is a valid one but does

Agreed Statement
Agreed Value

Concerning vehicle insurance, The Agreed Value is the amount your insurer agrees to pay you in the event your vehicle is written off in a crash.


A meeting of the minds. An agreement is made when two people reach an understanding of a particular issue, including their obligations, duties and rights. While an agreement is sometimes used to mean contract — a legally binding oral or written agreement — it is actually a broader term, including understandings that might not rise to the level of a legally binding contract.

Agreement Mistake

This kind of mistake in contract occurs where there is no real “meeting of minds” between the contracting parties, and the contract is therefore void or voidable. This may arise because the parties are at cross purposes, or the contract is too vague to be interpreted. There are three important metas of agreement mistake: mistake

Agreement Of Sale

A contract where a seller agrees to sell and a buyer agrees to buy, under specific terms and conditions spelled out in writing and signed by both parties.

Agricultural Property Relief

A deduction of either 50% or 100% which is made from the value of land in the UK, Channel Islands or Isle of Man when it is assessed for inheritance tax purposes.

Aid And Abet

To actively, knowingly, or intentionally assist another person in the commission or attempted commission of a crime.

Aid Effectiveness

Aid effectiveness is the effectiveness of development aid in achieving economic development (or development targets). Aid agencies are always looking for new ways to improve aid effectiveness, including conditionality, capacity building and support for improved governance. Micro-Macro Paradox The major findings by Paul Moseley and others conclude that it is impossible to establish any significant

Alan Greenspan

Alan Greenspan is a former Chairman of the United States Federal Reserve (the Fed). Alan Greenspan was born on 6th March 1926 in New York, New York. He attained a B.S in Economics (summa cum laude) from New York University in 1948. Greenspan achieved an M.A in economics from the same university in 1950. New

Alcoholic Beverage

Any drink that contains alcohol and includes wine, beer, spirits and liqueurs.

Algorithmic Trading

Algorithmic trading involves entering trading orders through electronic trading platforms using an algorithm -which helps in taking into account order’s characteristic like timing, price, and the volume of the order. Besides, in many cases, algorithmic trading also initiates orders without human interference. Algorithmic trading helps in dividing large trades into numerous smaller trades making it


A foreign-born person who has not qualified as a citizen of the country.

Alienation Of Affections
Alimony Payment

An alimony payment is a periodic pre-determined sum awarded to a spouse or former spouse following a separation or divorce. Alimony is an obligation to make payments for support or maintenance; an alimony payment is the actual sum paid to fulfil the obligation.

All Or None

A order to a broker to buy or sell the entire amount of the order in one transaction or not deal at all.

All Ordinaries

All Ordinaries or “All Ords” is the name for the Australian All Ordinaries index. The All Ordinaries index is Australia’s premier market indicator. The All Ordinaries index is comprised of the 500 largest stocks listed on the ASX (Australian Stock Exchange). The “ordinary” in All Ordinaries index signifies “common” shares. The All Ordinaries Index is

All Paper Deal

An all paper deal is an acquisition where a listed company acquires another company (listed or private) and the shareholders of the target company only receives shares in the acquiring company as payment for their shares in the target company. The opposite of the All Paper Deal is the All-Cash Deal, where the shareholder of

All The Estate I Own

(law) a formal accusation against somebody (often in a court of law)


To assign a whole item of cost, or of revenue, to a simple cost centre, account or time period.


In general, allocation means to distribute according to some plan. In investing, allocation is heard most often in “asset allocation.” Large pension funds and individual investors alike aim for an allocation of funds that best achieves their investment objectives, like safety, steady income, and capital appreciation. Asset allocation for the individual investor usually focuses on

Allotment Letter

If you make a successful application for a new share issue, you’ll receive an allotment letter telling you how many shares you’ve actually received (which may well be different from the number you applied for if the issue is oversubscribed). The allotment letter – also known as a share allotment form – will be exchanged

Allotted Shares

Shares distributed by allotment to new shareholders.


Characteristic of a cost that permits its inclusion in a cost-plus type contract, and depends on: its reasonableness its allocability provisions of GAAP. practices appropriate under the circumstances, and the terms of the contract.

Allowable Expenses

Expenses incurred by a person whilst carrying out duties at work, which are ‘approved’ by the tax authorities and can be offset against income to reduce income tax liability.

Allowance For Doubtful Accounts

“Allowance for Doubtful Accounts” is a method for recognizing that some Accounts receivable items will not be collected in full. The allowance method focuses on recognizing bad debts as a percentage of receivables rather than on an item-by-item basis. At the end of each accounting cycle, the balance in the contra asset account of Allowance


A coefficient which measures risk-adjusted performance, factoring in the risk due to the specific security, rather than the overall market. A high value for alpha implies that the stock or mutual fund has performed better than would have been expected given its beta (volatility).

Alter Ego
Alternate Beneficiary

A person, organization or institution that receives property through a will, trust or insurance policy when the first named beneficiary is unable or refuses to take the property. For example, in his will Jake leaves his collection of sheet music to his daughter, Mia, and names the local symphony as alternate beneficiary. When Jake dies,

Alternative Dispute Resolution

Procedures for resolving legal conflicts between parties outside of the traditional court setting. ADR includes such processes as arbitration, mediation, and conciliation. The Civil procedure rules envisage an expanded role for ADR, and parties appearing in court have been penalised in costs for failing to take ADR seriously. Alternative Dispute Resolution (ADR) is the name given to

Alternative Investment Market

AIM is the London Stock Exchange’s market for small, young and growing companies. There are special tax breaks designed to encourage investors to put money into AIM stocks. Specifically, if you invest for a year or more, your investment will be treated as a business asset which will mean you’ll face a significantly lower capital

Alternative Minimum Tax

The US Congress introduced alternative minimum tax (AMT) in 1970 to prevent high-income taxpayers from lowering their tax liability through excessive tax loopholes. Form 1040 and 1040A include worksheets that help to determine alternative minimum tax liability. Form 6251 is then used to calculate the tentative minimum tax. Any excess is to be added to the regular tax as alternative minimum tax. Since the alternative minimum tax is not indexed for inflation, over the years it has started affecting more middle-income taxpayers especially those claiming higher deductions, exemptions, and credits. The alternative minimum tax provisions treat these situations differently. There are only two levels of alternative minimum tax: 26% and 28%. Taxpayers may claim credit for the alternative minimum tax paid in previous years provided they have also submit Form 8810.

Alternative Motor Vehicle Credit

The Alternative Motor Vehicle Credit was enacted with the Energy Policy Act of 2005. Taxpayers may claim the Alternative Motor Vehicle Credit on form 8910. Many hybrid cars may benefit from the Alternative Motor Vehicle Credit; the Alternative Motor Vehicle Credit applies to qualifying hybrid vehicles that were purchased or put into service on or

Alternative Pleading

A group of people who have graduated from a school or university.


Unclear or uncertain.

Ameliorating Waste

Archaic term for an alteration to land or property that improves it. See Waste for more details.

Amended Complaint
Amended Pleading
Amended Return

An amended return is a tax return filed to correct a previous year’s return. The amended return may be filed with the IRS, one’s state revenue department, a city taxing agency, or any of several others. For a federal amended return, one uses Form 1040X to file the amended return. Filing an amended return for

American Bar Association
American Civil Liberties Union
American Depositary Shares

American Depositary Shares or ADSs are foreign issues that are traded on American financial markets. Foreign companies issue American depositary shares to tap into a larger pool of money by allowing American investors to buy the shares, in dollars, on domestic exchanges. Depositary banks and brokers act as the middlemen. This is an easy way for American investors

American Depository Receipt

An American Depository Receipt (ADR) is a negotiable, registered certificate representing a specific number of corporate stocks in a non-U.S. company. An ADR documents the holder’s beneficial ownership of foreign stock held in trust by a foreign branch or correspondent of an American bank. Introduced in 1927, an ADR provides the American investor with the

American Institute Of Certified Public Accountants

With over 330,525 CPA members (in August 2006), the American Institute of Certified Public Accountants (AICPA) is the largest professional organization of Certified Public Accountants (CPAs) in the United States of America. Approximately 40% of its members are engaged in the practice of public accounting, in areas such as auditing, accounting, taxation, general business consulting,

American Option

This is an option that can be exercised on any business day prior to it’s expiry date.

Americans With Disabilities Act

A federal law that prohibits discrimination against people with physical or mental disabilities in employment, public services and places of public accommodation, such as restaurants, hotels and theaters.


A stock exchange in New York.

Amicus Curiae
Amicus Curiae

Process similar to depreciation, usually applied to intangible fixed assets. An annual charge made in a company’s profit and loss account to reduce the value of an intangible asset to zero over a period of years. A common example has been goodwill amortisation, but that has been abolished under international accounting standards. The goodwill, acquired through a takeover, is instead subjected to an annual impairment test.

Amortisation Schedule

An amortisation schedule is a complete table of periodic loan payments, showing the amount of principal and the amount of interest that comprise each payment until the loan is paid off at the end of its term.

Amortising Loan

An amortising loan is a loan with scheduled periodic payments that are applied to both principal and interest. An amortised loan payment first pays off the relevant interest expense for the period, after which the remainder of the payment reduces the principal.


Amortization refers either to paying debt in regular installments over time or deducting intangible capital expenses over time. When it refers to debt, amortization is the practice of spacing out payments on that debt at regular intervals. For example, a 30-year fixed-rate mortgage usually requires monthly payments on the debt. In amortized loans, each monthly payment contributes to paying

Amount Due

Refers to the total sum of money due for the purchase of a good or service that must be paid by the set due date.

Analysis Of Variance

In standard costing and budgetary control this refers to the analysis of variances in order to determine their causes. The total profit variance or production cost variance is analysed into sub-variances to indicate the major reasons for differences between budgeted figures and actual outcomes.


Although the term analyst can be associated with a broad range of definitions, in the financial environment an analyst is an individual that analyzes information and data. An analyst might be a financial analyst, industry analyst, business analyst or systems analyst. A financial analyst is also known as a securities analyst, research analyst, investment analyst

Analytical Auditing

Analytical auditing is simply using analytical procedures whilst auditing to allow the auditor to understand the business, and changes to a clients business.

These analytical procedures are part of the many tools an auditor will use, and can help to highlight areas of concern or areas of growth.

Analytical Procedures

“Analytical Procedures” refers to a tool used by external auditors in public accounting. There are 2 main approaches to audit methodology: Test of controls, and Substantive procedures (aka “Substantive tests”). While it is generally considered more efficient and thus more favourable to rely on a test of controls method, the inability to gain confidence with

Analytical Review

Analytical review is an auditing procedure that uses ratios to determine whether any significant changes have taken place.

Ancillary Administration
Ancillary Jurisdiction
Ancillary Probate

A probate proceeding conducted in a different state from the one the deceased person resided in at the time of death. Usually, ancillary probate proceedings are necessary if the deceased person owned real estate in another state.


In the financial world, the term angel is short for an angel investor. An angel is an affluent individual who invests his/her personal capital into a business endeavour (usually a start-up) in exchange for equity ownership. Frequently, an angel is a former or current entrepreneur who has become wealthy through the sale of a business.

Angel Investor

An angel investor is a private investor who provides capital for entrepreneurial start-ups or expansion. An angel investor acts alone or as part of a syndicate. An angel investor participates in the equity of the company by buying stocks or convertible debt instruments. The holding period is usually less than ten years. An angel investor

Animus Possidendi

‘Intention to possession’. To establish adverse possession, the squatter must show that he intended to take possession of the land. Although this is a subjective matter, a court will not normally take the squatter’s word that this was his intention — he will have to lead evidence.

Announcement Date

Most commonly, the announcement date is the date on which a company declares dividends. In this usage, announcement date is a synonym for the declaration date. Suppose on the announcement date of May 1 the company’s board declares a quarterly dividend of $.25 on the company’s 500,000 outstanding shares, to be paid on May 31

Annual Equivalent Rate

A figure quoted in loan advertisements to help people compare one product with another. It indicates what the rate would be if interest was compounded and paid just once a year. The annual equivalent rate will typically be higher than the actual annual rate calculated without compounding as many investment products are not compounded annually.

Annual Fee

Annual Fee – also known as the Annual Management Charge – is a fee paid on an ongoing annual basis by you to the manager of your investment or life insurance /pension policy. These charges vary from company to company and from product to product but usually are in the range of 0.35% to 2%.

Annual Growth Rate

Annual Growth Rate is used to describe the growth of some element of a business (revenue, units delivered, etc.).  The annual growth rate can be expressed in terms of an average or compound. Compound Annual Growth Rate (CAGR) is generally used as it reduces the effect of the volatility of periodic returns that can render an Average Annual

Annual Investment Allowance (AIA)

A tax allowance up to the value of £200,000 each tax year, which can be offset against corporation tax when your company buys assets.

Annual Meeting

Annual meeting. Each public corporation holds an annual meeting of the shareholders, where the executives of the company review recent developments, and issues are presented to the shareholders for a vote. The shareholders also elect members of the board of directors and carry out such other business as may come up as allowed by the corporation by-laws. Business to come before the

Annual Percentage Rate (APR)

The interest percentage of a loan, including all finance charges and other payments and credits, averaged over the course of a year.

Annual Percentage Yield

Whether you are borrowing money to make a large purchase or depositing your money in a financial institution so you can make money (e.g., savings account, certificate of deposit), you will need a basic understanding of some key financial terms: annual percentage rate, annual percentage yield, and finance charges. The Annual Percentage Yield is the annual rate

Annual Report

A document produced each year by limited liability companies containing the accounting information required by law. Larger companies also provide information and pictures of the activities of the company.


Annualization is a tool which is used to predict the annual amount of something using only the data from part of the year.


To annualize is to take an item measured for a period other than one year and compute what it would be for a single year. Although it’s possible to annualize numbers for periods longer than one year, usually the items to annualize are for periods of 12 months or less. For example, if managers annualize


A person who receives an annuity.


A purchased policy that pays a fixed amount of benefits every year — although most annuities actually pay monthly — for the life of the person who is entitled to those benefits. In a simple life annuity, when the person receiving the annuity dies, the benefits stop; there is no final lump sum payment and no provision to pay benefits to a spouse or other survivor. A continuous annuity pays monthly installments for the life of the retired worker, and also provides a smaller continuing annuity for the worker’s spouse or other survivor after the worker’s death. A joint and survivor annuity pays monthly benefits as long as the retired worker is alive, and then continues to pay the worker’s spouse for life.

Annuity Certain

An annuity in which payments continue for a specified period irrespective of the life or death of the person covered.

Annuity Prospectus

Legal document that provide specific information about flexible annuity contracts. Must be accessible to every prospective buyer.


A court procedure that dissolves a marriage and treats it as if it never happened. Annulments are rare since the advent of no-fault divorce but may be obtained in most states for one of the following reasons: misrepresentation, concealment (for example, of an addiction or criminal record), misunderstanding and refusal to consummate the marriage.


A defendant’s written response to a plaintiff’s initial court filing (called a complaint or petition). An answer normally denies some or all facts asserted by the complaint, and sometimes seeks to turn the tables on the plaintiff by making allegations or charges against the plaintiff (called counterclaims). Normally a defendant has 30 days in which to file an answer after being served with the plaintiff’s complaint. In some courts, an answer is simply called a “response.”

Answer Over

When you plead again after the defects in your presentation have been pointed out to you by the opposite party.

Antecedent Debt

A legally enforceable obligation, which has been in existence prior to the time in question, to reimburse another with money or property.


To date a document before the date on which it is drawn up.

Antenuptial Agreement

The requirement for anti-circumvention laws was globalised in 1996 with the creation of the WIPO Copyright Treaty. In the United States, the Digital Millennium Copyright Act (“DMCA”)has implemented the treaty provisions regarding the circumvention of some technological barriers to copying intellectual property. Section 103 (17 U.S.C Sec. 1201(a)(1)) of the DMCA states: No person shall

Anti-Lock Brake System (ABS)

An anti–lock braking system (ABS) is a safety anti-skid braking system used on aircraft and on land vehicles, such as cars, motorcycles, trucks, and buses. ABS operates by preventing the wheels from locking up during braking, thereby maintaining tractive contact with the road surface.

Anti-Theft Device

A range of technologies intended to deter auto theft, such as a car alarm. Equipping vehicles with anti-theft devices often lead to a discount on insurance premiums.


In patent law, a situation in which an invention is “anticipated” by being too similar to an earlier invention to be considered novel. Because novelty is a requirement for a patent, anticipated inventions are not patentable. Anticipation can occur when a prior invention or printed publication matches all of the primary characteristics of the invention,

Anticipatory Breach
Antitrust Law

Legislation enacted by the federal and various state governments to regulate trade and commerce by preventing unlawful restraints, price-fixing, and monopolies, to promote competition, and to encourage the production of quality goods and services at the lowest prices, with the primary goal of safeguarding public welfare by ensuring that consumer demands will be met by

Antitrust Laws

Antitrust laws are regulations enacted at the state and federal level that constrain businesses from accumulating or exerting excessive market power. Price fixing, restraint of trade, and monopolization of markets are among the business practices prohibited by antitrust laws. Contractual arrangements between buyers and sellers and collusion between competitors qualify as restraint of trade under

Apgar Score

An Apgar Score is the score given to a newborn child by their doctor that measures their pulse, grimace, reflex, irritability, skin colour, respiration and muscle tone. Healthier babies have higher Apgar Scores. There is a broad range of injuries which can occur to a baby during the birthing process including brain damage (leading to

Apparent Authority

To appeal a judicial decision is to request that a more senior judicial body or court of law review that decision (which, presumably, was taken by a lower court). In England, an appeal may be made on a number of different grounds (e.g. points of fact, points of law, etc.). The nature of this ground may influence the precise route that the appeal will take.


A party to a lawsuit who appeals a losing decision to a higher court in an effort to have it modified or reversed.

Appellate Court

Technically, any court in which an appeal may be heard. In England, the term is normally used, if at all, with reference to the Court of Appeal. In other common-law jurisdictions (e.g. the United States), use of the term is considerably more widespread.


A party to a lawsuit who wins in the trial court — or sometimes on a first appeal — only to have the other party (called the appellant) file for an appeal. An appellee files a written brief and often makes an oral argument before the appellate court, asking that the lower court’s judgment be upheld. In some courts, an appellee is called a respondent.

Application Form

A form that you complete in order to apply for a job, a place on a course, etc. or to get something such as a loan or a licence

Applications Software

Applications software are computer programs that are design for a specific purpose or application. 


The separating of a loss to a proportionate degree among two or more insurers that cover the same loss.


A method of depreciation that values an asset at the beginning of an accounting period and again at the end.

Appraisal Ratio

A ratio used to measure the quality of a fund’s investment picking ability. It compares the fund’s alpha (or the adjusted return of the fund assuming the market return is zero) to the portfolio’s unsystematic risk or residual standard deviation.

Appraised Value

Appraised value. When you apply for a mortgage loan, the loan originator will usually arrange for an appraisal to determine the fair market value of the property. The appraisal is carried out by a professional appraiser, usually one experienced in valuing real estate in the area. He uses comparisons, sometimes called comps as the basis for the estimate. The comps give him recent purchase prices of similar properties


A person whose job is to assess the monetary value of something.


An act or instance of appraising something or someone; especially: the valuation of a property by the estimate of an authorised person.


Appreciation is a term used in accounting relating to the increase in the value of an asset. In this sense, it is the reverse of depreciation, which measures the fall in the value of assets over their normal life-time.

In times of high inflation, appreciation will be common to all balance sheet assets. Generally, the term is reserved for property or, more specifically, land and buildings. In any viable modern economy, such property tends to increase in value over the years – if only because of the scarcity of usable land forces its price in a competitive situation.

Needless to say, there are considerable difficulties in assessing the increase in the value of any particular asset. This is principally because of the variety of interpretations that can be attached to the word value itself and due to the various instruments and methods used in the valuation process.

Approach The Bench
Approach The Witness
Appropriate Personal Pension Plan

A pension plan in which employer and employee pay full rate National Insurance contributions equivalent to the employee contracting into S2P. This rate will be greater than the rate paid by contracting out of S2P.

The difference between these rates, the contracted-out rebate, is paid by the Government into a scheme known as an appropriate personal pension plan which buys pension benefits at retirement age known as protected rights. Provided an employee qualifies, incentive payments may also be paid by the Government into the scheme.

The contracted-out rebate plus any incentive payments are known as minimum contributions. Payment of minimum contributions into an appropriate personal pension plan results in a reduction of S2P benefit at retirement age as though the employee had contracted out through a final salary-related scheme.


The action of taking something for one’s own use, typically without the owner’s permission.

Appropriation Accounts

These show the way that net profit is distributed (usually in the form of cash dividends) between partners in a partnership or between shareholders and reserve funds in a company.


Arbitrage is a financial transaction that involves a simultaneous purchase and sale of a given security or asset for the purpose of attaining the optimal profitability through yield differential. The synchronized buying and selling approach of arbitrage is best implemented when it takes place in different markets and exchanges. Thus, when arbitrage is employed, the purchase may be executed at one market, while the sale is done at another. An individual who engages in arbitrage is known as an arbitrageur, or merely an arb. An arbitrage investment strategy is sometimes referred to as a “risk-free profit” or “no beta profit” since an arbitrage position is completely hedged. That means that arbitrage guarantees the utmost performance of both sides of the transaction without risk or loss at the time the position is assumed. Arbitrage is an advance investment tactic based on arbitrage pricing theory. Emerging in the mid-seventies, arbitrage was devised as an alternative to CAPM (Capital Asset Pricing Model), which calculated the anticipated return by taking into account the rate of risk-free security and a risk premium.

Arbitrage is also used as a term that describes a leveraged speculative transaction or portfolio.

Arbitrage Pricing Theory

Arbitrage pricing theory (APT) posits that investors can predict the return on an asset by tracking its performance in relationship with independent macro-economic variables and common risk factors. Variables and risk factors referenced in arbitrage pricing theory models might include GDP, inflation, interest rates, yield spreads, etc. Arbitrage pricing theory presumes the asset being tracked

Arbitrage-Free Pricing

Most financial engineering models are what is known as relative pricing models. They price instruments based on prices of other instruments quoted in the market—an instrument’s price is determined relative to other prices quoted in the market. Financial theorists and economists often use what is known as absolute pricing models. These price instruments without regard


someone who engages in arbitrage (who purchases securities in one market for immediate resale in another in the hope of profiting from the price differential).


In arbitration, an independent third party considers both sides in a dispute and makes a decision to resolve it. Arbitration is considered a form of alternative dispute resolution (ADR). It allows two parties to bring their legal dispute before an arbiter, or third party. Arbitration is considered a simplified version of a trial where both parties will receive information prior to the hearing. During the arbitration, both parties can hear witness testimony and present evidence. Each party is also allowed to cross-examine witnesses. Then the arbiter hears the evidence and makes a decision, which is generally binding to both parties.

Arbitration Clause

An arbitration clause is a commonly used clause in a contract that requires the parties to resolve their disputes through an arbitration process. Although such a clause may or may not specify that arbitration occurs within a specific jurisdiction, it always binds the parties to a type of resolution outside of the courts and is


A person to whom the authority to settle or judge a dispute is delegated.


A persuasive presentation of the law and facts of a case or particular issue within a case to the judge or jury.

Arithmetic Mean

The arithmetic mean of a set of two or more values is the sum of all the values divided by the number of values. In mathematics and statistics the arithmetic mean is one type of average, or measure of central tendency, but schoolchildren are taught to call the arithmetic mean “the average.” Because the arithmetic


A loan with an interest rate that changes periodically in keeping with a current index, such as one-year treasury bills.

Arm’s Length Principle

The arm’s length principle (ALP) is the condition or the fact that the parties to a transaction are independent and on an equal footing. It is used specifically in contract law wish to arrange an equitable agreement that will stand up to legal scrutiny, even though the parties may have shared interests (e.g., employer-employee) or

Arm’s Length Transaction

An arm’s length transaction is a transaction, often between two affiliated parties, that’s conducted as if the parties were unrelated. An arm’s length transaction is carried out under free-market conditions in which each party acts in its own self-interest. In the case of buying or selling, an arm’s length transaction ensures outside parties that the

Armed Services

The Constitution authorizes Congress to raise, support, and regulate armed services for the national defense. The president is commander in chief of all the branches of the service and has ultimate control over most military matters. The United States has always been wary of maintaining a strong military force. This care was shown by the

Arms Index

Arms Index is a mathematic market meter designed to communicate the relationship between upward and downward moving stock prices and trading volumes. Arms Index is a technical analysis indicator. Created in the late sixties by Richard Arms, the Arms Index was intended to calculate the relationship between advancing and declining averages. Namely, the Arms Index

Aroon Indicator

The Aroon Indicator, or “Dawn’s Early Light” in Sanskrit, was developed by Tushar Chande in 1995. Chande chose this name because the two up and down indicators are designed to reveal the beginning of a new trend. The Aroon Indicator is used for identifying trends in an underlying security, determining how strong the trend is, and


A court appearance in which the defendant is formally charged with a crime and asked to respond by pleading guilty, not guilty or nolo contendere. Other matters often handled at the arraignment are arranging for the appointment of a lawyer to represent the defendant and the setting of bail.


the state of being behind in payments


Seize (someone) by legal authority and take into custody. To arrest someone is to apprehend that person, sometimes forcibly, in order to bring him to answer for criminal charges, or else to prevent an imminently certain ‘breach of the peace’. The term ‘arrest’ is morally neutral; anyone intentionally deprived of his liberty is thereby arrested, whether for good reason or bad. As a consequence, while one might argue whether or not an apprehended party was lawfully arrested, it would be very much incorrect to say (assuming an unlawful arrest) that the apprehended party was never arrested at all.

Arrest Procedure

The Police and criminal evidence act 1984 sets out the following principles for an arrest to be lawful. Note that an arrest is unlawful, regardless of the procedure followed, if there is no Power of arrest for the offence in question. s.28 of PACE requires that the arrestee would be told in unequivocal terms (i) that he is under

Arrest Warrant

An order from a court, usually a Magistrates’ Court allowing the police to carry out an arrest.

Arrestable Offence

Significance Of The Term Although now all but obsolete in terms of official usage in English law, ‘arrestable offence’ remains conceptually significant and is still widely used in theoretical discussions about the law. This is due, no doubt, to the intuitive appeal of the term and the various different categories of offence conceptually associated with


malicious burning to destroy property. The criminal act of deliberately setting fire to property.

Arthur Andersen

Arthur Andersen LLP, based in Chicago, was once one of the “Big Five” accounting firms (the other four being PricewaterhouseCoopers, Deloitte Touche Tohmatsu, Ernst & Young and KPMG), performing auditing, tax, and consulting services for large corporations. In 2002, the firm voluntarily surrendered its licenses to practice as Certified Public Accountants in the U.S. pending

Articles Of Association

Document setting out the relative rights of shareholders in a limited liability company.

Articles Of Impeachment
Articles Of Incorporation

A document filed with state authorities (In the US, usually the Secretary of State or Corporations Commissioner, depending on the state) to form a corporation. As required by the general incorporation law of the state, the Articles normally include the purpose of the corporation, its principal place of business, the names of its initial directors who will control it, and the amounts and types of stock it is authorized to issue.


The term ‘articulation’ is used to refer to the impact of transactions on the balance sheet and profit and loss account through application of the accounting equation.

Artificial Person

An entity that is recognised by the law as a legal person.

As Is
As Per Advice

As Per Advice are the words written on a bill of exchange to indicate that the drawee has been informed that the bill is being drawn on him or her.


Asbestos refers to a set of six naturally occurring fibrous silicate minerals including chrysotile, crocidolite, amosite, anthophyllite, tremolite, and actinolite. Asbestos was used in commercial and industrial industries for many years but is now strictly regulated because it has been associated with lung cancer, mesothelioma and respiratory health conditions.

Ascending Bottoms

Ascending bottoms refers to a chart pattern in which the lows of the trading range get progressively higher over a given time frame. Ascending bottoms chart patterns can be used to evaluate stocks, commodities, indexes or virtually anything with a price/time chart. Ascending bottoms can be plotted for virtually any time frame: daily, weekly, monthly,

Ascending Triangle

An Ascending Triangle is a bullish continuation chart pattern consisting of two converging lines that resemble a “triangle”. The triangle contains the recent price action. One trend line is drawn horizontally and represents a resistance level that has historically prevented the price from heading higher. The second trend line connects a series of increasing troughs and


acronym of Association of Southeast Asian Nations

Asian Development Bank

A multilateral development finance institution, established in 1966, owned by its 64 member countries and aiming to reduce poverty in the region.

Asian Financial Crisis

The Asian financial crisis was a financial crisis of 1997 that crippled the economies of most of Asia. Commonly, known as the IMF crisis, there prevailed a constant fear of worldwide financial contagion due to this crisis. It is known that the initiation of the Asian crisis took place with the financial collapse of the

Asian Option

An option whose expiration value depends on the average value of an underlier over a specified period.

Ask Price

The ask price is the lowest price at which an investor is willing to sell an asset (e.g. stocks, commodity, etc.) on an exchange or in the over the counter (OTC) market at a given time and for a given volume of such asset.


A crime that occurs when one person tries to physically harm another in a way that makes the person under attack feel immediately threatened. Actual physical contact is not necessary; threatening gestures that would alarm any reasonable person can constitute an assault. Compare battery.

Assault And Battery

The expression of approval or agreement.


In business and accounting by asset is meant probable future economic benefits controlled by an entity as a result of past transactions or events and from which future economic benefits may be obtained. Asset Characteristics Assets have three essential characteristics: They embody a future benefit that involves a capacity, singly or in combination with other

Asset Allocation

Asset allocation is the dividing of one’s investment portfolio among different classes of investments. Asset allocation involves choosing among stocks, bonds, cash, and such assets as real estate and precious metals. Investors practice asset allocation to maximize their investment return for the level of risk they are most comfortable with; this frequently (but not always)

Asset Allocation Fund

An asset allocation fund is a single mutual fund that spreads its portfolio across a variety of investments to further diversify and minimize risk for the investor. In an asset allocation fund, the fund manager creates a highly diversified portfolio based on the performance of the holdings in each category. An asset allocation fund is

Asset Cover

The Asset Coverage Ratio measures the ability of a company to cover it’s debt obligations with it’s assets.

Asset Coverage Ratio

Asset Coverage Ratio provides a picture of the financial position of a company by comparing its assets (tangible and monetary) to its existing liabilities. The ratio allows the investors to reasonably predict the future earnings of the company and to assess the risk of insolvency. The Assets Coverage Ratio is generally used as part of a

Asset Depreciation Range

Asset depreciation range refers to a system used to determine the useful life of different classes of assets. Under the asset depreciation range system, all tangible assets were placed in one of over 100 asset classes, which were based on the taxpayer’s particular business and industry. The range of years in an asset depreciation range

Asset Management

Asset management can refer to the primary activity of a financial services company choosing investment opportunities for their clients. The asset management services provided by such a company might feature a mix of traditional investments, such as stocks and bonds, and alternative investment vehicles not available to average investors, such as a hedge fund. Access

Asset Protection

Asset protection (sometimes also referred to as debtor-creditor law) refers to a set of legal techniques and a body of statutory and common law dealing with protecting assets of individuals and business entities from civil money judgments, creditors such as trusts, partnerships and international entities. Asset protection helps minimizes the risk of loss from unexpected

Asset Turnover

Asset turnover is a financial ratio that measures the efficiency of a company’s use of its assets in generating sales revenue or sales income to the company.

Asset-Backed Security

An asset-backed security (ABS) is a financial security collateralised by a pool of assets such as loans, leases, credit card debt, royalties or receivables.

Asset-Liability Management

Techniques for protecting a firm’s solvency in the context of accrual accounting.

Asset/Equity Ratio

The asset/equity ratio indicates the relationship of the total assets of the firm to the part-owned by shareholders (aka, the owner’s equity). This ratio is an indicator of the company’s leverage (debt) used to finance the firm.


Rights or other access to future economic benefits controlled by an entity as a result of past transactions or events.

Assets To Sales Ratio

Calculated by dividing total assets by total sales. Common Usage Assets to sales ratio is a part of the financial statements of a companies performance or can be derived from financial data and calculated there-after. It helps us to understand how efficient the company or industry is at generating sales from assets – in other words, how good

Assets Under Management

An important measure of the size of a fund or group of funds is assets under management. Assets under management equals the market value of portfolio assets owned by investors. Assets under management typically excludes assets of the fund principals. Assets under management is therefore somewhat like the amount of deposits held by a bank.

Assignable Error

An error that has occurred during a trial that can be used and referred to should an appeal be deemed necessary.

Assigned Risk

A person to whom a property right is transferred. For example, an assignee may take over a lease from a tenant who wants to permanently move out before the lease expires. The assignee takes control of the property and assumes all the legal rights and responsibilities of the tenant, including payment of rent. However, the original tenant remains legally responsible if the assignee fails to pay the rent.


An assignment is a term used with similar meanings in the law of contracts and in the law of real estate. In both instances, it encompasses the transfer of rights held by one party – the assignor – to another party – the assignee. The legal nature of the assignment determines some additional rights and

Assignment For Benefit Of Creditors

An assignor is the party that transfers a property or right (with their associated obligations and rights) to another (the assignee) under an assignment.

Assistance After The Offence

Under s.4 of it is an offence knowingly to carry out any act with the intent to impede the apprehension or prosecution of a person known guilty of an arrestable offence. Although it is, in general, an offence to attempt to commit an offence, it is not an offence to attempt to commit out an

Associate Justice
Associated Company

One company exercises significant influence over another, falling short of complete control.


a formal organization of people or groups of people

Association Of British Insurers

This is the trade association to which most UK insurance companies belong. One of its functions is to monitor quality and decide common areas of interest so that minimum standards of customer service can be maintained.

Association Of Private Client Investment Managers & Stockbrokers

The Association of Private Client Investment Managers and Stockbrokers (APCIMS) is a trade association that represents the investment community.

Association Of Southeast Asian Nations

The Association of Southeast Asian Nations is an organization made up of countries located in South Asia who meet annually to discuss the political and economic conditions of the region. The generally accepted abbreviation for the Association of Southeast Asian Nations is ASEAN. The annual meeting held by the Association of Southeast Asian Nations is


psychology A theory that association (of experiences etc) is the basis of consciousness and mental activity

Assumed Duty Of Care

In general, English law does not regard an omission to act (see: Omission) as conferring criminal liability. One of the places where it might do so is where a duty of care exists. Failing to act in a way compatible with that duty of care may constitute the Actus Reus of a criminal offence (see: R v

Assumption Of Risk

An assumption of risk is the risk assumed when engaging in inherently dangerous or risky actions. Claimants who engage in such activities may legally forfeit their right to compensation from a potential injury. Assumption of risk is an available defence for certain types of personal injury claims. To prove the assumption of risk several requirements must be met:

The plaintiff had actual knowledge of the risk involved in the conduct or activity;
The plaintiff must have the capacity to understand any type of written agreement or contract waiving liability. For instance, a mentally ill patient cannot waive their rights to sue their doctor.
The plaintiff voluntarily accepted the risk, either expressly through agreement or implied by their words and conduct. Consider, however, the plaintiff could not have been forced to participate in the activity.

Express assumption of risk usually takes the form of a written agreement between the plaintiff and defendant (i.e. a skydiving waiver of liability). Assumption of risk can also be assumed if a plaintiff is engaged in certain sporting activities, is entering a hazardous area, or participating in an activity where there is an inherent and obvious danger.


Insurance against an eventuality that must occur.

Assured Tenancy

Assured tenancy was the replacement for protected tenancy introduced by the housing act 1988. Don’t be fooled by the name: the `protected’ in `protected tenancy’ and the `assured’ in `assured tenancy’ do not refer to the same person. The main purpose of a protected tenancy under the rent act 1977 was to protect the tenant; the assured tenancy


A legal status granted to an individual who is in the United States and fears political persecution if he or she is forced to return to their home country.

Asymmetric Information

Asymmetric information signifies a situation in which one party involved in a transaction with another, has more or superior knowledge and information than the other. This is often the case between buyer and seller, where the seller has more knowledge than a buyer. However, the opposite condition can also happen at times. The situation can

At Fault

responsible for an undesirable situation; in the wrong.

At Issue Memorandum

A document that states that all parties to a case have been served, that the parties disagree (or are “at issue”) over one or more points to be resolved at trial, and how much time the parties estimate will be required for trial.

At Quote

The instruction a client gives a broker to obtain a quote from a market maker on the price for a particular share. e.g. ‘3,000 shares in Halifax at quote’.

The broker will check the bid and offer prices with a market maker and report back to the client. The client then has thirty seconds or so to place an order, and if he fails to do so the quotes lapse and the market maker will not be held to them.

At Sight

The words used on a bill of exchange to indicate that payment is due on presentation.

At The Bell

At the bell refers to the traditional opening or closing of a stock exchange. Many stock exchanges, such as the New York Stock Exchange, use an actual bell (hence the term: at the bell) to announce the traditional beginning and ending of the trading day. Some investors use at the bell market orders to indicate

At The Close

An at the close order is either a market order or a limit order which is executed just prior to the close of trading for the day. With an at the close market order, the broker is instructed to buy or sell shares at the best price available just before or at the close of

At The Market

An at the market order is an order to buy or sell shares at the best price currently available. An investor placing an at the market order agrees to accept the best price available at the time the order is placed, with no restrictions. An advantage of an at the market order is that it

At The Money Option

An at-the-money option is an option whose strike price is equal to the market price of its underlying security. For example, if a call option on stock XYZ, Inc. has a strike price of $50 and XYZ stock is currently trading for $50 per share, then this call is trading at-the-money. However, the buyer of

At The Opening Order

An at the opening order is a way for an investor to secure a position at the opening of a trading session. A trader can place a market at the opening order or a limit at the opening order. A market at the opening order is an order to buy or sell a specific number

At Will Employment

The right of employers to fire employees for any reason, or for no reason at all. It also gives employees the legal right to quit their jobs at any time for any reason. Despite this legal doctine, employers may not fire employees in a way that discriminates, violates public policy or conflicts with written or implied promises they make concerning the length of employment or grounds for termination.

Atlantic Standard Time

The Atlantic Time Zone (AST) is a geographical region that keeps standard time by subtracting four hours from Coordinated Universal Time (UTC), resulting in UTC-4; during some part of the year, it observes daylight saving time by subtracting three hours (UTC-3). The clock time in this zone is based on the mean solar time of the 60th meridian west of the Greenwich Observatory. In Canada,


Attempt is an inchoate offence set out in section 1 of the Criminal Attempts Act 1981. The Actus Reus of an attempt is any act that is `more than merely preparatory’ to the offence. To have the Mens Rea for an attempt, the accused must intend to bring about the consequences for the full offence. For example, to be


As a witness, to attest means to affirm an act or event as true.

Documents are legally attested when they are signed by the involved parties in the presence of a witness who also signs the documents.


The act of watching someone sign a legal document, such as a will or power of attorney, and then signing your own name as a witness. When you witness a document in this way, you are attesting — that is, stating and confirming — that the person whom you watched sign the document, in fact, did so. Attesting to a document does not mean that you are vouching for its accuracy or truthfulness. You are only acknowledging that you watched it being signed by the person whose name is on the signature line.


Attn is an abbreviation for attention.

Attorney At Law

An attorney at law in the United States is a practitioner in a court of law who is legally qualified to prosecute and defend actions in such court on the retainer of clients. Alternative terms include attorney-at-law, attorney and counsellor (or counselor) at law, attorney, and lawyer. The U.S. legal system has a united legal

Attorney Of Record
Attorney-Client Privilege

A rule that keeps communications between an attorney and her client confidential and bars them from being used as evidence in a trial, or even being seen by the opposing party during discovery.


Head of the United States Department of Justice and chief law officer of the Federal government. The Attorney General represents the United States in legal matters, oversees federal prosecutors, and provides legal advice to the President and to heads of executive governmental departments. Each state also has an attorney general, responsible for advising the governor and state agencies and departments about legal issues, and overseeing state prosecuting attorneys.


A person named in a written power of attorney document to act on behalf of the person who signs the document, called the principal. The attorney-in-fact’s power and responsibilities depend on the specific powers granted in the power of attorney document. An attorney-in-fact is an agent of the principal.

Attorney’s Advertising
Attorney’s Fee
Attorney’s Work Product

Attornment in English real property law, is the acknowledgment of a new lord by the tenant on the alienation of land.

Attractive Nuisance

Something on a piece of property that attracts children but also endangers their safety. For example, unfenced swimming pools, open pits, farm equipment and abandoned refrigerators have all qualified as attractive nuisances.

Attractive Nuisance Doctrine

A feature of a product that makes it distinct or attractive.


The action or process of gradually reducing the strength or effectiveness of someone or something through sustained attack or pressure.


An auction is a method of asset sale by competitive bidding. An auction is most useful when the potential price of the asset to be sold is uncertain. Different auction formats exist, varying according to how prices are quoted and bids tendered. The most commonly known of these is the English Auction, which is commonly used for artworks and wine. This auction is also called the ascending price or open-outcry auction. The best-known auction houses, Sotheby’s and Christie’s, were founded in the eighteenth century, but written records of auctions go back to ancient times. Economists specializing in game theory have investigated the theory of bidding strategies for an auction, and how these strategies depend upon the rules and procedures of the auction. In the business arena, these experts are sometimes hired as consultants for important auctions, such as when the Unites States government sold wireless spectrum licenses by auction.

An auction is usually a public sale. Individuals (potential purchasers) invariably inspect the assets for sale before deciding on whether, and if so, how much, they’d like to bid.

Auctions are held for residential and commercial properties, antiques, cars and even second-hand endowment policies.

Following the bidding, the asset is sold to the highest bidder, provided a ‘reserve price’ set by the seller has been achieved.

The purchaser will be asked to sign a binding contract after bidding successfully, so it’s necessary to ensure that any valuations, searches etc. are carried out prior to the sale.

If you’re thinking of buying a property or car at auction, be careful. These sales are populated by professionals who know the ropes. You’re more likely than they to overpay for an asset!

Auction Market

An auction market is a market wherein buyers and sellers both enter simultaneous bids. Unlike a typical auction, an auction market features many buyers and sellers who transact through brokers who bid competitively for the best price. A security’s price for a transaction in an auction market is determined when a buyer’s “bid” price meets

Auction Without Reserve

An advertisement that some item or other will be sold by auction is normally an invitation to treat, not an offer. The bidder makes an offer which the auctioneer can accept or decline. However, if an auction is without reserve, then the auctioneer must sell to the highest bidder, that is, he makes a unilateral offer to


An examination of the financial records of a person, business, or organization, typically done to correct careless or improper bookkeeping or to verify that proper records are being kept. Businesses and nonprofits often undergo an annual audit by an independent accounting firm. In the US, the IRS also conducts audits, mainly to assess taxes owed.

Audit Committee

In a publicly-held company, an audit committee is an operating committee. Committee members are normally drawn from members of the Company’s board of directors. An audit committee of a publicly-traded company in the United States is composed of independent and outside directors referred to as non-executive directors. Not for profit entities will also often have

Audit Manager

An employee of an accountancy firm, usually holding an accountancy qualification, given a significant level of responsibility in carrying out an audit assignment and responsible to the partner in charge of the audit.

Audit Manual

A written document that explains the auditing policies and procedures of a firm.


The most general definition of an audit is an evaluation of a person, organization, system, process, project or product. Audits are performed to ascertain the validity and reliability of information, and also provide an assessment of a system’s internal control. The goal of an audit is to express an opinion on the person/organization/system etc. under


A person appointed by a company to perform an audit. In the UK auditors are Chartered Accountants.

Auditors are required to certify that the accounts produced by their client companies have been prepared in accordance with normal accounting standards and represent a true and fair view of the company. If they don’t feel able to certify as such, they may ‘qualify’ the accounts by saying that they weren’t able to perform the checks they would have liked to. A qualified auditor’s report is a serious matter for a quoted company, and will send alarms bells though the City.

Auditor’s Report

The Auditor’s report is a formal opinion, or disclaimer thereof, issued by either an internal auditor or an independent external auditor as a result of an internal or external audit or evaluation performed on a legal entity or subdivision thereof (called an “auditee”). The report is subsequently provided to a “user” (such as an individual,

Augmented Estate

In general terms, an augmented estate consists of property owned by both a deceased person and his or her spouse. The concept of the augmented estate is used only in some states. Its value is calculated only if a surviving spouse declines whatever he or she was left by will and instead claims a share

Aunt Millie

Aunt Millie is a derogatory term referring to a novice investor implying they are uninformed or unsophisticated. Experienced investors may refer to a simple or straightforward investment as one that may be attractive to Aunt Millie. The term also insinuates this type of investor may not understand the risk of the investment in relation to

Australian Securities Exchange

The Australian Securities Exchange (ASX), the primary stock exchange group in Australia, was created in July 2006 when the Australian Stock Exchange and the Sydney Futures Exchange merged to form one entity. ASX, ranked as the world’s 10th largest in terms of market capitalization is a vertically integrated exchange group. It offers trading products across various asset classes along

Austrian Economics

Austrian economics is a school of economics that preaches strict methodological individualism. Proponents favour laissez-faire view


Autarky defines the state of an economy, which is self-reliant and does not participate in trade, or transact with other economies. Autarky refers to a closed economy, which relies on its own resources and is not affected by influences outside the economy. The word autarky is of Greek origin and is often confused with the term

Authorised Guarantee Agreement

An agreement made between a tenant who wishes to assign his lease, and his landlord, to the effect, that the tenant will accept liability for any breach of the covenant of his assignee (see leasehold covenant). AGAs are a creation of the landlord and tenant covenants act 1995, and seek to strike a balance between the protection

Authorised Share Capital

The total value of shares that the company could issue, as distinct from the up and paid up share capital.

Automated Order Entry System

An automated order entry system is a computer system installed by exchanges to route stock and option orders directly to the trading pit. The electronic automated order entry system routes small orders directly to the appropriate specialist on the exchange floor, bypassing floor brokers. Both round and odd lots orders can be entered on such

Automatic Reinvestment Plan

An automatic reinvestment plan is an arrangement whereby a mutual fund automatically reinvests any gains back into the fund. Most investors look upon mutual funds as a long-term investment and an automatic reinvestment plan is a simple way of keeping profits constantly working in the fund. An automatic reinvestment plan makes reinvesting capital gains and

Automatic Resulting Trust

In general, an automatic resulting trust arises when a settlor transfers property to another to be held on trust, but, for some reason or other, the beneficial interest cannot be assigned properly to the beneficiaries. The beneficial interest, therefore ‘rebounds’ or ‘results back’ to the settlor, there is no other object to which it may

Automatic Stay

In bankruptcy law, an automatic stay is an automatic injunction which halts actions by creditors, with certain exceptions, to collect debts from a debtor who has declared bankruptcy. Under section 362 of the United States Bankruptcy Code, 11 U.S.C. § 362, the stay begins at the moment the bankruptcy petition is filed. Secured creditors may,

Automatic Trade

A term used by the London Stock Exchange to denote a trade generated by the system through automatic execution.


Acting reflexively, not under conscious control. In English law, the distinction between automatism and Insanity is drawn on the basis of internal and external factors and is somewhat archaic. Automatism requires an external factor (e.g., a severe head wound). In an archetypal automatism case, Denning LJ classed sleepwalking as a meta of automatism; more recently


Autonomation is a technological innovation that aims to allow machines to work harmoniously with their operators by giving them the ‘human touch.’ Known as Jidoka in Japanese, the approach utilises automatic and semi-automatic processes to reduce the physical and mental load on workers. The concept was introduced by the founder of Toyota Industries Corp, Sakichi


Autonomics refers to the economic conditions currently surrounding the automobile industry, mainly in the United States, but also worldwide. The economics of the automotive industry in the US is starting to change with the current manufacturers in financial turmoil. GM is on the brink of failure, and Chrysler and Ford are struggling. The US automotive industry


Autoregressive is a stochastic process that can be described by a weighted sum of its previous values and a white noise error. An autoregressive process operates under the premise that past values have an effect on current values. Autoregressive Conditional Heteroskedasticity (ARCH) models assume that the variance of the current error term is related to the

Average Cost

Average cost is an economic term that is denoted by the total cost of production divided by the number of units produced. The average cost is also the summation of average variable costs and average fixed costs. Average cost is one of the fundamental components of assessing demand and supply. It significantly affects the supply

Average Daily Volume

Average Daily Volume is the cumulative number of shares traded over a given time period, divided by the number of trading sessions in that period. Time frames for calculating average daily volume can vary though monthly and annual average daily volume are fairly common. Market technicians compare current daily volume to average daily volume to

Average Price Per Share

The average price per share is determined by dividing the cost of acquiring the shares by the number of shares purchased. The average price per share can seem complicated to determine if an investor has purchased different quantities of a stock at different prices. An example of determining an average price per share would be

Average Propensity To Consume

Average propensity to consume (APC) is the proportion of annual income spent on consumption of goods and services. It is essentially nothing more than the average expenses of a household. Calculations And Examples To calculate the percentage of average propensity to consume, consumption (C) is divided by income (Y). The identity that defines average propensity to consume

Average Total Cost

In economics, average cost or unit cost is equal to total cost divided by the number of units of a good produced: It is also equal to the sum of average variable costs and average fixed costs. Average costs may be dependent on the time period considered.

Average True Range

The Average True Range (ATR) measures stock price volatility.  As the volatility (as measured by differences between high, low, and closing prices) of the stock increases, this indicator will increase.  Lower volatility will be reflected by smaller values of the indicator. The ATR was originally introduced by Welles Wilder and is used by many trading

Average Variable Cost

The average variable cost (AVC) is the total variable cost per unit of output. This is found by dividing total variable cost (TVC) by total output (Q).

Award Letter

An award letter is the documentation sent from a college or university to the student that details for how much financial support the student is eligible.

Away From The Market

An Away-from-the-market (AFTM) order is a limit order where the buy limit order is lower or the sell limit order is higher than the current market price.

John Austin

John Austin is widely regarded as the successor to the jurisprudential ideas of Jeremy Bentham. As an early defender of Legal positivism, Austin wrote a great deal about what he considered the incoherence of Natural law jurisprudence, which confused (deliberately or otherwise) the concepts of law ‘as it presently is’ with law ‘as it ought to be’. According to

Accounting Terms Beginning With "B"


B-shares are shares issued domestically by Chinese companies and listed on either the Shanghai or Shenzhen stock exchanges. B-shares are reserved for foreign investors. A B-share’s value is quoted in renminbi but trade is conducted in foreign currency. The first B-shares were issued in 1991. Although they attracted some interest they were always criticised for


Commerce that takes place between businesses, for example, wholesale selling. This is to be distinguished from B2C, or business-to-consumer commerce.


Sales made directly to the end-user, rather than through another business entity.

Baby Bells

Baby bells, or Regional Bell Operating Companies (RBOCs), were essentially the divested local telephone service providers. Baby bells were the product of an antitrust lawsuit of 1982 entered against AT&T, which historically dominated the telephone service market in the United States. Baby bells were the direct result of Sherman Antitrust Law forcing AT&T to split

Baby Boomer

In the United States, a baby boomer refers to anyone born during the high-birth-rate years of the postwar period, generally defined as 1946 through 1964. This 19-year time-span encompasses an extremely diverse population of 76 million. Nevertheless, certain characteristics of the baby boomer can be identified. The baby boomer remembers neither Word War II nor

Bachelor of Laws
Back Door Financing

Back door financing is a method used by U.S. government agencies to bypass congressional appropriations (the conventional way of obtaining funds) and borrowing directly from the U.S. Treasury referred to as the “back door”. Back door financing avoids the discipline and controls of the budget process. Back door financing is also used by state government

Back Pay

Back pay is a payment due for work done prior to the current pay period. Back pay may be the result of a missed payment or a payment that was intentionally not made, or back pay may be owed due to a backdated pay increase. Back pay applies to both hourly as well as salaried

Back Taxes

Taxes that have not been paid on the due date or were underreported either by accident or by intention on a past tax return. The tax authorities can demand payment of back taxes plus the imposing of penalties and or interest.

Back Testing

Backtesting is the examination of past performance to predict the future price of an investment. Backtesting can incorporate a variety of indicators (i.e. earnings, inflation, interest rates, breadth, etc.). A simple example of backtesting can be used to determine which years of the presidential cycle are best for stock appreciation? With backtesting, it has been

Back-End Load

A back-end load is a sales charge or a commission paid when an investor sells an investment. A back-end load may also be known as a redemption fee or a deferred sales charge. In England, a back-end load fee is sometimes called an exit charge. A back-end load is often added to a mutual fund

Back-To-Back Inheritance Tax Plan

The combination of a life assurance policy and an annuity on the same life, the purpose of which is to reduce inheritance tax. The annuitant seeks to more than replace capital expended for the annuity by paying premiums on a life policy, the proceeds of which pass to his/her dependants on death and outside the estate.

Back-To-Back Life Sentences

A retailer’s order for a product that is temporarily out of stock with the supplier.

Backup Withholding

Backup withholding is a mechanism that enables the IRS to collect taxes on income and earnings from recipients who lack a taxpayer identification number (TIN). For example, income earned by an employee without a Social Security number would be subject to backup withholding. Form 1099 non-wage payments from brokers or banks to entities without a

Backup Witholding

In the US, Backup withholding at a flat 25% is required from various payments reportable on Forms 1099, 5498, or W-2G if a recipient fails to provide you with his taxpayer identification number (TIN) or if the Secretary of the Treasury notifies the payer that the TIN furnished by the recipient is incorrect. If a


Backwardation is a market condition where spot prices exceed forward prices. Contango is the opposite condition, where forward prices exceed spot prices. The terms are most commonly used in oil markets but are also applied in certain commodities and energies markets. In oil markets, the prevailing condition may reflect immediate supply and demand. If crude oil is contango, it may indicate immediately available supply. Backwardation can indicate an immediate shortage. Anything that threatens the steady flow of oil around the world, such as imminent war, tends to drive the oil market into backwardation.

Bad Credit

A negative rating from the credit reporting agencies. Many factors can contribute to someone getting a “bad credit” rating, among these are non-payment of an account or late payments over an extended length of time. Whether non-payment of an account is willful or due to financial hardship, the result can be the same, a negative

Bad Debt

Bad debt is the portion of a company’s receivables that are uncollectible. Companies account for bad debt either by the direct method or the allowance method. Under the direct method, the company reduces accounts receivable when a specific invoice is deemed uncollectible. While this method may seem logical, it is only allowed when total bad debt is small and immaterial. Under the allowance method, the company estimates the portion of accounts receivable that will be uncollectible and periodically records charges for bad debt expense. The allowance method is preferred because (a) it recognizes that bad debt is a normal, continually recurring cost of doing business, and (b) under the matching principle, the cost of bad debt more closely corresponds to reported revenue in the accounting period. A significant rise in the bad debt to accounts receivable and bad debt to sales ratios indicate greater risk and a deterioration in the quality of the company’s revenues. On the other hand, no or minuscule bad debt may indicate that the firm is too conservative in extending credit.

Bad Faith

Bad faith is an intentional and conscious decision to mislead or deceive someone and fail to follow a duty. It differs from a negligent action because it implies the person made the decision willfully. In personal injury, bad faith generally refers to a tort claim against an insurance company claiming the insurance company made an


The money paid to the court, usually at arraignment or shortly thereafter, to ensure that an arrested person who is released from jail will show up at all required court appearances. The amount of bail is determined by the local bail schedule, which is based on the seriousness of the offense. The judge can increase the bail if the prosecutor convinces him that the defendant is likely to flee (for example, if he has failed to show up in court in the past), or he can decrease it if the defense attorney shows that the defendant is unlikely to run (for example, he has strong ties to the community by way of a steady job and a family).

Bail Bond

The money posted by a “bondsman” for a defendant who cannot afford his bail. The defendant pays a certain portion, usually 10%. If the defendant fails to appear for a court hearing, the judge can issue a warrant for his arrest and threaten to “forfeit,” or keep, the money if the defendant doesn’t appear soon. Usually, the bondsman will look for the defendant and bring him back, forcefully if necessary, in order to avoid losing the bail money.

Bail Bondsman

A person who receives goods under a bailment, that is, in circumstances where the goods enter his possession but where he is under an obligation to return them to the original party at the agreed time.


A court official usually classified as a peace officer (sometimes as a deputy sheriff, or marshal) and usually wearing a uniform. A bailiff’s main job is to maintain order in the courtroom. In addition, bailiffs often help court proceedings go smoothly by shepherding witnesses in and out of the courtroom and handing evidence to witnesses


An arrangement whereby goods are transferred from one person (the bailor) to another (the bailee), but with no transfer of title. A bailment is created when, for example, one leaves his car at a garage for repairs. Note that such an arrangement may give rise to a repairer’s lien if the owner of the car fails to pay the garage


One who bails property; one who places property in the hands of another (called a bailee) for safekeeping.


Action to prevent business failure, usually financial, but based on the nature of the business or collaboration. A bailout can also refer to a public relations “rescue” of a company or organization that has a bad reputation.

Bait And Switch

Bait and switch is a deceptive means of sales where a product is advertised at an attractive price (bait) then the price or product is altered to the advantage of the advertiser (switch). The bait and switch tactic is often fraudulent and illegal, but sometimes a bait and switch can be performed in a more


In accounting, the balance of an account is defined as the sum of all debits and credits to that account. An account balance can be either current, including all such debits and credits or defined for a period ending earlier. For example, the balance due on an invoice reflects the total of all charges accrued

Balance Due
Balance Of Payment

A balance of payment is a systematic, comprehensive and detailed statement on the economic transactions conducted by a country with other countries around the world at a certain period of time. Balance of payments features the current and capital accounts. Current accounts assess the transactions of goods and services, transfers and investment income. Capital accounts assess the financial flows through bonds,

Balance On Capital Account

The balance on capital account is the amount of foreign purchases in the U.S. less U.S. purchases made in other countries.

Balance Sheet

A statement of the financial position of an entity showing assets, liabilities and ownership interest.

Balance Transfer

The credit card market-place is highly competitive. You may well find cards in the market that offer rates that are significantly lower than your existing credit card. Indeed, there are several credit cards available that promote interest-free periods as introductory offers. Therefore, if you have an outstanding balance on your existing credit card on which

Balance Transfer Fee

Many cards now charge a percentage of balances transferred onto them Introductory balance transfer offers have been incredibly popular with credit card users over the last 5 years or so since they were introduced to the UK by Egg plc, especially when people discovered that by constantly moving balances from card to card as the introductory periods

Balance-Of-Payments Surplus

The balance-of-payments surplus is the positive amount that is left over after adding the balance on current account and the balance on capital account together.

Balanced Budget

A balanced budget is a budget in which income equals expenditures. In other words, if a country takes in X dollars in a year and spends exactly that amount, it has a balanced budget. The term ‘balanced budget’ usually applies to the U.S. federal government. For most of the past forty years, the United States

Balanced Fund

A balanced fund is a mutual fund that invests in stocks, bonds, and money market investments (cash). The proportion of investments varies by the balanced fund, but the investment goals are similar: to conserve principal, provide a source of income, and provide a level of long-term growth. Thus, a balanced fund must strive to meet

Balanced Investment Strategy

A balanced investment strategy is an investment approach that tries to balance shorter-term income with long-term growth. A balanced investment strategy achieves this by combining different types of investments on the theory that if one sector falters another portion of the portfolio will prosper. A balanced investment strategy often includes stocks (individual stocks as well

Balanced Scorecard

The balanced scorecard, a concept for measuring whether the activities of a company are meeting its objectives in terms of vision and strategy, was developed and first used at Analog Devices in 1987. By focusing not only on financial outcomes but also on the human issues, the balanced scorecard helps to provide a more comprehensive view of a

Balloon Loan

A balloon loan is any loan that has one final large payment called the balloon payment due at the end of the loan period. Bullet loan and balloon note are also common terms for the balloon loan. A balloon loan may be short-term or long-term. Before the balloon payment, a balloon loan may have partially

Balloon Payment

The final payment on a loan which is significantly larger than those preceding it.


A combination of banking and insurance business. A high street bank, for example, might sell both mortgages and the life insurance policies that must go with them. Also applies to pension sales by banks.


A bank is a financial institution that accepts deposits from the public and creates credit.

Bank Draft

A bank draft is a written order in the form of a check instructing the payment of money from one bank account to another. The bank draft is drawn by one bank against funds that it has deposited in an account at a second bank. The first bank is giving its consent for the second

Bank Facility

An arrangement with a bank to borrow money as required up to an agreed limit.

Bank For International Settlements

The central bankers’ bank, based in Basle, Switzerland. It aims to foster co-operation between central banks and other agencies to promote monetary and financial stability.

Bank Holding Company

A bank holding company is a company that owns or control over 25% of a bank. A company that owns or controls more than 25% of a bank holding company is also considered a bank holding company. A bank holding company is regulated pursuant to the Bank Holding Company Act of 1956, as amended. A

Bank Interest Rates

Bank interest rates vary according to a number of reasons. Banks change the rates of interest they offer to customers for two basic reasons. When the Bank of England’s Monetary Policy Committee changes base rate, bank interest rates will usually, though not always, be changed to reflect the increase or decrease in base rate. However,

Bank Line

A moral, rather than a contractual, commitment by a bank to provide a loan to a borrower up to a stated total amount over a stated period, typically one year.

Because a bank line, also known as a line of credit, is not a legal commitment, it is not usual for a commitment fee to be charged. However, it is often necessary to keep compensating balances on deposit, typically 10% of the bank line plus an additional 10% of actual borrowings. Where customers are officially notified in respect of a line, the term is advised line or confirmed line. In cases where the bank sets an internal guide and the customer is not notified the term is guidance line.

Bank Of England

The Bank of England ( ) is the UK’s central bank. Originally founded in 1694 by a group of private bankers to raise money for the Crown, it was recognised as the central banknote issuer in the UK in 1844 and was recognised as responsible for interest rate policy in 1870 but it was

Bank Overdraft

You have a bank overdraft when the amount of money withdrawn from a bank account is greater than the amount actually available in the account. This sum of money – the excess withdrawal, is known as an overdraft and the bank account is said to be ‘overdrawn’. An overdraft is a form of short-term borrowing

Bank Reconciliation

This refers to comparing the business’ bank balance with a bank statement to spot differences.

Bank Reserves

Bank reserves is the vault cash and all the deposits of commercial banks with the Federal Reserve Banks.

Bank Run

A bank run (also known as a run on the bank) is a type of financial crisis. It is a panic which occurs when a large number of customers of a bank fear it is insolvent and withdraw their deposits. A run on the bank begins when the public begins to suspect that a bank

Bank Secrecy Act

The Bank Secrecy Act of 1970 (or BSA, or otherwise known as the Currency and Foreign Transactions Reporting Act) requires U.S.A. financial institutions to assist U.S. government agencies to detect and prevent money laundering. Specifically, the act requires financial institutions to keep records of cash purchases of negotiable instruments, file reports of cash transactions exceeding

Banker’s Draft

In situations where a person owes money to a creditor, and the creditor is not prepared to accept a personal cheque because he thinks it might bounce, a banker’s draft can provide a solution. It is simply a cheque made out to the creditor by the debtor’s bank, and in the eyes of the creditor is much more secure.

Bankers Acceptance

A bankers acceptance (BA) is a money market instrument: a short-term discount instrument that usually arises in the course of international trade. Before we explain BAs, let’s introduce some more basic concepts. A draft is a legally binding order by one party (the drawer) to a second party (the drawee) to make payment to a

Bankers Automated Clearing Services

BACS Payment Schemes Limited is a membership-based industry body whose role is to develop, enhance and promote the use and integrity of automated clearing service for payments originated by Settlement Members or those they sponsor.

Banking Code

The updated Banking Code and Business Banking Code contain an enhanced promise by banks and building societies to treat customers fairly and reasonably. The Banking Code and Business Banking Code are reviewed every three years. Changes to the codes were made after consultation with consumer groups, HM Treasury, the Financial Services Authority, the Office of


(of a person or organization) declared in law unable to pay outstanding debts.


A legal proceeding that relieves you of the responsibility of paying your debts or provides you with protection while attempting to repay your debts. There are two types of bankruptcies — liquidation, in which your debts are wiped out (discharged) and reorganization, in which you provide the court with a plan for how you intend to repay your debts.

Bankruptcy Court
Bankruptcy Estate
Bankruptcy Proceedings
Bankruptcy Sale

In many corporate bankruptcy cases, the debtor will use the bankruptcy process to sell its assets and to assume and assign valuable leases, executory contracts, and licenses (see earlier posts on what happens to leases in bankruptcy, to executory contracts, and to intellectual property licenses, a special type of executory contract). A variety of mechanics


Generally archaic, but still widely used, the collective term for barristers as a professional body. This term also refers to the customs and traditions that regulate the barristerial profession. Writers often use ‘the Bar’ as a convenient substitution for ‘barristers’. See also, barrister.

Bar Association
Bar Chart

A bar chart, also known as a bar graph, is a diagram consisting of rectangular bars. The length of each bar in a bar chart is proportional to the numerical value it represents. The bars in a bar chart may be positioned vertically or horizontally. When a bar chart has vertical bars, it is also

Bar Council

The Bar Council (more formally ‘General Council of the Bar’) is the representative and regulatory body for barristers in England. It defines a code of conduct for barristers generally and sets out the requirements for training and qualification of new barristers. Note, however, that the Bar Council does not approve the nomination of new barristers;

Bar Examination

The bar examination is the test which a law school graduate must pass to obtain a license to practice law. It is used to determine if a graduate is qualified to practice law in a specific jurisdiction. The bar is offered several times per year, but most law school graduates wait until they have graduated

Bare Trust

A trust in which the trustee has no personal discretion, but is obliged to give effect to the wishes of the beneficiaries. See also nominee.


Bargain is any purchase or sale of securities between two members of the London Stock Exchange. The term bargain is used interchangeably with the term contract. No special price is implied by the use of the term. Figures showing the turnover of the London Stock Exchange are published detailing the number of bargains. If you want

Bargain Conditions Apply

A term used by the London Stock Exchange to denote that certain conditions were agreed between the two participants at the time of trading.

Barings Bank

The collapse of Britain’s Barings Bank in February 1995 is perhaps the quintessential tale of financial risk management gone wrong. The failure was unexpected. Over a course of days, the bank went from apparent strength to bankruptcy. Barings was Britain’s oldest merchant bank. It had financed the Napoleonic wars, the Louisiana purchase, and the Erie


In criminal and civil law, the act or practice of bringing repeated legal actions solely to harass. Usually, the actions brought lack merit. This practice has been declared a crime in some jurisdictions (e.g. the United States). In England and Wales, however, the offence was abolished in 1967. The term has also fallen into disuse

Barrier Option

A barrier option is a path-dependent option that has one of two features: A knockout feature causes the option to immediately terminate if the underlier reaches a specified barrier level, or A knock-in feature causes the option to become effective only if the underlier first reaches a specified barrier level. Premiums are paid in advance.

Barrier To Entry

A barrier to entry (or barriers to entry) is an economic term used to define the conditions that make entry of a firm into a certain market or sector of the economy difficult. Companies find it extremely difficult to establish a base in such a market dominated by a well-established firm. The market then becomes a monopoly of that firm or duopoly


a British or Canadian lawyer who speaks in the higher courts of law on behalf of either the defence or prosecution

Barter System

A barter system calls for the exchange of goods and services for other types of goods and services. This system was prevalent in earlier times when currency was not yet in place. Later, the barter system was replaced by the monetary exchange of goods. In developed countries, this system exists alongside the monetary system. The barter system was used in

Base Interest Rate

The base interest rate is the lowest interest rate that investors will accept for investing in a non-Treasury security. The base interest rate is pegged to the interest rate of the most recently-issued (also known as an on-the-run) Treasury of comparable duration. Since Treasuries represent the lowest-risk investment available, the base interest rate is generally

Base Rate

The base rate is the lowest rate of interest that a bank will charge. However loans are normally offered at a rate of x% above base rate depending on the risk profile of the borrower.

The base rate normally matches the Bankof England base rate, which is reviewed on a monthly basis by the Bank’s Monetary Policy Committee. The base rate is set at a level to meet the Government’s inflation target.

Basel Committee

The Basel Committee has played a leading role in standardizing bank regulations across jurisdictions. Its origins can be traced to 1974. On June 26, 1974, German regulators forced the troubled Bank Herstatt into liquidation. That day, a number of banks had released payment of DEM to Herstatt in Frankfurt in exchange for USD that was

Basic Materials Sector

The Basic Materials Sector consists of companies involved with the discovery, development and processing of raw materials. Industry Components of the Basic Materials Sector The following industries are grouped under the Basic Materials sector. Chemical Manufacturing Chemicals – Plastics & Rubber Containers & Packaging Fabricated Plastic & Rubber Forestry & Wood Products Gold & Silver

Basic Sum Assured

A term used in conjunction with policies such as low-cost endowment assurance and low start endowment assurance. These sorts of policies operate on a ‘with-profits’ basis and often in conjunction with repayment of a loan or mortgage. If the policyholder dies during the term, a guaranteed death benefit repays the loan. However, to guarantee to


Basing refers to a stock that is forming a base with little or no trend. The resulting price pattern is a flat line. Basing usually occurs over a long time period – weeks, months or even years. Basing can occur after a stock price run-up and can also occur after a slow decline in price. Traders generally


For income and capital gains tax purposes, the value that is used to determine profit or loss when property is sold. Often the basis is what you paid for the property, “adjusted” to reflect improvements made or damage incurred while you own the property. See stepped-up basis, carryover basis.

Basis Point

In finance, a basis point is one one-hundredth of a per cent. For example, a 150 basis point rise in interest rates is the same as a 1.5% rise. A 10 basis point fee is the same as a 0.1% fee. When changes in interest rates are quoted in basis points, it is always understood

Basis Swap

A basis swap is a floating-floating interest rate swap. A simple example is a swap of 1-month USD Libor for 6-month USD Libor. This might be used to customize exposures to specific points on the yield curve. More common are basis swaps between two floating indexes from different segments of the money market. A bank

Basket Option

A basket option is an option whose payoff is linked to a portfolio or “basket” of underlier values. The basket can be any weighted sum of underlier values so long as the weights are all positive. Basket options are usually cash-settled. A call option on France’s CAC 40 stock index is an example of a

Basket Trade

A contract or other instrument for the purchase or sale of a group of shares or currencies, all of which are traded together.

Sometimes used to refer to a UK share trade using every share in the FTSE 100.

Basket Warrant

A warrant over a group of securities, often within a sector.


A crime consisting of physical contact that is intended to harm someone. Unintentional harmful contact is not battery, no mater how careless the behavior or how severe the injury. A fist fight is a common battery; being hit by a wild pitch in a baseball game is not.

Battle Of The Forms

Colloquial term for the situation where an Offer and the Acceptance of offer are both on set terms, and those terms are in conflict.

Bayesian Priors

This technique is an explicit statement about subjective probability concerning an event. The willingness to place a zero probability on an event often betrays a misunderstanding of this concept. Probabilities must range between zero and one. The probability of intelligent life on Mars may be close to zero but with new evidence, this could be

Beach Bum Trust Provision

Bears are market participants who expect the market to decline. Bears may expect the broad market averages to decline, or their bearishness may be confined to a specific stock or industry sector. To profit from their forecasts, bears sometimes sell short their markets. Alternately, they may purchase options positions or other derivatives that will gain

Bear Market

A bear market is a market in which prices decline against a background of widespread pessimism (the opposite of bull market). A bear market is generally shorter in duration than a bull market. A bear market signifies a prolonged decline in stock prices that may occur for months or even years. A bear market in

Bear Trap

A bear trap occurs when a declining market reverses direction, catching short-sellers off guard. In a bear trap short-sellers, who have continued selling in anticipation of a further drop in a now-bullish market, are eventually forced to buy back stock at a higher price to cover their positions. A bear trap can also be created

Bearer Bond

A bond which does not record its owner’s name. Possession of the bond certificate is, therefore, the only proof of ownership. Dividends are claimed by submitting a detachable coupon to the paying agent.

Bearer Paper
Bearer Shares

Stocks or shares which do not record owner’s names and for which the companies do not keep a register of ownership. Possession of the certificate is therefore the only proof of ownership.


Bearish refers to the investor feeling that a certain security or sector or an entire market is going to fall. A bearish investor expects stocks markets to go down. Hence he treads cautiously. A bear market typically exhibits falling stock prices. Bearish sentiment may prevail in any kind of market including bond market, commodity market

Bearish Abandoned Baby

The bearish abandoned baby is a rarely seen candlestick charting pattern that traders consider reliable at predicting reversals. Three candles comprise the bearish abandoned baby: a long white candle the first day, followed by a Doji candle the second day that gaps above the white candle, followed by a black candle the third day that

Bearish Belt Hold

The Bearish Belt Hold is a candlestick pattern that forms during an upward trend. The 2-day Bearish Belt Hold pattern starts following a stretch of bullish days. Day 1 is bullish but is followed on Day 2 by a bearish candlestick. The opening price, which becomes the high for day 2, is higher than the close of the previous day. The stock price declines throughout the day, resulting in a long bearish candlestick with a short lower shadow and no upper shadow.

Bearish Candlestick Patterns

Bearish candlestick patterns consist of 1, 2, 3 or more candlesticks in a pattern that is associated with a future bearish price move. Used in isolation, bearish candlestick patterns generally do not provide a significant trading advantage. However, they may prove to be a powerful tool when used in conjunction with other indicators. One Candlestick

Bearish Doji Star

The Bearish Doji Star is a double candlestick formation that is viewed by technical analysts as a bearish reversal pattern. The Bearish Doji Star is a candlestick pattern that forms during an upward trend.  This is what happens in the pattern: following a stretch of bullish trades, a long bullish candlestick occurs; the subsequent candlestick is characterized by

Bearish Engulfing Pattern

The bearish engulfing pattern is a relatively simple candlestick charting pattern consisting of one white candle followed by a longer black candle — it is a bearish reversal pattern. The body of the white candle in a bearish engulfing pattern may be of any length. The body of the black candle in a bearish engulfing

Bearish Harami

The bearish harami is a candlestick charting pattern — it is a bearish reversal pattern. A typical bearish harami is characterized by one long candle and a much shorter candle which is completely engulfed by the large candle. Some traders prefer that the large candle engulfs the shadows as well as the body of the


Bears are stockmarket animals who just happen to be pessimists – reckoning that share prices (or any other type of investment) are going to fall. So a City dealer who holds shares in XYZ plc will want to dispose of his holding, before the price falls. In a ‘bear market,’ the general sentiment is that

Before-Tax Income

Before-tax income, also known as pretax income, is the amount of income the company has generated before it pays Federal, state, and local income taxes. Before-tax income is a useful financial indicator because income taxes, while a cost of doing business, is substantially determined by governments and somewhat out of the control of company managements.

Beginning Inventory

Beginning Inventory is the amount of inventory a company has in stock at the start of the current fiscal year. It is closely related with Beginning Inventory Cost, which is the amount of money spent to get these goods in stock. It should be calculated at the Lower of Cost or Market.

Behavioural Economics

Behavioural economics is essentially a combination of economics and psychology. It supplements mainstream economics with a realistic psychological foundation. Behavioural economics is said to augment the explanatory power of economic theory. It is believed to generate the following positive externalities for mainstream economic theory. Generate added theoretical insights Make better predictions Suggest better policy measures An important

Behavioural Finance

Behavioural finance integrates ideas from the fields of individual and social psychology with classical financial theory to understand the performance of markets. Behavioural finance is closely related to behavioural economics. The key idea of behavioural finance is that market participants do not always make decisions rationally. Behavioural finance recognizes several deviations from rationality such as

Beige Book

The Beige Book is a “Summary of Commentary on Current Economic Conditions by Federal Reserve District,” as its formal title states. Besides geographic region, the Beige Book discusses the economy by industry sector. The Beige Book is based on reports from Federal Reserve Bank and Branch directors, as well as interviews with economists, business executives,


In a financial exchange, the sound of the bell indicates the start or close of the market for the trading day. Historically, the bell was always an actual bell, but the term in now also used symbolically to refer to the official start or stop of trading. The opening bell signals the start of market

Bell Curve

Bell curve is statistically a large and random sample which, when measured, will produce a bell curve on a bar chart – the scale measurement being along the x-axis and the total occurrences within the sample up the y-axis. If one took as a sample all the inhabitants of Greater London as a suitably large


someone who assumes leadership of a movement or activity.

Bench Trial

A trial presented before a judge is a bench trial. Civil trials are generally held before a judge unless the defendant or plaintiff requests a jury. In a bench trial, the judge will hear the evidence presented by each party and make a ruling for the case. In a criminal case, defendants may have the

Bench Warrant

A bench warrant is an arrest warrant issued by a judge or court. Bench warrants allow the police to bring a person to court to appear before the judge. Bench warrants are generally used when a person does not comply with a court order. A bench warrant is generally filed if the judge demonstrates a


A benchmark is a reference point against which other data are compared. For example, the S and P 500 index is a commonly used benchmark for the performance of many mutual funds that invest in common stocks.

Benchmark Interest Rate

The benchmark interest rate is the lowest interest rate that an investor will accept for a non-Treasury investment. The benchmark interest rate is also known as the base interest rate or the threshold interest rate since the benchmark interest rate is the threshold below which investors refuse to invest funds. The benchmark interest rate is

Beneficial Interest

In the law of trusts, a ‘beneficial interest’ in some property (of any type) implies a right to use and enjoy that property (typically) as the possessor of the interest sees fit. Where one person holds the property on trust for another, the latter is ascribed a beneficial interest in that property even though its legal

Beneficial Loan

A loan made by an employer to an employee on which interest is either not charged or is less than the official rate. The difference between the interest charged and the official rate is taxable.

Beneficial Owner

Under a trust, the person who has equitable title to some asset or property. Note that the beneficial owner is regarded in equity as being the property’s ‘true’ owner, despite the fact that he does not possess legal title to it.

Beneficial Use
Beneficiaries’ Right Of Occupation

A trust of land governed by the provisions of the Trusts Of Land And Appointment Of Trustees Act 1996 (TOLATA). Since 1997, all new trusts whose property is, or includes, land will be governed by this act, as will any trust for sale created before 1997. A settled land act settlement can continue to exist and


In Inheritance Law, The beneficiary is the person who will receive the benefits and/or property in the event of the insured’s death as outlined in the will of the deceased.

Beneficiary Principle

The principle that, for a trust to be valid, there must be some person or persons with standing to enforce the trust in the courts. The beneficiary principle is often invoked to explain why English law does not, on the whole, allow the creation of a private purpose trust. A trust of imperfect obligation is one that is expressed in

Benefit In Kind

These are benefits, excluding salaries, given to employees which include cars and car fuel, medical insurance and gifts etc. and which are taxed as employment income.

Benefit Of Counsel
Benford’s Law

Benford’s law, also called the first-digit law, states that in lists of numbers from many real-life sources of data, the leading digit is 1 almost one-third of the time, and larger numbers occur as the leading digit with less and less frequency as they grow in magnitude, to the point that 9 is the first


A legal term sometimes used in wills that means “leave” — for example, “I bequeath my garden tools to my brother-in-law, Buster Jenkins.”


Any disposal of the estate made under a will except for Immovable property (essentially buildings and land), which is called a ‘Devise’ or money, which is called a ‘Legacy’.

Bermuda Option

A Bermuda option is a derivative instrument where the holder of the option has the right, but not the obligation, to exercise his option only on certain predefined dates occurring in regular intervals throughout the duration of the contract. The Bermuda option is a hybrid of an American option, where the holder is entitled to

Berne Convention
Best Evidence

A rule of evidence that demands that the original of any document, photograph or recording be used as evidence at trial, rather than a copy. A copy will be allowed into evidence only if the original is unavailable.

Best Execution

The Stock Exchange rule that requires brokers to carry out a deal on behalf of a client at the best price available in the market. The concept of best price is hard to define. If a broker thinks that the market is falling, should they hang on before buying? Brokers have some discretion but, generally speaking, they execute deals immediately (as much for their own protection as anything else). Timely execution means carrying out the deal within 20 minutes of receiving the client instruction.

Best Interests (Of The Child)

The test that courts use when deciding who will take care of a child. For instance, an adoption is allowed only when a court declares it to be in the best interests of the child. Similarly, when asked to decide on custody issues in a divorce case, the judge will base his or her decision


The beta (ß) of a stock or portfolio is a number describing the relation of its returns with that of the financial market as a whole. An asset with a beta of 0 means that its price is not at all correlated with the market. A positive beta means that the asset generally follows the market. A negative beta shows that the asset inversely follows the market; the asset generally decreases in value if the market goes up and vice versa.

Beta Shares

A term previously given to the shares of listed companies, basically second in line to and traded with less activity than alpha shares on the London Stock Exchange, along with gamma and delta shares.

Beta Value

A measurement of the movement of the price of a particular stock compared with the movement of the market as a whole during the same period. if a stock has a beta value of under 1, it is regarded as low-risk if a stock has a beta value of over 1, it is regarded as

Beyond A Reasonable Doubt

The burden of proof that the prosecution must carry in a criminal trial to obtain a guilty verdict. Reasonable doubt is sometimes explained as being convinced “to a moral certainty.” The jury must be convinced that the defendant committed each element of the crime before returning a guilty verdict.


Offer (a certain price) for something, especially at an auction.

Bid-Offer Spread

Firms wishing to take on the responsibilities of market-making are obliged to quote their prices to broker/dealers who then decide whether or not to respond to them. These quotes are two-way prices, the lower of which is known as the bid price (the price at which the holder can sell shares) and the higher is

Bid/Ask Spread

The bid/ask spread is the difference between the price sellers are asking for and the price that buyers are willing to pay. There is a bid/ask spread in virtually any freely-traded market. For example, if the last trade on XYZ Corp. was $10.00, the current ask price might be $10.05 and the bid $9.95. This


Someone who bids, e.g. at an auction


To separate the issues in a case so that one issue or set of issues can be tried and resolved before the others. For example, death penalty cases are always bifurcated. The court or jury first hears the evidence of guilt and reaches a verdict, and then hears evidence about and decides upon which punishment

Big Bang

Sometimes described as the biggest deregulation of the London stock market in modern times, ‘Big Bang’ took place in October 1986. At the time: ‘screen-based’ computer trading was widely introduced (within a short time it had superseded floor trading) Big banks rushed to purchase stockbroking firms (sending a lot of old men back to their

Big Bang 2

Big Bang 2, on Monday, October 20, 1997, was the start of a switch from a quote-driven system of trading to an order-driven one. The trading hours of the London Stock Exchange remain unchanged – 8.30 am to 4.30 pm. The electronic order book ( SETS ) cuts out the middleman, in the shape of

Big Board

Big Board is the nickname of the New York Stock Exchange (NYSE). Over 80 percent of U.S. securities are traded on the Big Board, the largest stock market in the world. A significant number of Big Board companies are based outside the U.S. Big Board members ply their trade on the trading floor. These brokers

Big Figure

If a bond is priced at 105.45, the big figure is 105. When quoting a price, market makers might just refer to the figure after the decimal point, ignoring the big figure. Also known as the handle in the US.

Big Four

In the UK the four large clearing banks: Lloyds TSB, Barclays, HSBC and Royal Bank of Scotland.

Big Mac Index

A crude but entertaining analysis, originated by The Economist magazine, comparing the price of the ubiquitous snack, designed to show relative price levels around the world and judge whether a currency might be over or undervalued.

Big Six

Traditionally the six big accountancy firms: KPMG, PriceWaterhouse, Coopers & Lybrand, Ernst & Young, Deloitte & Touche and Arthur Andersen. The number fell to five with the creation of PricewaterhouseCoopers following the merger of Price Waterhouse and Coopers & Lybrand. It then fell to four with the demise of Arthur Andersen (Accenture, initially called Andersen Consulting, was created in 1989).

Bilateral Contract

A statute in draft before it becomes law

Bill Of Attainder

Beginning in the fourteenth century and lasting to the nineteenth, there was a law in England that enabled nobles and royalty to punish citizens without trial. The British Bill of Attainder is perhaps one of the most interesting, creative, albeit potentially tyrannical, pieces of law ever enacted. It is not difficult to see why a king or

Bill Of Exchange

A bill of exchange is a document acknowledging an amount of money owed in consideration for goods received. It is a kind of a written financial document that states the company or the individuals mentioned in the document to pay a certain amount on a particular date. It contains the debtor’s authorized signature. This makes it

Bill Of Lading
Bill Of Particulars
Bill Of Rights

The ‘glorious revolution’ of 1688 brought about the downfall of King James II of England (who was also James VII of Scotland); the new monarchs, William and Mary, were obliged in 1689 to accept the terms of the Bill of Rights, which substantially reduced the prerogative powers of the monarchy, and laid the foundation for the principle

Bill Of Sale
Billing Cycle

The time between periodic billings for goods and services, typically one month.

Binary Options

Binary options is a financial instrument that allows you to speculate on future market movements of underlying assets. Some regulatory bodies consider binary options to be financial instruments and regulate them as such. Other jurisdictions consider binary options to be a way to bet on the stock market and regulated the instrument as gambling. Both

Binding Authority

The binding authority or binding precedent is the existing law that the judge must evaluate when making a decision in a case. For example, a lower court in the same jurisdiction of a higher court must follow the applicable holding of the higher court. Binding authority follows the doctrine of stare decisis, which means “stand

Black (1976) Option Pricing Formula

Used for pricing options on non-dividend paying stocks.

Black Economy

Black economy is also known as the underground economy in economic terminology. It is basically a type of market where the rules of taxation and trade are not applicable. The black economy is also called underdog, black economy, shadow economy and parallel economy. The range of activities that take place in the black economies at

Black Friday

Black Friday refers to September 24, 1869. On Black Friday, a group of speculators led by James Fist and Jay Gould attempted to corner the gold market. They failed, and the resulting collapse in gold, and then stocks, became known as Black Friday. From this original Black Friday came the practice of labelling market collapses

Black Monday

Black Monday, or October 19, 1987, was the day of the single largest broad decline in the history of US equity markets. The Dow Jones Industrial Average declined by over 22% on Black Monday. Following Black Monday major stock markets experienced similarly substantial declines globally. Black Monday had no apparent catalyst. The leading explanation for

Black Swan

A black swan is a seemingly improbable or unforeseeable event with dramatic consequences. Nassim Taleb gets credit for molding the black swan (a real type of bird) into a financial/economic term. Fool Jack Uldrich gave this synopsis in a 2007 book review of Taleb’s The Black Swan: The Impact of the Highly Improbable: “The book takes its title from the

Black Tuesday

Black Tuesday refers to October 29, 1929. Black Tuesday occurred five days after the US stock market crash of Black Thursday. The week of Black Tuesday and its aftermath usually marks the beginning of the Great Depression in the US. On Black Tuesday, the stock market fell by 13% and more than 16 million shares

Black-Scholes Option Pricing Model

The Black-Scholes Option Pricing Model predicts an option’s price given the strike price, expiration date, risk-free rate of return, stock price, and standard deviation of the stock’s return. Wall Street was quick to adopt the Black-Scholes Option Pricing Model in the early 1970s although key assumptions of the Black-Scholes Option Pricing Model are obviously violated

Black’s Law Dictionary

Black’s Law Dictionary is the most widely used law dictionary for the law of the United States. It was founded by Henry Campbell Black. It has been cited as legal authority in many Supreme Court cases (see Secondary authority). The latest editions, including abridged and pocket versions, are useful starting points for the layman or


The action, treated as a criminal offense, of demanding payment or another benefit from someone in return for not revealing compromising or damaging information about them.

Blank Endorsement
Blank Media Tax

A blank media tax (or blank media levy) is a government-mandated scheme in which a special tax or levy (additional to any general sales tax) is charged on purchases of recordable media. Such taxes are in place in various countries and the income is typically allocated to the developers of “content”. (A distinction is sometimes

Blanket Insurance

In real estate, coverage for different kinds of property at a specific location or a specific property at different locations. In general, it refers to insurance that covers a number of entities that are not necessarily related.

Blanket Mortgage

A mortgage or trust deed that covers more than one lot or parcel of real property, and often an entire subdivision. As individual lots are sold, a partial re-conveyance or release from the blanket mortgage is usually obtained.

Blanket Search Warrant
Blemished Defendant

A trendy term for a defendant in a criminal trial who is not of exemplary character, but whose character is nonetheless not sufficiently bad that he cannot benefit from a direction to the jury that his good character should be taken into account (see V ye direction for discussion).

Blow-Off Top

A blow-off top refers to an extremely fast spike up in a stock’s price, followed by an extremely fast and severe drop in price. A blow-off top may be found on an intra-day chart, a daily chart, or even a weekly or monthly chart in some cases. A blow-off top may be found on individual

Blue Chip

A company with a large market capitalisation, stable earnings, consistent dividend record, and reputation as a reliable investment.

There are no formal rules for joining the ranks of blue chips, and not necessarily any agreement about which companies belong to the club, but the companies that make up a country’s leading stock index would commonly be regarded as blue chips. The term is believed to come from the gambling chip used in casinos.

Blue Chip Stock

Blue-chip stock is equity in the securities of high-quality companies. Blue-chip stock is often also high in public share price. Blue-chip stock is a term named after the blue-coloured highest poker chip denomination. Stock of “blue chips” or “blue-chip stock” demonstrate some combination of high credit rating, strong balance sheet, stable earnings power. A blue-chip

Blue Laws
Blue Ribbon Jury
Blue Shield

The Blue Shield concept was developed at the beginning of the twentieth century by employers in lumber and mining camps of the Pacific Northwest to provide medical care by paying monthly fees to medical service bureaus composed of groups of physicians. The first official Blue Shield Plan was founded in California in 1939. In 1948

Blue Sky Laws

The laws that aim to protect people from investing in sham companies that consist of nothing but “blue sky.”

Blue sky laws require that companies seeking to sell stock to the public submit information to and obtain the approval of a state or federal official who oversees corporate activity.


Blue-collar is a workplace designation that defines an employee who performs manual or technical labour, such as in a factory or trades, in contrast to a white-collar worker, who does non-manual work generally at a desk. Examples of blue-collar work include carpentry, construction, automotive repair, maintenance, mining and agriculture. The blue-collar designation defines a working-class

BM&F Bovespa

BM&FBOVESPA is a Brazilian company, created in 2008, through the integration between the São Paulo Stock Exchange (Bolsa de Valores de São Paulo) and the Brazilian Mercantile & Futures Exchange (Bolsa de Mercadorias e Futuros).

It is the most important Brazilian institution to intermediate equity market transactions and the only securities, commodities and futures exchange in Brazil. BM&FBOVESPA further acts as a driver for the Brazilian capital markets.

BME Spanish Exchanges

Bolsas y Mercados Españoles (BME) is the operator of all stock Markets and financial systems in Spain. BME has been a listed company since 14 July 2006 and an IBEX 35® constituent since July 2007. BME is a highly diversified company structured into seven business-units which represents the broadest and most varied range of products

Boalt Hall

The UC Berkeley School of Law, commonly referred to as Boalt Hall, is one of 14 schools and colleges at the University of California, Berkeley. Boalt Hall is regarded as one of the most elite law schools in the United States. It is consistently ranked both as one of the top 10 law schools and the top

Board Of Directors

The directors are a company’s most senior managers and are elected to run the company by shareholders. Directors of public companies generally have to be re-elected by shareholders every 3 years which is usually just a formality, but there are occasional upsets.

Board Of Governors

A Board of Governors is the collective name given to the individuals who oversee the operation of an institution directly serving the public interest. A Board of Governors serves a function similar to that of a Board of Directors for US corporation. While a Board of Governors presides over Amtrak, the US Postal Service, universities

Board Of Trustees

The Board of Trustees is responsible for overseeing the activities of a nonprofit organization, ranging from huge foundations to small local charities. A Board of Trustees usually has between five and 20 members. Many members of a Board of Trustees hold other, external positions; but the Board of Trustees may also include senior management of


A room in which the members of a board meet regularly.

Boiler Insurance

Boiler insurance is a type of property insurance that pays accidental losses to machinery and equipment. Although it is called boiler insurance it can actually cover just about any device that uses, transmits or generates mechanical or electrical power; of course, certain exclusions apply. Standard property insurance policies normally exclude coverage for losses caused by

Boiler Room

A boiler room is an unflattering term used to describe a place of business where high-pressure telemarketing tactics are used to solicit sales. A boiler room is most often associated with stock brokerage firms. A boiler room may rely on aggressive cold calling to sell risky stocks to willing investors. A boiler room may use sales methods that violate the National Association of Securities Dealers (NASD) rules requiring brokers to recommend investments that are appropriate to an investor’s portfolio. For example, a broker working in a boiler room might try to sell very speculative stock to a retired investor whose portfolio cannot endure such high risk. Boiler room brokers may also try to create investor interest in non-existent companies to profit from the sale of fraudulent shares. The term boiler room is derived from an industrial area that houses steam boilers.


Boilerplate is standard generic verbiage which is repeated verbatim in numerous contracts, agreements, licenses or other documents. Boilerplate material is often inconsequential, non-specific and applies to everyone equally. Boilerplate can be a one-size-fits-all template, a generic fill-in-the-blank form or simply standardized pre-printed text often referencing generalized terms and conditions. With the proliferation of personal computers,

Bollinger Bands

Bollinger Bands are plotted (typically) two standard deviations above and below a simple moving average of the price series. Since standard deviation is a measure of volatility, the Bollinger Bands widen during periods of volatility and contract during calm markets. Calculation of Bollinger Bands Bollinger Bands consist of a moving average and two outer bands.  The moving

Bona Fide
Bona Fide Purchaser
Bona Fide Purchaser Without Notice

In full: a ‘bona fide purchaser of a legal interest for value without notice, actual, constructive or imputed’, also known as ‘equity’s darling’. A person who pays money or other valuable consideration for property that has any attached equitable interests (see: Equitable interest land and property), takes the property free of those interests if he can

Bona Vacantia

Ownerless goods. Under English law, the general principle is that any genuinely ownerless property (of whatever type, including land) reverts to the Crown. In practice, courts rarely make the determination that property is ownerless; instead, they employ a number of devices (such as a resulting trust) to ‘find’ an owner where there would otherwise be none.


The name sometimes given to loan finance (more commonly in the USA). A certificate of debt issued by a company or the government. Bonds generally pay a specific rate of interest and pay back the original investment after a specified period of time.

Bond Fund

A bond fund is a mutual fund that invests in bonds. A bond fund is considered a fixed income. Most bond funds pay interest monthly, and rates tend to be steady, but the interest paid does change gradually along with changes in the investment portfolio. The yield that bond funds pay tends to track market rates, but the NAV varies rather than the interest paid per

Bond Market

The term bond market has many different meanings, which include fixed income market and credit income market. It is a financial environment or market where individuals can apply for new debts which are most commonly known as the primary market. The secondary market is the term used for debt securities to buy and sell. Such

Bond Of Auction

Under Scottish law, the Executor of an estate may be required to bond a certain sum of money, or take out a policy of insurance, to compensate the estate in the event of his errors in handling the job.

Bond Placement

A bond placement is the process of selling a new bond issue often to an institutional investor. For a company in need of financing, this is a typical transaction arranged through an investment banker.

Bond Plus Option

In finance, a Bond+Option is a capital guarantee product that provides an investor with a fixed, predetermined participation to an option. Buying the zero-coupon bond ensures the guarantee of the capital, and the remaining proceeds are used to buy an option. As an example, we can consider a bond+call on 5 years, with Nokia as

Bond Rating

A bond rating is the measure of the quality of the bond or fixed-income security. Bond ratings are assigned by bond rating agencies including firms such as Standard and Poor’s, Moody’s, and Fitch. Several rating systems are used, but the most common one ranges from AAA for the safest to C- for the least secure. Investment-grade bonds are rated from AAA to BBB-. BB+ and below bonds are

Bond Valuation

Bond valuation is the process by which one may determine the fairest pricing at which to buy a bond. Just as with all of the various types of securities and capital investments, what is theoretically a fair value for any kind of bond is based on how much value the stream of cash flow it

Bonus Issue

A bonus issue is also described as a free issue, a scrip issue, a capitalisation issue and a stock dividend. These are new shares issued by a company to its existing shareholders, usually in a mathematical proportion to the number of shares already held. These shares are issued free of charge as an accounting exercise

Booby Trap
Book Account
Book Value

The book value of an asset or group of assets is the price at which they were originally acquired, in many cases equal to purchase price. The value of an asset as entered in a company’s balance sheet or an organisation’s accounts. Applied to the whole company it means its net assets. One way of valuing a bank, for instance, is to look at its book value and, if it is quoted, to compare that with its market value.

Book Value Per Share

A company’s total assets minus total liabilities, or net assets, divided by the number of shares outstanding. Equivalent to shareholders funds per share.

Book-Entry, Registered And Bearer Bonds

Bonds can be issued in three forms, which differ in how they evidence ownership. Bearer bonds are issued as an engraved certificate. The issuer maintains no records of who owns the bonds. Ownership is transferred by transferring the certificate. Whoever can produce the certificate is presumed to own the bond. Part of the certificate is

Book-To-Bill Ratio

The book-to-bill ratio measures the relationship between orders received and the amount of product shipped and billed. The book-to-bill ratio is widely published for the semiconductor equipment industry, and it is an important indicator of the health of the personal computer industry and the overall technology sector as well. A book-to-bill ratio of above 1


Although the term bookings has multiple meanings, in the financial sense bookings are funds that are expected to be received from customers in the near future based on accepted orders or contracts. Cancellations, amendments and extensions can have a positive or negative impact on bookings. Bookings differ from sales, where money has been received for


Bookkeeping (also book-keeping or book keeping) is the recording of all financial transactions undertaken by an individual or organization. The organization may be a business, a charitable organization or even a local sports club. Bookkeeping is “keeping records of what is bought, sold, owed, and owned; what money comes in, what goes out, and what

Books Of Account

The books in which the transactions of a business are recorded.


A boom refers to a rising financial market. Another term for boom would be a bull market. During a stock market boom, the majority of stocks rise in price and there is often a euphoric feeling about the market. A boom market does not necessarily refer to the stock market as a whole. Individual sectors

Border Patrol

The historical term for what is now called the Bureau of Customs and Border Protection (“BCBP”), a branch of the Department of Homeland Security. The primary functions of the BCBP/border patrol are to guard the borders from illegal entrants and to meet and question immigrants and visitors arriving at airports and other border stops.


Borrowing is the act of receiving something which will be returned in the future. In finance and economics, borrowing generally refers to receiving money. In simple terms, borrowing can be illustrated as the act of receiving a certain amount of money with the intention that the receiver will have to return the same amount of money after a fixed span

Bottom Fisher

A bottom fisher is an investor who attempts to buy stocks at or near their lowest price. A bottom fisher is looking for bargain-priced stocks which the investor believes have nowhere to go but up in price from their current level. A bottom fisher is similar to a market timer insofar as the bottom fisher

Bottom Line

Bottom line is an informal term for net income. It derives from the position of net income on the income statement – it’s the last line, or “bottom line.” The bottom line of net income is the final tally of what the company earned after all expenses have been deducted and all intermediary stages of


Boulwarism was named after General Electric’s former vice president Lemuel Boulware, who pioneered the strategy.

Bound Over

For example, ‘bound over to be of good behaviour and to keep the peace’. If a person is bound over after conviction he or she is released, subject to a recognizance (see: Recognizance). The effect is that the offender’s good behaviour is assured by the threat of forfeit of money.

Bounded Rationality

Bounded rationality is a branch of economic theory about decision making. It was first proposed by behaviourist Herbert Simon in 1957. As per Simon, decision making by economic agents is a type of search process, which is guided by an agent’s aspiration levels. Aspiration level in its turn is that value of a particular goal


A stock market in a non-English-speaking country, especially France.

Breach Of Contract

A breach of contract occurs when a person or company fails to perform or meet the terms of a contract, written or oral. Common breach of contract can include a homeowner failing to pay their mortgage, a celebrity not showing up at an event or a caterer failing to cater an event. Breach of contract is one of the most common types of lawsuits in which the plaintiff seeks specific damages.

To demonstrate a breach of contract you must prove you had a valid contract with another person. This is easy if you have a written contract and both parties have signed it. If the contract is oral you may need additional evidence, which varies from state to state. You must prove you upheld your legal responsibilities under the contract and the other party failed to do their duty under the contract. This can be proven if one party did not perform their duty, makes it clear they have no intention to perform their duty or makes it impossible for the other party to perform their duty. Finally, you must prove you suffered financial loss or were harmed by the breach.

Breach Of Promise
Breach Of The Duty Of Care

To succeed in a claim for negligence, the claimant must establish that he was owed a Duty of care and that the defendant was in breach of that duty. Whether a breach occurred is a question of fact to be established on the evidence, but the standard of care expected is a matter of law. Standard Of

Breach Of The Peace

The term ‘breach of the peace’ frequently occurs in legal documentation, but its meaning is not well defined. A breach of the peace is not merely a disturbance, but a situation where there is an outbreak of violent behaviour or the threat of such behaviour. A breach of the peace need not occur in a

Breach Of Trust
Breach Of Warranty
Break Even

The level of a company’s sales at which sales match costs and neither a profit nor a loss is made. Or a level in the market at which an existing holding will make neither a loss nor a gain.

Break Even Rate On Warrant

The annual percentage growth rate required from the underlying instrument to break even (avoid a loss) on a warrant.

Break-Even Analysis

The break even point for a product is the point where total revenue received equals the total costs associated with the sale of the product (TR=TC). A break-even point is typically calculated in order for businesses to determine if it would be profitable to sell a proposed product, as opposed to attempting to modify an existing product instead so it can be made lucrative. Break-Even Analysis can also be used to analyze the potential profitability of an expenditure in a sales-based business.

Break-Even Point

The break-even point for any investment is the price at which an investor neither makes nor loses money on that investment. An investor’s break-even point must include the recoupment of all fees, commissions and other expenses associated with the purchase and sale of the investment. When trading options, the break-even point for a call option

Breaking And Entering

A breakout occurs when the price of a stock breaks through a resistance level, often on high volume. The resistance level is usually a price ceiling at which the stock has previously encountered selling. In many cases, but not always, that resistance level is the highest point in a “handle” portion of a base pattern. Technical traders

Breakout Standard Regression Channel

The Breakout Standard Regression Channel is a special case of Linear Regression Channels;  the upper and lower lines are spaced by a specified number of standard deviations above and below the middle linear regression baseline channel. Calculation The Breakout Standard Regression Channel is started using the first ‘n’ points in a chart to construct a baseline channel.


Bribery, which is synonymous with pecuniary corruption, is an act implying money or gift given that alters the behaviour of the person in ways not consistent with the duties of that person or in breach of law. Bribery constitutes a crime and is defined by Black’s Law Dictionary as the offering, giving, receiving, or soliciting

Bridge Loan

A bridge loan is a temporary source of financing intended to last only until more permanent financial arrangements can be made. A bridge loan is usually for a year or less, often much less. The bridge loan is very common in two arenas, start-up finance and real estate. A start-up anticipating receipt of venture capital

Bridging Loans

Bridging loans are short term loans. Bridging loans are often used by purchasers of a property who need funds for a limited period of time. e.g. until they sell their existing home. Major banks and building societies can offer bridging loans. But consider all the risks before you opt for a bridging loan. For example,


A brief is the written legal argument which states the legal reasons and arguments for various petitions and motions before the court to counter the arguments of opposing counsel. In a personal injury claim, the legal brief outlines reasons for the judge to rule in favour of a certain party or why the judge should

British Bankers’ Association

The British Bankers’ Association (BBA) represents the interests of the high street clearing banks.

British Citizenship

We begin with some preliminary but altogether necessary points. First, the law governing British nationality and British citizenship is extremely complex, and the present discussion constitutes merely a simplified summary of the subject. Second, although the terms ‘Britain’ and ‘United Kingdom’ (UK) refer to two distinct objects (a geographical region and a political association, respectively),

Broad Ticker

The broad ticker is an electronic information service that displays financial news and information as well as traditional stock market ticker prices. Dow Jones is the traditional supplier of this service. The broad ticker is often on display in the board room of a stockbroker. To avoid charges of insider trading, appearance on the board ticker is a traditional definition of public information. Old-timers say that in the days of


In 1898 Guglielmo Marconi, a twenty-four-year-old Italian, began the world’s first commercial radio service. For citizens of the United States, radio—and later television—not only introduced an abundance of entertainment and information, it also raised many legal questions surrounding its implementation and regulation. In radio’s earliest days, stations all broadcast at the same frequency; this posed


A broker is someone who has a license to transact stocks, bonds, commodities, or real estate.

Broker (Stockbroker)

Member of a stock exchange who arranges purchase and sale of shares and may also provide an information service giving buy/sell/hold recommendations.

Broker Loan Rate

The broker loan rate, also known as the call money rate, is the interest rate that banks charge a broker for the funds that the broker uses to make margin loans to clients. The broker charges his clients the broker loan rate plus a service charge. The broker loan rate only applies to clients who

Broker Recommendation

A broker recommendation is an opinion given by a broker regarding the merits of a particular stock. A broker recommendation may be issued by an individual analyst or represent a consensus of the entire brokerage. A broker recommendation is typically based on equity research data. Thus, before issuing a broker recommendation, analysts may examine various

Broker’s Report

Bulletin written by a stockbroking firm for circulation to its clients, providing analysis and guidance on companies as potential investments.


A Broker-dealer typically is a securities trading firm which combines the functions of a stockbroker – acting as an agent for investors – with that of a dealer – acting as a principal for its own account. This so-called dual capacity became a feature of the London stock market only after Big Bang in 1986.


A stock broker’s business; charges a fee to act as an intermediary between buyer and seller.

Brokerage House

A brokerage house is a place from which a broker conducts business. The term brokerage house is often referred to as a broker, brokerage, or a brokerage firm. Working through a licensed brokerage house, your broker buys and sells shares of stock for your portfolio as per your instructions. A full-service brokerage house provides a

Brought To Trial

In markets, a bubble is an extended period of extreme overvaluation. Bubbles occur in stock markets, real estate, commodities and precious metals. There have even been bubbles in the flower market, the most famous example being the Dutch Tulip Mania of the seventeenth century. Bubbles are formed when excessive speculation enters a market. Instead of

Bucket Shop

You may think a bucket shop is simply somewhere you buy cheap airline tickets. It’s originally an American expression for a gambling den and in stockmarket terms, that’s something much less palatable. A bucket shop is also sometimes called a boiler room, ie. a share-broking business run by somebody who isn’t a member of the


A budget is an official statement statement of the state expenditure and estimated revenues during a particular financial year. It acts as a tool for the government in power for implementing its policies and programs.

The budget highlights the expenses needed for the execution of different policies. The budget casts a significant impact on a country’s economy. It ensures aggregate fiscal discipline thereby controls the total expenditure. It also plays a crucial role in the allocation of resources depending on social and economic priorities. It also ensures the effective deliverance of services and undertaking of programs. The central government budget in India is divided into the revenue and capital budget. The revenue budget comprises the revenue receipts of the government while the capital budget takes care of the capital receipts and payments.

Budget Account

A bank account set up to control a person’s regular expenditure. The account would typically include the payment of such items as mortgage, utilities, telephone and other similar items. Annual expenditure for each item is divided by 12 and paid into the account monthly. The bills are then paid from the budget account as they become due.


In architecture, construction, engineering and real estate development the word building may refer to one of the following: Any man-made structure used or intended for supporting or sheltering any use or continuous occupancy, or An act of construction. To differentiate buildings and other structures that are not intended for continuous human occupancy, the latter are called non-building structures. Structural height in

Building And Loan
Building Societies Association

The Building Societies Association (BSA) is the trade association representing the interests of member societies. But the Building Societies Association has seen its numbers shrink in recent years as names such as Abbey National (now Abbey) and Cheltenham and Gloucester gave up their ‘mutual’ status.

Building Society

‘Mutual’ non-profit-making institutions set up to lend money to their members for house purchase. Building societies are ‘Mutual’ because they are owned by their members, who are entitled to their profits and benefits.

The Building Societies Act 1986 enabled building societies to provide a much wider range of services to their members, including unsecured personal loans, insurance policies, house-selling and pensions. This was designed to put them on a level playing field with banks.

In recent years some of the UK’s largest building societies have demutualised and effectively turned themselves into profit-making banks, with their profits being distributed to shareholders rather than their customers.

Building societies are regulated by the Financial Services Authority (FSA). Their trade association is the Building Societies Association.

Bulk Sale
Bulk Sales Acts
Bulk Sales Law

A bull is an investor who purchases a financial instrument in the expectation that it will increase in value. For an investment such as stocks, a bull expects prices to rise. Equity bull markets, consequently, are marked by persistent upward trends in stock prices. For investments that carry yields, such as bonds, a bull expects

Bull Market

A bull market is a period in which the prices in a market rise overall. Any asset class, including stocks, bonds, or commodities, can experience a bull market. Historically, bull markets tend to last longer than bear markets. Bull markets in stocks often coincide with periods of robust economic growth. Increased earnings often lead to higher stock prices, and

Bullish Abandoned Baby

The bullish abandoned baby is a rarely seen candlestick charting pattern that traders consider reliable at predicting reversals. Three candles comprise the bullish abandoned baby: a long black candle the first day, followed by a Doji candle the second day that gaps below the black candle, followed by a white candle the third day that

Bullish Belt Hold

The bullish belt hold is a candlestick charting pattern that tends to signal the reversal of a downtrend. A single long white candlestick with no lower shadow and a small upper shadow (i.e. white closing Marubozu) characterizes the bullish belt hold pattern. The bullish belt hold occurs following a series of down days when the

Bullish Candlestick Patterns

Bullish candlestick patterns consist of 1, 2, 3 or more candlesticks in a row that are associated with a future bullish price move.  Used in isolation, bullish candlestick patterns generally do not provide a significant trading advantage. However, they may prove to be a powerful tool when used in conjunction with other indicators. One Candlestick Bullish

Bullish Doji Star

The Bullish Doji Star is a double candlestick formation that is viewed as a bullish reversal pattern. The Bullish Doji Star is a candlestick pattern that forms during a downward trend. This is what happens in the pattern: following a stretch of bearish trades, a long bearish candlestick occurs; the subsequent candlestick is characterized by a gap

Bullish Engulfing Pattern

The bullish engulfing pattern is a relatively simple candlestick charting pattern consisting of one black candle followed by a longer white candle — it is a bullish reversal pattern. The body of the black candle in a bullish engulfing pattern may be of any length. The body of the white candle in a bullish engulfing

Bullish Homing Pigeon

The Bullish Homing Pigeon candlestick pattern represents a potential reversal in a downward market. In traditional technical analysis, the Bullish Homing Pigeon candlestick pattern would be recognized as an “inside day”. The Bullish Homing Pigeon candlestick pattern starts with a bearish trend concluding with two bearish candlesticks. The first is a large body candlestick;  this is followed


The Frankfurt-based German central bank, sometimes known as the Buba.

Bundle Of Rights

The bundle of rights is a common way to explain the complexities of property ownership. Teachers often use this concept as a way to organize confusing and sometimes contradictory data about real estate. The bundle of rights is commonly taught in US first-year law school property classes to explain how a property can simultaneously be

Burden Of Proof

The burden of proof is the level of proof one party must prove for a disputed assertion. Civil cases have a burden of proof which is described as a “preponderance of the evidence.” In a criminal case, however, the plaintiff (the government) must prove “beyond a reasonable doubt” to get a criminal conviction.

In a criminal case, the burden of proof resides with the state and the state must prove the defendant is guilty. The defendant does not have to prove anything (unless they are claiming insanity, duress or self-defence as their defence), and they are assumed innocent until proven guilty.

In civil law, the burden of proof is on the plaintiff (exceptions exist) and the plaintiff can win their case if they can prove a “preponderance of evidence” in their favour, although some cases such as fraud require a higher level of proof called “clear and convincing evidence.” So for a general civil claim, the jury may find for the plaintiff if they believe there is more than a 50% probability that the defendant was negligent in causing the plaintiff’s injury.

Bureau of Economic Analysis

The Bureau of Economic Analysis is an agency (the Deparment of Commerce) that keeps record of the United States’ economic data.


The crime of breaking into and entering a building with the intention to commit a felony. The breaking and entering need not be by force, and the felony need not be theft. For instance, someone would be guilty of burglary if he entered a house through an unlocked door in order to commit a murder.

Burn Rate

Burn rate is the speed at which a company spends shareholder capital, depleting its cash reserves. Burn rate measures the expenditures of a company or individual. Investors want this number to be smaller than the sales of the company. e.g. if Manny’s Used Cars is spending 100k per month (that’s his burn rate) on employees, utilities, taxes and merchandise repurchases,


A business is an organisation or economic system where goods and services are exchanged for one another or for money.

Business Combination

A transaction in which one company acquires control of another.

Business Continuity Plan

A business continuity plan is usually a separate document, associated with larger organisations. It sets out a range of procedures for dealing with issues, in the event of a major problem or disaster situation, to minimalise interruption to the business. Such events would include fire, flooding, electrical or gas faults, accidents with hazardous materials, even

Business Cycle

More or less regular fluctuations in aggregate economic activity, between peaks and troughs, typically over a five to ten year period.

Business Day

The business day is defined as any of the days Monday through Friday less holidays, during which most businesses are in operation. Most businesses are closed on the days that are not a business day. By this definition, approximately 252 of the 365 days in a year should be a business day. Not all are,

Business Efficiency

The efficiency ratio, a ratio that is typically applied to banks, in simple terms is defined as expenses as a percentage of revenue (expenses/revenue), with a few variations. A lower percentage is better since that means expenses are low and earnings are big. It is related to operating leverage, which measures the ratio between fixed costs and

Business Entity

A business which exists independently of it’s owners.

Business Ethics

Business ethics is a form of the art of applied ethics that examines ethical principles and moral or ethical problems that can arise in a business environment. In the increasingly conscience-focused marketplaces of the 21st century, the demand for more ethical business processes and actions (known as ethicism) is increasing. Simultaneously, pressure is applied on

Business Expenses

Business expenses are the costs a business incurs in the course of producing goods, providing services, or conducting trade. If a business operates at a profit, its business expenses may be tax-deductible. IRS rules specify that business expenses have to be necessary and ordinary to be deductible. Ordinary business expenses are frequent and/or ongoing, such

Business Intelligence

The term business intelligence (BI) refers to technologies, applications and practices for the collection, integration, analysis, and presentation of business information and also sometimes to the information itself. The purpose of business intelligence is to support better business decision making. It dates to 1958. D. J. Power explains in “A Brief History of Decision Support

Business Invitee
Business Method Patent

Business method patents are a class of patents which disclose and claim new methods of doing business. This includes new types of e-commerce, insurance, banking, tax compliance etc. There is a sustained debate as to what extent such patents should be granted, particularly for inventions that are essentially legal or contractual in nature as opposed

Business Model

A business model is the way or ways that a company generates revenues and profits. A particular business model can be thought of as the prototypical operational framework repeated in the business plans of several companies of the same type. For instance, magazine publishers generally operate according to the subscription business model. Each business model

Business Performance Management

The acronym “BPM” may also refer to Business Process Mapping. Now, for Business Performance Management Business performance management (BPM) (or Corporate performance management, Enterprise performance management, Operational performance management) is a set of processes that help organizations optimize their business performance. It is a framework for organizing, automating and analyzing business methodologies, metrics, processes and systems that drive business performance. BPM is seen

Business Plan

A business plan defines a business and its goals. A good business plan is an essential tool for starting and successfully managing a business. The typical business plan has detailed descriptive information and financial data. Non-financial data in a business plan usually includes a statement of purpose and executive summary, a discussion of marketing methods,

Business Process

A business process or business method is a collection of interrelated tasks, which solve a particular issue. There are three types of business processes: Management processes, the processes that govern the operation of a system. Typical management processes include “Corporate Governance” and “Strategic Management”. Operational processes, processes that constitute the core business and create the primary value stream. Typical operational processes

Business Process Mapping

Business process management (BPM) is a method of efficiently aligning an organization with the wants and needs of clients. It is a holistic management approach that promotes business effectiveness and efficiency while striving for innovation, flexibility and integration with technology. As organizations strive for the attainment of their objectives, BPM attempts to continuously improve processes –

Business Records Exception

An exception to the hearsay rule, which allows a business document to be admitted into evidence if a proper foundation is laid to show it is reliable.

Business Valuation

Business Valuation is the process of determining the economic value of a business or company. Business valuation can be used to determine the fair value of a business for a variety of reasons,  including sale value, establishing partner ownership and divorce proceedings. There are a variety of business valuation techniques used for determining a fair price

But For Rule
Buy And Hold

Buy and hold is an investing philosophy that believes in buying excellent companies and holding those investments for the long term. Buy and hold is an investing strategy designed to minimize transaction costs while maximizing the possibility of enjoying the long-term returns generated from a given business. Since long-term stock appreciation is based on the long-term

Buy On Close

An order to purchase a security or currency when the market closes, at a price or exchange rate within the range between the highest and lowest prices or rates at which trades were executed during the closing of the market.

Buy On Opening

A buy on opening order is an order to your broker to buy a stock at the opening bell. A buy on opening order is a market order which means that your buy on opening order will be filled at the best price possible within the opening range of prices. No specific price is guaranteed

Buy Order

A buy order is an order to buy a stock or other asset. It is used to add long positions or cover short positions. Buy orders are submitted to a broker, who first attempts to match it against any outstanding buy orders from its own customers. If the buy order can’t be filled internally, it

Buy To Hold

Buy to hold is an investment approach very similar to buy and hold, but conveying active watching, and an open-minded willingness to sell. This language is used in order to reflect that the approach is more active than mere “buy and hold” (sometimes criticized for “buy and put your head in the sand”) investing. While

Buy To Let

Buy to Let was a term first coined back in 1996 when people started wanting to get on the back of rising property prices. They did this by buying another home in addition to their residential one to rent out – hence the term Buy to Let. Since those days, Buy to Let has undergone

Buy-Sell Agreement
Buyer Brokerage

Buyer brokerage (or Buyer agency as it is also known) is the practice of real estate brokers (and their agents) representing a buyer in a real estate transaction rather than, by default, representing the seller either directly or as a sub-agent. In the United Kingdom and Australia, the most common term is Buying agent. In

Buyer’s Market

A buyer’s market is any market in which there are more sellers than there are buyers. The laws of supply and demand typically cause prices to drop in a buyer’s market. A buyer’s market can be likened to buying a stock at sale prices. A buyer’s market can refer to the stock market as a

Buyers Guide

A document, relevant to life assurance, personal pension and unit trust products, which is given to prospective clients at the initial interview, which indicates that the adviser is either independent or a tied agent (company representative) and how they differ. The guide subsequently states the identity of the issuer that is, which type of adviser he/she is and his/her obligations to the investor. Also the company whose products may be purchased will provide full product details and indications of charges/ commissions payable in writing. It is a mandatory requirement, whether advisers are independent or tied agents, that a Buyers Guide be given to a prospective client (prospect) prior to any product discussions.

Buying Agent

Buying agents (also known as relocation agents or property search agents) is a term used in the UK to describe people acting as agents on behalf of a buyer and not the seller, as do traditional Estate agents (or, in the United States, Real estate brokers) whose job is to obtain the maximum price for

Buying On Margin

When investors engage in buying on margin, they borrow money to purchase securities. The first step in buying on margin is to set up a margin account. Investors can borrow up to half the cost of securities while buying on margin. Because brokerages have different rules for buying on margin, investors must pay close attention


The purchase of a controlling share in a company.


The rules that govern the internal affairs or actions of a corporation. Normally bylaws are adopted by the shareholders of a profit-making business or the board of directors of a nonprofit corporation. Bylaws generally include procedures for holding meetings and electing the board of directors and officers. The bylaws also set out the duties and powers of a corporation’s officers.


a nonparticipant spectator

Jeremy Bentham

Jeremy Bentham was an extremely forthright and influential 19th-century philosopher, with wide-ranging philosophical interests. In law, his most influential writings argued that the principles of Positivism could, and should, be applied to law. He is therefore regarded as the spiritual father, if not the actual founder, of the doctrine of Legal positivism. Bentham had no time at

Stock Market Bubble

A stock market bubble is a typical kind of an economic bubble occurring in the stock market where market participants inflate stocks prices way beyond their intrinsic value or fair value. According to behavioural finance theory, stock market bubbles are formed due to cognitive biases which lead to groupthink, or herd behaviour. However, these bubbles

Accounting Terms Beginning With "C"

C Corporation

Common business slang to distinguish a corporation whose profits are taxed separately from its owners under subchapter C of the Internal Revenue Code, from an S corporation, whose profits are passed through to shareholders and taxed on their personal returns under subchapter S of the Internal Revenue Code.


The C-suite: the most important people in world business; the chief executives and heads of finance and information at the 10,000 most successful companies in the world.


C2C is the abbreviation for consumer-to-consumer electronic commerce. C2C is an electronic Internet-facilitated medium that involves transactions between consumers utilizing a third-party. The most common example of C2C is the online auction. In this form of C2C, consumers post items for sale and other consumers bid to purchase them. The third-party facilitating the C2C transaction


A Pool-side hotel room, with our without a bed.


The Cabinet is the collective decision-making body of Her Majesty’s Government in the United Kingdom. It is composed of the Prime Minister and, in recent decades, from eighteen to twenty-four Cabinet Ministers. These ‘Ministers of the Crown’ constitute the most senior level of government officials, and are assigned key executive roles within the Government. They


The right to operate sea, air, or other transport services within a particular territory.


A cadastre (also spelt cadaster), using a cadastral survey or cadastral map, is a comprehensive register of the metes-and-bounds real property of a country. A cadastre commonly includes details of the ownership, the tenure, the precise location (some include GPS coordinates), the dimensions (and area), the cultivations if rural and the value of individual parcels

Cafeteria Employee Benefit Plan

In the US, a plan enabling employees to choose from a variety of benefits, depending on their own particular circumstances. Young employees for example will have different requirements to older employees.

Calendar Call
Calendar Year

Calendar year defines the year as designated by the Gregorian calendar in common use as beginning on January 1st and ending on December 31 of that same year. For example, the calendar year 2006 begins on January 1, 2006, and ends at the stroke of midnight on December 31, 2006. A calendar year contains 365


In the textiles industry, Calendering is a finishing process used to smooth, coat, or thin a material.


A call is a type of option contract. A call option gives the call owner the right (but not the obligation) to buy the specified asset at a specific price, or exercise the option. Numerous call options are publicly traded, for various assets, expiration months, and strike prices. A call can be used for hedging

Call Money Market

Call money market refers to the mechanism which allows both dealers and brokers to borrow funds to invest. The funds are used either to provide finance for purchasing securities which can be added to the investment firm’s portfolio or as a resource for covering the margin accounts of the clients of the firm. The call money market offers

Call Option

A call option is an option contract that gives the owner (also called the buyer or holder) the right to buy (or “call”) a fixed amount of an underlying security at a stated price within a specified period of time. The owner of a call option has the right to call the security away from

Call Price

The call price is the price at which an issuer of a security can redeem that security. The call price is set at the time of issuance. The security with a call price can be either a callable bond or a preferred stock. The call price is also called the redemption price. The call price

Call Spread

The simultaneous purchase (sale) of a call at one exercise price and sale (purchase) of another call at a higher exercise price.

Call/Put Ratio

The Call/Put Ratio is calculated by dividing the daily or weekly volume of call options by the daily or weekly volume of put options. Typically, large call volume appears at market tops and large put volume at market bottoms. Only CBOE equity options or all CBOE options should be used for this indicator. Call/put ratios

Callable Bond

A callable bond (or redeemable bond) is a bond whose indenture includes one or more call provisions providing for the early retirement (“call” or “redemption”) of the bond. Call provisions may provide for optional redemption, extraordinary redemption or sinking fund redemption. When included in a bond’s indenture, extraordinary and sinking fund redemption are “boilerplate” provisions

Callable Security

A callable security (or redeemable security) is a security with a call provision. This provides for the early retirement (“call” or “redemption”) of the security. Redemption may be required (mandatory redemption) or it may be at the issuer’s option. The two common forms of callable securities are callable preferred stock and callable bonds. All or

Called Up

The company has called upon the shareholders who first bought the shares, to make their payment in full.

Calmar Ratio

A risk/return measurement that divides the average annual compounded rate of return by the maximum drawdown. It calculates the historical return for an investment made over a given period of time. Unless otherwise indicated the ratio is calculated using a 3-year time period. The higher the Calmar Ratio, the better the investment’s risk-adjusted performance over the time period indicated.


Mutual trust and friendship among people who spend a lot of time together.

Canadian Dollar

The Canadian dollar is the currency of Canada. Canada introduced the Canadian dollar as Canada’s official currency in 1858. CAD is the currency code for the Canadian dollar. C$ is the symbol for the Canadian dollar. Over the years and depending on Canada’s monetary policies, the Canadian dollar has either been floating freely or been

Cancellation Period

In financial services, the period after signing a contract during which customers are entitled to cancel their purchase of some financial products.


A candlestick is a basic unit in a candlestick chart that visually represents the movement of prices during a specified period of time — typically one trading day. The concept of candlestick charts was developed by Japanese rice traders in the 17th century. In its basic form, a candlestick consists of a rectangular box or

Candlestick Charts

Candlestick charts plot stock price data. Originated by Japanese rice merchants, candlestick charts are used both to identify price patterns and construct trend lines. Candlestick charts use the opening, high, low, and close price data for a specific period, usually days. Pictorially, candlestick charts have a “real body,” a rectangular vertical box that connects the


Cannibalize, is a business strategy, to reduce the volume of sales of any product due to the induction of a new product by the same producer. Cannibalize or cannibalization is a decrease of demand for any existing product, which occurs as any vendor releases a latest and similar product. The concept of cannibalizing can be

Canon Law

The resource of insurance accessible to meet demand.

Capacity Utilisation Rate

The capacity utilisation rate is the value of production capacity which is actually being utilised over a specific period of time. The capacity utilisation rate is measured in percentages and is adjusted to reflect production aptitude of various capital goods and natural resource producers, as well as factories, utilities and the like. Although lower capacity


Capital expense or capital expenditure; the initial costs of a business, in contrast to operational expenditure.


An amount of finance provided to enable a business to acquire assets and sustain it’s operations.

Capital Account

The account in a country’s balance of payments that records the flows of capital between domestic residents and foreigners.

Capital Adequacy

A measure of the financial strength of a bank or securities firm, usually expressed as a ratio of its capital to its assets.

For banks, there is now a worldwide capital adequacy standard, drawn up by the Basel Committee of the Bank for International Settlements. The Basel Capital Accord, introduced from 1988, requires banks to have capital equal to a minimum of 8 per cent of their assets.

In 2004, a revised framework, known as Basel II, was issued. Among its proposals are that capital requirements should be more risk sensitive and that greater use should be made of risk assessments produced by banks internal systems.

The revisions, which have sparked controversy, are being considered by national banking supervisors and implementation and were passed at the end of 2007.

Capital Adequacy Ratio

Capital adequacy ratio (CAR), also known as Capital to Risk (Weighted) Assets Ratio (CRAR) is a measure of a bank’s capital against risks. It is calculated as a ratio of a bank’s net capital to its risk factors involved. In other words, the Capital adequacy ratio can be determined as a percentage of a risk-weighted

Capital Allowances

Capital allowances is the practice of allowing a company to get tax relief on tangible capital expenditure by allowing it to be expensed against it’s annual pre-tax income.

Capital and Interest Mortgage

A Capital and Interest Mortgage is one of the most usual types of mortgage. The monthly repayment made by the borrower includes a repayment of capital borrowed and an amount for the interest charged. At the beginning of the mortgage, most of the payment is used to cover the interest and only a small amount

Capital Appreciation

Capital appreciation is defined as any increase in the market price of a stock. Investors who are long the market derive their trading profits from the capital appreciation of the stocks they hold. Capital appreciation can stem from a number of factors: capital appreciation can result from a company’s actual increase in growth or profits,

Capital Appreciation Fund

A capital appreciation fund is a mutual fund that is structured to gain the maximum amount of growth possible. To achieve this, a capital appreciation fund selects high-growth investments, usually small-cap stocks. A capital appreciation fund tends to be volatile and high-risk. A typical capital appreciation fund is involved in sectors that typically show potential

Capital Asset

Capital asset has two related meanings in the fields of accounting and financial economics. In accounting, a capital asset is an asset that is recorded on a balance sheet as capital – that is, property that creates more property, e.g. a factory that creates shoes, or a forest that yields a quantity of wood. In

Capital Asset Pricing Model

The Capital Asset Pricing Model (CAPM), originated in the early to mid-1960s, was built upon the concept of modern portfolio theory and diversification. The capital asset pricing model is used to determine a theoretically appropriate required rate of return of an asset, if that asset is to be added to an already well-diversified portfolio, given that asset’s non-diversifiable risk.

Capital Budgeting

Capital budgeting (or investment appraisal) is the planning process used to determine a firm’s long-term investments such as new machinery, replacement machinery, new plants, new products, and research and development projects. Many formal methods are used in capital budgeting, including techniques such as: Net present value Profitability index Internal rate of return Modified Internal Rate of

Capital Case
Capital Controls

Capital controls are a type of restriction imposed by the government of any country on the movement of capital. Capital controls are practised to prevent a country’s capital from moving freely in and out of the economy. Policies are taken to restrict foreign investment in the financial market, foreign direct investment on business or property

Capital Employed

The value of all the assets employed in a business, including equity and preference share capital, fixed and current assets, and gross borrowings plus current assets and less current liabilities.

The most common use of capital employed is in the calculation of ‘Return on Capital Employed’ which measures the operating profit of a company as a percentage of capital employed. In effect, ROCE is telling you how efficient a company is at squeezing profit out of capital. A company that gets 20m of profit out of 200m capital employed is doing much better than one that gets 20m of profit out of 800m of capital employed.

Capital Equipment

The assets of a company that are used in the production process, such as machinery. Most often capital equipment refers to long-term assets, but it can include short-term assets as well. Such equipment will not be sold in the normal course of business but will be used, worn out or consumed over time as business

Capital Expenditure

Spending on non-current (fixed) assets of a business.

Capital Flight

Capital flight is described as the movement of money and/or assets from one investment or country to another. This movement is generally in search of increased returns and/or economic or political stability. This phenomena is usually the end result of an economic event that upsets investors and forces them to lose confidence in a specific country or region’s economic

Capital Formation

Capital formation is a term used in national accounts statistics and macroeconomics. It basically refers to the net additions to the (physical) capital stock in an accounting period, or, to the value of the increase of the capital stock; though it may occasionally also refer to the total stock of capital formed. Thus, in UNSNA,

Capital Gain

Capital gains are a profit amount by which the selling price of an asset surpasses the original purchase price of that asset. Examples of assets include bonds, stocks, mutual funds and real estate. Capital gains can be classified into two types: realized capital gain and unrealized capital gain. A realized capital gain is an investment that is already sold at a profit. An unrealized capital gain is that investment which has not yet been sold but would result in a profit after it is sold.

Capital Gains Distribution

A capital gains distribution is a distribution of income from a mutual fund to its shareholders. It occurs when the fund sells shares of its holdings for a profit; after this, it then pays the capital gains distribution to its shareholders. Because the capital gains distribution comes from the assets of the mutual fund, it

Capital Gains Tax

Capital gains are subject to capital gains tax. A capital gain is the profit earned by selling capital assets (stocks, bonds, real estate) for more than the original purchase price. The amount of capital gains tax depends upon whether the asset is sold short-term (less than one year) or long-term (more than one year). An

Capital Goods

In a basic sense, capital goods are goods used for the purpose of producing other goods. Capital goods would include items such as industrial buildings, equipment, and heavy machinery. Capital goods also categorize office buildings, highways, and various government installations. The nominal value of capital goods is commonly known as “book value”. Capital goods may

Capital Loss

The loss incurred when a capital asset (investment or real estate) decreases in value. This loss is not realized until the asset is sold for a price that is lower than the original purchase price.

Capital Market

The general term for the market in which medium to long-term capital is raised, including stock and bond markets. It also refers to the intermediaries at investment banks and brokerages who make the markets.

Capital Market Line

A capital market line (CML) is a line intersecting returns on no-risk investments and returns on the entire market. The difference between the capital market line and the efficient frontier is that the capital market line includes no-risk investments. All portfolios along the capital market line are efficient portfolios. The capital market line is used

Capital Offense
Capital Punishment

The decision by a jury, in the second phase of a capital case, that the convicted defendant should be put to death.

Capital Requirement

The capital requirement is a bank regulation, which sets a framework on how banks and depository institutions must handle their capital. The categorization of assets and capital is highly standardized so that it can be risk-weighted. Internationally, the Basel Committee on Banking Supervision housed at the Bank for International Settlements influence each country’s banking capital

Capital Stock

Capital stock is stock authorized for issue by the charter of any company. Capital stock includes both common and preferred stock. An accounting balance sheet item, capital stock represent the original investment amount of a corporation. Capital stock initial contributions remain on corporate ledgers at their original price. Capital stock account as shown on the

Capital Structure

Capital structure, capitalization, invested capital. They all mean pretty much the same thing — how much money and from what sources the company has used to build itself up and purchase its assets. It is the total amount of debt and equity, which can be further broken down into retained earnings, additional paid-in capital, common stock, and preferred

Capital Surplus

Balance sheet item under shareholders’ equity. Increases by the value above an original par value per share that newly issued shares are sold for. The amount of the raised equity capital that fall within the original par value per share increase the stock capital line item.

Capitalisation Issue

Issue of shares to existing shareholders in proportion to shares already held. Raises no new finance but changes the mix of share capital and reserves.


An economic and political system in which a country’s trade and industry are controlled by private owners for profit, rather than by the state.


The market capitalization (market cap) of a company is the stock price multiplied by the number of shares outstanding. Capitalization represents the theoretical price at which one could purchase the entire company. This is only an estimate, however, as a purchase of that size would almost certainly distort the market price. Stocks are divided into

Capitalized Interest

Capitalized interest is the interest added to the cost of a self-constructed, long-term asset. It considers the interest on debt used to finance the asset’s construction. The details of capitalized interest are explained in the Financial Accounting Standards Board’s (FASB) Statement of Financial Accounting Standards No. 34, Capitalization of Interest Cost. You can find this

Capitalized Value
Capped Rate Mortgages

Capped rate mortgages are a cross between a fixed rate and a variable rate mortgage. The interest rate will never rise above a certain rate within what is known as the capped rate period. If the usual variable mortgage rate is less than the capped rate then the borrower is charged that variable rate. Such

Captain Of Industry

Captain of industry was a term that originated in the U.S. during the Industrial Revolution describing a business leader who, as well as amassing a personal fortune, contributes positively to the country in some way. This may have been through increased productivity, expansion of markets, providing more jobs, or acts of philanthropy. This contrasts with

Carnal Knowledge
Carrier’s Case

Carrier’s Case (1473) 13 Edw. IV, f. 9, pl. 5 (Star Chamber and Exchequer Chamber) was a landmark English court case in property crime law decided in the Star Chamber (also called Anonymous v. The Sheriff of London). The English court adopted the “breaking bulk” doctrine. If someone transporting merchandise on behalf of someone else (being a bailee) and keeps the property by breaking it open

Carry Trade

A carry trade is a transaction done between a country with a very low-interest rate and one with a higher rate which seeks to exploit this difference and create a profit. For example, a trader could borrow Japanese Yen at almost 0% and then loan it out in Thailand, for example, for 4%. The investor

Carrying For Hire
Carrying On Business
Carrying Value

In accounting and finance, the carrying value or carry value of an asset is the amount reported as the asset’s current nominal “worth” for accounting purposes. It is also called the book value of an asset (although book value may also be used to refer to the shareholders’ equity in the balance sheet). In accounting,

Carryover Basis

The tax basis of someone who receives a gift. The recipient’s basis is the same as the giver’s; it simply “carries over” when the gift is made.


a consortium of independent organizations formed to limit competition by controlling the production and distribution of a product or service


A case is a legal action filed in court. It can also refer to the evidence and testimony by one party in a lawsuit. It is used to prove the plaintiff or the defendant’s case. A case can be initiated through a complaint, petition, or indictment. If a plaintiff wins a civil case they can

Case Law

Case law is part of common law. It includes judgments, also called precedents, which are followed by all courts in the same jurisdictions. The law is recognized, affirmed, and enforced by the subsequent court. Case law varies from statute laws which are laws enacted by legislatures.

Under some conditions, a judge may decide to rule against established case law in the hopes that the courts will begin to review established precedents which may be outdated given the current societal “climate.” If a judge rules against a precedent this may force the case to be appealed to a higher court and the established law may be overturned.

Case Of First Impression
Case Stated

An appeal in writing, from either a Magistrates’ court or (more typically) the Crown Court, heard by the Divisional Court of the Queen’s Bench Division of the High Court. The lower court must ‘state the case’ for the decision reached, describing both the facts of the case and the legal issues considered. This form of

Case System

Cash on hand (such as money held in a cash box or a safe) and deposits in a bank that may be withdrawn on demand.

Cash Account

A Cash account is a brokerage account funded with cash. The investor can use it to buy stocks or other investments only if there is money in the account to cover the purchase. Beginning investors will want to stick with a cash account to avoid the risks of a margin account, where you’re allowed to borrow money or

Cash And Cash Equivalents

Cash and cash equivalents are the most liquid assets found within the asset portion of a company’s balance sheet. Cash equivalents are assets that are readily convertible into cash, such as money market holdings, short-term government bonds or Treasury bills, marketable securities, and commercial paper. Cash equivalents are distinguished from other investments through their short-term

Cash Asset Ratio

The cash asset ratio – also known as the cash ratio – is a stringent test of a company’s liquidity. The cash asset ratio is computed as cash plus marketable securities, divided by current liabilities. Thus if cash is $50,000, marketable securities are $50,000, and current liabilities are $75,000, the cash asset ratio is (50,000

Cash Back Credit Card

Cashback credit cards offer a straightforward cash reward for using them. These loyalty schemes return a percentage of your spending to you in the form of a cash rebate. The exact percentage on offer varies and most cash back credit cards tempt potential users with an introductory period offering a higher percentage return. Introductory cashback

Cash Back Mortgage

A Cash Back mortgage does what it says on the tin! On completion of the mortgage, your lender will pay a percentage of the amount borrowed ‘back’ to you as a lump sum. The higher the cashback sum paid, the greater and more complex the number of strings likely to be attached to the mortgage.

Cash Basis

Cash basis is an accounting method that recognizes revenue and expense only when cash is paid or received. The cash basis method thus focuses exclusively on the company’s most liquid and tangible asset, namely, cash. The cash basis method is distinguished from the accrual method, which recognizes revenue when earned and expenses when incurred. The

Cash Cards

Cash cards are plastic cards, issued typically by banks and building societies and used for withdrawing cash from Automatic Teller Machines (ATMs) – also known as hole in the wall machines. To withdraw cash, the user needs to input a personal identification number (PIN). Cash cards are often combined with debit or credit cards.

Cash Conversion Cycle

The cash conversion cycle is the number of days it takes a company to run cash through the sales process, from sitting in the bank, through buying inventory, selling that inventory, and receiving the cash from the sale. Shorter is better. CCC = DIO + DSO – DPO where DIO = days inventory outstanding DSO = days sales

Cash Coverage Ratio

Cash Coverage Ratio measures the ability of the company’s operating cash flow to cover its obligations, including its liabilities or ongoing concern costs. The Cash Coverage Ratio is an important indicator of the liquidity position of a company. It is often used by the banks to decide whether to make or refinance any loan. The Cash Coverage

Cash Cow

A cash cow represents the division of a company that provides a steady and significant cash flow. A cash cow tends to operate in a mature industry with little competition. A cash cow requires minimal ongoing investment and the cash flow that a cash cow provides tends to be used to support other divisions and

Cash Crop

In agriculture, a cash crop is a crop which is sold for money. The term is used to differentiate from crops that are not sold, such as those fed to livestock or grown as food for the producer’s family. In tropical and subtropical areas, coffee, cocoa, sugar, bananas and oranges are common cash crops. In

Cash Dividend

Cash dividend is a payment of cash to you from a company as a sharing of the company’s profits.

Cash Equivalents

Short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Cash Flow

Revenue or expense streams that change a cash account over a given period. Cash inflows arise from one of three activities: financing, operations and investing. Cash flow can also be negative, if a business spends more money than it takes in during a given period of time.

Cash Flow Projections

Statements of cash expected to flow into the business and cash expected to flow out over a particular period.

Cash Flow Statement

Provides information about changes in financial position. The cash flow or flow of funds statement shows how an operation has been financed in the latest accounting period and how resources have been used.

Cash Machine (ATM)

Cash machines are often referred to as ‘cash dispensers’ or ‘hole in the wall machines’. Cash machines are a cross between a cash till and a computer, which enables users to access their bank accounts and carry out transactions such as withdrawing cash. The first cash machine in the United Kingdom was introduced by Barclays

Cash Out

The term cash out applies to a type of mortgage refinancing where the property owner receives cash by taking on additional debt secured by accumulated equity in the real property, hence the phrase cash out. Low and falling mortgage interest rates encourage cash-out refinance, or refi mortgages. Falling rates make it worthwhile to replace an

Cash Ratio

Cash Ratio (also called Cash Asset Ratio) is the ratio of a company’s cash and cash equivalent assets to its total liabilities. Cash ratio is a refinement of quick ratio and indicates the extent to which readily available funds can pay off current liabilities. Potential creditors use this ratio as a measure of a company’s liquidity and how

Cash Reserves

A company’s cash reserves are the funds available to meet its needs for cash, especially unanticipated needs. What level of cash reserves is sufficient depends on the company. For example, a major airline may need $1.5 billion in cash reserves to fund operations and avoid bankruptcy. Financial analysts use a number of ratios that include

Cash Return On Capital Invested

CROCI, or Cash Return on Capital Invested, compares the cash generated by a company to its equity. This metric is cashflow based as opposed to earnings-based. Cash flow is generally considered more important than earnings as earnings can be manipulated via accounting policies. Cash Return on Capital Invested is also known as Cash Return on

Cash Settlement

A cash settlement is a payment in cash for the value of a stock or commodity underlying an options or futures contract upon exercise or expiration.

Cashier’s Check
Cashier’s Cheque

A cashier’s cheque is issued and certified by a bank on its own account. A purchaser acquires a cashier’s cheque by paying the bank the value of the cashier’s cheque plus any fees. Often, to obtain a cashier’s cheque, the purchaser must have an account with the bank issuing the cashier’s cheque. Basically, the bank

Castle-In-The-Air Theory

The Castle-in-the-Air Theory, one of the Investment Theories, is rather opposite in its postulations compared to the Firm Foundation Theory. The Firm Foundation Theory believes and tries to understand the intrinsic value of any stock or other asset. The castle-in-the-air theory delves deep into another aspect of investing behaviour – it tries to unravel and understand the psychic

Casualty Insurance

Generally, casualty insurance is a type of indemnity that provides coverage against loss from injury or property loss. Specifically, casualty insurance offers protection against perils associated with legal liability, as well as health and sickness. Casualty insurance is a very broad category and includes almost all types of non-life insurance. Major classes of casualty insurance

Casualty Loss

A casualty loss is a type of tax loss that is a sudden, unexpected, or unusual event. Damage or loss resulting from progressive deterioration of property through a steadily operating cause would not be a casualty loss. “Other casualty” are events similar to “fire, storm, or shipwreck.” It is generally held that wherever force is applied to property which

Catch-Up Effect

Catch-up effect is a theory that expresses the possibility of poorer economies growing at a quicker pace than richer economies. According to the catch-up effect theory, the national income of economically backward nations generally catches up with the national income of economically advantaged nations. It is seen that developing nations tend to surpass their more


Causation is the relationship between an activity and the outcome. Claimants who wish to file a personal injury claim must demonstrate that the defendant’s actions were the “proximate cause” for their loss. Causation involves proving the person new the outcome was likely or could be the foreseeable result of the negligence and continued to proceed with the action, exposing another party to the risk of harm.

For example, if a driver rams their car into a restaurant and the ceiling of the restaurant collapses and a steel beam crushes a patron of the restaurant, injuring him, the patron may sue the driver for their injuries. Although the driver did not intentionally drop the steel beam on the patron they should have foreseen that their actions were the proximate cause of the patron’s injury because injury to a patron of the restaurant is a foreseeable result of crashing a car into a building. Note that the particular injury and the manner in which the injury occurs do not have to be foreseeable in order to constitute proximate cause. Talk to an injury lawyer if you are considering filing an injury claim and you are not sure if your case meets the requirements.

Causation In Criminal Liability

In criminal law, there are two aspects to causation. Firstly, the prosecution must prove that the acts or ommissions of the defendant was the cause of the consequence both in fact and in law. Factual Causation The factual test for causation is the ‘but for’ test, which is proved if the jury are satisfied that

Causation In Negligence

In a claim for negligence, the claimant must establish not only that he was owed a duty of care, and that the defendant was in breach of that duty, but that the breach was the cause of the injury or loss he suffered. There are two parts to this question of causation: causation in fact, and

Causation In Tort

The issue of causation, that is, whether the claimant’s loss or injury can justly be attributed to the defendant’s wrongful acts, is important in a number of areas of tort law, in particular trespass to the person, and Negligence. See causation in negligence for more details.

Cause Of Action

A specific legal claim – such as for negligence, breach of contract or medical malpractice – for which a plaintiff seeks compensation. Each cause of action is divided into discrete elements, all of which must be proved to present a winning case.

Cautioning Before Interview

The Codes of Practice associated with the Police And Criminal Evidence Act 1984 set out a number of rather complex rules about when and how a police officer should caution a suspect before questioning him. In essence, however, it comes down to this: a suspect should be cautioned before asking any question that could reasonably be

Caveat Emptor

Caveat emptor is Latin for “Let the buyer beware”. Generally, caveat emptor is the property law doctrine that controls the sale of real property after the date of closing. Explanation Under the doctrine of caveat emptor, the buyer could not recover from the seller for defects on the property that rendered the property unfit for


The CBOE, or Chicago Board Options Exchange, was founded in 1973 as an exchange devoted entirely to trading options contracts. The growth of the CBOT has paralleled the increasing volume of options trading generally. In the earliest days, the only options contracts traded on the CBOE were on individual stocks. Then Black-Scholes was adopted and the SEC asked the CBOE to stop expanding the number of contracts traded in the booming options market until the stock option itself passed review. In the early 1980s, the CBOE introduced options on stock indices, such as the S&P 500. When the stock market crashed in 1987, interest in options declined, so the CBOE diversified into interest rate options. In June 2003, the CBOE introduced a hybrid trading system that combines features of screen-based and open-outcry trading. Today, the CBOE offers options on several hundred different assets, and CBOE volume averages well over one million contracts traded each day.

CBOE Gold Index

CBOE Gold Index stands for the Chicago Board Options Exchange (CBOE) Gold Index. The symbol for the CBOE Gold Index is GOX. The CBOE Gold Index tracks the prices of companies (i.e. there were 12 in 2008) involved in the production and mining of gold. The CBOE Gold Index is a price-weighted index, modified using

CBOE Volatility Index

Cboe’s volatility indexes are key measures of market expectations of volatility conveyed by option prices.


The CBOT, or Chicago Board of Trade, is the world’s oldest exchange for trading commodity futures and options. The CBOT was established in 1848 to provide commodities buyers and sellers with a centralized location to negotiate forward contracts. In 1865, the CBOT listed the first exchange-traded derivative in the US. Actually a standardized forward contract,


A County Court Judgment (CCJ) is a type of court order in England, Wales and Northern Ireland that might be registered against you if you fail to repay money you owe.

CDR Counterparty Risk Index

The CDR counterparty risk index is a measure of credit risk associated with purchasing credit derivatives. The CDR counterparty risk index is calculated based on the average credit spread of 5-year credit default swap contracts traded by 15 major international financial institutions. The CDR counterparty risk index was launched in June 2008 by Credit Derivatives

Cease And Desist Order

An official count of the number of people living in a certain area, such as a district, city, county, state, or nation. The United States Constitution requires the federal government to perform a national census every ten years. The census includes information about the respondents’ sex, age, family, and social and economic status.

Central Bank

Central bank is a general name given to a nation’s chief monetary authority. Central banks are responsible for a wide range of economic decisions. These may vary from ensuring currency stability, maintaining a low inflationary rate to assisting in full and gainful employment. A number of central banks also issue currency for their specific countries. The commercial entity function as the government’s bank, supervise commercial banks, handle exchange reserves and modulate the credit system. Central banks also perform the crucial role as lender of last resort. Prominent examples of central banks include Reserve Bank of India (RBI) and the United States Federal Reserve System.


An acronym for the Chief Executive Officer, the person who is responsible and accountable for the functioning of a company as a whole. A CEO is also often referred to as the “president” or “director” of a company. A CEO usually reports directly to the company’s board of directors.

Certainty Of Intention

If the existence of a valid express Trust is disputed, a factor that the court will consider is whether there was sufficient certainty of intention; that is, whether the settlor genuinely intended to create a trust (see also three certainties). The party that wishes to assert the existence of the trust must provide evidence of the

Certainty Of Subject Matter

An interesting set of setiusggons, but problematic. Two things: First of all, the first suggestion is probably not going to work because it frustrates the purpose of the trust. One of the things Burroughs is probably going to have to do is make promises against the trust principal to carry out his obligations under the

Certificate of Deposit

A CD, or Certificate of Deposit, is a savings instrument issued by a bank or thrift. The CD pays interest on deposits held for the term of the CD. The interest rate on a CD is usually quoted as an annual percentage yield, or APY and is determined by competitive market forces. CD yields tend to vary across institutions. Early withdrawal of funds deposited to a CD generally incurs a penalty. Typical periods for a CD are 1 to 6, 9, 12, 18, 24, 30, 36, 48, or 60 months. A CD is sometimes called a time deposit. A jumbo CD is a CD having a minimum denomination of $100,000. Individuals and institutions alike can use the CD as a low-risk way to earn interest income.

Certificate Of Incorporation
Certificate Of Title
Certification Mark
Certified Check
Certified Copy
Certified Financial Planner

Certified Financial Planner, or CFP, is a financial professional who is approved by the Certified Financial Planner Board of Standards. A typical Certified Financial Planner is an experienced financial expert whose job it is to advise clients on the matters of income tax planning, retirement planning, and estate planning. A Certified Financial Planner may also

Certified Management Accountant

The title Certified Management Accountant is a professional designation awarded by various professional bodies around the world. The CMA designation is a post-nominal award issued to individuals who have achieved a peer-based criteria of professional competency in the field of Management Accounting. Management accounting qualifications differ from those such as the ACA or CPA “Chartered”

Certified Public Accountant

A designation given to an accountant who has passed a standardised CPA exam and met the government-mandated work experience and educational requirements required to become a Certified Accountant.


A common-law writ issued by a superior court to one of inferior jurisdiction demanding the record of a particular case.

Cestui Que

Cestui que, Cestuy que, is an Anglo-French phrase of medieval English invention, which appears in the legal phrases cestui que trust, cestui que use, or cestui que vie. It is commonly pronounced as “Setty-Kay” or “Sesty-Kay”. According to Roebuck, “Cestui que use” is pronounced “setticky yuce”. Cestui que use and cestui que trust are more

Cestui Que Trust
Cestui Que Use
Ceteris Paribus

Ceteris paribus is a Latin expression which loosely means “holding other things constant”. Mostly used in economics, this phrase is used by economic analysts to denote the effect of one economic change on another when all other variables, which may affect the latter, remain constant. The use of this phrase in economics is done for simplification of


CFA stands for Chartered Financial Analyst, a professional designation given by the CFA Institute to investment professionals. The CFA designation is geared toward asset valuation and portfolio management, but the range of topics covered in the self-study curriculum also includes ethical and professional standards, financial theory, probability and statistics, microeconomics and macroeconomics, accounting and financial


An acronym for the Chief Financial Officer, who is the head accountant of a company. A CFO manages anything that has to do with the company’s finances.


CFP is short for a certified financial planner, which is a professional designation in the financial planning industry. The CFP designation is administered and regulated by the Certified Financial Planner Board of Standards, Inc. Financial planners that wish to obtain a CFP designation must meet several requirements mandated by the CFP board, including minimum education

Chaikin Oscillator

The Chaikin Oscillator is a volume indicator based upon a moving average of the Accumulation/Distribution Line (ADL). Chaikin Oscillator Calculation The Chaikin Oscillator is created by subtracting one exponential moving average of the Accumulation/Distribution Line (e.g. 10-day average) from another EMA of the same line (e.g. 3-day average). The result is plotted on the chart.

Chain Of Causation

In many claims in tort, or prosecutions in criminal law, the causal relationship between the defendant’s wrongdoing and the victim’s loss or injury is perfectly clear. If A hits B over the head, and B sustains a concussion, there is no real issue of causation. Problems arise in this area when the causal relationship is

Chain Of Title

A chain of title is the sequence of historical transfers of title to a property. The “chain” runs from the present owner back to the original owner of the property. In situations where documentation of ownership is important, it is often necessary to reconstruct the chain of title. To facilitate this, a record of title


The person who chairs the meetings of the board of directors of a company (preferably not the chief executive).

Chairman Of The Board

The highest-ranking position in a corporation; the member of the board of directors who presides over board meetings. However, the chairman of the board may not always have the greatest actual authority; this is reserved for the Chief Executive Officer. Sometimes the title is honorary. In small companies, it is common for one person to hold several titles.

Challenge For Cause

A party’s request that the judge dismiss a potential juror from serving on a trial jury by providing a valid legal reason why he shouldn’t serve. Potential bias is a common reason potential jurors are challenged for cause — for example, the potential juror is a relative of a party or one of the lawyers, or admits to a prejudice against one party’s race or religion. Judges can also dismiss a potential juror for cause. There is no limit on the number of successful challenges for cause. Compare peremptory challenges.


An illegal agreement in which a person with no previous interest in a lawsuit finances it with a view to sharing the disputed property if the suit succeeds.

Change Of Circumstances
Changes To The Law On Evidence Of Bad Character

This Act introduces radical reforms to the law of evidence in criminal proceedings, among other things Changes To The Law On Criminal Hearsay In general, the 2003 Act makes few substantive changes to the kinds of evidence that must be excluded because they are Hearsay. However, it makes a number of procedural changes, which have the

Channel Lines

Lines on a technical analysis chart connecting high and low points in a market over time. If a line is broken it might indicate an imminent move to a new level – either higher or lower – and the trader using the chart would position himself to make a profit from that move.

Chapter 11

Chapter 11 is a section of the US Bankruptcy Reform Act of 1978. Chapter 11 allows partnerships, corporations, and individuals who are unable to service debts or pay its creditors, to seek judicial relief for re-organization. On Chapter 11 filing, the court imposes a moratorium on foreclosures, repossessions, tax levies and other creditor actions, and

Chapter 13

Chapter 13 is a provision in U.S. bankruptcy law under which people who earn a steady income can create a plan to pay back some or all of their debts. Debtors who use chapter 13 can propose a repayment schedule spanning 3-5 years, depending on their income level. Those who earn less than their state’s

Chapter 7

The most familiar type of bankruptcy, in which many or all of your debts are wiped out completely in exchange for giving up your nonexempt property. Chapter 7 bankruptcy takes from three to six months, costs about $200, and commonly requires only one trip to the courthouse.

Character Witness

In relation to interest or taxes, describes the reduction in ownership interest reported in the income statement (profit and loss account) due to the cost of interest and tax payable.

Charge Back

When a cardholder cancels a credit or debit card transaction before it has been processed. When a chargeback occurs many banks charge the seller a fee.

Charge Card

A charge card is a physical card that records an account number of a buyer in a retail payment system. In a charge card transaction, the buyer presents the charge card to a merchant, the charge card issuer guarantees the merchant will be paid for the authorized transaction, and the cardholder receives an invoice from

Charge Certificate

A Charge Certificate applies when a property is registered with the HM Land Registry. A Charge Certificate will prove or transfer ownership of land. The Land Registry issues a Charge Certificate to the mortgagee of the property who has registered title. If there is no mortgage on the property, the Land Registry issues a Land

Chargeable Gift

Any item given under a Will which is eligible for taxation.

Charitable Contribution
Charitable Organization

A charitable organization (also known as a charity) is an organization with charitable purposes only. Trusts, foundations, unincorporated associations and in some jurisdictions specific types of companies, may be established for a charitable purpose or may acquire such purpose after establishment. Charities are all non-profit organizations, however, not all non-profit organizations are charities. Organizations that

Charitable Remainder Trust
Charitable Uses Act (1601)

The preamble to this Act, which sets out a long and varied list of endeavours that are properly regarded as charitable, is still seen by the courts as providing a starting point for determining whether an organization is a valid charity or not. See: Scottish burial reform and cremation society v Glasgow corporation (1968), CharitableTrust


Charity involves granting of resources or services for economically underprivileged populace, public bodies, educational institutions or for religious purposes. Charitable organizations and non-profit organizations provide charitable services to targeted groups. Of this non-profit organizations mostly operate in a corporate business framework. Whether an organization is a charitable one or not is determined by the law of

Charity Credit Cards

Charity credit cards are simply ordinary credit cards that promote a particular set of causes or one cause. Together with similar cards, they are known as affinity cards. What this means is that a set donation will be made to the charity or charities when you are issued with the card and for every transaction,

Charles Schwab Corporation

The Charles Schwab Corporation (NYSE: SCHW) provides securities brokerage, banking through Schwab Bank, and related financial services to individual investors. The corporation also serves independent investment advisors and company benefit plan sponsors. The Charles Schwab Corporation provides a full range of securities, brokerage, banking, money management and financial advisory services through its operating subsidiaries. Its broker-dealer subsidiary, Charles Schwab

Chart Of Accounts

A list of all of the accounts that are held in which business transactions are classified and recorded.

Chartered Accountant

Chartered Accountant (CA) is the title used by members of certain professional accountancy associations in the British Commonwealth countries and Ireland. The term chartered comes from the Royal Charter granted to the world’s first professional body of accountants upon their establishment in 1854. Chartered Accountants work in all fields of business and finance. Some are

Chartered Certified Accountant

Chartered Certified Accountant (Designatory letters ACCA or FCCA) is a British qualified accountant designation awarded by the Association of Chartered Certified Accountants (ACCA) The term Chartered Certified Accountant was introduced in 1996. Prior to that date, ACCA members were known as Certified Accountant. It is still permissible for an ACCA member to use this term.

Chartered Financial Analyst

Chartered Financial Analyst (CFA) is an international professional designation offered by the CFA Institute of USA (formerly known as AIMR) to financial analysts who complete a series of three examinations. Candidates must have a U.S. bachelor’s degree (or equivalent), be in the final year of their bachelor’s degree program, or have at least four years

Chartered Institute of Management Accountants

The Chartered Institute of Management Accountants (CIMA) is a UK based professional body offering training and qualification in management accountancy and related subjects, focused on accounting for business; together with ongoing support for members. CIMA is one of a number of professional associations for accountants in the UK and Ireland. Its particular emphasis is on

Chartered Market Technician

A Chartered Market Technician (CMT) is a professional designation that establishes proficiency in technical analysis of the financial markets.  Membership in the Market Technicians Association (MTA) is required to be a Chartered Market Technician. The CMT designation requires completion of an education program and examination series in technical analysis. The Market Technicians Association (MTA) oversees the program curriculum and administration


A set of techniques, used by a chartist, to plot price movements and other financial market data on a graph. The theory is that by looking at historical movements of a stock or commodity or other tradeable asset, patterns can be spotted, and these patterns can be used to anticipate future price movements. There are many different strands of charting, also known as technical analysis.


A chartist is an investor who attempts to predict market movements through the use of chart patterns. A chartist believes that by studying past market actions, as graphically displayed on a stock market chart, that the future course of the market can be revealed. In this respect, a chartist relies on technical rather than fundamental

Chasing The Market

An investor who is chasing the market purchases securities after a market has already risen or sells securities after a market has already dropped. In other words, investors who are chasing the market tend to buy high and sell low. Investors who take their cue from the actions of other investors often end up chasing

Chattel Mortgage

Chattels is one of those funny legal words which means simply ‘the things you own’. The legal definition of chattels is: property of any kind other than freehold land. In practice, it will mean your moveable items such as furniture or personal possessions. If you’re the sort of person who goes out to dinner or

Cheapest To Deliver
Checking Account

A checking account is an account at a depository institution against which checks may be written to make payments. For the consumer checking account, payment can also often be made via debit card. The bank, thrift, or credit union that maintains the checking account will generally send an account statement each month. Checking account balances usually pay very little or no interest. In the US, the FDIC insures checking account balances up to $100,000 per individual. Banks are required to meet a reserve requirement for all checking account deposits by depositing money with the Federal Reserve, typically in the form of vault cash. Checking account balances are also counted in the narrow definition of the money supply known as M1.

Chicago Board Of Trade

The Chicago Board of Trade (CBOT) is a commodities exchange located in Chicago, IL, and one of the busiest institutions of its kind in the world. Thousands of members trade futures and options on the Chicago Board of Trade (e.g. U.S. Treasuries, grains, livestock, precious metals, etc.). In 1848, a group of local business leaders founded the Chicago Board of Trade in an attempt to smooth out the boom and bust cycle of grain prices. Through the 19th century, the Chicago Board of Trade grew in importance to the city’s and region’s economy. However, throughout its growth, the Chicago Board of Trade also had difficulty preventing market manipulation, particularly by traders who tried to “corner” the market in various commodities. The Grain Futures Act of 1922 and the Commodity Exchange Act in 1936 imposed regulations on the Chicago Board of Trade aimed at curtailing these activities. Trading of financial instruments on the Chicago Board of Trade began in the 1970s. In 1973 the Chicago Board of Trade established the Chicago Board Options Exchange (CBOE), a sister entity. By the 1990s, the Chicago Board of Trade was facing increased competition from more efficient electronic exchanges. This prompted the Chicago Board of Trade to initiate efforts toward implementing electronic trading in 2001. In 2006 the Chicago Mercantile Exchange announced plans to buy out the Chicago Board of Trade, and in 2007 the exchanges merged to form CME Group.

Chicago Mercantile Exchange

The Chicago Mercantile Exchange (CME), a financial and commodity futures and options exchange located at 20 S. Wacker Drive, Chicago, was established in 1898 as an agricultural commodities exchange as Chicago Butter and Egg Board. Often referred to as ‘the Chicago Merc’ or simply ‘the Merc’, it was initially a non-profit organization. The CME changed to a joint-stock

Chicago School

The Chicago School is a neoclassical economic school of thought that has its beginnings at the University of Chicago during 1940s. Principal dogmas of Chicago school lay stress on freedom from government control and believes that free markets are the best allocator of economic resources. Chicago school has made an impact on finance by developing

Chicken Game

A chicken game is a game theory setup that typically describes two players heading toward each other. If the players continue on the same path, they bump into each other; if one swerves out of the way and the other doesn’t, the swerver “loses” and is labeled the chicken, while the second, implicitly braver player,

Chief Accounting Officer

A company’s Chief Accounting Officer (CAO) is typically responsible for overseeing all aspects of an organization’s accounting function. The C-level position often reports to top-level management and requires extensive experience.

Chief Executive

The director in charge of the day-to-day running of a company.

Chief Financial Officer

A Chief Financial Officer aka CFO is a corporate officer, often of a public company, whose primary responsibility is the management of financial risks for said company. CFOs occupy an increasingly important and visible role in corporations. Besides managing the finances and risk of a company, their roles have typically expanded to communicating the financial performance of the company

Chief Justice
Chief Operating Officer

The Chief Operating Officer (COO) is a company executive, usually a second in command responsible for day-to-day operations.

Chief Rent

Chief Rent is a small sum of money in rent payable by the owner of a freehold property to the Lord of the Manor (yes, really!). In the past Chief Rent was payable indefinitely but may now be redeemed by a lump sum payment. It’s similar to the ground rent payable by a leaseholder.


A young human being below the age of puberty or below the legal age of majority.

Child And Dependent Care Credit

The child and dependent care credit is a federal income tax credit. The child and dependent care credit is available to a person who is employed or looking for work, who pays someone to care for a child or dependent. If the person seeking the child and dependent care credit is married, his/her spouse must

Child Custody
Child Support

The entitlement of all children to be supported by their parents until the children reach the age of majority or become emancipated — usually by marriage, by entry into the armed forces or by living independently. Many states also impose child support obligations on parents for a year or two beyond this point if the

Child Tax Credit

The Child Tax Credit is a nonrefundable credit offered by the IRS for families with children who meet five IRS qualifying tests. Depending on income levels, the amount of the Child Tax Credit can be up to $1,000 per child. The Child Tax Credit represents a dollar-for-dollar reduction in a taxpayer’s income tax liability. The

Child Tax Credit

A child tax credit is a tax credit based on the number of dependent children in a family. United States In the United States, a taxpayer can claim a $700 per child tax credit if he has a “qualifying child” living with him. According to the Motley Fool, the child must have a Social Security

Chooser Option

A chooser option (or preference option) is a path-dependent option for which the purchaser pays an up-front premium and has the choice of having the derivative be a vanilla put or call on a given underlier. She has a fixed period of time to make that choice. There is usually a single strike and expiration

Chose In Possession

Another term for ‘thing in possession’. See: thing in possession, thing in action, chose in action.


Attrition or turnover of customers of a business or users of a service. In the new economy (which provides unprecedented choice, and instant and global access to products and information) churn rate determines business earnings and growth. A firm has to earn and re-earn every day the loyalty of its customers.

Churn Rate

Churn rate is a measure of customer attrition. The churn rate is defined as the percentage of customers who stopped doing business with a company in a period divided by the average number of customer existing in that period. Churn rate is a useful business metric for any subscription-based or other account driven service, such


In sales, the practice of getting consumers to purchase more than they need to, or unnecessary sales made solely to generate income. Can also refer to the general turnover in a client base.


It is King Henry II (reigned 1154–89) who first instituted the early English custom of having judges ride around the countryside (‘ride circuit’) each year to hear legal cases on appeal. This obviated the need for appellants to travel to London, which made matters more convenient for the opposing parties (long-distance travel at this time

Circuit Breaker

The stock market circuit breaker has the same purpose as the electric switch in most homes: to shut the system down when the load becomes too high, giving it time to cool off and prevent a meltdown. The load limited by the circuit breaker is rapid downward movement of prices. The circuit breaker is supposed

Circuit Court

The name used for the principal trial court in many states. In the federal system, appellate courts are organized into thirteen circuits. Eleven of these cover different geographical areas of the country — for example, the United States Court of Appeal for the Ninth Circuit covers Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon and

Circuit Judge

Circuit Judges are senior judges in England and Wales who sit in the Crown Court, County Courts and certain specialized sub-divisions of the High Court of Justice, such as the Technology and Construction Court. The modern office of Circuit Judge was created by the Courts Act 1971. Circuit Judges sit below High Court Judges but

Circulating Assets

Assets that turn from cash to goods, and then back to cash again. Examples include purchasing materials to build a product; manufacturing the product (which results in stock); and selling the stock for cash.

Circulating Capital

Circulating capital is referred to that capital, which flows within any organization. Circulating capital can be measured as that stock of value which is used within any production organization. Major components of circulating capital include stocks of raw materials, inventories of finished goods, cash on hand for paying wages and work in progress. [1] The initial use of term

Circumstantial Evidence

Circumstantial evidence or indirect evidence is not based on actual personal knowledge or observation of the facts, but is evidence which is used to draw inferences. It is possible to obtain a conviction with the use of circumstantial evidence if it is backed up by corroborating evidence and other factual information.

For example, a criminal trial may include information from a witness who arrived at a murder scene to see another person holding a bloody knife. Although the person holding the knife could have committed the murder they also could have arrived on the scene after the crime had occurred and simply picked up the knife. It could have been after they picked up the knife that the witness arrived at the scene. The witness may at that time assume the defendant committed the murder, but they did not actually witness the event. Corroborating evidence may be needed from another source such as an eye witness to the crime to prove the person holding the knife actually killed the victim.


Citations can be criminal or civil, although a criminal citation has much more serious ramifications. A criminal citation is used in some jurisdictions for charging someone with a crime without the police making a physical arrest. The citation will generally state the date and time the defendant must appear in court. It will also list

Citation Of Legislation And Case Law

A description the standard procedure for citation of legislation and court cases. Public General Acts of Parliament Because Acts of Parliament are issued annually, each new Act is considered a ‘chapter’ in the annual volume. Hence, to cite an Act fully, the year and chapter number should be provided. Until 1963, the year was expressed

Citizen’s Arrest

The concept of a ‘citizen’s arrest’ is most relevant to people employed in quasi-constabulary roles, such as security guards. In general, private security personnel don’t have any greater powers of arrest than any other private citizen. However, English law recognizes a number of circumstances in which one private citizen may lawfully arrest another. This guide

Civil Action
Civil Calendar
Civil Case

Civil cases are cases which do not involve criminal crimes. Common civil cases include debt collection, general personal injury cases, medical malpractice cases, birth injury accidents, motorcycle accidents, car accidents and breaches of contracts. In a civil case, the burden of proof is on the plaintiff. For instance, if you have filed a personal injury

Civil Code

A civil code is a systematic compilation of laws designed to comprehensively deal with the core areas of private law. A jurisdiction that has a civil code generally also has a code of civil procedure. In some jurisdictions with a civil code, a number of the core areas of private law that would otherwise typically

Civil Complaint

A civil complaint is the first pleading in a civil case and initiates a civil lawsuit to seek relief for damages. The civil complaint will give notice to the defendant that legal action has begun against them by the plaintiff and will outline the material facts and legal theories of the case. The complaint will

Civil Law

Civil law is the body of law which outlines the resolutions, remedies and rights for noncriminal disputes. Civil laws are generally “codified” and are continuously updated. In civil law cases, the judge will evaluate the facts of the case and apply the provisions within a framework established by a comprehensive, codified set of laws. The American legal system was highly influenced by the common law traditions brought to the North American colonies from England, although some states’ laws have also been influenced by other countries such as Spain, Mexico and France.

The most common types of civil cases include divorce cases, medical malpractice, personal injury, child custody suits and contract disputes.

Civil Law Notary

Civil law notaries are trained jurists who often receive the same training as advocating jurists — those with a legal education who become litigators such as barristers in England and Wales and Northern Ireland or Avocats in France and in Quebec. In Scotland, notaries are qualified solicitors and members of the Law Society of Scotland.

Civil Lawsuit

A civil lawsuit is the action a victim or plaintiff can bring against another person or defendant for causing physical or emotional injuries. Civil lawsuits can be initiated regardless of whether the defendant is found criminally responsible or guilty of a crime. Civil cases are brought by the plaintiff (injured party) against the defendant (potentially

Civil Liability
Civil Liberties
Civil Penalties
Civil Procedure

The rules used to handle a civil case from the time the initial complaint is filed through pretrial discovery, the trial itself and any subsequent appeal. Each state adopts its own rules of civil procedure (often set out in a separate Code of Civil Procedure), but many are influenced by or modelled on the Federal Rules of Civil Procedure.

Civil Procedure Act 1997

This act gives effect to the Lord Woolf’s report Access to Justice and establishes a Civil Procedure Rule Committee with power to make rules for all civil legislation (except family proceedings). See: Woolf report, Woolf reforms, Civil procedure rules

Civil Procedure Rules

The Civil Procedure Rules (CPR) were created under the authority of the Civil procedure act (1997), and give effect largely to the recommendations of the Woolf report. The purpose of the rules is to unify the procedures for civil claims in the High Court, the county courts and, in some cases, in the Civil Division of the Court of

Civil Rights
Civil Rights Act Of 1964
Civil Wrong

an infringement of a person’s rights, especially a tort.

Claim Against A Governmental Agency
Claim Against An Estate
Claim In Bankruptcy
Claim Of Right

Enacted in 1989, the Claim of Right has similar provisions to the English Bill of rights, many of which remain in force. See: Constitutional legislation


someone who claims a benefit or right or title

Class A Shares

Class A shares of stock are generally thought of as a preferred tier of classified stock. In many companies, Class A shares have greater voting rights than Class B shares or any other class of shares. One reason for creating this disparity in voting rights between classes of stock is to insulate company management, typically

Class Action
Class Action Suit

A class-action lawsuit is a claim brought by one party for a group of individuals who have been injured or suffered loss from the same action or grievance. To have a class action lawsuit there must be a group of people with a “well-defined interest” who have similar injuries as each other. The goal of the class action lawsuit is to increase the power of the suit of individuals to fight against the malfeasance of a larger entity.

Common class actions suits included a 2006 class-action suit against Enron by a group of investors who settled their lawsuit for $7.2 billion. Another common class-action suit was filed against Bridgestone/Firestone when their tires led to numerous accidents and injuries. Makers of silicone breast implants were the subject of another huge product liability class action, which eventually settled for $3.4 billion. Fishermen and canners also successfully filed a lawsuit against Exxon for the Valdez oil spill.

Class B Shares

Class B shares are a classification of common stock that may or may not have more voting rights than Class A shares – typically thought to be the preferred class. It is a common misconception that Class B shares carry less weight than Class A, which is not always the case with Class B shares.

Class C Shares

Class C shares are a common class of mutual funds. Class C shares of this type are often referred to as “level-load” shares. In addition to Class C shares, there are also Class A and Class B mutual funds. Class C shares carry neither a back-end or front-end load, yet have higher expense ratios. This

Class Of Objects

The group of people eligible to be considered beneficiaries under a trust. For a fixed trust, the class of objects is identical to the set of designated beneficiaries. Where the trustees are accorded a discretion to select who will benefit under the trust, the class of objects may be wider than the (final) set of beneficiaries. This

Classical Economics

Classical economics is a school of economic thought. It came into prominence with the publication of Wealth of Nations by Adam Smith in 1776. Classical economics evolved with time and was influenced by doctrines like mercantilism, physiocracy, classical liberalism and the industrial revolution. Stalwarts like Adam Smith, John Stuart Mill, David Ricardo, W. Jevons, Alfred Marshall, Jean-Baptiste Say

Clean Hands Doctrine
Cleaning Fee
Clear And Convincing Evidence

Clear and convincing evidence is a standard of proof greater than a preponderance of evidence but lower than the standard of beyond a reasonable doubt (which is required in criminal cases). Under the clear and convincing level of proof, a party must prove it is “substantially more likely than not that it is true.” Most

Clear And Present Danger

Speech that poses a “clear and present danger” to the public or government will not be protected under the First Amendment’s guarantee of free speech. The classic example is that shouting “Fire!” in a crowded theatre is not protected speech.

Clear Title

1. General: Satisfaction of the requirements of a due process. 2. Banking: See check clearing. 3. Futures and options: Procedure through which a clearinghouse acts as a counter-party to every trade and assures financial integrity of each contract. 4. Importing: Release of a shipment after approval of its shipping documents and customs entry, and payment


The economic policies associated with the administration of William Jefferson Clinton, 1993-2001.

Close Corporations

A corporation owned and operated by a few individuals, often members of the same family, rather than by public shareholders. US State laws permit close corporations to function more informally than regular corporations. For example, shareholders can make decisions without holding meetings of the board of directors, and can fill vacancies on the board without a vote of the shareholders.

Close Season

Period during which those who are ‘insiders’ to a listed company should not buy or sell shares.

Closed Economy

A closed economy is an economy that neither exports nor imports anything.

Closed Shop
Closed-End Fund

A closed-end fund is legally known as a closed-end management company. A closed-end fund issues a fixed number of shares, usually through a one-time public offering, after which timeshares in the closed-end fund are traded on a stock exchange, and not directly from the fund. A closed-end fund differs from a mutual (open-end) fund, which

Closing Argument
Closing Arguments

At trial, a speech made by each party after all the evidence has been presented. The purpose is to review the testimony and evidence presented during the trial as part of forcefully explaining why your side should win. Especially in trials before a judge without a jury, it is common for both parties to waive their closing argument on the theory that the judge has almost surely already arrived at her decision.

Closing Bell

The closing bell is a signal which marks the end of an exchange’s daily trading session. Not all exchanges use an actual bell but all exchanges have a closing bell signal which marks the official end of the trading session. Even though extended trading hours are reducing the importance of the closing bell, the closing

Closing Costs

Most generally, closing costs are associated with the cost of a transaction. However, more commonly closing costs pertain to real estate and constitute a range of fees and expenses paid by both the seller and buyer at the time of the transaction. Closing costs are typically comprised of title insurance premiums, deed recording fees, inspection

Closing Price

The closing price of a stock is the price of the final trade of the trading day. Unfortunately, the final trade of the trading day — and, hence, the closing price — is not as cut-and-dried as it used to be. In the U.S. the closing price of virtually every stock used to be its

Closing The Books

A term used to describe making the final entries, and balancing the profit and loss account at the end of the financial year.

Cloud On Title
Co-Ownership Of Land

Like anything else that can be owned, land can be owned by more than one person at a time. Strictly speaking, of course, it is an interest in land that is owned, not the land itself. In England and Wales, it is not possible for a private citizen to ‘own’ land as such. When we speak


An obsolete form of co-ownership of land which was automatically assumed when land was inherited by two or more sisters, there being no male heir. Each co-parcenor held an equal share of the title, and had the same rights of possession over the whole estate (we would call this an undivided share these days). Unlike a tenancy in

Code Of Professional Responsibility

Any of several defendants answering the same charge.


A supplement or addition to a will. A codicil may explain, modify, add to, subtract from, qualify, alter or revoke existing provisions in a will. Because a codicil changes a will, it must be signed in front of witnesses, just like a will.


Literally, ‘making a book’ (or ‘codex’). In law, codification is the process of collecting and restating either the complete law of a distinct legal system (e.g. France’s Napoleonic Code, established in 1804) or else a particular branch of law within that system (e.g. America’s Uniform Commercial Code, first published in 1952, and later enacted, in


Arrange (laws or rules) into a systematic code.

Cognitive Functions

Cognitive functions are the ability of the brain to process information. Severe brain injuries from personal injuries can lower the cognitive function of a claimant. Individuals commonly suffer brain injuries and loss of cognitive functions if they have been severely injured in a bike, motorcycle, or car accident. Birthing injuries due to medical malpractice may


the act of living together and having a sexual relationship (especially without being married)

Coincident Indicator

A coincident indicator is an economic indicator that measures the current state of the economy of a nation. The coincident indicator is based on employment, demand, or income levels that move up or down directly with the changes in the economy. Economists depend on coincident indicator measurements to assess the current economic performance of the


insurance issued jointly by two or more underwriters


In lending agreements, collateral is a borrower’s asset that is forfeited to the lender if the borrower is insolvent — that is, unable to pay back the principal and interest on the loan. When insolvent, the borrower is said to default on the loan, in which case the lender becomes the owner of the collateral. In a mortgage, for instance, the real estate being acquired with the help of the loan serves as collateral. Should the buyer fail to pay mortgage interest, the ownership of the real estate is transferred to the bank in the process known as foreclosure.

Collateral Attack
Collateral Descendant
Collateral Estoppel
Collateral Power

A collateral power (or power of appointment) is also known as a ‘mere power’. For further discussion see mere power.

Collateral Security

Collateral security is extra security provided by a borrower to back up his/her intention to repay a loan. Such security is likely to be documentation (deeds) giving right of title to the property, which the lender may take over and sell to repay the loan if the borrower does not keep up the mortgage payments.

Collateral Source Rule

The collateral source rule does not allow a plaintiff to have their benefit from the tortfeasor or from the lawsuit reduced because they receive compensation from another source, such as an insurance company. Under the collateral source rule, if a plaintiff has additional sources of payments such as insurance coverage to pay for their expenses

Collateralized Debt Obligations

Collateralized debt obligations are securitized interests in pools of – generally non-mortgage – assets. Assets – called collateral – usually comprise loans or debt instruments.

Collateralized Mortgage Obligation

A type of MBS with cash flows segregated into bonds offering different maturity and risk characteristics.

Collection Agency

A company hired by a creditor to collect a debt that it is owed. Creditors typically hire a collection agency only after they have made efforts to collect the debt themselves, typically through letters (called “dunning” letters) and telephone calls. In the US, Collection agencies are regulated by the federal Fair Debt Collection Practices Act. Unfortunately, too many collectors ignore this law.

Collective Bargaining

Collective bargaining is the process whereby workers organize collectively and bargain with employers regarding the workplace. In various national labour and employment law contexts collective bargaining takes on a more specific legal meaning. In a broad sense, however, it is the coming together of workers to negotiate their employment. A Collective agreement is a labour

Collective Mark
Collective Work
Collision Insurance

Collision insurance is a coverage that helps pay to repair or replace your car if it’s damaged in an accident with another vehicle or object, such as a traffic light or a tree. If you’re renting or financing your car, collision coverage is typically required by the lender.


A secret agreement for an illegal purpose; conspiracy. Secret cooperation between two people in order to fool another. Collusion was often practiced by couples before no-fault divorce in order to make up a grounds for divorce (such as adultery). By fabricating a permitted reason for divorce, colluding couples hoped to trick a judge into granting their freedom from the marriage. But a spouse accused of wrongdoing who later changed his or her mind about the divorce could expose the collusion to prevent the divorce from going through.

Collusive Action
Color Of Law
Color Of Title

A person who endorses a promissory note.


Commodity Exchange Inc. (COMEX) was established in 1933 through the merger of four smaller exchanges based in New York: the National Metal Exchange, the Rubber Exchange of New York, the National Raw Silk Exchange, and the New York Hide Exchange. COMEX shot into prominence when a 1933 ban on Americans holding gold was repealed in

Command Economy

A command economy, also called a planned economy, is directly controlled by the government. The state owns all property and controls all resources including land, labour, and capital in a command economy. Allocations of resources, supply, and price are regulated through central planning. A command economy discourages individualistic profit motives and consumeristic needs. Under such

Command Theory

The classic example of a ‘command theory’ of law is Kelsen’s model of law. See Kelsen.

Commencement Of Action

the activity of buying and selling, especially on a large scale. The exchange of goods or services for money or in kind, usually on a scale large enough to require transportation from place to place or across city, state, or national boundaries.

Commercial Bank

A commercial bank is a financial intermediary which collects credit from lenders in the form of deposits and lends in the form of loans. A commercial bank holds deposits for individuals and businesses in the form of checking and savings accounts and certificates of deposit of varying maturities while a commercial bank issues loans in

Commercial Frustration

An unforeseen and uncontrollable event that excuses a party to a contract from performing his or her duties under that contract. For example, a landlord can break a lease if the property she agreed to rent accidentally burns down before the tenants move in.

Commercial Hedger

A commercial hedger is a corporation that attempts to stabilize the price of a commodity by taking a position or stake in the commodities market. Since a commercial hedger uses the commodity to produce its own goods, locking in prices is a favourable strategy. A commercial hedger in the commodities market can be both a

Commercial Information Exchange

A Commercial Information Exchange (CIE) is an Internet-based commercial property listing service that is operated by a local association to serve the local market. A CIE is the commercial real estate equivalent of the residential Multiple Listing Service. CIEs help commercial real estate professionals (brokers, property owners, developers, investors, tenants, etc.) share information about commercial

Commercial Law

Commercial law (sometimes known as business law) is the body of law which governs business and commerce. It is often considered to be a branch of civil law and deals both with issues of private law and public law. Commercial law regulates corporate contracts, hiring practices, and the manufacture and sales of consumer goods. Many

Commercial Loan

A commercial loan is a loan borrowed by a company to pay for any of several financial needs. A commercial loan is short term, and it may be renewable once it matures. A commercial loan is used to finance working capital needs; that is, needs for operations and other current requirements of the business. A

Commercial Mortgage

A commercial mortgage is a loan made using real estate as collateral to secure repayment. A commercial mortgage is similar to a residential mortgage, except the collateral is a commercial building or other business real estate, not residential property. In addition, commercial mortgages are typically taken on by businesses instead of individual borrowers. The borrower

Commercial Paper

A method of borrowing money from commercial institutions such as banks.

Commercial Property

The term commercial property (also called investment or income property) refers to buildings or land intended to generate a profit, either from capital gain or rental income. Commercial property includes office buildings, industrial property, medical centres, hotels, malls, retail stores, shopping centers, farmland, multifamily housing buildings, etc. In many states, residential property containing more than


the act of commercializing something; involving something in commerce


The fee paid for a service, often based on results or on a percentage of the sales or profits.
A committee (often official) dedicated to a specific aspect of business.

Commitment Fee

A fee paid by a borrower to a lender in return for the commitment to make funds available.

Committal Proceedings

The formal process followed by a magistrates’ court when transferring a case to the Crown Court. An offender may be ‘committed for trial’ (i.e. by jury), or ‘committed for sentence’. The latter occurs when either the magistrates have found the accused guilty or the accused has pleaded guilty, but the magistrates themselves are without authority

Committee Of The Whole House

The House of Commons convened for the particular purpose of discussing in detail a new Bill that has passed its Second reading. This is not a debate, as such, and no vote is taken. Its purpose is to allow the proposal of technical and detailed improvements in the Bill. In practice this procedure is used only occasionally;

Committee Stage

After a new Bill has passed its Second reading, it moves to the committee stage, where it is discussed in detail, usually by a Standing committee, but occasionally by a Committee of the whole house. In either case, the purpose is to examine the clauses of the Bill in detail and, if necessary, to propose amendments. In practice, the


A reasonably interchangeable good or material bought and sold freely as an article of commerce. Commodities include agricultural products, fuels, and metals and are traded in bulk on a commodity exchange or spot market.

Commodity Channel Index

The Commodity Channel Index (CCI), first introduced by Donald Lambert, is an oscillator used to help determine when a stock has been overbought and oversold. The Commodity Channel Index usually trends between +/-100. The CCI measures the variances in the price of a given equity compared to the average price of the same equity. A

Commodity Exchange

A commodity exchange is a market organized to allow for the selling and buying of commodities. Commodities, which are hard goods, as opposed to services, may be bought and sold on a commodity exchange in three types of markets: cash, futures and options. Cocoa, corn, crude oil, and gold are a few examples of commodities

Commodity Futures

Commodity futures are futures contracts for the delivery of commodities. The oldest commodity futures market is the Chicago Board of Trade (CBOT), which began trading the first futures contract, a standardized forward agreement, in 1865. All the earliest commodity futures were for agricultural products. Today, commodities futures contracts also exist for natural resources such as

Commodity Futures Trading Commission

The Commodities Futures Trading Commission oversees various matters with commodities trading including disclosure, registration of trading firms and individual traders, fair trading practices, record keeping, and customer fund protection.

Commodity Index

A commodity index tracks the price of various types of commodities. A commodity index can track the price of commodities in the spot market or in the futures market. A commodity index is traded like any other indices and allows investors to invest in commodities without purchasing or storing the commodity itself. A commodity index

Common Area
Common Carrier
Common Counts
Common Gap

A Common Gap is a gap in stock price brought about by normal market forces and are considered to be very common. They are represented graphically by a jump or drop from the previous close to the open price on the (daily, weekly, monthly) stock chart. The trading range maintains the gap throughout the trading day. Common

Common Law

Common law is case law which is established by precedent developed by judges through historical decisions. Common law varies from laws established through statutes or regulations issued by the executive branch or the federal or state legislatures. Common laws are case-based reasoning. If a case is similar to another case than any past cases are

Common Law Exceptions To The Hearsay Rule

Although the general principle is that Hearsay evidence is inadmissible to prove the facts it expresses, over the years the courts have developed a number of exceptions. Although the Cja (2003) make some radical changes to the law regarding hearsay, it expressly preserves (s.118) many of these common law exceptions, including the following: A public document or record

Common Law Marriage

In some US states, a type of marriage in which couples can become legally married by living together for a long period of time, representing themselves as a married couple and intending to be married. Contrary to popular belief, the couple must intend to be married and act as though they are for a common-law marriage to take effect — merely living together for a long time won’t do it.

Common Law Prescription

Traditionally, to acquire an Easement by Prescription under the common law has required that the easement be exercised ‘since time immemorial’. Since ‘time immemorial’ was, and still is, deemed to extend back to 1189, it was very difficult to establish that the purported easement had been in use continuously since that time. The modern approach is to allow the

Common Market

‘Common market’ is a vague term often carelessly used by writers on in the hope that readers will read it in the same context that they write it. The term has no well-defined meaning. In the early days of the UK’s membership of the EEC, the term ‘The Common Market’ was widely used to denote the

Common Mistake

A common mistake occurs when a contract is formed and appears valid, and yet the situation that obtains in the real world makes the contract meaningless. For example, if two people enter into an agreement to transport goods using a particular ship, and the ship had sunk before the contract was settled, then the contract is

Common Property
Common Stock

Common stock is a security representing a legal claim to a percentage of a company’s earnings and assets. Holders of common stock have some input into choosing company management, but do not generally have much say in the day to day operations. If the common stock is publicly traded, the company will generally be required to meet regulatory obligations such as filing audited financial reports. Holders of common stock are also offered the chance to participate in an annual meeting, where the company may share its vision for the future. Investors may purchase a common stock if they believe a company will be worth more in the future than it is valued at in the present. Common stock does not always pay a dividend. If the company goes bankrupt, common stockholders generally lose their entire investment.


The freehold tenure of part of a multioccupancy building (typically a flat) with shared responsibility for common services.


Communism is a socio-economic structure of government practised in North Korea and Cuba. It is a political and economic philosophy, which believes in the common possession of the means of production and assets. Communism is the principle that advocates that there should be no proletariat in society. Communism attempts to eradicate several problems that are believed to

Community Property

A method for defining the ownership of property acquired during marriage, in which all earnings during marriage and all property acquired with those earnings are considered community property and all debts incurred during marriage are community property debts. Community property laws exist in Arizona, California, Idaho, Nevada, New Mexico, Texas, Washington, and Wisconsin. Compare equitable distribution and separate property.

Community Sentence

Under current Sentencing legislation, a criminal conviction may attract a fine (see: Fine sentencing), a Custodial sentence, or a community sentence. Community sentences are generally felt to be suitable for offences less serious than those for which imprisonment is appropriate. Currently, the following community sentences are recognized. Probation Community service Combination order (i.e., a combination of the above) Action

Companies Act

The Companies Act 1985 as modified by the Companies Act 1989. Legislation to control the activities of limited liability companies.

Companies House

A UK government department that collects and stores information regarding limited companies. Registered businesses must provide a statement at the end of each financial year.


A company is a commercial organization with the primary objective of increasing shareholder’s value. A company can be either public or private.

Company Car

Strictly speaking, a company car is a vehicle owned by an employer or a leasing company and provided to an employee as a perk or as a necessity to do the job. During the 1980’s company cars became increasingly popular because of their kind treatment by the tax system. Essentially, it was tax favourable for


Qualitative characteristic expected in financial statements, comparable within company and between companies.

Comparable Rectitude
Comparative Advantage

Comparative advantage refers to an economic unit’s relative ability to produce more goods at a lower price than another unit. Comparative advantage says that while one unit (or nation) may be able to produce fewer of a product that another unit, both can gain by having the less-productive unit focus its resources to producing that which

Comparative Negligence

Comparative Negligence is the process the court uses in certain states to determine who is responsible for an accident and how the compensation will be distributed for property damage or personal injury loss between each of the parties in the case. For instance, if a plaintiff is found at fault 25% for their injuries they

Compellable Witness

Compellable witness In the law of evidence, a person is `compellable’ if he or she can be required to give evidence in court proceedings, even if unwilling. The question of compellability does not arise if a person is willing to give evidence, but that person must still be a Competent Witness for the party who


something (such as money) given or received as payment or reparation (as for a service or loss or injury).

Compensatory Damages

Compensatory damages are paid to compensate the claimant for loss, injury, or harm suffered by (see requirement of causation) another’s breach of duty. Quantum/Measure of Damages – Breach Of Duty – Contract On a breach of contract by a defendant, a court generally awards the sum which would restore the injured party to the economic position


A trendy term broadly meaning ‘authority to make a decision’. A body has competence in a particular area if there is some legal basis for its authority to make decisions in that area. The term is particularly used of courts, and of the institutions of the EU (see competence of the EU). See also: Competent Witness.

Competent Evidence
Competent Witness

In the law of evidence, a person is ‘competent’ if he or she is legally permitted to give evidence in a court hearing. If a person is competent but unwilling to give evidence, then the question of compellability arises (see compellable witness). However, a non-competent witness is never compellable. The rules on competence (and compellability)


A conflict management style that emphasises assertiveness and minimises cooperation.


Competition in economics is a healthy rivalry that exists between sellers or firms to offer any type of commodity or economic service. Under competition, an economy is assumed to have several firms. These firms continuously strive to hold a greater portion of the market. This phenomenon in economics is termed as competition. Competition was a common occurrence between

Competition Commission

The Competition Commission is an independent public body established by the Competition Act 1998. It replaced the Monopolies and Mergers Commission in April 1999. The Commission conducts inquiries into mergers, markets and the regulation of the major regulated industries. Inquiries are undertaken in response to a reference made to it by another authority – usually by the Office of Fair Trading (OFT) the Secretary of State, or by the regulators under sector-specific legislative provisions relating to regulated industries. The Commission has no power to conduct inquiries on its own initiative.

Competition Law

Competition law, known in the United States as “antitrust law”, has three main elements: prohibiting agreements or practices that restrict free trading and competition between business entities. This includes, in particular, the repression of cartels. banning abusive behaviour by a firm dominating a market, or anti-competitive practices that tend to lead to such a dominant

Competition Regulator

A competition regulator is a government agency, typically a statutory authority, sometimes called an economic regulator, which regulates and enforces competition laws, and may sometimes also enforce consumer protection laws. In addition to such agencies, there is often another body responsible for formulating competition policy. Many nations implement competition laws, and there is general agreement

Competitive Advantage

A competitive edge that enhances a company’s appeal as an investment. Have you ever wondered what Warren Buffett means when he says that he looks for businesses with wide economic moats? While it’s fun to imagine a company in a castle surrounded by alligator-invested waters, what Buffett actually means is that he looks for businesses that have


For copyright purposes, a work formed by selecting and assembling preexisting materials (generally facts or data unprotected by copyright) in a unique way to form an original work of authorship. A database is a good example of a compilation. A compilation must have some creative aspects — such as the way it is organized and

Complainant’s Previous Sexual History

Pertaining to the troublesome issues surrounding the eliciting of evidence of a complainant’s previous sexual history in trials for sexual offences, particularly rape. The reason that this area of law is so fraught with difficulties is that rape is a particularly serious crime, and carries a maximum penalty of life imprisonment. Yet in a great many


Papers filed with a court clerk by the plaintiff to initiate a lawsuit by setting out facts and legal claims (usually called causes of action). In some states and in some types of legal actions, such as divorce, complaints are called petitions and the person filing is called the petitioner. To complete the initial stage


Qualitative characteristic expected in financial statements.


This is the last stage in the purchase of a property. The legal documentation is finalised and the lender has sent the mortgage funds to the purchaser’s solicitor. Once the purchaser’s solicitor forwards the funds to the seller’s solicitor the property is now owned by the Purchaser.

Compliance Officer

A Compliance Officer ensures that their corporation is conforming to a rule, such as a specification, policy, standard or law. They practice regulatory compliance, which describes the goal that corporations or public agencies aspire to in their efforts to ensure that personnel are aware of and take steps to comply with relevant laws and regulations.

Compos Mentis

A composite, or composite index, is an aggregation of components to produce a broad statistical measure. A stock index, for example, is a composite index as it combines individual stock prices to produce one number that represents the market as a whole. The technique used to calculate the composite number varies; a composite may add

Compound Annual Growth Rate

A business (not accounting) term showing the mean growth rate of a business metric on an annualized basis. For instance, you can use it to describe revenue growth or decline for a business over several years. Or investors can use it to describe a smoothed gain or loss over a given investment period of time.

Compound Annual Return

The compound annual return shows the investment return, assuming the investment grew at the same rate every year. For example, suppose an investment grew from $4,000 to $8,000 over four years. The total return is (($8,000-$4,000)/$4,000), or 100%, and the simple annual return is 100%/4, or 25%. The compound annual return, in contrast, compounds the

Compound Growth Rate

The compound growth rate measures the average growth of an amount over time. In other words, the compound growth rate assumes a constant rate of growth, thus smoothing the expansion rate. The advantage of the compound growth rate is that it expresses growth as one number. The downside of the compound growth rate is that

Compound Interest

When interest is applied to capital and accrued up until that particular date. For example, a £1,000 loan with 20% interest will have a balance of £1,200 after the first year, then £1,440 at the end of the second year.

Compound Question

When money is placed on deposit to earn interest, the interest can be paid out periodically as it is earned, or it can be left on deposit. If interest left on deposit does not itself earn interest, the deposit is said to earn simple interest. Measure time in years. With simple interest, at any time

Compounding A Felony
Compounding And Misprision

These are archaic terms for common law offences that are now defined by s.5 of the Criminal law act 1967. ‘Compounding’ is accepting reward for withholding prosection. ‘Misprision’ is failing to report an offence to the police, again for reward. s.5 only applies in respect of arrestable offences, and specifically excluded all other common law

Comprehensive Income

Accounting Comprehensive income is defined by the Financial Accounting Standards Board, or FASB, as “the change in equity [net assets] of a business enterprise during a period from transactions and other events and circumstances from nonowner sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners.” Comprehensive

Comprehensive Insurance Coverage

1) n. an agreement between opposing parties to settle a dispute or reach a settlement in which each gives some ground, rather than continue the dispute or go to trial. Judges encourage compromise and settlement, which is often economically sensible, since it avoids mounting attorneys’ fees and costs. 2) v. to reach a settlement in

Compromise Verdict
Comptroller of the currency

The comptroller of the currency is appointed by the President and is responsible for supervising the national banks.

Compulsory Building And Contents Insurance

Some home lenders have in recent years enticed customers with competitive ‘fixed rate’ or ‘low start’ deals. These deals are often sold on the condition that the lender takes out the home lenders own insurance policy. In that way, lenders can profit from the insurance business as compensation for offering what may have been a

Compulsory Insurance

Certain classes of person are required by statute to take out a policy of insurance in respect of the liabilities to others. These include motorists (Road Traffic Act (1988)), and employers (Employers’ Liability (Compulsory Insurance) Act (1969)). There are currently plans to impose compulsory insurance on doctors and dentists, and providers of pension schemes.

Compulsory Registration

The 1925 law of property reforms envisaged a system of a total registration of interests in land (see registered land). However, it was decided that it would be too much of an administrative burden to make registration compulsory over the whole of England and Wales at the same time. Instead, England and Wales were divided

Compulsory Registration Area

An area where it is compulsory to apply for registration of an estate in land with the land registry when a particular event occurs (see Events Triggering FirstRegistration). Since 1st December 1990, the whole of England and Wales has been a compulsory registration area.

Concealed Weapon
Concentric Diversification

A growth strategy in which a company seeks to grow and develop by adding new products to its existing product lines to attract new customers.

Conceptual Framework

A statement of principles providing generally accepted guidance for the development of new reporting practices and for challenging and evaluating the existing practices.


Concessionality is the extent to which the terms of a soft (below market rates) loan reduce a lender’s returns in comparison with a loan of the same amount and duration as the soft loan advanced at full market rates.


Any of various forms of mediation whereby disputes may be settled short of arbitration.

Conclusion Of Fact
Conclusion Of Law
Concurrent Estate

A concurrent estate or co-tenancy is a concept in property law, particularly derived from the common law of real property, which describes the various ways in which property can be owned by more than one person at a given time. The parties who own property jointly are referred to as co-tenants or joint tenants. Most

Concurrent Lease

If a person grants a Lease of his land, then grants another lease to another person, what does the second Lessee get? If the second lease is longer than the first, he gets a right to take possession at some point in the future, but what rights does he have before then? Doctrinally a second lease that is

Concurrent Sentences
Condemnation Action
Condition Precedent
Condition Subsequent
Conditional Bequest
Conditional Fee

A conditional fee arrangement (CFA) is one in which a claimant pays his legal representatives’ fees only in the event of a successful outcome. The lawyer may seek to cover the expenses of lost cases in a number of ways. Here describes the historical background to CFA, the metas of CFA that are currently lawful,

Conditional Insurance

Your mortgage lender may insist on certain insurance products being taken out before granting you a mortgage. Lenders used to stipulate life insurance as a requirement but no longer do so (although you would be well advised to ensure that you have enough to cover the cost of your mortgage rather than leaving your dependants

Conditional Sale

Economic conditions relating to economic policy, taxation and exchange rate setting imposed on a country when it draws on funds (especially at the IMF).

Conditions Of Carriage

The terms of your contract with an airline after you buy a ticket. Conditions of carriage cover everything from baggage limitations to the amount of compensation you can recover if you’re injured on the flight. These provisions often vary from airline to airline. A few, but by no means, most, conditions of carriage appear in


A condominium, or condo, is a form of housing tenure and other real property where a specified part of a piece of real estate (usually of an apartment house) is individually owned while the use of and access to common facilities in the piece such as hallways, heating system, elevators, exterior areas is executed under


One person’s approval of another’s activities, constituting a defense to a fault divorce. For example, if a wife did not object to her husband’s adultery and later tries to use it as grounds for a divorce, he could argue that she had condoned his behavior and could perhaps prevent her from divorcing him on these grounds.


An admission of misdeeds or faults

Confession And Avoidance
Confession Of Judgment
Confidence Game
Confidence Indicator

A confidence indicator gauges the optimism of a group of participants in an economy or a securities market. Perhaps the best-known confidence indicator is the Consumer Confidence Index, compiled each month by the Conference Board. Another key consumer confidence indicator is the University of Michigan Consumer Sentiment Index. Each confidence indicator measures consumer optimism about

Confidential Communication

n. certain written communications which can be kept confidential and need not be disclosed in court as evidence, answered by a witness either in depositions or trial, or provided to the parties to a lawsuit or their attorneys. This is based on the inherent private relationship between the person communicating and the confidant’s occupation or

Confidential Relation
Confidentiality Agreement

A confidentiality agreement, also called nondisclosure agreement, is a contract entered into by two or more individuals, in which all parties agree that certain information is to remain confidential. The most important function of a confidentiality agreement is to protect sensitive commercial, technical, or scientific information. A confidentiality agreement is frequently utilized to protect trade

Confinement In Prison

In most US states with fault divorce, grounds for a spouse not in prison to obtain a fault divorce if the other spouse has been imprisoned for a certain number of years.


A Confirm or Confirmation is a tool used by external auditors (Public Accounting industry) to confirm the internal records of the client they are serving (auditing) to the consent of outside parties involved with specific operations of the client’s business. Confirmations are one of the main tools auditors employ to satisfy the need for evidential matter (see [SAS 31]]) in

Conflict Of Interest

A conflict of interest is a situation when a firm or agent benefits from both sides of an issue, or in investing is hired by an individual to represent his best interests but works for or has a business relationship with the other side of the issue. Common conflicts encountered in investing include- The financial planner who advises you to invest in products

Conflict Of Law

Term used in Scotland for the Grant of probate.

Conformed Copy
Conforming Loan

A conforming loan is a residential mortgage that is eligible for purchase by the Fannie Mae (FNMA) and Freddie Mac (FHLMC). A conforming loan must meet the necessary requirements established by the two quasi-government organizations. The two agencies set limits on the conforming loan size. This dollar value limit on the principal of the conforming

Confusingly Similar
Conjugal Rights

A situation set up so that another person commits a wrongdoing. For example, a husband who invites his wife’s lover along on vacation may have connived her adultery, and if he tried to divorce her for her behaviour, she could assert his connivance as a defence.


An old-fashioned term referring to the relationship of “blood relatives” — people who have a common ancestor. Consanguinity exists, for example, between brothers and sisters but not between husbands and wives.

Conscientious Objector
Conscious Parallelism
Consensus Ad Idem

“Meeting of minds”. For a contract to be useful the parties must be in agreement about its provisions. In the event of a possible breach of contract, the party alleged to be in breach may wish to claim that the contract did not exist at all, as there was no certainty about the subject of

Consensus Forecast

A consensus forecast aggregates the estimates of security analysts of key market-moving data, particularly a company’s quarterly earnings per share (EPS). Based on analysts’ earnings models, a consensus forecast of a company’s EPS is prepared by services such as the Institutional Brokerage Estimate System (IBES), First Call, and Zacks. The methodology for preparing a consensus

Consensus Recommendation

The consensus recommendation is an average of analyst ratings on a stock. Suppose five security analysts follow Acme stock; two say “buy”, one says “hold”; two say “sell”. To compute a consensus recommendation, each rating is assigned a value, e.g., a buy is a 5; a hold, 3; a sell, 1. The consensus recommendation is

Consent Decree
Consequential Damages

Conservatorship is a legal concept in the United States. A person under conservatorship is a “conservatee,” a term that can refer to an adult.


Sometimes used with a stronger meaning of understating assets and overstating liabilities.


Someone appointed by a judge to oversee the affairs of an incapacitated person. A conservator who manages financial affairs is often called a “conservator of the estate.” One who takes care of personal matters, such as healthcare and living arrangements, is known as a “conservator of the person.” Sometimes, one conservator is appointed to handle


Conservatorship is a legal concept in the United States. A person under conservatorship is a “conservatee,” a term that can refer to an adult.


The basis of a contract. Consideration is a benefit or right for which the parties to a contract must bargain; the contract is founded on an exchange of one form of consideration for another. Consideration may be a promise to perform a certain act — for example, a promise to fix a leaky roof — or a promise not to do something, such as build a second story on a house that will block the neighbor’s view. Whatever its particulars, consideration must be something of value to the people who are making the contract.

Consignment Shop

A Consignment shop is a specific type of shop, usually second-hand, that sells used goods on the behalf of the owners of the products.


The person who delivers over or commits merchandise.


The measurement and display of similar transactions and other events is carried out in a consistent way throughout an entity within each accounting period and from one period to the next, and also in a consistent way by different entities.

Consolidate Loans

When a person seeks to consolidate loans, he/she is essentially taking out one loan to pay off many others. Usually, when a debtor is in danger of bankruptcy, he/she will hurry to consolidate loans. Those who consolidate loans often aim for a lower or fixed interest rate. There are many debt consolidation companies that offer

Consolidated Accounts

A parent or holding company’s accounts are made up by consolidating the accounts of its subsidiaries and other investments that it controls.

Consolidated Financial Statement

A consolidated financial statement presents the financial position or results of a parent company and its subsidiaries as if it were a single enterprise. Under Generally Accepted Accounting Principles (GAAP), all majority-owned subsidiaries must be consolidated in a consolidated financial statement of the parent company. Preparing a consolidated financial statement for a firm with a

Consolidated Financial Statements

Present financial information about the group as a single reporting entity.

Consolidated Omnibus Budget Reconciliation Act

A federal law requiring that employers offer employees — and their spouses and dependents — continuing insurance coverage if their work hours are cut or they lose their job for any reason other than gross misconduct. Courts are still in the process of determining the meaning of gross misconduct, but it’s clearly more serious than


Consolidation is a process that aggregates the total assets, liabilities and results of the parent and its subsidiaries (the group) in the consolidated financial statements.

Consolidation Loan

A consolidation loan is a type of loan that encompasses a number of other liabilities into one loan. The greatest advantage of a consolidation loan is its low rate of interest. For instance, those with outstanding credit card debt face significant interest rate charges and may, therefore, benefit from a relatively low-interest rate consolidation loan

Consolidation Phase

A broadly sideways move in a market following a large rise or fall, often with lower and more stable volumes.


A group of separate individuals or companies that come together to undertake an enterprise or transaction that is beyond the means of any one member. For example, a group of local businesses may form a consortium to fund and construct a new office complex. The duties and rights associated with marriage. Consortium includes all the


a secret agreement between two or more people to perform an unlawful act


A peace officer for a particular geographic area — most often a rural county — who commonly has the power to serve legal papers, arrest lawbreakers and keep the peace. Depending on the state, a constable may be similar to a marshal or sheriff.

Constant Dollar GDP

Constant dollar GDP is gross domestic product adjusted for price changes. Gross domestic product is the total market value of all goods and services an economy produces. But the actual GDP in a given year – known as current dollar GDP – also reflects either an increase or decrease in the general level of prices

Constant Dollars

Constant dollars are dollars that have been adjusted for the impact of inflation, as opposed to current dollars, which are actual dollars paid or received. Constant dollars can be computed by the formula Constant Dollars = Current Dollars x (Previous Consumer Price Index/Current Consumer Price Index), where the Consumer Price Index (CPI) measures the level


1. A document setting out a state’s basic legal framework and, quite often, limiting and defining the powers of government. See also: written constitution. 2. Of a trust, constitution consists in transferring the trust property’s legal title from the settlor or testator to the trustee. See also: constitution of trusts.

Constitution Of Trusts

Constitution refers to the transfer of legal title. When property is disposed of upon death, a valid will constitutes the trust and legal title vests in the trustees. When making a lifetime disposition, Turner LJ in Milroy v Lord set out three ways of transferring property: Outright transfer of gift Declaration of trust with a

Constitutional Convention

There is no specific Constitutional legislation in the UK legal system, although some legislation and case law is recognized as having constitutional significance. Aside from these legal manifestations of the constitution, there are a large number of conventions by which UK legislators and politicians abide. Failing to do so cannot be actionable in the courts, and

Constitutional Law

The body of law that deals with the organization and function of the apparatus of state.

Constitutional Legislation

The UK constitution does not exist as a separate document, but as a combination of specific items of legislation, case law, and convention. Much UK legislation ha constitutional significance, but of particular importance are Magna Carta, the Petition of right, the Bill of rights and Claim of right, the Act of settlement (1700), the Act of union with Scotland (1707), the Parliament

Constitutional Monarchy

A constitutional monarchy is a form of government in which a monarch acts as head of state within the guidelines of a constitution, whether it be a written, uncodified, or blended constitution. This form of government differs from absolute monarchy in which an absolute monarch serves as the source of power in the state and

Constitutional Rights
Construct Validity

Construct validity refers to the degree to which inferences can legitimately be made from the operationalisations in your study to the theoretical constructs on which those operationalisations were based. Like external validity, construct validity is related to generalising.

Constructive Eviction

When a landlord provides housing that is so substandard that a landlord has legally evicted the tenant. For example, if the landlord refuses to provide heat or water or refuses to clean up an environmental health hazard, the tenant has the right to move out and stop paying rent, without incurring legal liability for breaking the lease.

Constructive Fraud
Constructive Notice
Constructive Possession
Constructive Trust

A constructive trust is an equitable remedy resembling a trust imposed by a court to benefit a party that has been wrongfully deprived of its rights due to either a person obtaining or holding legal right to property which they should not possess due to unjust enrichment or interference. A constructive trust is not a


A person who provides expert advice professionally.

Consumer Confidence

Consumer confidence is an attempt to measure the public’s perception of the state of the economy. Consumer confidence readings are produced by the Conference Board (Consumer Confidence Survey) and the University of Michigan (Consumer Sentiment Survey). Both consumer confidence surveys are conducted by telephone polling several thousand US households on their feelings about the current

Consumer Confidence Index

The Consumer Confidence Index (CCI) gauges the level of optimism of Americans toward the U.S. economy. The Consumer Confidence Index is determined by The Conference Board, a business and research group. Each month it asks U.S. households how they rate business conditions and job availability, as of now and six months from now. It then

Consumer Credit Act

The Consumer Credit Act (CCA) of 1974 applies to most businesses that lend money to consumers or offer goods and services. The Act requires that these businesses obtain a consumer credit license from the Office of Fair Trading (OFT). It also sets down rules for how certain credit and hire agreements should be set out

Consumer Durables

In US macroeconomic statistics, consumer durables are those durable goods produced for purchase by consumers. All durable goods, including consumer durables, are arbitrarily defined as goods designed to provide a benefit for at least three years. The importance of consumer durables to macroeconomic statistics stems from consumers’ spending behaviour. Consumers tend to buy more consumer

Consumer Goods

Consumer goods are goods that be used in order to fulfil human’s needed such as food and clothes.

Consumer Leasing Act
Consumer Price Index

The Consumer Price Index more commonly known as CPI, is a figure calculated by the federal government that is used a measure of inflation.

Consumer Prices

Consumer prices are the amount of money a person is willing to spend for a particular commodity. Consumer price index (CPI) is described as a measure that analyzes weighted average of prices of a basket of consumer services and goods like food and transportation. The consumer price index is computed by admitting price changes for

Consumer Protection

Consumer protection is a form of government regulation which protects the interests of consumers. For example, a government may require businesses to disclose detailed information about products—particularly in areas where safety or public health is an issue, such as food. Consumer protection is linked to the idea of consumer rights (that consumers have various rights

Consumer Protection Laws
Consumer Surplus

The consumer surplus theory is based on the assumption that there is a difference between the price the consumer is willing to pay for certain goods or services, called the reserve price and the price they actually pay for them. The theory suggests that along with the product, the customer also receives satisfaction which amounts to more than whatever has been paid;


The actualization of a marriage. Sexual intercourse is required to “consummate” a marriage. Failure to do so is grounds for divorce or annulment.

Consumption Of Fixed Capital

Consumption of fixed capital is the estimate of output used up in GDP.

Consumption Tax

A consumption tax is a charge levied on spending on goods and services. Often a consumption tax will be a percentage of the total price of the purchased goods or services. A consumption tax is distinct from an income tax in that the latter is a percentage charge imposed on an entity’s earnings. Many local


Contagion is the cross-border spread of financial shocks. Such international spillover means that economic or financial troubles that originate in one nation can affect others. Contagion can occur at any time during a business cycle; not just at the trough. Thus, contagion is not necessarily related to a crisis, although this is when contagion is most


Contango refers to a situation that can arise in the futures market. When the price of a futures contract is lower than its spot price, or when a price that is farther in the future than a nearer future price is higher, then it is said to be ‘in contango’. If there was a curve showing the

Contemplation Of Death
Contempt Of Court
Contents Insurance

Contents insurance should be considered by all householders whether or not they have a mortgage. Contents insurance covers items such as furniture; carpets, curtains; electrical goods and many policies also cover personal possessions, which may be removed from the home. This is separate to buildings insurance. Most home contents policies cover loss or damage to

Contestable Market

A contestable market is one that has few companies- but all existing companies behave in a competitive manner to deter new entrants. A contestable market may have only one firm behaving in a competitive manner. Prime examples of contestable markets include electricity and gas supply companies, low-cost domestic airlines, and internet service providers.

Contingency Fee

A contingency fee is a payment method used to hire a lawyer by paying the lawyer a percentage of the compensation awarded after the claimant wins the personal injury case. The contingency fee allows claimants in a personal injury case to avoid paying a retainer fee to a lawyer to hire them to help them

Contingent Beneficiary
Contingent Fee

A contingent fee in the United States or conditional fee in the United Kingdom is any fee for services provided where the fee is only payable if there is a favourable result. In the law, this is the “no win no fee” system. Subtly different from a Contingency fee arrangement, a contingent fee arrangement is one in

Contingent Interest

A person has a ‘contingent interest’ in some property if there is a possibility that a real interest in that property will come to him at some point in the future. If, for example, person A makes a Will leaving his house to whichever of my children marries first, then the children have contingent interests.

Contingent Liabilities

Obligations that are not recognised in the balance sheet because they depend upon some future event happening.

Contingent Liability

Contingent liabilities are liabilities that may or may not be incurred by a company and which depend on the outcome of a forthcoming event such as a court case. These are recorded in a company’s accounts as contingent liabilities under accounts payable. Such liabilities are not shown in the balance sheet, usually, a footnote is

Contingent Remainder

The postponement of a hearing, trial or other scheduled court proceeding, at the request of one or both parties, or by the judge without consulting them. Unhappiness with long trial court delays has resulted in the adoption by most states of “fast track” rules that sharply limit the ability of judges to grant continuances.

Continuation Pattern

A Continuation Pattern is a technical analysis term that suggests a trend has exhibited a temporary diversion in behaviour but is about to continue on its existing trend. There are several candlestick formations that signal a continuation pattern. Among them are Falling Three Methods, Rising Three Methods, Downside Tasuki Gap and Upside Tasuki Gap.

Continuing Objection
Continuous Linked Settlement

Settlement risk has historically been a problem in foreign exchange markets because each currency must be delivered in its home country. Due to time zone differences, several hours might elapse between a payment being made in one currency and the offsetting payment being made in another currency. Continuous Linked Settlement (CLS) is a settlement system


An entry made into an account or statement to nullify a previous entry.

Contra Account

An account which offsets another account. A contra-asset account has a credit balance and offsets the debit balance of the corresponding asset. A contra-liability account has a debit balance and offsets the credit balance of the corresponding liability. The account is an income account that is expected to hold a balance opposite to what is

Contra Proferentum

Construed against the person making the statement. For example, in an Exclusion clause, the benefit of any doubt in the meaning of the clause is to the benefit of the party that would be disadvantaged by it.

Contract By Deed

Also called a ‘speciality contract’. This meta of contract takes the form of a deed (see: Deed), and therefore imposes greater legal obligations on the signatories than a simple contract. For example, in most cases claims for Damages against a contract by deed can be entered up to 12 years from the date of coming into effect;

Contract Note

Your contract note is evidence that you’ve bought or sold shares. It remains an important document. However, with the shortening of the stockmarket’s trading account under “rolling settlement” and given the increasing use of online share dealing, you will no longer receive physical share certificates. Certainly, if your funds are being held by a stockbroker

Contract Of Record

A Contract of Record is the most formal of the metas of contract (see: Contract) recognised by UK law. Contracts of Record are usually made between individuals and the courts, and include recognisances (see: Recognizance) and court judgements. Some writers consider Contracts of Record by the quasi-contracts (see: Quasi-contract).

Contract Race

A situation which is peculiar to England & Wales, in which a seller has received and accepted two or more offers on the property and will sell to whoever is ready to exchange contracts first. Such situations were common in the feverish housing market of the mid-1980s. Changes being considered by both main political parties

Contract Size

Contract size is the deliverable amount on a contract. The quantity of goods or commodities deliverable on any future, forward or option contract is, then, the contract size. IMM contract size for the British pound is 62,500 British pound sterling, IMM contract size for the euro is 125,000 euros, and IMM contract size for the

Contract Under Seal

Archaic term for an agreement made by Deed. See also Covenant.


A project owner or other entity that enters into a contract with a contractor/vendor and receives specified goods and/or services under the terms of the contract.


A legally binding agreement involving two or more people or businesses (called parties) that sets forth what the parties will or will not do. Most contracts that can be carried out within one year can be either oral or written. Major exceptions include contracts involving the ownership of real estate and commercial contracts for goods worth $500 or more, which must be in writing to be enforceable. (See statute of frauds.) A contract is formed when competent parties — usually adults of sound mind or business entities — mutually agree to provide each other some benefit (called consideration), such as a promise to pay money in exchange for a promise to deliver specified goods or services or the actual delivery of those goods and services. A contract normally requires one party to make a reasonably detailed offer to do something — including, typically, the price, time for performance and other essential terms and conditions — and the other to accept without significant change. For example, if I offer to sell you ten roses for $5 to be delivered next Thursday and you say “It’s a deal,” we’ve made a valid contract. On the other hand, if one party fails to offer something of benefit to the other, there is no contract. For example, if Maria promises to fix Josh’s car, there is no contract unless Josh promises something in return for Maria’s services.


A person who opposes or rejects popular opinion, especially in stock exchange dealing.

Contributory Negligence

Contributory negligence is a common law doctrine which states if a person’s injury or loss is caused by their own negligence they are not entitled to receive compensation for their loss. Only five states continue to use their doctrine to determine damages in an injury claim.

Most states have replaced the system of contributory negligence, which was leftover from British common law, with comparative negligence which allows claimants to recover compensation to the degree of their fault. For instance, under comparative negligence, the amount of the plaintiff’s award is reduced by the extent to which the plaintiff’s conduct contributed to the harm suffered.

In the five states which use a pure contributory negligence system, this serves as a complete bar to recovery in an injury claim for any party who is found to have contributed to their injuries at all. The states that still use pure contributory negligence are Alabama, Virginia, Maryland, and North Carolina; and the District of Columbia.

Until 1945 it was a complete defence in the UK, to a claim of Negligence that the claimant was himself to blame, even slightly, for the loss or damage he suffered. As a result, a person who was badly and obviously wronged could end up losing out in a tort action. The Law reform contributory negligence act (1945) eliminates the defence of contributory negligence, and in its place gives the courts the power to reduce the award of damages in proportion to the claimant’s share of the blame.


The power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

Controlled Substance

A comptroller or controller (also financial controller, abrv. FC) is a person who supervises accounting and financial reporting within an organization. A controller is an accountant in a business who oversees accounting and the implementation and monitoring of internal controls. In the United States, United Kingdom and Canada, a controller or financial controller is a

Controlling Interest

Controlling interest is simply an ownership status where a corporation or an individual owns fifty per cent or more of a company’s voting shares. One of the ways in which controlling interest may be achieved is by paying a control premium, which in effect grants enough ownership to set policies, direct operations, and makes a

Controlling Law
Conventional Mortgage

A conventional mortgage is a fully amortizing mortgage. The conventional mortgage can have either a fixed or a variable rate. The term conventional mortgage also implies that the loan is not insured by a government agency, such as the FHA or VA. Such loans are called FHA loans and VA loans, respectively. The terms conventional

Conversion Balances

This refers to transferring bookkeeping records between accounting software programs. It involves taking closing balances from the previous software and entering it into the new software as opening balances.

Convertible Bond

A convertible bond is a debt instrument that holders can convert into a fixed number of shares at a specified price before maturity. For example, if the par value of the convertible bond was $100 and the specified price was $50, the holder could get two shares for every convertible bond. This equity option makes

Convertible Loan

Loan finance for a business that is later converted into share capital.

Convertible Security

A convertible security or convertible is a hybrid security with a provision for the convertible to be exchanged for some other security. Usually, conversion is at the security holder’s option, but a mandatory convertible security requires conversion, usually according to some schedule. Most convertibles are either convertible preferred stock or convertible bonds issued by a


Convexity is a measure of the curvature, or the degree of the curve, in the relationship between bond prices and bond yields. Convexity demonstrates how the duration of a bond changes as the interest rate changes.

Convexity Bias

A bias in Eurodollar futures rates that makes them slightly higher than corresponding forward rates.


An attorney who passes transfer of immovable property from one party to another.


Conveyancing is the act of transferring the legal title in a property from one person to another. The buyer must ensure that he or she obtains a good and marketable ‘title’ to the land; i.e., that the person selling the house actually has the right to sell it and there is no factor which would impede a mortgage or re-sale. A

Conveyancing Fee

Conveyancing fee is the fee charged by a solicitor or licensed conveyancer after the legal paperwork for transferring a property has been completed. It should be remembered that as well as this fee, stamp duty, land registry fees and legal disbursement fees also required to be paid.

Conveyancing Protocol

There is, in principle, no reason why parties who wish to buy and sell real property should do so in a way that is markedly different from any other form of sale and purchase. There are, to be sure, certain formality requirements. In particular, the transfer of ownership must be formalized in a Deed, and the new


A formal declaration that someone is guilty of a criminal offense, made by the verdict of a jury or the decision of a judge in a court of law.


COO, or Chief Operating Officer, is a member of upper-level management who is responsible for the company’s day-to-day operations. The functions of a COO may be construed as those of a hands-on executive. Thus, while the job of a Chief Executive Officer (CEO) is of a more general and strategic nature, a COO is charged

Cooking The Books

Cooking the books is an unethical practice of misrepresenting company’s financial standing. When cooking the books, corporations typically manipulate their accounting records and financial statements. Cooking the books is fraudulent and illegal, and is mainly done for the purpose of inflating profits, achieving preset budgets, and receiving sizeable bonuses. Methods employed for cooking the books

Cooling Off Period

A cooling-off period is defined as the period of time you’re allowed, after signing an agreement, to cancel it without incurring a financial penalty. Legislation regarding cooling-off periods is complex. Indeed, there are five main pieces of legislation consumers can call upon if they wish to back out of contracts they’ve entered into. It should

Cooling-Off Rule

A business owned and operated by its members.

Cooperative Housing
Cooperative Insurance
Cop A Plea
Coppock Curve

The Coppock Curve, also known as the Coppock Indicator, is a long-term price momentum indicator used to spot major bottoms in the stock market. The Coppock Curve was created by E.S.C. Coppock and first published in Barron’s Magazine on October 15, 1962. Coppock was an economist and founder of Trendex Research in San Antonio, Texas. The Episcopal


Legal protection enacted by governments, giving original creators exclusive rights to their work, for a limited amount of time.

Copyright Office
Copyright Owner

Under the Copyright Act of 1976, a term with two meanings. First, it refers to the person or entity listed as the owner in the U.S. Copyright Office, usually the original author or developer. Second, it refers to a person or entity to which an exclusive part of the copyright has been transferred in writing.

Copyright Registration

Act required by the U.S. Copyright Office before a court action may be brought to prevent infringement. Copyright protection automatically attaches to any work of authorship as soon as it is fixed in a tangible medium of expression. Registration also confers strategic benefits in an infringement action, including a presumption that the registered owner is

Cornering The Market

Cornering the market occurs when an investor or group of investors purchases enough stock or a sufficient quantity of a commodity that they can unduly influence the stock or commodity’s price. Cornering the market is illegal. Probably one of the most famous historical examples of an attempt at cornering the market occurred several years ago


The person who presides over a coroners court. Because of the role this court plays determining the cause of death, coroners are often medical practitioners, with little legal training; this situation is likely to be changed by legislation proposed recently. The role of the coroner (still called the ‘crowner’ in some parts of the country) is

Coroners’ Court

The court formally charged with determining the place and cause of death, and the identity of the deceased, when a death occurs in violent, suspicious or ‘unnatural’ circumstances (see: Court system of England).

Corporate Abuse

A corporate scandal is a scandal involving allegations of unethical behaviour by people acting within or on behalf of a corporation. A corporate scandal sometimes involves accounting fraud of some sort. A wave of such scandals swept United States companies in 2002 (accounting scandals of 2002). List Of Corporate Scandals 2006 HP Spying Scandal Adelphia

Corporate Actions

Corporate actions include both mandatory actions (stock splits, mergers & acquisitions, cash dividends, return of capital) and voluntary actions (tender offers, rights issues, buyback offers). Corporate actions are used to distribute profits to shareholder, influence stock prices, or during mergers/spinoffs to increase company profitability.

Corporate Bond

A Corporate Bond is a bond issued by a corporation. The term is usually applied to longer-term debt instruments, generally with a maturity date falling at least a year after their issue date. (The term “commercial paper” is sometimes used for instruments with a shorter maturity.)

Sometimes, the term “corporate bonds” is used to include all bonds except those issued by governments in their own currencies. Strictly speaking, however, it only applies to those issued by corporations. The bonds of local authorities and supranational organizations do not fit in either category.

Corporate bonds are often listed on major exchanges (bonds there are called “listed” bonds) and ECNs like MarketAxess, and the coupon (i.e. interest payment) is usually taxable. Sometimes this coupon can be zero with a high redemption value. However, despite being listed on exchanges, the vast majority of trading volume in corporate bonds in most developed markets takes place in decentralized, dealer-based, over-the-counter markets.

Some corporate bonds have an embedded call option that allows the issuer to redeem the debt before its maturity date. Other bonds, known as convertible bonds, allow investors to convert the bond into equity.

One can obtain an unfunded synthetic exposure to corporate bonds via credit default swaps.

Corporate Bond Fund

A corporate bond fund is a mutual fund that invests in corporate bonds. If a bond fund is not otherwise designated, it is presumed to be a corporate bond fund. Bond-rating and maturity are key factors in types of bond funds. Corporate bond funds are usually assumed to invest in investment-grade bonds unless they are labeled as a high-yield bond fund or a junk bond fund. Investment-grade bonds

Corporate Crime

In criminology, corporate crime refers to crimes committed either by a corporation (i.e., a business entity having a separate legal personality from the natural persons that manage its activities), or by individuals that may be identified with a corporation or other business entity (see vicarious liability and corporate liability). Corporate crime overlaps with: white-collar crime,

Corporate Finance

Corporate finance is an important sub-division of finance. It deals with various financial decisions made by corporations. It also looks at various resources that are used to make financial decisions. The basic aim of corporate finance is to generate the maximum possible value and reduce the financial risks taken by a firm.

Corporate finance is normally categorized into three broad categories – long term decisions, techniques, and short term decisions. Capital investment decisions are mainly concerned with various financial aspects of projects undertaken by companies.

Short term corporate finance decisions are classified as working capital management. Working capital management deals with areas like current liabilities and current assets. Other areas of importance in short term corporate finance decisions are management of inventories and cash resources. Lending and borrowing of money for shorter spans of time are also important in this regard.

Corporate Governance

Corporate Governance refers to the rules, processes, and various laws by which all businesses are operated and regulated. Corporate governance can be defined by the internal clients such as officers, stockholders, or a board of directors within a corporation as well as external factors like consumer watchdogs or government and global agencies like the SEC or the World Bank.

Corporate Lending

Corporate Lending departments works with businesses to create specifically designed corporate loans to grow operations or provide financing for acquisitions and buyouts. These loans are varied in form from asset-based lending, structured finance, or cash flow corporate lending along with other financial services.

Corporate Opportunity
Corporate Raid

A corporate raid (sometimes referred to as breaking a company) is a business term that describes a particular type of hostile takeover in which the assets of the purchased company are immediately sold off (business liquidation). The target company essentially disappears in the process. This can be a profitable exercise if the company holds disposable

Corporate Recovery

Corporate recovery is the term given to the rescues undertaken by professional accountants, who are professionally trained, to assist the management of companies in nursing a company in financial and other difficulty back to health. This work is usually undertaken at the behest of the directors of the company and is normally undertaken by licensed

Corporate Recovery Department

Part of an accountancy firm which specialises in assisting companies to recover from financial problems.

Corporate Resolution
Corporate Risk Management

Practices that serve to optimize risk-taking in a context of book value accounting.

Corporate Social Responsibility

Companies integrate social and environmental concerns in their business operations and in their interactions with stakeholders.

Corporate Stock

Corporate stock is the capital or monetary fund that a company raises through the sale of shares. Shares of corporate stock define an ownership entitlement, called an equity position, and represent a proportional claim on a company’s assets and future earnings. Ownership is determined by the number of shares of corporate stock a person owns

Corporate Tax

Corporate tax refers to a tax levied by various jurisdictions on the profits made by companies or associations. As a general principle, the tax varies substantially between jurisdictions. In particular, allowances for capital expenditure and the amount of interest payments that can be deducted from gross profits when working out the tax liability vary substantially.

Corporate Title

Publicly and privately held for-profit corporations often confer corporate titles or business titles on company officials as a means of identifying their function in the organization. In addition, many non-profit organizations, educational institutions, partnerships, and sole proprietorships also assign titles of the same nature. Common corporate titles, such as Chief Executive Officer (CEO), Chairman of

Corporate Welfare

Corporate welfare is a term describing a government’s bestowal of money grants, tax breaks, or other special favourable treatment on corporations. The term was coined by Ralph Nader in 1966, and creates a satirical association between corporate subsidies and welfare payments to the poor, and implies that corporations are much less needy of such treatment


A legal structure authorized by state law that allows a business to organize as a separate legal entity from its owners. A nonprofit is often referred to as an “artificial legal person,” meaning that, like an individual, it can enter into contracts, sue and be sued and do the many other things necessary to carry on a business. One advantage of incorporating is that a corporation’s owners (shareholders) are legally shielded from personal liability for the corporation’s liabilities and debts (unpaid taxes are often an exception). In theory, a corporation can be organized either for profit-making or nonprofit purposes. Most profit-making corporations are known as C corporations and are taxed separately from their owners, but those organized under subchapter S of the Internal Revenue Code are pass-through tax entities, meaning that all profits are federally taxed on the personal income tax returns of their owners.

Corporation Tax

Tax payable by companies, based on the taxable profits of the period.

Corpus Delecti

Latin for the “body of the crime.” Used to describe physical evidence, such as the corpse of a murder victim or the charred frame of a torched building.

Corpus Delicti
Corpus Juris

In statistics, correlation is an assessment of the extent of the linear relationship between two variables. A correlation coefficient is the index of the extent of the linear relationship. The most common correlation coefficient is the Pearson product-moment correlation, defined as the covariance of the two variables divided by the product of their standard deviations.

Correlation Coefficient

A correlation coefficient is a numerical, descriptive measure of the strength of the linear relationship between two variables. Values for the correlation coefficient range between -1 and +1, with a correlation coefficient of +1 indicating that the two variables have a perfect, upward-sloping (+) linear relationship and a correlation coefficient of -1 showing that the

Corroborating Evidence

Corroborating evidence is evidence which is supplementary evidence that confirms or strengthens initial evidence such as testimony. For example, if Sue saw James drive his automobile into another car which is green and another witness stated that when he examined James’ car there was green paint on the fender, the testimony of the witness corroborates


A person who signs his or her name to a loan agreement, lease or credit application. If the primary debtor does not pay, the cosigner is fully responsible for the loan or debt. Many people use cosigners to qualify for a loan or credit card. Landlords may require a cosigner when renting to a student or someone with a poor credit history.


Cost is referred to as the value of money that has the power to produce any commodity or service. Cost is exhaustible in nature; once cost is given up for any good or service, it cannot be used anymore. Cost can be explained as a certain amount of money, which is used as an input and is exhausted in order to acquire any good or service.

Cost Basis

Basis (or cost basis), as used in United States tax law, is the original cost of property adjusted for factors such as depreciation. When property is sold, the difference between the sale price and basis is the income or loss reported at that time on U.S. tax returns. Basis is most commonly used in the computation of capital gains. From

Cost Bill
Cost Driver

A Cost Driver is any activity that causes a cost to be incurred. The Activity-Based Costing (ABC) approach relates indirect cost to the activities that drive them to be incurred. In traditional costing the cost driver to allocate indirect cost to cost objects was volume of output. With the change in business structures, technology and

Cost Management
Cost Of Capital

Cost of capital is described as the opportunity cost of a specific investment. Cost of capital includes the cost of equity and cost of debt. It is the rate of return that a company is capable of earning at the equivalent level of risk as to the chosen investment. In other words, the cost of capital is an expected return that the capital supplier contrives to earn

Cost Of Carry

Out-of-pocket costs incurred while an investor has an investment position. Examples include interest on long positions in margin account, dividend lost on short margin positions, and incidental expenses.

Cost Of Completion
Cost Of Equity

The cost of equity is the minimum rate of return that a business or organization must offer investors or owners to offset their wait for a return on investment and for assuming some level of risk. There are conflicting approaches to estimating the cost of equity and cost of equity percentages. The traditional formula for

Cost Of Funds Index

There are several cost of funds indexes published. The most widely used is a monthly index published by the Federal Home Loan Bank of San Francisco (FHLBSF). It is called the 11th District Monthly Weighted Average Cost of Funds Index (COFI). It is one of several indices used by mortgage lenders to set the floating

Cost Of Goods Manufactured

The cost of goods manufactured is a calculation of the production costs of the goods that were completed during an accounting period.

Cost Of Goods Sold

Materials, labour and other costs directly related to the goods or services provided.

Cost-Of-Living Adjustment

COLA, or cost-of-living adjustment, is an act of adjusting wages to create economic balance for the changes in the cost of living. A COLA is measured by the Consumer Price Index (CPI or cost-of-living index), which calculates the changes in consumer prices. A COLA takes into account many components, such as the cost of transportation,

Cost-Of-Living Index

A cost-of-living index measures the changes in prices consumers pay for a fixed basket of goods and services over time. While the Bureau of Labor Statistics states that its monthly Consumer Price Index is not a complete cost-of-living measure, the CPI is usually considered a cost-of-living index; indeed, CPI and cost-of-living index are often used

Cost-Plus Pricing

Cost-plus pricing is a pricing method used by firms. It is used primarily because it is easy to calculate and requires little information. There are several varieties, but the common thread in all of them is that one first calculates the cost of the product, then includes an additional amount to represent profit. Cost-plus pricing

Cost-Volume-Profit Analysis

In management accounting, Cost-Volume-Profit Analysis (CVP) is a form of cost accounting. It is a simplified model, useful for elementary instruction and for short-run decisions. COST-VOLUME-PROFIT ANALYSIS Cost-volume-profit (CVP) analysis expands the use of information provided by breakeven analysis. A critical part of CVP analysis is the point where total revenues equal total costs (both fixed and variable costs).

Cost/Benefit Analysis

Cost-benefit analysis is essentially a system of economic accounting, which owes its origin to a French engineer, Jules Dupuit. Noted economist Alfred Marshall also formulated some key concepts of CBA. It was, however, the Federal Navigation Act of 1936, which gave an impetus towards the development of practical models of CBA. It was not until the

Cottage Industry

A cottage industry is a system of production which takes place in private homes rather than in a factory, with the tools and other means of production individually owned. Often products produced by a cottage industry are hand-made and/or unique in some distinctive way. Cottage industry products are often identified with an area or even

Council Of Economic Advisers

The Council of Economic Advisers is a panel that provides the President of the United States with advice on matters of international and domestic economic policy. Congress established the Council of Economic Advisers with the passage of the Employment Act of 1946. Three economists (i.e. a chairman and two members) comprise the Council of Economic

Council of Mortgage Lenders

The departure of building societies from the ‘mutual club’ and the increasing role of banks and other specialist lenders in providing home loans led to the formation of the Council of Mortgage Lenders (CML). It acts as a representative body for its members. The CML’s work is administered by the staff of the Building Societies

Council Tax

This replaced the Community Charge (unpopularly known as the poll tax) on April 1, 1993. One bill is sent to individual domestic properties each year – the amount payable depending on the valuation banding of the property, how many people are resident and any benefits or reductions the payer or other residents may be entitled


A general term for an Advocate, that is, someone who is representing a party to a court hearing. The term is commonly used as a linguistic shorthand for Barrister, although I can’t see any reason in principle why it should be used of a solicitor advocate as well.


A defendant’s court papers that seek to reverse the thrust of the lawsuit by claiming that it was the plaintiff — not the defendant — who committed legal wrongs, and that as a result, it is the defendant who is entitled to money damages or other relief. Usually filed as part of the defendant’s answer


Contrary to or tending to counteract the fluctuations in an economic cycle.


The rejection of an offer to buy or sell that simultaneously makes a different offer, changing the terms in some way. For example, if a buyer offers $5000 for a used car, and the seller replies that he wants $5500, the seller has rejected the buyer’s offer of $5000 and made a counteroffer to sell


A counterparty is a legal and financial term. It means a party to a contract. A counterparty is sometimes referred to as a “contraparty.” Example: If you have signed a contract with BigCompany that states that you will buy something from them, you and BigCompany are counterparties. Any legal entity can be a counterparty. Examples

Counterparty Risk

Counterparty risk refers to the risk of default of one party in a particular transaction. Credit ratings can be used to evaluate counterparty risk. For example, a party with a AAA credit rating represents a lower counterparty risk than a party with a B credit rating. The lower the counterparty risk, the lower a particular

County Court

In the UK, the county courts here the majority of civil cases, particularly the less serious ones (see: Court system of England). There are currently 226 county courts in England, administered by the Court Service (see: Court service). Some county courts are empowered to deal with uncontested divorce cases (contested cases are heard in the Family


Rate of interest payable on a loan.

Course Of Employment

A court is a public forum used by a power base to adjudicate disputes and dispense civil, labour, administrative and criminal justice under its laws. In common law and civil law states, courts are the central means for dispute resolution, and it is generally understood that all persons have an ability to bring their claims

Court Calendar

A list of the cases and hearings that will be held by a court on a particular day, week or month. Because the length of time it will take to conduct a particular hearing or trial is at best a guess and many courts have a number of judges, accurately scheduling cases is difficult, with the result that court calendars are often revised and cases are often heard later than initially planned. A court calendar is sometimes called a docket, trial schedule or trial list.

Court Costs

The fees charged for the use of a court, including the initial filing fee, fees for serving the summons, complaint and other court papers, fees to pay a court reporter to transcribe deposition and in-court testimony and, if a jury is involved, to pay the daily stipend of jurors. Often costs to photocopy court papers

Court Of Appeals

The Court of Appeals is the highest court in the state and is also called the Supreme Court in some states and at the federal level. It generally has the discretion to decide which cases to hear. However, the Court of Appeals is mandated by law to hear death penalty cases, legislative redistricting cases and certifications of questions of law.

In a civil case, either side may appeal the verdict in the case. If a criminal is found guilty they have the right to file an appeal, but the government may not appeal the verdict if the defendant is found not guilty. The parties in a criminal case, however, can both appeal the sentencing which was given after a guilty verdict.

To win an appeal the appellant or litigant must be able to prove the trial court made legal errors which affected their case. The Appeals Court is only reviewing evidence and facts on record which were established during the trial, they do not hear witnesses or review more evidence.

Court Of Customs And Patent Appeals
Court Of Equity

A chancery court, equity court or court of equity is a court that is authorized to apply principles of equity (as opposed to law) to cases brought before it. The decisions are not precedent-setting. These courts began with petitions to the Lord Chancellor of England. Some common law jurisdictions – such as the American states of Delaware, New Jersey, and Tennessee – preserve the distinctions between law and

Court Of First Instance

The court originally set up to deal with matters arising from the internal administration of the EU (so-called ‘staff cases’), but which now has essentially the same jurisdiction as the ECJ. The only important actions over which it does not have jurisdiction are those bought by one member state against another for failure to comply with obligations

Court Of Law
Court Order

A court order (or court ruling) is an official proclamation by a judge (or panel of judges) that defines the legal relationships between the parties to a hearing, a trial, an appeal or other court proceedings. Such ruling requires or authorizes the carrying out of certain steps by one or more parties to a case.

Court Service

The UK body responsible for the administration and running of the Court of Appeal (see: Court of Appeal), all Divisions of the High Court (see: High Court), Crown Court (see: Crown court), county courts (see: County Court), and the judicial tribunals (see: Tribunal). More information is available on the Court Service Web site]]. The Court Service is an agency

Court System Of England

In the UK, all but the most serious or difficult civil and criminal cases are handled by separate court systems: civil cases by tribunals and county courts, criminal cases by magistrates’ courts and Crown Court centres. In England and Wales, more serious cases, and some appeals, are handled by the High Court. Appeals from the


A signed written agreement between two or more parties (nations) to perform some action.

Covenant Not To Compete
Covenant That Runs With The Land
Covenants, Conditions And Restrictions
Cover Note

A document confirming that recently-purchased insurance is in force. Used if a claim should be necessary before the full contract arrives.

Cover Ratio

The number of warrants required to exercise into one share, or one unit of the underlying asset. Also known as the subscription ratio, exercise ratio, conversion ratio, entitlement ratio, parity ratio, multiplier, or set.

Take care when applying the cover ratio: some issuers express the ratio as an inverse, so that a cover ratio of 100 will be written as 0.01.

Coverdell Education Savings Account

Formerly called the education IRA, the Coverdell education savings account is an investment plan used for funding a child’s college education. The maximum amount one may contribute to a Coverdell education savings account changes over time, and there are several rules one must follow to avoid penalties. For example, any funds in the Coverdell education

Covered Call

A covered call is a short call option which is backed — or covered — by sufficient pre-purchased shares of the underlying stock. An investor’s risk is limited when selling (or writing) a covered called since the investor already owns sufficient stock to cover the option if the covered call is exercised. By selling a

Covered Combination

The covered combination is a strategy that allows the investor to receive premium income in exchange for being willing to double his stock position in the event of a downward price move, enhance his rate of return on the upside, and lower his breakeven price in a static market.

Covered Option

A covered option is either a put or a call option which is covered (backed) by sufficient shares of the underlying security. An option is a covered option if sufficient shares are already owned to “cover” the option if it is exercised. The opposite of a covered option is a naked option. The advantage of

Covered Put

A covered put is a put option which is sold by an investor and which is covered (backed) by a corresponding number of short shares of the underlying security. A covered put may also be covered by deposited cash or cash equivalent equal to the exercise price of the covered put. Since a covered put


A CPA, the common acronym for Certified Public Accountant, is an accountant licensed by a state board to engage in public accounting. The requirements to become a CPA vary by state, but each CPA candidate must pass the Uniform CPA Examination and fulfil certain experience requirements. After gaining certification, a CPA is required to take


CPI is the common abbreviation for the Consumer Price Index, which measures the change in prices urban Americans pay for a fixed basket of goods and services. The CPI encompasses over 80,000 consumer items in a wide range of categories, like apparel, medical care, and transportation. Besides the overall “headline” CPI, a “core” CPI is

Crack Spread

The word “spread” is generally used in the financial industry to refer to the difference between two related entities that can be expressed quantitatively while the word “crack” is used in the oil refining industry as a verb describing the process of separating and transforming the various chemical components of crude oil into saleable refined

Crash Of 1929

The Crash of 1929 took place from September through November 1929, when the Dow shed over one-third of its value from its high of 381 on 9/3/29. The Crash of 1929 officially began on Black Thursday, October 24, when $9 billion in market losses occurred and 11 speculators threw themselves out their skyscraper windows. The

Crash Of 1987

The Crash of 1987, Black Monday, took place on October 19, 1987. During the Crash of 1987, the Dow lost 22% of its value in one day. Shareholders could not reach their brokers, brokers could not supply prices and computers were overloaded. The Crash of 1987 dwarfed the infamous Black Thursday of 1929. However, unlike

Creative Accounting

Creative accounting and earnings management are euphemisms referring to accounting practices that may or may not follow the letter of the rules of standard accounting practices but certainly deviate from the spirit of those rules. They are characterized by excessive complication and the use of novel ways of characterizing income, assets, or liabilities. The terms

Creative Destruction

Renowned economist Joseph Schumpeter coined a term ‘creative destruction’ in his work titled ‘Capitalism, Socialism and Democracy’ published in 1942. It essentially refers to that ‘industrial mutation’ process, which continuously changes a nation’s economic structure; involving annihilation of old ones and the creation of new ones. Destruction occurs with the purpose of a new creation.

Credible Witness

Credit denotes the borrowing of money by one party from another which is returned at a specified time in the future. A contractual agreement is drafted that determines the amount of money to be credited to the borrower and the date on which the amount is to be repaid. The amount credited is determined according to the capacity of the

Credit (Bookkeeping System)

Entries in the credit column of a ledger account represent increases in liabilities, increases in ownership interest, revenue, or decreases in assets.

Credit (Terms Of Business)

The supplier agrees to allow the customer to make payment some time after the delivery of the goods or services. Typical trade credit periods range from 30 to 60 days but each agreement is different.

Credit Balance

While maintaining a margin account, the amount of funds which are deposited in the customer’s account after a successful execution of a short sale order is called a credit balance. The credit balance amount includes both the money earned through the short sale itself and the specified margin amount which the customer is obliged to deposit

Credit Bureau
Credit Card

A credit card is the small plastic card issued to the borrower. the credit card issuer agrees to lend the buyer money (at a significant interest rate) for the purchase and promises to pay the seller. The credit card issuer typically provides a 25-day grace period during which credit card interest charges do not accrue.

Credit Card Fraud

Credit card fraud cost the banking industry £504.8 million in 2004 but the introduction of chip & PIN knocked that figure sharply lower in 2005. While the ultimate financial cost of credit card fraud is usually carried by the banks, the impact on you in time, inconvenience and frustration can be considerable. There are different

Credit Card Protection

When you take out a credit card or loan of any kind, you will normally be offered Payment Protection Insurance (PPI). This credit card protection will pay your debt if your circumstances change and you are unable to repay it. For example, it could come in handy if you are made redundant, suffer a serious

Credit Control

Methods used by companies to try to ensure their customers settle their accounts within the agreed time period.

Credit Crunch

The credit crunch is the informal term for the decrease in lending activity that has made business more difficult for companies reliant upon leverage, or borrowed capital.

Credit Default Swap

A Credit Default Swap or CDS is actually a swap contract. For this, the buyer of this type of swap is provided with protection when making numerous payments to the seller, who is also protected. In exchange for making this swap, the seller is given a payoff if for some reason the bond or loan were to default. The easiest way to think of the Credit Default Swap or CDS is that this bilateral contract is set up between the buyer and seller so both parties are protected.

Credit Derivative

A Credit Derivative is a contract to transfer the risk of the total return on a credit asset falling below an agreed level, without transfer of the underlying asset. This is usually achieved by transferring risk on a credit reference asset. Early forms of credit derivative were financial guarantees. Some common forms of credit derivatives

Credit Enhancement

Any methodology that reduces the credit risk of a transaction with a counterparty.

Credit File

A record of your financial history Your credit file is a record of your financial activity and is maintained by a credit reference agency. It contains details of all the applications for credit that you’ve made and the decisions that were made. If you miss payments or go into arrears, this will be noted on your file,

Credit History

Credit history is generally a temporal record of repaying debt. Additionally, credit history is an indication of one’s creditworthiness and is measured by a FICO score developed by Fair Isaac Company. The FICO score ranges from 350 to 850, quantifying the probability of debt repayment. Credit history is reflected by a credit report, which is

Credit Insurance
Credit Limit

The credit limit is the maximum amount of money that may be charged to your credit card account. The issuer will usually allow you to carry the full amount as an unpaid balance provided you make minimum payments and pay the finance charges due each month. Most charge additional fees if your account exceeds the credit limit.

Credit Note

A document sent to a customer of a business cancelling the customer’s debt to the business, usually because the customer has returned defective goods or has received inadequate service.

Credit Purchase

A business entity takes delivery of goods or services and is allowed to make payment at a later date.

Credit Rating

A credit rating refers to the capability of companies to repay their debt obligations (i.e. creditworthiness) and to the riskiness of certain investment products (i.e. bonds, debt securities, etc.). Lenders look at a credit rating to evaluate the likelihood of default by the borrowing party (i.e. counterparty risk). Credit ratings are assigned by credit rating

Credit Report

A credit report pulls together information on how much a person has borrowed in the past and how well he has done paying it back in order to let creditors know how much of a risk they would be taking by lending to him.

Credit Risk

Credit risk is risk due to uncertainty in a counterparty’s (also called an obligor’s or credit’s) ability to meet its obligations. Because there are many types of counterparties – from individuals to sovereign governments – and many different types of obligations – from auto loans to derivatives transactions – credit risk takes many forms. Institutions

Credit Sale

A business entity sells goods or services and allows the customer to make payment at a later date.

Credit Score

A credit score is a value computed by a credit reporting agency, or credit bureau, and based upon information about a person collected by the agency. The credit score is sold by subscription to banks and other companies, who use the credit score when making credit decisions. Three major credit bureaus compute their own credit

Credit Scoring

Credit scoring is a system employed by lenders to calculate the statistical probability that a loan they grant to you will be repaid. Different lenders have slightly different rules for assessing risk. Each lender works out the characteristics of ‘good’ and ‘bad’ customers, based on their past experience and credit score. Credit scoring allows lenders

Credit Spread

A credit spread is an option strategy implemented by the simultaneous purchase and sale of two options where the proceeds of the option sold exceed the cost of the option purchased. To set up a credit spread, the investor looks for options of the same security with different strike prices and with the same expiration

Credit Union

A credit union is a member-owned and controlled, financial cooperative that is entirely operated by and for its members. When an individual deposits money into a credit union, he/she becomes a member of the credit union and has partial ownership of that credit union. A credit union consists of individuals with a common affiliation, such


A person or organisation to whom money is owed by the entity.

Creditor’s Claim
Creditor’s Rights
Crime Against Nature
Crime Of Passion
Criminal Attorney
Criminal Calendar
Criminal Culpability

In general, for a criminal conviction to succeed, there needs to be a demonstration of culpability. On the whole, the accused will culpable if at the time of the offence he or she was not exempt from liability; for example, the perpetrator may be exempt if below the age of criminal consent (see: Exemption from criminal

Criminal Insanity
Criminal Justice
Criminal Law

Criminal law or penal law is the group of laws which outlines the processes and penalties for crimes committed against the public authority and run counter to the public interest.

They also establish the processes for the police, courts and other parts of the legal system to operate.

Common cases of criminal law including felonies and misdemeanours such as robbery, murder, kidnapping and rape, as opposed to civil crimes perpetrated against one party such as medical malpractice, personal injury or breach of contract.

Criminal laws are established by criminal codes. If a defendant is prosecuted for a crime under criminal laws they must be prosecuted and found guilty beyond a reasonable doubt. The penalties from crimes, as outlined by criminal laws and procedural laws, are used to deter additional crime as well as punish the criminal for their actions. Restitution may also be ordered in some cases to restore the victims of the crime.

Criminal Procedure

The framework of laws and rules that govern the administration of justice in cases involving an individual who has been accused of a crime, beginning with the initial investigation of the crime and concluding either with the unconditional release of the accused by virtue of acquittal (a judgment of not guilty) or by the imposition

Criminal Trial Procedure

This article describes the procedures by which criminal cases are assigned to either the magistrates’ court or to the Crown Court, and in outline the processes of trial and sentencing that follow from this determination. Note that at the time of writing (November 2002) these procedures are under review, and substantial changes are anticipated. Step

Critical Event

The point in the business cycle at which revenue may be recognised.

Critical Illness Insurance

Critical Illness Insurance is the financial safety net should you suffer from a critical illness. Critical illness coverage provides benefits that are paid upon the diagnosis of a critical illness such as cancer, heart attack, stroke, Alzheimer’s disease and others. In other words, critical illness coverage provides a living benefit that pays-directly to the policyholder-when

Critical Path Analysis

Critical Path Analysis is an analysis technique used to identify the critical (essential) and non-critical (non-essential) activities associated with a business process or work plan and the amount of float (slack) associated with each activity. The result of the analysis defines the critical path, a sequential set of related and essential steps that comprise a


A close friend who accompanies his buddies in their activities

Cross Default Clause

A cross-default clause is common stipulation under loan agreements in which a bank has a right to deny access to balances in any or all loan accounts to a borrower (with several loans at the same bank) even if only one loan goes into default. In fact, a bank can apply all available balance(s) in


Sometimes called a cross-claim, legal paperwork that a defendant files to initiate her own lawsuit against the original plaintiff, a co-defendant or someone who is not yet a party to the lawsuit. A cross-complaint must concern the same events that gave rise to the original lawsuit. For example, a defendant accused of causing an injury when she failed to stop at a red light might cross-complain against the mechanic who recently repaired her car, claiming that his negligence resulted in the brakes failing and, hence, that the accident was his fault. In some states where the defendant wishes to make a legal claim against the original plaintiff and no third party is claimed to be involved, a counterclaim, not a cross-complaint, should be used.


The interrogating or questioning of a witness by the party against whom he or she has been called and examined. See examination.

At trial, the opportunity to question any witness, including your opponent, who testifies against you on direct examination. The opportunity to cross-examine usually occurs as soon as a witness completes her direct testimony — often the opposing lawyer or party, or sometimes the judge, signals that it is time to begin cross-examination by saying, “Your witness.” Typically, there are two important reasons to engage in cross-examination: to attempt to get the witness to say something helpful to your side, or to cast doubt on (impeach) the witness by getting her to admit something that reduces her credibility — for example, that her eyesight is so poor that she may not have seen an event clearly.

Cross-Examination As To Bad Character

This article describes the situations in which the defendant in a criminal trial can be cross-examinated about his bad character, which may include previous criminal convictions, among other things. Character may also be an issue in cross-examination of other witnesses, but the rules are somewhat different. The prosecution may also wish to adduce original evidence

Crowding Out

Crowding out effect is an economic concept. It explains how a rise in the rate of interest, due to increased government borrowing (in money market) drives away or ‘crowds out’ private investment (from the lending market). Government’s ability to crowding out private investment is primarily due to its high credit rating and its ability to pay market demanded interest rate. [Government can fund


Crowdsourcing is the use of large numbers of users, or a ‘crowd’, to achieve an organizational outcome. The term was first coined in 2006 in a Wired magazine article, written by Jeff Howe. Taking a job that is normally carried out by an employee, an internal team, or a contractor, and asking a community to help solve the problem


The term ‘the Crown’ is used in three slightly different ways in UK legal documentation; it can mean: the person of the monarch, as a private individual, or the office of the monarcy, or the corporation of the Crown, which includes the ministers of the Government and their Departments, and the Civil Service. Until the

Crown Court

In the UK, the Crown Court hears the more serious criminal cases, and cases referred from the magistrate’s courts (see: Court system of England). The Crown Court is administered by the Court Service (see: Court service).

Crown Prosecution Service

The organization in the UK responsibilities for prosecuting breaches of criminal law (see: Metas of law). The Service is Headed by the Director of Public Prosecutions, who reports to the Attorney-General (see: Attorney-general).

Cruel And Unusual Punishment

Any act of inflicting unnecessary emotional or physical pain. Cruelty or mental cruelty is the most frequently used fault ground for divorce because as a practical matter, courts will accept minor wrongs or disagreements as sufficient evidence of cruelty to justify the divorce.

Cruelty To Animals

CSO is an abbreviation for Chief Security Officer. A CSO is the top executive of a corporation responsible for securing a company’s information and data both in physical and digital form. The CSO management position is most often found in technology companies. In recent years, the role of a CSO has increased due to the


Corporate social responsibility (CSR) is a recognition by businesses that they must look after their social, environmental, ethical and philanthropic relationships. The World Business Council for Sustainable Development, in its publication “Making Good Business Sense”, defines corporate social responsibility as follows: “Corporate social responsibility is the continuing commitment by business to behave ethically and contribute

Culpa Lata

From culpa lata dolo aequiparetur: a concealed fault is equivalent to a deceit. This term appears occasionally in law reports, either with or without its loose translation ‘Gross negligence’.


Culpability descends from the Latin concept of animal dung (culpa), which is still found today in the phrase mea culpa (literally, “my own fault”). The concept of culpability is intimately tied up with notions of agency, freedom and free will. All are commonly held to be necessary, but not sufficient, conditions for culpability. In explanations and predictions of human action and inaction culpability is

Cult Stock

A cult stock attracts investors with speculative possibilities rather than fundamental performance. It’s easy to confuse cult stocks with stocks with cult-like followings (the latter include Apple and the satellite radio companies). The difference is that true cult stocks usually have not yet achieved mainstream attention (and possibly never will, since they often have a speculative nature or lack of profitability).

Cumis Counsel
Cumulative Dividend

A cumulative dividend is a dividend that, if the company doesn’t pay it when it is due, must be paid in future periods. For example, suppose a company issues preferred shares with a purchase price of $100 and a cumulative dividend of 5% per year, or $5. If it is unable to pay the $5

Cumulative Sentence
Cumulative Total Return

The cumulative total return on an investment is the total profit — including dividends, interest and capital gains — received on an investment over a period of time. The period of time necessary to figure the cumulative total return on an investment can vary. The cumulative total return on an investment is often expressed as

Cumulative Voting
Cup And Handle

A cup and handle is a technical analysis charting formation that signals a stock or security is setting up for a possible breakout to the upside. The cup and handle pattern, also called cup with handle, was first introduced in 1988 by William O’Neil. Mr O’Neil describes the cup and handle as a bowl-shaped trading


Currency is money (coins and paper) used to buy goods and services. A broader definition is that money is a claim on human work.

Currency Board

A currency board is a kind of monetary authority of a country. Its basic function is to issue of notes and coins. Currency board traces back its origin to ‘English Bank Act’ of 1844. It was primarily used in colonies. Even after decolonization, many independent nations opted for currency boards. A country’s currency board can

Currency Futures

With $4.0 trillion traded daily, currency future (FX future or foreign exchange future) markets represent the largest asset class in the world. Forex futures are used for currency price trend speculation as well as hedging against foreign currency risks by international companies. Currency futures are a contract in the futures markets for exchange of currencies

Currency Pair

In FOREX markets, a currency pair is a price quote showing how much an investor will need of one currency to buy one unit of another currency. A currency pair is shown as a ratio of currency symbols. For example, in the EUR/USD currency pair, EUR is the base currency and the USD is the

Currency Peg

Currency peg is a term used to define the control of the value of a currency by relating it to another currency. US dollar is the most common currency against which other currencies are pegged. A pegged exchange rate is more commonly known as a fixed exchange rate. Pegged exchange rate relates to the value

Current Account

Current account and capital account together form primary components of the balance of payments. These balances are obtained as a sum total of the balance of trade, net factor income, and net transfer payments. When calculating current account, government, as well as private payments, are taken into account. Current account, along with net capital outflow,

Current Asset

An asset that is expected to be converted into cash within the trading cycle.

Current Cost Accounting

A valuation method whereby assets and goods used in production are valued at their actual or estimated current market prices at the time the production takes place (it is sometimes described as ‘replacement cost accounting’. The more usual convention is historical cost accounting.

Current Dollars

Current dollars (also known as “nominal dollars”) are dollars in the year they were actually received or paid, unadjusted for price changes. For many years the US economy has experienced inflation, so amounts expressed in current dollars misrepresent their actual purchasing power. For example, someone earning $20,000 in 1955 in current dollars – the dollars

Current Liability

A current liability is a liability that must be paid or fulfilled within one year. Examples include current portion of long-term debt, accounts payable, and accumulated expenses. The total is used as the denominator in the current ratio metric.

Current Market Value

The current market value of a stock is its most recent trade. Since the current market value of a stock can change rapidly during the trading day, it is often convenient to use end-of-day settlement prices to determine current market value, especially of a portfolio of stocks. The current market value of an individual stock

Current Method

The “current method” refers to one of 3 approaches (current, temporal, current + temporal) to foreign currency translation. Under the current rate method: Assets and liabilities are translated using the current rate. The current rate is the exchange rate of the given currency on the balance sheet date (date of financial reporting ie. 10K,10Q.) Owner’s equity and dividends

Current Monthly Income

As defined by the new bankruptcy law, a bankruptcy filer’s total gross income (whether taxable or not), averaged over the six-month period immediately preceding the bankruptcy filing. The debtor’s current monthly income is used to determine whether the debtor can file for Chapter 7 bankruptcy, among other things.

Current Ratio

The current ratio is an indication of a firm’s market liquidity and ability to meet short-term debt obligations. Acceptable current ratios vary from industry to industry. If a company’s current assets are in this range, then it is generally considered to have good short-term financial strength. If current liabilities exceed current assets (the current ratio is below 1), then the company may have problems meeting its short-term obligations. If the current ratio is too high, then the company may not be efficiently utilizing its current assets.

Current Value

A method of valuing assets and liabilities which takes account of changing prices, as an alternative to historical cost.

Current Yield

Current yield is equal to a bond’s annual interest payment divided by its current market price. A bond with a 5% coupon purchased at $900 has a current yield of 5.56%. (Current yield equals $50 annual interest divided by $900 market price.) So an investor who pays $900 for a bond with a 5% coupon


Curtesy tenure is the legal term denoting the life interest which a widower may claim in the lands of his deceased wife, under certain conditions. The tenure relates only to those lands of which his wife was in her lifetime actually seised and not therefore to an estate of inheritance


Curtilage is a legal term describing the enclosed area of land around a dwelling. It is distinct from the dwelling by virtue of lacking a roof, but distinct from the area outside the enclosure in that it is enclosed within a wall or barrier of some sort. It is typically treated as being legally coupled


CUSIP is an abbreviation for Committee on Uniform Securities Identification Procedures of the American Bankers Association. CUSIP numbers are designated and assigned by the CUSIP service bureau, operated by Standard and Poor’s. The CUSIP, or CUSIP number, is an alphanumeric identifier, comprising nine characters, for every class of traded financial instrument in the United States,

Custodial Interference
Custodial Sentence

Under current Sentencing legislation, a criminal conviction may attract a fine (see: Fine sentencing), a Community sentence, or a custodial sentence. A custodial sentence is a term of imprisonment or ‘detention at Her Majesty’s pleasure’. Under the Powers of criminal courts sentencing act (2000), a custodial sentence may only be imposed if such a sentence is mandatory (e.g., the mandatory


A Custodian is responsible for holding securities on behalf of clients in order to reduce the risk of having the assets lost or stolen. Since the assets are still in the clients name, assets are not fungible or can not be used by the custodian for his/her own ends. The custody agent would be performing investment discretion in a fiduciary capacity.


Custom is one of the most fruitful sources of law.  Custom is to society what law is to the state. Each is the expression and realization, to the measure of men’s insight and ability, or the principles of right and justice.  When the state takes up its function of administering justice, it accepts, as true


In sales, commerce and economics, a customer is the recipient of a good, service, product or an idea – obtained from a seller, vendor, or supplier via a financial transaction or exchange for money or some other valuable consideration.

Customers’ Collection Period

Average number of days credit taken by customers.

Customs Court
Cut-Off Procedures

Procedures applied to the accounting records at the end of an accounting period to ensure that all transactions for the period are recorded and any transactions not relevant to the period are excluded.

Cy Pres Doctrine

Crime committed using a computer and the internet to steal a person’s identity or sell contraband or stalk victims or disrupt operations with malevolent programs.


Cyberslacking is a term used to describe the increased use of the internet on company computers by employees for their personal use or entertainment.


Buying a domain name that reflects the name of a business or famous person with the intent of selling the name back to the business or celebrity for a profit. The Anticybersquatting Consumer Protection Act of 1999 authorizes a cybersquatting victim to file a federal lawsuit to regain a domain name or sue for financial


Stealing of financial and/or personal information through the use of computers for making its fraudulent or other illegal use.


A cycle is a recurring pattern, usually wavelike. In business, there are a few common patterns like this, such as the business cycle and the credit cycle. The business cycle is the boom and bust pattern of the market economy. The credit cycle is the expansion then subsequent contraction of credit. The credit cycle is


Occurring in cycles; recurrent.

Cyclical Stock

A cyclical stock is one whose profits are highly correlated with the business cycle. When the economy is in expansion, a cyclical stock has increased profits. Conversely, when the economy slows, so do the prospects for a cyclical stock. A cyclical stock may be found in sectors such as automobile, travel, or manufacturing. The common

Cyclical Unemployment

Cyclical unemployment is when workers lose their jobs because of downturns in the business cycle.

Voided Check

Accounting Terms Beginning With "D"


D-Mark or Deutsche Mark (DM) was Germany’s official currency until the euro became the currency of choice in 1999. D-Mark was replaced by the euro in circulation from that year. However, Deutsche Mark was accepted as legal payment of purchases made inside Germany until February 28, 2002. History D-Mark came into circulation from June 21, 1948, during

Daily High

The daily high is the highest price paid for a stock or a commodity during a trading day. Prior to the advent of pre-market trading and after-hours trading, the daily high for a stock was easy to determine. Today, however, a stock’s daily high can be open to question. Does the daily high refer only

Daily Low

The daily low is the lowest price paid for an equity during a given trading day. On the surface, it would appear that determining the daily low for a stock would be a simple matter. However, as stock trading evolves the precise determination of a stock’s daily low is not as certain as it once

Daily Official List

The daily record setting out the prices of all trades in shares and other securities conducted on the London Stock Exchange.

Daily Trading Limit

The maximum amount, set by the exchange, that the price of a stock, commodity or futures/options contract can rise or fall in a single day. In some cases, trading in an asset is automatically suspended when the daily limit is reached.

Daisy Chain

A situation in the stock market when dealers buy and sell to each other so that investors will think that there is a lot of trading in the market. This will encourage investors to invest and prices to rise

Daisy Chaining

Daisy chaining is an illegal practice undertaken by brokers and investors to artificially inflate stock prices for personal gain. Daisy chining entails forging false transactions in order to simulate a dynamic, high-interest environment with respect to a specific security. Once such a condition is achieved, the increasing volume and growth of the stock induced by


The remedy available at Common law for a breach of contract. In general, damages are a financial award, make against the person in breach, and intended to make good his failure to fulfil his obligations (see: Remedies for breach of contract). A sum of money paid in compensation for loss or injury.

Dangerous Weapon
Dark Cloud Cover

Dark cloud cover is a candlestick charting pattern that can signal the top of an uptrend — it is a bearish reversal pattern. A long white candle the first day followed the second day by a long black candle that opens above the white candle’s closing price and closes within the body of the white

Dark Pool

Dark pools are off-exchange platforms that match buy and sell orders anonymously so that investors can avoid tipping their hands, which can be very costly in the cutthroat environment of trading.


A computer database is a structured collection of records or data that is stored in a computer system. A database relies upon software to organize the storage of data. In other words, the software models the database structure in what is known as database models (or data models). The model in most common use today

Date Of Maturity

The date on which an insurer will pay the face amount of a policy to the policy owner if the insured is still alive.

Date Of Record

The date of record is the date that determines which shareholders receive dividend payments. On the day a company declares dividends (the declaration date), it decides on both a date of record and date of payment. An investor must be listed as the “holder of record” in the firm’s stock ledger on the date of

Date Rape
DAX 100

DAX 100 is the abbreviation for Deutscher Aktienindex 100, a German price-weighted index of that country’s top 100 stocks. The DAX 100 includes names such as Bayer, Commerzbank, BMW, and Schering. The Dax 100 is part of the German Stock Exchange Index family. The German Stock Exchange publishes a DAX 100 price index (HKDX). The

Day In Court
Day Trader

A day trader is a market participant who generally closes out all trading positions before the market closes for the day. The growth of online discount brokerage in the late 1990s made possible the amateur day trader. The professional day trader, in contrast, probably trades for a living. The professional day trader can often avoid

Day Trading

Day trading is the practice of quickly and frequently buying and selling stocks in the belief that the investor can capture substantial value through the short-term changes in the stock price. Day trading refers to the practice of buying and selling the same stock within the same trading day. Investors practicing day trading believe they


In radio and TV broadcasting, fairly standard divisions (based on audience composition) of a 24-hour day for scheduling commercials.

Days Sales Outstanding

Days Sales Outstanding (DSO) is a measure of how long it takes a company to collect money that it is due. DSO = \frac{Average\ accounts\ receivable}{\frac{Sales}{No.\ days\ in\ period}} Average accounts receivable is from the balance sheet and is the amount at the beginning of the period plus the amount at the end, divided by two. Sales is the

De Bene Esse

Good for the present. A decision de bene esse is one that should stand for the time being, or until some later decision upsets it.

De Facto
De Facto Corporation
De Jure
De Jure Corporation
De Minimis
De Novo
Dead Cat Bounce

A dead cat bounce is any sharp rise in prices after a severe decline. In order to have a true dead cat bounce prices must decline again following the bounce in prices. Investors who are fooled by a dead cat bounce and mistakenly believe that a market has turned around may buy into a still-declining

Deadly Weapon
Deal Origination

Deal Origination or Origination refers to the creation and development of relationships with M&A specialists and investment banks to secure a large quanity of deal flow. Deal origination is the first step towards creating a deal that will be securitized, marketed, syndicated, and executed. Often, Private Equity firms are hevaily involved in the deal origination market.


A dealer is an individual or entity that buys and sells a particular good and holds an inventory in that good. In contrast to an agent, the dealer always acts as the principal in a transaction, whereas the agent represents a client. The dealer has a natural niche in the trade in any high-priced good,

Death Benefit

Death benefit is the sum amount paid by the insurance company to the policyholder upon death. In and of itself, the death benefit constitutes the face value of the life insurance policy as per the original contract. Depending on a type of policy, the death benefit may be accompanied by dividends, as well as other

Death Penalty
Death Put

A death put, sometimes called a survivor’s option, is a feature of certain fixed income or debt instruments that allow for the estate of a deceased investor to “put back” or redeem that instrument without penalty. Certain certificates of deposits that otherwise charge a penalty for early withdrawal of principal wave this penalty in the

Death Row

A written acknowledgement of a debt – a name used for loan financing taken up by a company.


An entry recording an amount owed, listed on the left-hand side or column of an account.

Debit Card

A debit card is a plastic card that resembles a credit card. Using a debit card a customer can withdraw funds on deposit in the customer’s account using an ATM (automated teller machine.) A debit card draws directly on funds in the consumer’s bank account (i.e. checking account). Most businesses that accept credit cards will

Debits And Credits

Debit and credit are formal bookkeeping and accounting terms. Introduction Debits and Credits are the most fundamental concepts in accounting. In accounting theory, the financial aspects of an entity, stated in terms of units of currency, is calculated using the “accounting equation,” which is that Assets equal Liabilities plus Capital. Each Asset, Liability and Capital account contains debit and credit


A form of liability that represents money borrowed from banks or other institutions, or any money owed to another party. Simply put, debt is when you owe someone money. For most people, this means the balances they owe on credit cards, personal loans, mortgages, and overdrafts.

Consumer debt is running at an all time high, with easy access to credit causing many people to run up potentially dangerous levels of unsecured borrowing, while record house prices mean that the average mortgage size is getting larger and larger.

Since the credit crunch of 2008, more and more people are finding their debts are becoming unsupportable as the ability to take out new credit to pay for old dries up, and cash-strapped banks hike the interest rates on credit cards and so on.

If you’re struggling under sever debt problems, then you have a few which we’ll explain in further depth elsewhere: debt consolidation, debt management, IVA or bankruptcy.

All except consolidation will involve at least some damage to your credit file, but when matters come to head and a budget simply doesn’t balance, all are potentially viable solutions.

Debt Capital

Debt capital is funds supplied by lenders that is part of a firm’s capital structure. Debt capital usually refers to long-term capital, specifically bonds, rather than short-term loans to be paid off within one year. If the short-term debt is continually rolled over, however, it can be considered relatively permanent and thus debt capital. Debt

Debt Collector
Debt Consolidation

Borrowers with a number of different loans – usually which are unsecured (not secured on the property) – may find that they can replace these loans with a single loan secured on the property. This can often reduce the borrower’s monthly outgoings by paying only one loan which is secured on the property, sometimes over a longer-term.

Debt Consolidation Program

A debt consolidation program is a program in which several of a person’s debts or loans are combined into one large loan. With a debt consolidation program, a new loan is created. People participate in a debt consolidation program for a variety of reasons, the most common of which is to pay a lowered interest

Debt Counselling

Are you having difficulty managing your money? You may be considering loan consolidation, taking out one loan to cover all your existing repayments. Be careful you don’t end up even deeper in debt! The interest rates and fees charged by consolidation loan providers can be much higher than those available from high street lenders. Such

Debt Financing

Debt financing refers to the borrowing of funds in order to finance a purchase, acquisition or expansion. Debt financing applies to both individuals as well as to businesses and corporations. For businesses and corporations debt financing often involves the selling of notes, bonds, mortgages or other debt instruments. The individuals and financial institutions which provide

Debt Forgiveness

Debt forgiveness refers to partial or complete forgiveness of debt. More commonly used term is debt relief. Debt forgiveness is frequently used to refer to Third World debt. Debt could be owed by organizations, individuals or by countries. In the 1990s a large number of NGOs and other organizations came together under the aegis of

Debt Instrument

A debt instrument is a contractural or written assurance to repay a debt. A debt instrument can be a promissory note, a bill of exchange, a bond or other such instrument. A debt instrument may also be referred to as an instrument of indebtedness. In most cases, a debt instrument can be sold, traded, or

Debt Limit

A debt limit is the maximum amount of debt which a government is allowed to take on. A governmental debt limit may be changed — either up or down — through legislative or voter action. A debt limit is sometimes referred to as a debt ceiling. While a debt limit is often used to refer

Debt Market

The debt market is the market for trading debt securities. The debt market thus involves corporate bonds, government bonds, municipal bonds, negotiable certificates of deposit, and various money market investments. The debt market also includes individual loans bought from lenders and often packaged together in large amounts. The debt market includes the primary market, where

Debt Ratio

For a company, the debt ratio indicates the relationship between capital supplied by outsiders and capital supplied by shareholders. Often the debt ratio is computed as total debt (both current and long-term) divided by total assets. Thus if a company has $50,000 in debt and assets of $100,000, its debt ratio is 50%. The debt

Debt Relief

Debt relief is the partial or total forgiveness of debt, or the slowing or stopping of debt growth, owed by individuals, corporations, or nations. Debt relief for heavily indebted and underdeveloped developing countries was the subject in the 1990s of a campaign by a broad coalition of development NGOs, Christian organisations and others, under the

Debt Security

A debt security is a written agreement to repay a loan, usually with interest, within a given time frame. A debt security may also be referred to as a debt instrument. Issuing a debt security is one way that governments, corporations and even individuals raise capital. A debt security is generally backed by some form

Debt Service

Debt service is the repayment of a mortgage, including interest and principle.

Debt Service Coverage

The debt service coverage ratio calculates the amount of cash available to meet debt obligations. The debt service coverage ratio is used in both corporate and real estate finance. Excluding tax considerations, in corporate finance, Debt service coverage ratio = [Net Income + Depreciation/Amortization + Interest Expense]/[Interest Expense + Principal Payments]. For real estate loans,

Debt Service Coverage Ratio

The Debt Service Coverage Ratio (DSCR) is a benchmark used to measure a company’s cash producing ability to cover its debt payments, providing a useful indicator of financial strength. Debt Service Coverage Ratio is also known as the Interest Coverage Ratio and Debt Service Ratio. The Debt Service Coverage Ratio measures how effectively a company’s operations-generated

Debt To Equity Ratio

Debt-to-Equity Ratio is a measure of financial leverage, indicating what proportion of equity and debt a company is using to finance its assets. A high ratio implies that a company has been aggressive in financing its growth through debt and may be high risk for investors.

Debt To Total Assets Ratio

Debt-to-total-assets is a leverage ratio that defines the (total) amount of debt relative to assets.

Debt/Asset Ratio

The debt/asset ratio measures the ratio of the company’s assets that is financed by non-owners. The debt/asset ratio is computed by dividing total liabilities by total assets. To focus solely on the more permanent capital of the term, the debt/asset ratio can also be calculated by dividing long-term liabilities (obligations not due for one year

Debt/Equity Ratio

A comparison between the company’s total assets and its short- and long-term debts. This ratio is often used to measures a company’s ability to borrow and repay money, or its future prospects.


An owner of a financial obligation of another party.


A person or organisation that owes money to the entity. Someone who has the obligation of paying a debt.

Debtor Days

A ratio used to work out how many days on average it takes a company to get paid for what it sells. Calculated by dividing the figure for trade debtors shown in its accounts by its sales, and then multiplying by 365.

For example, a company with debt of £700,000 and sales of £12m, takes an average of just over 21 days to collect its debts. The lower the number of debtor days, the better.

An abnormally high figure suggests inefficiency, potential bad debts, window-dressing of the sales figures, or deliberate bullying by large customers trying to improve their own cash management.

Cash businesses, including most retailers, should have very low debt collection multiples, because they get their money at the same time as they sell the goods.

Debtor In Possession

The outcome of a proceeding before a judge, arbitrator, government agency or other legal tribunal. “Decision” is a general term often used interchangeably with the terms judgment or “opinion.” To be precise, however, a judgment is the written form of the court’s decision in the clerk’s minutes or notes, and an opinion is a written


All orders in a floor broker’s possession that have not yet been executed.


In law, a declaration ordinarily refers to a judgment of the court or an award of an arbitration tribunal is a binding adjudication of the rights or other legal relations of the parties which does not provide for or order enforcement. Where the declaration is made by a court, it is usually referred to as a declaratory judgment. Less commonly, where declaratory

Declaration Date

The declaration date is the date on which a company’s board of directors sets the amount of the next quarterly dividend. Typically it is many weeks in advance of the actual payout date.

Declaration Of Mailing
Declaration Of Trust
Declaratory Judgement

A court decision in a civil case that tells the parties what their rights and responsibilities are, without awarding damages or ordering them to do anything. Unlike most court cases, where the plaintiff asks for damages or other court orders, the plaintiff in a declaratory judgment case simply wants the court to resolve an uncertainty

Declaratory Relief

Separating a ‘consolidated’ (usually containerised) shipment into its original constituent shipments, for delivery to their respective consignees. Also known as degroupage.

Dedimus Potestatum

An outdated legal procedure that permitted a party to take and record the testimony of a witness before trial, but only when that testimony might otherwise be lost. For example, a party to a lawsuit might use the procedure to obtain the testimony of a witness who was terminally ill and might not be able


Purchases that are claimed as business expenses are described as deductible; they reduce business profits but reduce the amount of income tax owed.


An amount or part taken away from a total, especially an expense that you do not have to pay taxes on, or the process of taking away an amount or part.


A legal document intended to bind its signatory to strong legal obligations, such as a transfer of land or execution of certain metas of contract (see: Contract by deed). A deed has historically been associated with a certain degree of ceremony, particularly the requirement that it be ‘signed, sealed, and delivered’. In recent years this ceremony has become largely symbolic; what distinguishes a contract by deed from a ‘contract under hand’ (see: Contract under hand) is the wording used and the fact that it must be signed by a witness (two witnesses in some cases).

Deed In Lieu (Of Foreclosure)

A means of escaping an overly burdensome mortgage. If a homeowner can’t make the mortgage payments and can’t find a buyer for the house, many lenders will accept ownership of the property in place of the money owed on the mortgage. Even if the lender won’t agree to accept the property, the homeowner can prepare

Deed Of Trust
Deemed Dividend

deemed dividend is a designated undistributed capital gain dividend.

Deep Discount Bond

A loan issued at a relatively low price compared to its nominal value.

Deep Discount Broker

A deep discount broker is a financial professional who executes stock trades at highly nominal commission fees. The services of a deep discount broker are extremely limited. A deep discount broker will typically go no further than implementing basic securities and option trades. Thus, a deep discount broker may not be a viable alternative for

Deep In The Money

A deep in the money option is one that is presently very profitable. An option is commonly said to be deep in the money when the exercise (strike) price of the option is extremely favorable relative to the current market price of the underlying security. The more profitable the position, the further deep in the

Deep Out Of The Money

A deep out of the money option is presently worthless. An option is said to be deep out of the money when the exercise (strike) price of the option is extremely unfavourable relative to the current market price of the underlying security. The greater the gap, the further deep out of the money the option

Deep Value

Deep Value refers to a style of investing that involves buying companies that are deeply below their intrinsic value and often below even their cash on hand. The deep value investor often cares little about the quality of the company she buys, rather she cares primarily about the value of its tangible assets minus its liabilities. It is not uncommon for


Defalcation is a term used by the United States Bankruptcy Code to describe a category of bad acts that taint a particular debt such that it cannot be discharged in bankruptcy. The division is different from both criminal and civil rules describing permitted and unpermitted acts. Thus, parking fines garnered through illegal parking are generally


A false statement that injures someone’s reputation and exposes him to public contempt, hatred, ridicule, or condemnation. If the false statement is published in print or through broadcast media, such as radio or TV, it is called libel. If it is only spoken, it is called slander.

Defamation And Freedom Of Speech

English law has long recognized that a person’s good reputation is something that merits protection, and that compensation should be paid by someone who impugns that reputation. A person who is a victim of an attack on his reputation can be financially damaged, particularly if the imputation concerns his professional competence. However, in most cases,


Default in economics can be referred to as a condition that arises when any debtor is unable to pay back the debt in accordance with the legal obligations of the debt contract. Any organization or individual can be termed as a defaulter if it is unable to pay a scheduled sum of money or desecrated a credit agreement. Condition of default can arise in any kind of debt contract like bonds, loans, mortgages and promissory notes.

Default Judgment

At trial, a decision awarded to the plaintiff when a defendant fails to contest the case. To appeal a default judgment, a defendant must first file a motion in the court that issued it to have the default vacated (set aside).

Default Model

Default models are a category of models that assess the likelihood of default by an obligor. They differ from credit scoring models in two ways: Credit scoring is usually (but not always) applied to smaller credits—individuals or small businesses. Default models are applied more to larger credits—corporation or sovereigns. Credit scoring models are largely statistical,

Default Risk

Default risk is the risk born by a creditor that a debtor will default. Default risk is also called credit risk or financial risk. Creditors are compensated for lending to debtors with higher levels of default risk by the potential for higher rates of return. Consider the corporate bond as a form of debt with


A clause in a deed, lease, will or another legal document that completely or partially negates the document if a certain condition occurs or fails to occur. Defeasance also means the act of rendering something null and void. For example, a will may provide that a gift of property is defeasable — that is, it

Defective Title

An owner’s Title to land or goods can be ‘defective’ (that is, less than perfect) in at least four ways. He may not be the owner at all. Of course, the reason why a person seeks to sell something he does not own might be because he is a villain. However, a person may be dispossessed


An individual, company, or institution sued or accused in a court of law. The term defendant is the name for the person who is being sued in a civil case or charged with a crime in criminal prosecution. In arbitration the term defendant and respondent are synonymous. The defendant does not have to prove their case; this must be done by the plaintiff.

An individual becomes a defendant in a tort case after a plaintiff files a complaint with the court and notifies the defendant. Cases may be decided against a defendant if they refuse to answer the complaint, in which case the court will make a default judgment against them, or they take the case to court and lose.

Civil cases may allow for both parties in the complaint to receive compensation for their losses under some systems of compensation allocation. For instance, some states allow compensation to be awarded using a comparative negligence system which determines both parties level of negligence and divides the compensation accordingly.

Defense Attorney
Defense Department Contracts

Each business day, the Department of Defense posts information about contracts valued at $6.5 million or more. The language can be a bit dense and jargon-filled. We’ve put together the following for Foolish investors who want more insight on some of the terms governing those contracts. A good place to start is the Federal Acquisition Regulation (FAR); Part 16 goes over

Defensive Investment Strategy

Defensive investment strategy is an investment approach to allocating a portfolio as to reduce the risk. In other words, a defensive investment strategy outlines a way to preserve principal and minimize volatility associated with the ups and downs of the market. Employing a defensive investment strategy necessitates investing primarily in bonds and other highly liquid

Defensive Stock

A defensive stock is one whose profits are minimally impacted by economic downturns. A defensive stock may be found in sectors such as utilities, food, and consumer staples. The common thread is companies providing non-discretionary goods and services necessary for everyday life. A defensive stock may use its more predictable earnings to pay a regular

Deferred Annuity

A deferred annuity is a contract that delays annuity payments, unlike a regular annuity, until a certain period of time which has been selected by the investor. A deferred annuity typically has two main stages. The first stage of a deferred annuity is an accumulation stage, where the investor puts money into the account. The

Deferred Asset

An asset whose benefit is delayed beyond the period expected for a current asset, but which does not meet the definition of a fixed asset.

Deferred Compensation

Deferred compensation is the portion of an employee’s income that is paid out at a date later than when the income was actually earned. Broadly, there are two types of deferred compensation plans: qualified and non-qualified. Non-qualified deferred compensation plans include salary reduction arrangements, bonus deferral plans, supplemental executive retirement plans, and excess benefit plans.

Deferred Expenditure

Expenses incurred which do not apply to the current accounting period. Instead, they are debited to a ‘Deferred expenditure’ account in the non-current assets area of your chart of accounts. When they become current, they can then be transferred to the profit and loss account as normal.

Deferred Expense

A deferred expense is an expense incurred which does not apply to the current accounting period. Instead, the expense is debited to a ‘Deferred expenditure’ account in the non-current assets area of a chart of accounts. When such expenditure becomes current, it can then be transferred to the profit and loss account as normal.

Deferred Income

Revenue, such as a government grant, is received in advance of performing the related activity. The deferred income is held in the balance sheet as a type of liability until performance is achieved and is then released to the income statement.

Deferred Revenue

Deferred revenue is a liability that is created when monies are received by a company for goods and services not yet provided. Revenue will be recognized, and the deferred revenue liability eliminated when the services are performed. Deferred revenue stems from the accounting concept of revenue recognition, under which revenues are recognized only when the

Deferred Stock

Deferred stock is one or more shares of stock that does not pay dividends until a specified date or event occurs, such as a company reaching certain profitability levels. Deferred stock is typically held in a lock deferred stock compensation account until the expiration date. Shareholders of deferred stock do not have any rights to

Deferred Tax

Deferred tax represents a company’s liability for taxes owed that is postponed to future periods. Deferred tax is primarily the result of tax law that allows firms to write off expenses faster than they are recognized and thus create a deferred tax liability. For example, under tax law companies can often depreciate fixed assets at a faster rate for tax purposes than the actual use of the asset would dictate. Theoretically, the resulting difference between income under Generally Accepted Accounting Principles and income for tax purposes sets up a deferred tax liability for the apparent taxes owed to the IRS in the future. In actual practice, the deferred tax liability may be postponed indefinitely if the company continues to buy new equipment. Over the past decades, accounting standards for deferred tax have been revised substantially. The rules for deferred tax remain complex and, in some circles, controversial. Some observers argue that deferred tax is merely an accounting fiction and that no deferred tax should be recognized because the only tax liability is the amount actually owed to the IRS.

Deferred Taxation

The obligation to pay tax is deferred (postponed) under tax law beyond the normal date of payment.

Deficiency Judgement

A deficiency judgment (also spelt deficiency judgement) is a judgment lien against a debtor, defendant or borrower whose foreclosure sale did not produce sufficient funds to pay the mortgage in full. This option may or may not be available to the lender, depending on whether they have made a recourse or nonrecourse loan. The fuller,


The property of being an amount by which something is less than expected or required.

Deficit Spending

Deficit spending represents an overload of government expenditures over government revenue, creating a shortfall or deficit that needs to be financed. Deficit spending may be reflective of excessive buying of goods and services and establishing costly government programs. Deficit spending may also be the result of transferring grants to individuals and corporations. Acute deficit spending

Defined Benefit Plan

A defined benefit plan is a type of qualified retirement plan, meaning it receives favourable tax treatment. A defined benefit plan is employer-sponsored, and the employer can deduct contributions made to the defined benefit plan. The employer contributes to the defined benefit plan based on a specific formula indicating the exact benefit an employee can

Defined Benefit Plan

A type of pension plan that pays a definite, pre-determined amount of money when the worker retires or becomes disabled. The amount received is based on length of service with a particular employer. Most often, the monthly benefit is a fixed amount of money for each year of service. Payments under a defined benefit plan

Defined Contribution Plan

A defined contribution plan is a type of qualified retirement plan, meaning it receives favourable tax treatment. A defined contribution plan requires the employer, on behalf of the employee, to make a specified, fixed contribution to the plan. The total dollar contribution made to the defined contribution plan is based on a percentage of the


Deflation is a broad decline in prices. Deflation occurs when the prevailing demand cannot absorb the supply of goods. Companies attempt to stimulate demand by cutting prices, which in turn may lead to cost-cutting wage reductions. The reduction in purchasing power further reduces demand. During periods of deflation, cash is often considered ‘king’ as goods


A deflator is used to convert current dollars into dollars that are adjusted for price changes. Because price levels change over time, direct comparisons of output, wages, and other dollar-denominated measures are often meaningless. To usefully compare a salary of $50,000 in 1965 with a salary of $100,000 in 2005, a deflator must be used.

Degree Of Kinship
Delayed Exchange
Delayed Opening

A delayed opening is the intentional postponement of the opening of trading in a specific security. A delayed opening is a relatively rare event and is only triggered by extraordinary circumstances. Major news about a company (positive or negative) which causes a significant imbalance between buy and sell orders prior to the open of trade

Delegated Legislation

While Parliament is the primary legislating body, it is widely recognized that it does not have time to issue all legislation in the form of a statute (see: Statute). Instead, statutes will grant delegated powers to other people or bodies (typically ministers) to supply the detailed legislation. The most important forms of delegated legislation are:


Deleveraging is the unwinding of debt. Companies use leveraging (i.e. borrowing) to accelerate their growth or return, however, when a company is concerned about defaulting on its obligations or concerned about rampant losses, it can use deleveraging to lower its risk of default and mitigate its losses. By deleveraging its balance sheet, a company sells


(typically of a young person or that person’s behaviour) showing or characterized by a tendency to commit crime, particularly minor crime.


A public company is said to delist if it ceases trading of its shares on a public exchange. A company can delist voluntarily for a few reasons. For example, some public companies delist upon going private in a leveraged buyout, or LBO. A company can also desist its shares because another firm is acquiring it.

Delivery Month

The specified month within which a futures contract matures and is settled by delivery of the underlying asset is referred to as the delivery month. Every futures contract has a specified delivery month. For example, delivery month dates for wheat contracts are in March, May, July, September and December. Delivery may occur anytime during the

Delivery Notice

A delivery notice is given to the holder of a futures contract indicating when the actual underlying commodity will be delivered.

Delta Hedging

Delta hedging is the process of setting or keeping the delta of a portfolio of financial instruments zero, or as close to zero as possible – where delta is the sensitivity of the value of a derivative to changes in the price of its underlying instrument. Mathematically, delta is the partial derivative of the portfolio’s


Demand is defined as the amount of a particular good or service that buyers are willing to purchase at a specific point along the supply curve (on a supply and demand schedule).

Demand Curve

The demand curve is an economic tool showing the amount of something that is demanded at a point in time and at a specific price.

Demand Deposit

A demand deposit is a type of financial account that allows the account holder to withdraw funds on demand. This means that demand deposit balance withdrawals can be made without previous notice. In this respect, a demand deposit is very different from a term deposit, which carries certain temporal access restrictions. Demand deposit accounts are

Demand Elasticity

Demand elasticity, also known as price elasticity of demand, is a concept economists use to measure price sensitivity. In principle, demand elasticity is an economic term defined as the percentage change in quantity demanded, divided by the percentage change in price. Demand elasticity can be expressed graphically through a simplified linear demand curve. On this

Demand Forecasting

Demand forecasting is an activity a company does internally when it sets its sales budget. The demand forecast influences all upstream commitments and decisions. Forecasting is important and fundamental to any business. It is the act of looking ahead and anticipating the future. Forecasting provides lead time to do the following: Respond to new situations (avoid

Demand Note

In general, land retained by the estate owner, and not granted out to tenants. The term usually referred to the land of a feudal overlord which he retained for his own personal use. These days the concept is only legally relevant where it refers to demesne land of the crown.

Demesne Land Of The Crown

Land belonging to the Crown by virtue of the fact that it has never been granted to anyone else, or has reverted to the Crown by Escheat. This land is neither Freehold nor Leasehold, but an entirely different kind of land ownership from that of private individuals. Conventionally, most of the foreshore is considered to be Crown demesne land.

Demographic Factors

These are factors that are used to define the characteristics of a person or a population.


Data that portrays specific characteristics of a group of people (e.g., sex, race, age, geographic location). Used as a noun, it means a set of people who are grouped because of their similarity in one or more aspects.

Demonstrative Evidence

A charge required as compensation for the delay of a ship or freight car or other cargo beyond its scheduled time of departure.


An objection that an opponent’s point is irrelevant or invalid, while granting the factual basis of the point.


The word denomination has three distinct but closely related uses in a financial context. First, in a given currency, the denomination of legal tender specifies the face value of a given coin or note. In the US, there are four different common coins: the penny ($0.01), nickel ($0.05), dime ($0.10), and quarter ($0.25), and each


Reducing the obligations on a contract.

Department Of Housing And Urban Development

The Department of Housing and Urban Development, (HUD), established in 1965, is a ministry of the US government. The Department of Housing and Urban Development strives to make homeownership affordable. The Department of Housing and Urban Development regulates Ginnie Mae, Fannie Mae and Freddie Mac. State and local governments, and non-profit organizations get funds from


The term dependent generally describes a person who is financially sustained by someone else. Most commonly, the word dependent applies to children who are supported by their parents. A dependent may also rely upon financial help derived from grandparents, older siblings, or legal guardians. One spouse that is financially born by the other is likewise

Dependents Benefits

Deposit has two distinct meanings. Meaning one is applied to funds provided as security or collateral for expected delivery of a good. For instance, in a real estate acquisition, a deposit is provided in advance of closing. The exact timing and amount varies depending upon the part of the country. A real estate purchase deposit

Deposit Slip

A slip of paper that accompanies cash or cheque payment. It details the amount of the deposit, the bank account the funds should be paid into, and the date of deposit.

Depositary Receipt

Depositary Receipt (DR) was created in 1927 to aid US investor who wished to invest in non-US corporations. A depositary receipt is a negotiable certificate of ownership of shares in a foreign company traded in the USA through a US depository bank. Each depositary receipt represents a specific multiple or fraction of the underlying shares


An important tool used in pretrial discovery where one party questions the other party or a witness in the case. Often conducted in an attorney’s office, a deposition requires that all questions be answered under oath and be recorded by a court reporter, who creates a deposition transcript. Increasingly, depositions are being videotaped. Any deponent may be represented by an attorney. At trial, deposition testimony can be used to cast doubt on (impeach) a witness’s contradictory testimony or to refresh the memory of a suddenly forgetful witness. If a deposed witness is unavailable when the trial takes place — for example, if he or she has died — the deposition may be read to the jury in place of live testimony.

Depository Trust Company
Depreciable Amount

Cost of a non-current (fixed) asset minus residual value.

Depreciable Property

Depreciable property is any property other than land a property owner may depreciate for tax purposes. Tangible property such as buildings, equipment furniture, machinery, and vehicles is depreciable property, and some forms of intangible property such as copyrights, computer software, and patents are depreciable property. Depreciation enables the property owner to recover the cost of


Depreciation is an economic term that refers to the decline in the value of assets through the passage of time. This is in account of the wear and tear, depletion, obsolescence and other factors that occur through the usage of the asset. The depreciation cost of the asset is spread over the period of time during which it is used. The depreciation cost is a non-cash expense which reduces the company’s reported earnings although the free cash flow of the company increases.

Depreciation is a process of accounting, where the expense of the asset is adjusted against the income generated by the owner of the asset. For example, the company with equipment of $1 million and a life of 10 years would expend $ 100,000 as its depreciation cost every year. This cost will be matched with the income generated by the equipment in the 10 years it serves the owner.

Depreciation also refers to the fall in the value of a currency when compared with the other currencies. For example, the US dollar depreciates as against the Indian rupee. In such a case, to obtain goods and services valued to the original amount of Indian rupee prior to the depreciation, the purchasers would have to pay more US dollars.

Depreciation And Amortization

Depreciation and amortization are accounting transactions that record the loss in value of long-term assets. Here’s an example of depreciation and amortization: A company buys a new machine for $5,000 that it expects to use 5 years and then discard. It then records depreciation of $1,000 each year of the machine’s five-year “useful life.” (“Depreciation”

Depreciation Reserve
Depressed Market

A depressed market occurs when supply overtakes demand, resulting in weak and lower prices. The depressed market has more sellers than buyers and is often referred to as a “buyer’s market.” Although some companies struggle in a depressed market, many blue chips companies do remarkably well under depressive and volatile market conditions. There are many


In economics, a severe and prolonged recession is sometimes called a depression. Unlike a recession, no standard definition of a depression exists. (A recession is often defined as two consecutive quarters of declining GDP, though the NBER is the official arbiter of what constitutes a recession.) Like a recession, a depression is characterized by increased


The act of removing an item from the financial statements because the item no longer satisfies the conditions for recognition.


Deregulation is an act by which the government regulation of a particular industry is reduced or eliminated in order to create and foster a more efficient marketplace. Deregulation is usually enacted to weaken government influence and forge greater competition. By this token, deregulation also creates an economic environment favourable to upstart companies that were unable


A derivative is an agreement between between two or more parties which serves as a security whose value is based on price fluctuations of an underlying asset (stocks, bonds, commodities, etc.). Derivatives are a form of alternative investment and the most common forms include futures, options, and swaps.

Derivative Action
Derivative Instrument

An instrument which derives its value from the value of other financial instruments.

Derivative Security

A derivative security is an asset whose price is based on the value of some other underlying asset. An option is one type of derivative security. The futures contract is another type of derivative security. The swap is yet a third major type of derivative security. An option contract is a right (not the obligation)

Derivative Work

For copyright purposes, a new work based upon an original work to which enough original creative work has been added so that the new work represents an original work of authorship. Examples of derivative works include a translation of a book into another language, a jazz version of a popular tune and a movie based on a play.

Derogation From Grant

It is a general principle of law that if person A grants an interest in land to person B, he must not then act in such a way as to make that grant worthless. A good example is Harmer v Jumbil (1921), in which the Landlord was held to have granted a worthless Lease, by making it impossible

Descending Bottoms

Descending bottoms refers to a succession of lower lows in a stock’s trading range. One of the easiest ways to see descending bottoms is on a stock chart, with the chart depicting lower lows over time. Descending bottoms can be tracked for virtually any time frame, from hourly, to daily, to weekly, to monthly or

Descending Tops

Descending tops are a series of trades with each high lower than the one preceding it. Descending tops are most clearly seen on a chart which records an equity’s trading range. Descending tops can be charted for virtually any time frame, from minute-to-minute charts to daily charts and all the way through yearly charts —

Descending Triangle

A Descending Triangle is a bearish chart pattern used in technical analysis. The pattern usually forms during a downtrend as a continuation pattern, or as a reversal pattern at the end of an uptrend. The descending triangle is determined by drawing one descending trend line that connects a series of lower highs and a second horizontal trend line

Descent And Distribution

The area of law that pertains to the transfer of real property or personal property of a decedent who failed to leave a will or make a valid will and the rights and liabilities of heirs, next of kin, and distributees who are entitled to a share of the property. Origin Of The Law The

Descriptive Mark

A trademark or service mark that describes the characteristics of the product or service to which it’s attached. For instance, “Jiffy Lube” describes its purportedly fast service. Marks judged to be descriptive are initially considered legally weak and don’t get much protection from the courts. If federal registration is sought, they are usually placed on


The voluntary abandonment of one spouse by the other, without the abandoned spouse’s consent. Commonly, desertion occurs when a spouse leaves the marital home for a specified length of time. Desertion is a grounds for divorce in states with fault divorce.

Design Patent

In the United States, a design patent is a patent granted on the ornamental design of a functional item. Design patents are a type of industrial design right. Ornamental designs of jewellery, furniture, beverage containers (see Fig. 1) and computer icons are examples of what can be covered by design patents. A similar concept, a


A decrease in the quality and range of the practical knowledge of individuals, organisations, or societies due to attrition, automation, computerisation, downsizing, a lack of learning opportunities, or neglect.

Detection Risk

Detection Risk, in auditing, is the risk that the auditing procedures used will not find a material misstatement in the financial statements of the company being audited.


In tort law, detinue is an action to recover for the wrongful taking of personal property.


Devaluation is lowering of the exchange value of a particular currency. Devaluation is also understood as lessening of the value of a particular good or service. This is done by bringing down the amount of gold that is available against a particular currency. Devaluation is also defined as a significant drop in a currency’s value


Devanning is the act of unloading cargo from a container.

Devils Horns

The devil’s horn effect, closely related to the halo effect, is a form of cognitive bias that causes one’s perception of another to be unduly influenced by a single negative trait.


A devise is a gift of real estate.


One who receives a gift of real property through a will. Also known as a distributee.


When the Labour Government came to power 1997, it diligently implemented its manifesto commitment to devolve a measure of self-government to Scotland and Wales. In doing so, it claimed that the process of devolution would not upset the UK constitution, and the sovereignty of the Westminster parliament would be retained. But is this right? Or


DIAMONDS are Exchange-Traded Funds (ETFs) trading on the American Stock Exchange (AMEX). DIAMONDS represent units of beneficial ownership in the DIAMONDS Trust, a unit investment trust holding a portfolio of the 30 stocks that comprise the Dow Jones Industrial Average (Dow or DJIA). DIAMONDS closely track (before expenses) the DJIA. Their value approximates 1/100 the


A division or contrast between two things that are or are represented as being opposed or entirely different.


A formal pronouncement from an authoritative source.

Difference On Consolidation

Difference between fair value of the payment for a subsidiary and the fair value of net assets acquired, more commonly called goodwill.


Product differentiation can be described as a marketing process that displays the deviation between products. This is done to make products more appealing to a particular target market. Differentiated product makes a competitive advantage for the seller as customers perceive the product as superior to its peers. Product differentiation also makes a product unique. Product differentiation can be

Digital Money

Digital money is money transmitted in electronic form to pay for good and services, typically over the Internet or through other electronic media. A vendor accepting digital money contacts the issuing bank upon receipt of a buyer’s payment authorization. The vendor then receives the funds’ transfer and fulfils the order of goods or services. Digital

Digital Option

A digital option is a type of exotic options which offers a fixed payout if the underlying instrument price exceeds a pre-specified strike price (i.e. digital call option). If the digital option is a put, the lump-sum cash payment will occur if the underlying instrument price drops below the pre-specified strike price (i.e. digital put

Diluted Earnings Per Share

Diluted earnings per share is earnings per share that fully reflects the impact the firm’s dilutive securities (eg, convertible bonds) may have on earnings per share. Diluted earnings per share is distinguished from basic earnings per share, both of which are computed by dividing net income by the weighted average number of outstanding shares. But

Diluted Share

Diluted share is a term used in reporting earnings per share, as in “earnings per diluted share.” Under Statement of Financial Accounting Standards 128, a company that has a complex capital structure (ie, it has securities that have the potential of becoming common shares) must report earnings on both a “basic” (non-dilutive) and diluted share


Dilution is an investment phenomenon that occurs when a company increases the number of shares of its stock, either through the issuance of new stock or conversion of Convertible Securities.

Diminished Capacity
Diminished Responsibility

The defence of diminished responsibility is a special defence (only available to a charge of murder) and partial defence (if successful, it reduces the conviction to manslaughter). This defence is widely used because murder has a mandatory life sentence. To succeed, the defendant must show that, on the balance of probabilities, the elements of diminished

Diminishing Return

Diminishing return, or the law of diminishing return, is an economic tenet, which provides that adding additional units of productivity beyond a certain threshold will incrementally regress production returns. The law of diminishing return is a product of Europe at the turn of the eighteenth century, where it was put forth toward free trade and

Diminution In Value

A dip in the market is a decline in prices, generally considered a temporary downturn. An individual stock or commodity can have a dip in prices, a sector can have a dip in prices, or the broader market can experience a temporary dip in prices. Some investors see a market dip as a buying opportunity.

Diplock Court

A Crown Court convened with no jury, named after Lord Diplock who championed the idea. The rationale for the use of such courts is that there are some criminal cases in which no jury will serve reliably, because the likelihood of intimidation is too high. They have generally been used only in Northern Ireland, for

Direct And Proximate Cause
Direct Applicability

A provision of EU law is ‘directly applicable’ if it becomes part of the national law of member states without further administrative measures in the member states. The related concept of ‘direct effect’ indicates that certain provisions of EU law create rights and duties that can be relied on by individuals in national courts. ‘Direct

Direct Deposit

Direct deposit is a program in which a payment is deposited directly into a savings, checking, or brokerage account. With direct deposit the named recipient of a payment never sees or handles a check; instead, once a direct deposit account has been established, funds are electronically transferred directly into the specified account. A direct deposit

Direct Effect

EU legislation is said to have ‘direct effect’ when its provisions can be relied on in national courts. That is, directly effective provisions create rights and duties between individuals, which they can enforce in the courts of member states. There is a related concept sometimes mistaken for this, ‘direct applicability’, which states that certain provisions

Direct Evidence

Direct evidence is evidence gathered from a witness who actually saw or heard the event in question. Direct evidence differs from circumstantial evidence which requires inference or presumption. Direct evidence is very good for a case because it does not ask a jury to develop opinions based on circumstantial evidence but can provide evidence beyond a reasonable doubt.

Common types of direct evidence include DNA, photos of the crime in progress, eye witness testimony and fingerprints. There is some debate within the legal community about whether or not any evidence can actually be called “direct evidence.” Legal experts generally depend on both direct evidence and circumstantial evidence to prove their case. Direct evidence, however, is not always necessary to win a case; cases can also be won with circumstantial evidence alone.

Direct Examination

At trial, the initial questioning of a party or witness by the side that called him or her to testify. The major purpose of direct examination is to explain your version of events to the judge or jury and to undercut your adversary’s version. Good direct examination seeks to prove all facts necessary to satisfy

Direct Method (Of Operating Cash Flow)

Presents cash inflows and cash outflows.

Direct Purchase Program

A direct purchase program allows an investor to buy stock directly from a company, without using a broker. In order for a company to offer a direct purchase program, it must register its intent with the SEC, which means that not every company offers a direct purchase program to the public. Using a direct purchase

Direct Relationship

A direct relationship is is a high correlation between two variables.

Direct Stock Purchase Plan

A direct stock purchase plan (DSP) is a company-sponsored program in which the company sells shares of its stock directly to investors. Brokers are not involved in a direct stock purchase plan. The chief advantage of a direct stock purchase plan is that an investor avoids (or significantly reduces) commissions. Investors of limited means can

Direct Tax

Direct tax in economics refers to that type of taxes that are levied directly on any organization or an individual. Direct tax though in a colloquial sense refers to that type of taxes that are paid directly to the government by any individual. Direct tax in economic terms and colloquial terms do not always match. In a

Direct Taxation

Direct taxation is one point tax imposed by the government on income earned, wealth accumulated or gift received. Incidence of direct tax cannot be transferred and is borne by the recipient directly. Income earned can be by an individual or an organization. Direct tax rates may vary from one state to another, and also from

Directed Verdict

A ruling by a judge, typically made after the plaintiff has presented all of her evidence but before the defendant puts on his case, that awards judgment to the defendant. A directed verdict is usually made because the judge concludes the plaintiff has failed to offer the minimum amount of evidence to prove her case even if there were no opposition. In other words, the judge is saying that, as a matter of law, no reasonable jury could decide in the plaintiff’s favour. In a criminal case, a directed verdict is a judgement of acquittal for the defendant.

Direction To Acquit

A trial judge may ‘direct the jury to acquit’ on a matter of law. For example, if the prosecution has not satisfied the evidential burden (see: Evidential burden), the jury is unnecessary. It is not the jury’s job to rule on points of law, but on points of fact. If there are not enough facts,

Directional Movement Index

The Directional Movement Index (DMI) is an indicator developed by J. Welles Wilder for identifying when a definable trend is present in an instrument. That is, the DMI tells whether an instrument is trending or not.


A document issued by the European Union requiring all Member States to adapt their national law to be consistent with the Directive.

Director Of Public Prosecutions

The head of the Crown Prosecution Service (see: Crown Prosecution Service). The Director must be a lawyer of at least 10 years’ standing.


Person(s) appointed by shareholders of a limited liability company to manage the affairs of the company.

A member of the governing board of a corporation, typically elected at an annual meeting of the shareholders. Directors are responsible for making important business decisions — especially those that legally bind the corporation — leaving day-to-day management to officers and employees of the corporation. For example, a decision to borrow money, lease an office or buy real property would normally be authorized by the board of directors. However, in the small business world, where it is common for owners to be directors, officers and employees simultaneously, distinctions dividing the roles and responsibilities of these groups are often blurred.

Directors are elected by the shareholders. They manage or direct the affairs of a corporation. Typically, the directors make only major business decisions, major policy changes and monitor the activities of the officers. They are the people who primarily manage the corporation.

Directors And Officers Insurance

Directors and officers liability insurance (D&O insurance) protects against legal claims for wrongful acts performed by corporate directors or officers in performing their corporate duties. Wrongful acts include omissions, errors, misstatements, misleading statements, neglect or breach of duty. Beneficiaries are the directors, officers or the corporation itself. Directors and officers can be personally sued by

Disability Benefits

Money available from Social Security to benefit those under 65 who qualify because of their work and earning record and who meet the program’s medical guidelines defining disability. The benefits are roughly equal to those available in Social Security retirement benefits.

Disability Insurance

Disability insurance is an insurance policy that pays supplemental income benefits in the event that the insured person (policyholder) becomes incapable of working his or her job. The incapacity that necessitates disability insurance may be illness, accident, or another trigger; the policy spells out what constitutes a trigger. Benefits from a disability insurance policy will


The act of denying or contradicting a previous statement. Can also mean the refusal to abide by a formerly enacted contract or agreement.

Discharge In Bankruptcy
Discharge Of Contract

A Contract is deemed to be discharged, that is, completed and no longer binding, in the following circumstances. Performance. That is, all parties have satisfied the requirements of the contract to the satisfaction of the other parties. The overwhelming majority of contracts are discharged this way. However, it not always clear when a contract has been performed,

Dischargeable Debts

(law) a voluntary repudiation of a person’s legal claim to something.

Disclaimer Of Opinion Report

A Disclaimer of Opinion, commonly referred to simply as a Disclaimer, is issued when the auditor could not form, and consequently refuses to present, an opinion on the financial statements. This type of report is issued when the auditor tried to audit an entity but could not complete the work due to various reasons and


the action of making new or secret information known. The making known of a fact that had previously been hidden; a revelation. For example, in many US states, you must disclose major physical defects in a house you are selling, such as a leaky roof or potential flooding problem.


Discontinued in a financial context is usually associated with discontinued operations. When companies dispose of operations that can be identified as a specific, separate segment of their business, these activities are considered discontinued operations. GAAP provides for separate disclosure of discontinued operations, which warns investors that these activities will no longer be part of the

Discontinued Operations

“Discontinued operations” refers to business operations that a company has either discontinued or will discontinue in the near future or in subsequent periods. For accounting purposes, income from discontinued operations is usually presented as a line item in the income statement, and is usually not considered when making projections of a company’s growth prospects.


Discount. In a bond trade, discount is the difference between face value and the market price.

Discount Broker

A discount broker is a stockbroker offering low commission rates. The low rates offered by a discount broker are primarily achieved through automation of trading and customer service. A discount broker will often have access to alternate quotation services, allowing trades to execute without incurring exchange fees. A discount broker may also specialize in high-volume

Discount Loan

A discount loan is a loan that does not require the payment of interest or any other charges; rather, a discount loan deducts the interest and/or other charges from the face amount of the loan when it is given out. That way, the person taking out the discount loan receives less. For example, a discount

Discount Rate

The term discount rate is used in several different contexts: mathematical discount rate, monetary policy, and project valuation. Mathematical Discount Rate Discount rate normally refers to the interest rate, though in fact, a discount rate is slightly different from the interest rate, in terms of how it is calculated. This is because the discount rate

Discount Received

A supplier of goods or services allows a business to deduct an amount called a discount, for prompt payment of an invoiced amount. The discount is often expressed a percentage of the invoiced amount.

Discount Window

The discount window is not actually a place but is where banks go to borrow money from the Federal Reserve. Through the discount window, the regional branches of the Federal Reserve Bank lend money to banks that need funds to retain liquidity. Discount window loans are fully secured and are meant to be short-term. The discount rate is the interest

Discounted Cash Flow Analysis

Discounted cash flow analysis is a valuation tool analysts use to evaluate the attractiveness of investment opportunities. Discounted cash flow analysis projects the cash flows an investment will generate in future years, then applies a discount rate to the cash flow stream to derive a present value for the investment. The company’s weighted average cost

Discounted Cashflow

Discounted cash flow (DCF) is a valuation methodology used to estimate a security’s intrinsic value.

Discounts And Allowances

Discounts and allowances are reductions to a basic price. They could modify either the manufacturer’s list price (determined by the manufacturer and often printed on the package), the retail price (set by the retailer and often attached to the product with a sticker), or the list price (which is quoted to a potential buyer, usually

Discouraged workers

Discouraged workers are workers who exit the labor force because of the difficulty finding a job.


A formal investigation — governed by court rules — that is conducted before trial. Discovery allows one party to question other parties, and sometimes witnesses. It also allows one party to force others to produce requested documents or other physical evidence. The most common types of discovery are interrogatories, consisting of written questions the other party must answer under penalty of perjury, and depositions, which involve an in-person session at which one party to a lawsuit has the opportunity to ask oral questions of the other party or her witnesses under oath while a written transcript is made by a court reporter. Other types of pretrial discovery consist of written requests to produce documents and requests for admissions, by which one party asks the other to admit or deny key facts in the case. One major purpose of discovery is to assess the strength or weakness of an opponent’s case, with the idea of opening settlement talks. Another is to gather information to use at trial. Discovery is also present in criminal cases, in which by law the prosecutor must turn over to the defence any witness statements and any evidence that might tend to exonerate the defendant. Depending on the rules of the court, the defendant may also be obliged to share evidence with the prosecutor.

Discretion To Admit Hearsay

Until recently the criminal courts have had very little discretion to admit Hearsay evidence. If the evidence is not of a meta that is expressly allowed by one of the common law or statutory exceptions to the rule excluding hearsay, it is inadmissible. Of course, the courts have always asserted a right to exclude hearsay evidence that

Discretion To Admit Hearsay

Until recently the criminal courts have had very little discretion to admit Hearsay evidence. If the evidence is not of a meta that is expressly allowed by one of the common law or statutory exceptions to the rule excluding hearsay, it is inadmissible. Of course, the courts have always asserted a right to exclude hearsay evidence that

Discretionary Fiscal Policy

In macroeconomics, a discretionary fiscal policy is an economic policy based on the ad hoc judgment of policymakers as opposed to a policy set by predetermined rules.

Discretionary Trust

A form of trust, usually express, where there is some discretion to be exercised by the trustee(s) in the allocation of benefits of the trust. Unlike in a fixed trust, the beneficiaries of the discretionary trust have no identifiable equitable interest in the trust property until the discretion of the trustee is actually exercised. See also: fixed


The ‘right to silence’ of a person accused with a criminal offence is a fundamental, long-standing principle of English Law. It is closely related to the principles that the defendant is ‘innocent until proven guilty’, and the privilege against Self-incrimination. All these principles are predicated on the assertion that, in an allegation of criminal behaviour,


A participant in a discussion.

Diseconomies Of Scale

Diseconomies of scale are the opposite of economies of scale. At a certain point, more inputs, for example, overcrowding of a hotel, could create lower returns. The chart on the right shows where diseconomies of scale result due to bureaucracy, non-value-added services, strategic inertia, and more.


The action of spoiling the appearance of something or someone; defacement.


the quality of being dishonest


Disinflation occurs when the overall rate of inflation decreases over a given time period. With inflation being an increase in the general level of prices, disinflation means that the rate of that increase has slowed. In other words, during disinflation, the prices of goods and services are still increasing, but they are increasing at a


Change one’s will or take other steps to prevent (someone) from inheriting one’s property.


A medium which permits the consumer to purchase goods and services directly from the producer. This enables the consumer to cut costs as the middleman is eliminated from the supply chain. Online shopping is an example of a disintermediary because it allows manufacturers and consumers to interact directly with each other.


Disintermediation is a decrease in the use of banks to borrow and invest money.

Disjunctive Allegations

Dismissal is the termination of a lawsuit which can be done with prejudice, which does not allow the case to be brought to the court a second time, or without prejudice, which does allow the case to be brought to court again in the future. In a civil case, it is easier for a plaintiff

Displaced Homemaker

A homemaker is a person who maintains the upkeep of his or her residence, especially one who is not employed outside the home. A displaced homemaker describes someone who has been out of the paid workforce for years, usually raising a family and managing a household and its chores, without pay, during those years. The homemaker becomes

Disposable Income

The difference between a debtor’s current monthly income and allowable expenses. This is the amount that the new bankruptcy law deems available to pay into a Chapter 13 plan.


The assertion of conflicting claims or rights between parties involved in a legal proceeding, such as a lawsuit, mediation or arbitration.


Dissaving occurs when spending exceeds disposable income.


Is the termination of a corporation’s legal existence. Dissolution may be caused many ways including, failure to file annual reports, failure to pay certain taxes, bankruptcy, or voluntary dissolution of the corporation by the shareholders and directors.

Distinctive Mark

The ancient right to recover losses incurred by the Unlawful behaviour of another person by seizing his goods. See Distraint.

Distress Sale

A distress sale occurs when, despite non-favourable selling conditions, an asset is forced to be sold quickly due to extraneous conditions. For example, the sale of a foreclosed home is a distress sale. Other examples of a distress sale include the sale of stocks, futures contracts, or other investment products. In any of those cases,

Distressed Security

A distressed security is a security belonging to a company that is under financial distress, such as bankruptcy, restructuring, liquidation, etc. in order to be able to pay debts (avoid insolvency). One strategy for dealing with a distressed security is to purchase the distressed security at a discount price and hold onto it until it


Distribution is a broader concept to deal with. In business and economics distribution is used in a singular perspective. In business, distribution is referred to as a process that makes available to the consumer a product or service for use. Distribution is one of the major aspects of the marketing process. A good after being manufactured needs

Distributive Fairness

The situation where employees receive what they assume they deserve from their work.

District Attorney
District Court

In US federal court and, in some states, the name of the main trial court. Thus, if you file suit in federal court, your case will normally be heard in federal district court. States may also group their appellate courts into districts — for example, The First District Court of Appeal.

District Judge

This term is used to unify two categories of legal professional, both of which require similar qualifications and experience of the post-holder. These are what used to be known as a ‘stipendiary Magistrate’, and a Registrar of the court. Where the distinction is significant, it is conventional to write ‘District Judge (magistrates’ court)’ for the former.


Divergence occurs when the trend of price doesn’t follow the trend of its indicator. Traders make transaction decisions by identifying situations of divergence, where the price of a stock and a set of relevant indicators, such as the On-Balance-Volume, are moving in opposite directions. Bullish divergence:  the indicator is making a new high while the


Diversification is the process of investing in separate asset classes (stocks, bonds, cash) and/or stocks of different companies in an attempt to lower overall investment risk.

Diversified Investment Company

A diversified investment company is an investment fund that adheres to a diversification strategy by investing in a wide array of securities and companies. A diversified investment company is different from other investment companies in the way of its regulated investment structure. According to the Investment Company Act legislated in 1940, a diversified investment company


To divest is to liquidate, or sell off, one’s investment in a company or government body. Many people who divest do so for political or ethical reasons, such as perceived government oppression of a minority population. Other reasons to divest are anti-trust violations, poor performance, or changes in a company’s leadership. Individuals, businesses, and government


An order to an offending party to rid itself of property; it has the purpose of depriving the defendant of the gains of wrongful behaviour.


The sale or other disposal of some kind of asset.


A portion of profits distributed by a corporation to its shareholders based on the type of stock and number of shares owned. Dividends are usually paid in cash, though they may also be paid in the form of additional shares of stock or other property. The amount of a dividend is established by the corporation’s board of directors; however, state laws often restrict a corporation’s ability to declare dividends by requiring a minimum level of profits or assets before the dividend can be approved.

Dividend Clawback

A dividend clawback is an incentive for investors to keep investment development plans on schedule. Dividend clawback means a promise by investors to return dividends as equity to the investment if any cash deficiencies occur. A dividend clawback pays for any investment shortfall from project cost overruns. For example, if 20 investors received $20 million

Dividend Cover

Earnings per share divided by dividend per share.

Dividend Discount Model

A way of valuing a share based on the net present value of the dividends that you expect to receive in the future. The simplest version of the model assumes that the company’s dividend rate remains constant. The ‘fair’ price of the share is the dividend (in pennies per share) divided by the required rate

Dividend Payment Factors

Dividends are corporate profits distributed to shareholders. Dividend payment factors include company profitability, capital needs, stock price trends, and investor expectations. A company must act in the best interest of its shareholders, so in making dividend decisions it considers the impact on the company business, the share price, and shareholder value. Profitability The single biggest

Dividend Payout Ratio

The dividend payout ratio is the percentage of a company’s annual earnings paid out as cash dividends. Dividend payout ratios vary by industry and are affected by market conditions and tax law. Moreover, both a low dividend payout ratio and a high dividend payout ratio can have good or bad implications. A low dividend payout

Dividend Rate

Dividend rate is how much money the dividend is over the coming year.

Dividend Reinvestment Plan

Under a dividend reinvestment plan (also known as a DRIP or a DRP), investors receive stock dividends in the form of additional shares in a company rather than as a cash payment. Investors who participate in a dividend reinvestment plan receive quarterly notification of new shares purchased. A dividend reinvestment plan is a convenient way

Dividend Stock Structure

Dividend stocks denote part of a company’s profits. Shareholders normally receive dividend payouts in the form of cash. Preferred stockholders normally receive payment first; shareholders with common stock receive payment second. However, if the company is low on cash or simply wants to increase its liquidity by lowering the price per share of its stock,

Dividend To Stock Price Ratio

The dividend-to-stock-price ratio represents one of the more accurate gauges of value when considering whether to purchase a particular common stock and at what price. The ratio is determined by dividing the dividend into the stock price. Earnings can be manipulated in many ways: influenced by receivables, creative accounting, deferred revenue and compensation, interest expense,

Dividend Yield

Dividend per share divided by current market price.

Dividends Payable

Dividends payable is a liability of the firm for the cash dividends owed to shareholders. Suppose a company’s board of directors on August 1 declares a quarterly dividend of $1 for each of the firm’s 500,000 outstanding common shares, which is payable on August 25 to shareholders of record on August 15. On August 1,

Division Of Labour

Introduction Division of labour is the term first used in Adam Smith’s The Wealth of Nations to describe the separation of the manufacturing process into distinct and simple operations which are then delegated to specific hands or machines to perform. Smith thought that the quality and quantity of work carried out by a workforce organized along the division of labour principle was so superior compared to work


Divisor is shorthand for the Dow Divisor. The popular Dow Jones Industrial Average is a price-weighted average of 30 stocks. Initially, simply dividing the sum of its 30 stock prices by 30 (in other words, applying a divisor of 30), was sufficient to compute the DJIA. Given stock splits, mergers, etc., the calculation became much


The legal termination of marriage. All US states require a spouse to identify a legal reason for requesting a divorce when that spouse files the divorce papers with the court. These reasons are referred to as grounds for a divorce.

Divorce Agreement

Diworseification is a play on the word “diversification.” It was coined by Peter Lynch to describe the process of diversifying outside of your expertise or core competency. Here’s the breakdown: di-worse-i-fication.

DIY Investment Trusts

Investment trusts provide a way for a person or a company to set aside certain assets for a particular purpose. While attorneys can set up an investment trust for a fee, in some instances a DIY approach will suffice. The legal aspects surrounding investment trusts may require a bit of research on the part of


The DJIA (Dow Jones Industrial Average), also known as the Dow, is the oldest continuing US market index and most widely quoted stock market indicator. The DJIA is a price-weighted average, meaning a $70 stock has more impact on the DJIA than a $30 stock. The DJIA is composed up of 30 large, well-known, industrial

Doctrine Of Avoidable Consequences

The doctrine of avoidable consequences is the legal principle that requires the injured party to minimize their damages. For instance, a person who suffered an injury due to a medical malpractice case should take reasonable efforts to get medical care and find a cure for their condition. If there has been a breach of contract

Doctrine Of Common Employment

The case of Priestly v Fowler (1837) established that an employer could not be vicariously liable to his own employees, for the torts of other employees. This principle became known as the doctrine of common employment, and survived until it was abolished by the law reform personal injuries act (1948).

Doctrine Of Equivalents
Doctrine Of Notice

To have ‘notice’ of something is to be aware that it exists. In land and property law the concept of notice is usually associated with an Encumbrance on Title. For example, if property X is held on Trust for beneficiary B, then B’s interest is an encumbrance, and something a purchaser of X would rather be free of. The historical

Dogs Of The Dow

Dogs of the Dow is a popular investment strategy. The basic approach of Dogs of the Dow is to select ten of the 30 Dow Jones Industrial Average (DJIA) stocks that have the highest dividend yield. These are “Dogs of the Dow” because the relatively high dividend yield is suggestive of a company that is

Doing Business As

If the name in use in the course of operation for a business differs from the legal name of the entity, that business is said to be “doing business as” whatever name it has chosen to use. The flexible “doing business as” technique has several applications. A legal entity can be created in advance without


A doji is a type of candlestick where the day’s opening price and closing prices are the same or nearly the same. A basic doji candlestick shape resembles a plus sign. Other possible doji shapes include a cross, inverted cross, or “T.” By itself, a doji represents market indecision about the direction of a stock


A dollar is a unit of currency in a number of countries. United States of America, Canada, Australia, Jamaica, Singapore, Azerbaijan, Hong Kong, The Bahamas, and Antigua are some countries where a currency is called the dollar, although this may or may not be same as US dollar. The currency of the United States and

Dollar Cost Averaging

Dollar-cost averaging is the discipline of regularly buying shares of stock. An investor using this long-term technique would invest a set amount every month, as opposed to saving it up and investing it in one lump sum.

Dollar Drain

A dollar drain occurs when one country imports more from a particular country than it exports.


Dollarization occurs when a country consciously adopts United States dollar as its preferred currency. The US dollar can be used in isolation or form a parallel coinage with local currency. Forms of Dollarization Full dollarization is generally implemented by countries at the transitional economic growth phase- especially those suffering from high inflation. Dollarization may, however,

Domain Name

A combination of letters and numbers that identifies a specific computer or website on the Internet. A domain name usually consists of three parts: a generic “top-level” domain such as “.com” or “.gov” that identifies the type of organization; a second-level domain such as nolo or yahoo, which identifies the organization, site or individual; and

Domestic Violence

(law) the residence where you have your permanent home or principal establishment and to where, whenever you are absent, you intend to return; every person is compelled to have one and only one domicile at a time

Dominant Estate
Dominant Tenement

Property that carries a right to use a portion of a neighbouring property. For example, property that benefits from a beach access trail across another property is the dominant tenement.


the recipient of funds or other benefits

Dormant Bank Accounts

When there is no activity in a bank account for a period of a year or more, and the bank can’t get in touch with the account holder, then the account will be made dormant. This means that no statements or other material will be sent out to the account holder’s last known address as a

Dot Gain

A gain (or loss) in the halftone dot caused by ink bleeding or spreading as it is absorbed by the paper. The result is darker or muddier printed images.


Dot-com is an epithet for an Internet-based company. A dot-com gets its name from its dot com (.com) domain name server extension. Although today there are many more DNS extensions, the term dot-com has come to symbolize all web-based ventures. Dot-com firms were the product of the increasing availability of PCs combined with the emergence

Double Bottom

A double bottom is a chart pattern created when a stock makes a low, rebounds, then retests the same low and rebounds once again. A double bottom chart pattern resembles a “W”. A double bottom chart pattern has great significance for a chartist or technical analyst. To a technical analyst, the double bottom formation implies

Double Jeopardy
Double Taxation

Double taxation is the levying of tax by two or more jurisdictions on the same income, asset, or financial transaction. Corporations are treated as a separate legal taxable entity for income tax purposes. Therefore, corporations pay tax on their earnings. If corporate earnings are distributed to shareholders in the form of dividends, the corporation does not receive the reasonable business expense deduction, and dividend income is taxed as regular income to the shareholders. Thus, to the extent that earnings are distributed to shareholders as dividends, there is a double tax on earnings at the corporate and shareholder level. S corporations and LLCs are pass-through entities which are not subject to the double tax.

Double Top

Double top is a term used by technical analysts to describe a chart pattern which looks like a capital letter “M”. In a double top, a stock rises to a point, then falls, then rises again to the same level as the first peak, and then drops once again. The two high points (the double

Double Witching Hour

Double witching hour refers to the final hour of the stock market trading session where two classes of options or futures expire. The two classes that expire during the double witching hour may be stock options, index options and index futures. The double witching hour occurs on the third Friday of each month, except for

Doubtful Debts

Amounts due from credit customers where there is concern that the customer may be unable to pay.


The term “Dow” is usually used to mean the Dow Jones Industrial Average, an index of thirty blue-chip stocks that serves as the most widely used measure of the U.S. stock market. The term carries much weight in the stock market due to its popularity as a market index. To calculate the Dow, the trading

Dow Dividend Theory

The Dow dividend theory is a popular but simple investing strategy. There are several variations of the Dow dividend theory, but put simply, you find the 10 stocks of the 30-stock Dow Jones Industrial Average with the highest yield (dividend/price) and invest equally in each. The Dow dividend theory also requires that you repeat this

Dow Jones Asian Titans 50 Index

The Dow Jones Asian Titans 50 Index is an equity index reflecting the pulse of the Asia/Pacific markets. The Dow Jones Asian Titans 50 Index represents 25 companies from Japan and 25 companies from the other Asia/Pacific countries. The Dow Jones Asian Titans 50 Index was introduced in December 2000. The base value of the

Dow Jones Averages

The Dow Jones Averages refer to three price-weighted stock market indexes maintained by the editors of the Wall Street Journal. The first of the Dow Jones Averages to be created was the Dow Jones Transportation Average. It was formulated by Charles Dow in 1884. The Dow Jones Transportation Average, which was originally comprised primarily of

Dow Jones BRIC 50 Brazil Subindex

The Dow Jones BRIC 50 Brazil Subindex is a global float-adjusted market capitalization-weighted index. The Dow Jones BRIC 50 Brazil Subindex is one of the four subindexes used in the Dow Jones BRIC 50 Index. A pool of Brazilian companies selected from the Dow Jones Wilshire Global Total Market Index is used to construct the

Dow Jones CBOT Treasury Index

The Dow Jones CBOT Treasury Index is a fixed-income index. The Dow Jones CBOT Treasury Index measures the performance of three Treasury futures contracts traded on CBOT. The Dow Jones CBOT Treasury Index is a benchmark for longer-term fixed-income markets. The Dow Jones CBOT Treasury Index includes the price of the front-month future contracts for

Dow Jones Composite Average

The Dow Jones Composite Average is a combination of the Dow Jones Industrial Average, Dow Jones Transportation Average, and Dow Jones Utility Average. The Dow Jones Composite Average includes a total of 65 companies (30 Industrial, 20 Transportation, 15 Utility). The Dow Jones Composite Average is intended to be a broad market index but unlike

Dow Jones Composite Index

The Dow Jones Composite Index is a stock market index comprised of the constituents of the Dow Jones Industrial Average, the Dow Jones Transportation Average, and the Dow Jones Utility Average. The Dow Jones Composite Index is weighted by stock price and quoted in points. To calculate the Dow Jones Composite Index, first the stock

Dow Jones EURO STOXX 50

The Dow Jones EURO STOXX 50 Index is an equity index representing 50 blue-chip companies within the eurozone. The Dow Jones EURO STOXX 50 Index represents about 60% of the Dow Jones EURO STOXX Total Market Index’s free-float market capitalization. The Dow Jones EURO STOXX 50 Index is a free-float market capitalization-weighted index. The weight

Dow Jones Global Titans 50 Index

The Dow Jones Global Titans 50 Index is a worldwide equity index. The Dow Jones Global Titans 50 Index represents 50 multinationals with headquarters all over the world. At its inception on December 31, 1991, the Dow Jones Global Titans 50 Index was set at a base value of 100. The Dow Jones Global Titans

Dow Jones Industrial Average

The Dow Jones Industrial Average is one of the, if not the, most popular of US stock market indices. The Dow Jones Industrial Average is also referred to as the Dow. Back in 1884, Charles Dow developed his first stock market average with 11 stocks, mostly railroad companies. On May 26, 1896, Charles Dow published

Dow Jones STOXX 600 Real Estate Cap Index

The Dow Jones STOXX 600 Real Estate Cap Index is a real estate index representing 600 companies involved in real estate investment services either directly or indirectly. All companies included in the Dow Jones STOXX 600 Real Estate Cap Index are selected from companies included in the Dow Jones STOXX Global 1800 Index. Dow Jones

Dow Jones STOXX Americas 600 Real Estate Cap Index

The Dow Jones STOXX Americas 600 Real Estate Cap Index is a real estate index representing the Americas region. Companies included in the Dow Jones STOXX Americas 600 Real Estate Cap Index must be involved in real estate investment services. In particular, Dow Jones STOXX Americas 600 Real Estate Cap Index companies must all be

Dow Jones STOXX Americas 600 REITS Index

The Dow Jones STOXX Americas 600 REITs Index is a Real Estate Investment Trusts index representing 600 REITs in the Americas region. All companies included in the Dow Jones STOXX Americas 600 REITs Index are selected from companies included in the Dow Jones STOXX Global 1800 Index. Dow Jones STOXX Americas 600 REITs Index companies

Dow Jones STOXX Asia/Pacific 600 Real Estate Cap

The Dow Jones STOXX Asia/Pacific 600 Real Estate Cap Index is a real estate index representing the Asia/Pacific region. Companies included in the Dow Jones STOXX Asia/Pacific 600 Real Estate Cap Index must be involved in real estate investment services. In particular, Dow Jones STOXX Asia/Pacific 600 Real Estate Cap Index companies must all be

Dow Jones Transportation Average

The Dow Jones Transportation Average is the oldest of all four Dow Jones averages. The Dow Jones Transportation Average was created back in 1884 when Charles Dow created the first Dow Jones stock index. Primarily made of railroad companies, the first Dow Jones stock index then evolved into the Dow Jones Transportation Average. The Dow

Dow Jones Utility Average

The Dow Jones Utility Average was created after the Dow Jones Transportation Average and the Dow Jones Industrial Average. The Dow Jones Utility Average started in 1929. The Dow Jones Utility Average includes 15 utility stocks. Dow Jones Utility Average stocks are selected at the discretion of the editors of the Wall Street Journal (WSJ).

Down Payment

A lump sum cash payment paid by a buyer when he or she purchases a major piece of property, such as a car or house. The buyer typically takes out a loan for the balance remaining, and pays it off in monthly installments over time.


A downgrade is a reduction in the rating awarded a debt or equity security. A major credit agency downgrades the debt of a company or governmental entity when its financial situation deteriorates. The downgrade tells investors they are less certain to receive the interest payments and return of capital they are due. The downgrade usually


The downpayment is equity offered with a sales contract to secure a deal. In some cases, it may be earnest money, but in larger deals such as real estate, a separate earnest money payment secures the deal in the approval stages while the downpayment is paid later, if not at the close. In a real estate transaction, the downpayment determines the size of the mortgage.


In business jargon, the downside is the risk of an unfavorable outcome to a particular activity. In an investment context, the downside is generally understood to be the risk of price of decline, sometimes called downside risk. Sophisticated means of quantifying the downside to an investment portfolio have been constructed. For instance Value at Risk

Downside Protection

Downside protection is a cushion against the potential loss resulting from a price decline in a security or market. The challenge associated with downside protection is that downside protection needs to be balanced with upside potential for high returns. For this reason (among other more complicated ones), some investors do not believe in downside protection.

Downside Risk

Downside risk includes both the likelihood and extent to which a stock’s price may decline. Analysts use various measures to assess the downside risk of a stock. For example, stocks that are selling at the low end of their historical price-earnings ratio would appear to have relatively limited downside risk, because investors will perceive the

Downside Tasuki Gap

The Downside Tasuki Gap candlestick pattern is a continuation pattern which signals the continuation of a previous downward trend. The Downside Tasuki Gap starts with a bearish long body followed by another bearish body that has gapped below the first one. The third day of the Downside Tasuki Gap is bullish and opens within the body of the second day,


Downsizing is a cutback in a company’s operations and usually implies a reduction in its employee headcount as well. Downsizing results from many factors, including increased global competition, new technologies, and weaker labour unions; it takes various forms and has various outcomes. Some firms use downsizing as part of a long-term effort to transform their


A downtick is a transaction that occurs at a lower price than the previous trade for a given security. A downtick is sometimes called a minus tick. The opposite of a downtick is an uptick. A zero downtick is not actually a downtick, but is a trade that occurs at the same price as the


A downward trend, tendency, or movement.


A decline in profitability or business activity.


To restrict development in a given area. For example, a zoning board may allow only single-family housing units to be built in a certain neighbourhood, thus restricting the commercial development and allowed construction of apartment complexes.

Dragonfly Doji

A dragonfly doji is a variation on the doji candlestick with a long lower shadow and no upper shadow, such that it resembles a capital “T.” The trading pattern that creates a dragonfly doji proceeds with the price of a security opening at the high of the day, selling off to a low, and then

Dram Shop Act

The Dram Shop Act holds retail businesses liable for damages or loss caused by serving alcohol to intoxicated patrons. The law was passed to create an incentive for owners of alcohol establishments to develop responsible service policies and to properly train employees to refuse alcohol sales to intoxicated patrons. Dram shop laws vary by state.

Dram Shop Rule

A drawdown is the percentage loss from the high to the low for a fund or portfolio. It is typically measured from one high to the bottom occurring before the next high.


A drawee is the entity that is expected to accept and pay a bill of exchange (check, draft, letter of credit, etc.) on presentation or on a certain date (called due date or maturity date).


Cash taken for personal use, in sole trader or partnership business, treated as a reduction of ownership interest.

Dressing Up A Portfolio

Dressing up a portfolio refers to the practice of some portfolio managers of selling weak stocks and purchasing strong stocks near the end of a reporting period to improve the portfolio’s appearance. Dressing up a portfolio enables managers to present an impressive-looking portfolio in quarterly or annual fund reports. Another term for dressing up a


DRIP is the acronym for Dividend Reinvestment Plan. In a DRIP, any dividends paid out by a stock are automatically used to purchase more of the stock. DRIPs are generally administered by the company itself. Bypassing brokers allows DRIP participants to buy stock without paying commissions. To increase participation in DRIPS, companies sometimes offer a

Driving Under The Influence
Drop Dead Date
Dual Life Insurance

Dual life insurance is a unique form of life insurance that provides coverage for two people, instead of one. Most often, dual life insurance is purchased by married couples and used for estate planning. The key difference between dual life insurance and regular life insurance is that dual life insurance is designed to benefit the

Due Care
Due Diligence

Due diligence is the research usually before a purchase to insure that the assets are as expected and properly valued.

Due On Sale Clause

A due-on-sale clause is a clause in a loan or promissory note that stipulates that the full balance may be called due upon sale or transfer of ownership of the property used to secure the note. The lender has the right, but not the obligation, to call the note due in such a circumstance. Virtually

Due Process

Due process is a judicial constitutional guarantee that no judgment can be rendered in the absence of a just legal proceeding. Due process is warranted by the United States Constitution. The Fifth Amendment to the Constitution states that “no person shall . . . be deprived of life, liberty, or property, without due process of

Due Process Of Law

Alternatively known as predatory pricing, dumping denotes the practice in which the sellers price their products at a lower cost to eliminate the surplus and gain market. In international trade, the manufactures export their product at a lower price than its cost in the domestic market. At times the price is lower than the production cost of the


Packing material such as boards, blocks, planks, metal or plastic bracing, used in supporting and securing packages for shipping and handling.


A situation in which two suppliers dominate the market for a commodity or service.

Durable Goods

In US macroeconomic statistics, durable goods are arbitrarily defined as goods expected to last at least three years. Other goods are called non-durable goods. Durable goods are often subcategorized. Durable goods made for the consumer are called consumer durables. The emphasis on durable goods and consumer durables in economic statistics is founded in purchasing behaviour.

Durable Goods Orders

The durable goods orders report is issued monthly by the Department of Commerce and measures the dollar volume of new orders, shipments, and unfilled orders of durable goods. Durable goods orders give a reading on the country’s future manufacturing activity. Durable goods orders include those manufactured items with a normal life expectancy of three years

Durable Power Of Attorney

A power of attorney that remains in effect if the principal becomes incapacitated. If a power of attorney is not specifically made durable, it automatically expires if the principal becomes incapacitated. See durable power of attorney for finances; durable power of attorney for healthcare.


There are three defences which can be described as duress: Duress by threat. The threat must be of death or serious personal injury. The defence is not available to threats against property. The accused must have had a reasonable belief in the threat and his decision to commit the crime in response must be reasonable.

Duress of Circumstances

Duress of circumstances is a recognition in English Law that sometimes it is necessary to commit a crime in order to avoid a greater evil In August of 2009, Dr Sherif Abdel-Fattah was issued with a ticket after he was caught breaking the speed limit in a bid to reach a woman who was severely bleeding. If

Dutch Auction

A Dutch auction started in Netherlands’ farms, is a descending price auction for multiple identical items. A true Dutch auction starts with a prohibitive price and is bid lower. Early winners in a strict Dutch auction pay more and later winners pay less till the Dutch auction ends. A more familiar variant of Dutch auction


In international trade, a customs duty, or tariff, is a tax on the import or export of specific goods. An import duty designed to shield domestic industry from foreign competition is called a protective duty, or protective tariff. In contrast, a revenue duty is simply designed to raise government revenue. Every duty is a trade barrier, and some economic theories state that the result of all trade barriers is a general lessening of aggregate economic welfare. The World Trade Organization was founded in 1994 with a mission of reducing all trade barriers, including the import duty. In law, fiduciary duty refers to standards of conduct above and beyond normal arms-length business conduct in dimensions such as loyalty, care, and disclosure. Fiduciary duty is important in multiple areas of law including agency, trust, and corporate governance.

Duty Of Care

It is clear that the law of Negligence cannot make every individual responsible for harm that befalls any other individual, even where there is some causal relationship between the acts of one person and the injury or loss to another. If, for example, I book the last seat on a flight from A to B,

Duty Virtute Officii

A duty owed by a trustee to the beneficiaries of a trust, one arising out of his office as trustee. An example would be a trustee’s obligation, in the case of a discretionary trust, to distribute income from the trust amongst its beneficiaries. The term ‘virtute officii’ implies that the duty will pass to a

Dying Declaration

Under common law, a statement made by a person who has been mortally wounded may be admissible in Evidence during trial for his murder or manslaughter, even if it is Hearsay. That is, if X told Y that he, X, was stabbed by Z, then Y might be able to adduce evidence of X’s statement in court. Evidence

Dynamic Momentum Index

An indicator used in technical analysis that determines the overbought and oversold conditions of a particular asset. This indicator is very similar to the relative strength index (RSI). The main difference between the two is that the RSI uses a fixed number of time periods (usually 14), while the dynamic momentum index uses different time periods as volatility changes.

Dynamite Charge

An judge’s admonition to a deadlocked jury to go back to the jury room and try harder to reach a verdict. The judge might remind the jurors to respectfully consider the opinions of others and will often assure them that if the case has to be tried again, another jury won’t necessarily do a better

Ronald Dworkin

Ronald Dworkin was HLA Hart’s successor to the Chair of Jurisprudence at Oxford, and one of his most determined critics. According to Dworkin, the whole of Legal positivism rests on an unsteady foundation – the notion that there is a rule that can unambiguously classify rules into ‘law’ and ‘non-law’. Hart called this foundational principle

S&P 500 Dividend Aristocrats

The S&P 500 Dividend Aristocrats are blue chip companies with large market caps within the S&P 500 that have increased dividends every year for at least 25 consecutive years.

The Law Of Defamation

The law of defamation protects a person’s interest in maintaining his or her good name and reputation. Defamation can take the form of either libel or slander. The tort of defamation involves injury to one’s good name and reputation. Defamation can take one of two forms: libel or slander. Libel is defamation that is written

Accounting Terms Beginning With "E"

EAFE Index

The EAFE Index measures the overall performance of equities in Europe, Australia, and the Far East. Created in 1969, the EAFE Index is widely recognized as one of the primary measures of international stock market performance for U.S. investors. As of July 31, 2002, the EAFE Index included 1,021 securities in 21 countries, representing the

Earliest Predictor of Stock Movement

Stock prices move in trends. Once a trend starts, it may last for weeks, months, or even years. An investor who buys a stock at the beginning of a new uptrend and holds it through the advance stands to reap a substantial profit. The earlier an investor can identify the start of a new uptrend

Early Redemption Charge

A charge made by the mortgage lender if the borrower terminates a mortgage in advance of the terms of that particular mortgage. ERCs are generally imposed on fixed or discounted mortgages offering a relatively cheap deal for an initial period. They usually run only until the end of the initial cheap deal period, though some mortgages impose extended redemption penalties which continue even though the borrower has moved back onto the lender’s standard variable rate.

Early Retirement

Early retirement occurs when an individual retires before the required or generally accepted age, usually 65 or 67. Early retirement is possible for those who have saved up a large enough nest egg or who have come into a large sum of money. Early retirement is among the most common reasons for investing. Those who

Early Withdrawal Penalty

An early withdrawal penalty is a fine levied on funds removed from an investment before they are allowed to be removed, according to the agreement signed. For example, cashing in a one-year certificate of deposit after six months will result in an early withdrawal penalty equivalent to a few month’s interest. The purpose of an


designate (funds or resources) for a particular purpose.

Earned Income

Earned income is wages, salary, tips, fees or other compensation generated as a result of the active performance of labour or a service. Earned income is payment for work or service already completed. Earned income also includes profits from your own business or trade which you have materially participated in producing. Earned income ceases if

Earned Income Tax Credit

The earned income tax credit (EITC) is a tax refund program geared toward low-income workers. The earned income tax credit offers non-wastable tax credits. These earned income tax credit refunds come in a form of prepackaged payments made toward tax liabilities. Earned income tax credit qualifications, which determine the size of the earned income tax

Earnest Payment
Earning Asset

Any asset which produces income.


In everyday speech, earnings is often used interchangeably with income and profits to mean some positive financial increase. In investing, however, earnings are more likely to describe what is leftover in a given accounting period after all revenues and gains, and all expenses and losses, have been totalled. Thus earnings per share means net income

Earnings Before Interest

Earnings before interest and pretax operating income and pretax operating profit are the same. Earnings before interest is revenue less after-tax operating expenses. Earnings before interest can be calculated by subtracting cost of sales and selling, general and administrative expenses and taxes from sales. Earnings before interest and taxes, or EBIT, measures a company’s earning

Earnings Before Interest And Taxes

Earnings before interest and taxes (EBIT) is an indicator of financial performance. Earnings before interest and taxes can be computed as Gross Revenue – (Cost of Goods Sold + Selling, General, and Administrative Expense). Some analysts focus on earnings before interest and taxes rather than actual earnings. They argue that, since interest-rate levels and tax

Earnings Estimate

An earnings estimate is an estimate of a company’s future financial performance. They are based on historical financial performance, guidance offered by company management, and economic forecasting models. An earnings estimate is used to help determine the future valuation of a stock or industry. Institutional Brokers’ Estimate System (IBES), First Call, and Zack’s collect an

Earnings For Ordinary Shareholders

Profit after deducting interest charges and taxation and after deducting preference dividends (but before deducting extraordinary items).

Earnings Growth

Earnings growth is a key indicator for measuring a company’s success and the driving force behind stock price appreciation. Put simply, earnings growth is the percentage gain in net income over time. Thus if a company earns $1.00 in the second quarter of year 1 and $1.15 in the second quarter of year 2, earnings

Earnings Multiple

The earnings multiple of a stock, also called the price/earnings (P/E) ratio, is the share price divided by the earnings per share. The earnings multiple is often based on the prior twelve months of earnings data. However, the earnings multiple can also be based on the estimated future earnings. A $40 stock with $2 in

Earnings Per Share

The portion of a company’s profit allocated to each outstanding share of common stock.
Calculated as earnings for ordinary shareholders divided by the number of shares which have been issued by the company.

Earnings Report

An earnings report is an official document published by a publicly-traded company itemizing earnings, expenses and net profit. An earnings report can also be called an income statement or a profit and loss statement. Depending on the company, an earnings report may be published quarterly or yearly and must be distributed to all stockholders of

Earnings Retention Ratio

Earnings Retention Ratio measures the percentage of earnings retained after dividends have been paid out to the shareholders. Other names for the Earnings Retention Ratio are Plowback Ratio, Retention Rate and Retention Ratio. The philosophy behind the Earnings Retention Ratio is that the more earnings the company retains, the more capital it has available for growing

Earnings Season

Earnings season is the six to eight-week period each quarter where the majority of U.S. companies report quarterly or annual earnings. Just as there is a holiday season running from (roughly) the end of October through the first of January, there is earnings season for those who follow the antics of Wall Street. However, while

Earnings Surprise

An earnings surprise occurs any time a stock’s earnings do not match anticipated earnings. If the stock’s earnings are higher than the market expected then the earnings surprise is positive — and if earnings are less than the market was looking for then the earnings surprise is negative. A positive earnings surprise often results in

Earnings Yield

The earnings yield is earnings per share divided by the stock price. In the earnings yield computation, trailing 12-month earnings is typically used. For example, if earnings per share for the past four quarters is $3 and the stock price is $30, the earnings yield is 10%. The earnings yield is the reciprocal of the


A right to cross or otherwise use someone else’s land for a specified purpose.

Easement Of Access

An Easement that takes the form of a right to get access to one’s land by passing over land belonging to someone else. Where such an easement is not expressly granted in the conveyance, it may be implied as an easement of necessity.

Easement Of Necessity

An Easement that is implied into the conveyance of a piece of land, without which the land conveyed would essentially be worthless. Easements of necessity frequently take the form of an easement of access — if I sell a piece of land that is surrounded on all sides by land that I still own, I can hardly expect the

Easy Money

Easy money is a term used to describe the state of the money supply when the federal reserve lowers interest rates, thereby making it easier to borrow money.


to listen without the speaker’s knowledge


An abbreviation for “earnings before interest and tax.” Net income before income tax expense and interest expense is deducted.


EBITDA is Earnings Before Interest, Taxes, Depreciation, and Amortization.

EC Treaty

Strictly speaking, there is no specific document called the ‘EC Treaty’. The term generally refers to the original Treaty of Rome, which established the EEC, as variously amended over the years by later treaties. The Treaty of Maastricht renamed the European communities (by this time largely dominated by the EEC) to the ‘European Community’, and re-issued the amended (and


The ECB, or European Central Bank, is the central bank of the Eurozone states that use the Euro as their common currency. The main goal of the ECB is to promote price stability within the Eurozone. The ECB focuses on controlling inflation via interest rate policy. Critics of the ECB have suggested that this is


the application of mathematics and statistics to the study of economic and financial data.

Economic Capital

While the term economic capital is a more recent development, the concept it represents dates to the 1980s. Regulators have always been interested in the capital ratios of the financial institutions they oversee, but it was during the 1970s and 1980s that they started to implement explicit capital adequacy regulations. To do so, they had

Economic Cycle

The economic cycle is the periodic fluctuation of the economy between periods of growth and contraction. The major phases of the economic cycle are expansion, prosperity, contraction and recession. Governments and central banks often intervene to smooth the peaks and valleys of the economic cycle. For example, the Federal reserve may restrict the money supply

Economic Good

In economics, a good is a material that satisfies human wants and provides utility, for example, to a consumer making a purchase. A common distinction is made between ‘goods’ that are tangible property (also called goods) and services, which are non-physical. Commodities may be used as a synonym for economic goods but often refer to

Economic History

Economic history is studying the evolution of economic processes and related phenomena over a certain length of time. There are several processes that are used in studying economic history like combining statistical and historical methods. At times economic theories are applied to historical situations in order to study economic history. Economic history is inclusive of subjects

Economic Indicators

Economic indicators are specific data that help reveal the direction of the economy.

Economic Moat

Economic moat is a term popularized by Warren Buffett describing a company’s competitive advantage. In the chemical industry, these are often called barriers to entry. They help defend against competitors who inevitably will try to copy successful products. The wider and more durable a company’s competitive advantages, the wider the moat. And the wider the moat, the better for

Economic Principles

Economic principles are guiding rules of the discipline of economics. There are several areas that come under the domain of economic principles like economic decisions, working of economy, and popular interaction. There are certain economic principles that govern economic decision-making processes of people. The principle of trade-off, for example, states that people have to give up

Economic Profit

Economic profit is a RAPM that is widely employed for assessing a firm’s financial performance. It is also known by the trademarked name economic value added (EVA). The concept is that a firm only adds value for its shareholders if it makes a profit in excess of what could have been earned if its capital

Economic Recovery Act of 1981

The Economic Recovery Act of 1981 (ERTA) was a tax cutting initiative.

Economic Rent

Economic rent is a measure of money received by owners of factors of production for its use. Land, labour and capital are primary factors of production. Economic rent is minimum monetary compensation that has to be offered to an owner of a factor of production, for use of that asset. For instance, with labour, economic

Economic Resource

An economic resource is defined as labor, land, capital, or entrepreneurial ability.

Economic Sanctions

Economic sanctions are imposed on a country by another country or a group of countries for varied reasons. Sanctions can relate to trade barriers, tariffs, import or export quotas, and import duties. A country on which economic sanctions have been imposed usually retaliates by imposing counter economic sanctions. For instance, in 2002 the US imposed import tariffs on steel that provoked

Economic Statistics

For traders involved with the foreign exchange and stock market, forecasters of currency exchanges, and even economic policymakers around the globe, something they work with daily is economic statistics. To most people, these numbers and facts mean little but to professionals such as this, economic statistics are a vital part of doing their job. In

Economic System

An economic system is an arrangement that necessitates the production, distribution and consumption of goods and services between members in a specific society. People and institutions make up the basic structure of an economic system with their relationships to productive resources like property making up the whole. The problems of economics like apportioning of limited productive resources can be tackled

Economic Value Added

A metric that helps measure a company’s true economic profit. As a result, it helps investors determine whether the company is creating value for its shareholders.


the branch of social science that deals with the production and distribution and consumption of goods and services and their management.

Economies Of Scale

Economies of scale refer to the efficiency gained in a production process as the rate of production is increased. By sharing the costs of production; operating costs, and cost per unit produced, are decreased over time. It can be defined as a state when the number of goods or services produced goes up by a sizable margin but that

Economies Of Scope

Economies of scope refer to the ability to produce a multitude of products or product models in a single, flexible facility, cheaper than in various different facilities. This could be done in part by highly-flexible and versatile programmable automation which would facilitate inexpensive and quick product-to-product changes. In economies of scope, economies are created by


An expert in the science of economics.


The economy is defined as the sum of all consumption and production activities and their inter-relationships. We normally talk about an economy in terms of one geographic region, most often a country such as the United States, but also at a city level (the New York economy), a state or province-level (the Illinois economy), or at a supra-national level, such as the economy of

Economy Of High Wages

The economy of high wages is the concept that higher wages will directly lead to higher productivity. The theory suggests that wages are positively associated with the marginal product or productivity of the worker. The theory should be subject to the law of diminishing returns. When the salary of a low wage earner is increased, they

Economy Of Scale

Economy of scale (or economies of scale) fundamentally constitutes the increase in production output by way of improving production efficiency. In a fixed cost environment, economy of scale is indicative of lower-than-average cost per unit. Thus, for instance, having achieved economy of scale, the largest automobile maker may be able to produce a given car


An entrepreneur operating an environmentally sustainable business.


EDGAR stands for the Electronic Data Gathering, Analysis, and Retrieval System of the Securities and Exchange Commission (SEC). Since 1996, all U.S. companies have been required to make most of their SEC filings through EDGAR. The EDGAR filings can be accessed for free to anyone visiting the SEC’s website ( EDGAR filings are also available through several commercial websites, which may make EDGAR data easier to manage and manipulate. Notably, a company need not file with EDGAR the annual report it sends to shareholders. However, companies must use EDGAR to file their 10-K, which contains much of the same information, and often additional data besides. EDGAR provides historical and current filings of the 10-Q (the company’s quarterly report), 8-K (current updates of “material” events), 13-D (acquisitions of more than 5% of the company’s stock), 14-A (proxy statements), 14-D (tender offers), and Forms 3, 4, and 5 (statements of insider holdings). EDGAR also provides prospectuses, i.e., detailed descriptions of a company’s activities when it is about to go public or sell new securities.

Education Index

The United Nations publishes a Human Development Index every year, which consists of the Life Expectancy Index, Education index, and Income index. The Education Index is calculated from the Mean years of schooling index and the Expected years of schooling index. Education is a major component of Well-Being and is used in the measure of

Education IRA

The education IRA is a savings plan for certain expenses of higher education, such as a university or technical college education. It is not an individual retirement account and is not used for retirement. The amount that may be contributed to an Education IRA may change from year to year, due to acts of Congress.

Education Law

The body of state and federal constitutional provisions; local, state, and federal statutes; court opinions; and government regulations that provide the legal framework for educational institutions. The laws that control public education can be divided into two categories: those written exclusively for schools and those pertaining to society in general. Federal statutes regarding the education

Effective Annual Interest Rate

An effective annual interest rate is used to determine the interest rate on an annual basis after accounting for the effects of compounding. A 10% annual rate compounded yearly would imply a 10% effective annual interest rate. A 10% annual rate compounded monthly would imply a 10.47% effective annual interest rate. The effective annual interest

Effective Debt

Effective debt is the net sum total of a business concern’s (or individual entity’s) outstanding debt. Effective debt includes items like bond issues, loans and leases payments to name a few. It provides an accurate measurement of the total debt load of a company, to investors. Bad debt is a serious financial problem for business houses. Cash flow

Effective Interest Rate

The rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument.

Effective Tax Rate

The effective tax rate for an individual is usually the ratio of taxes to adjusted gross income. The effective tax rate thus measures the average rate of taxation for all income. Here’s an example of an effective tax rate: assume a taxpayer pays 5% on the first $10,000 ($500) in income and 10% on the


Economic efficiency refers to a situation where no further improvement can be made to existing production, without adversely affecting other entities. In such a scenario, an increase in output is impossible without increasing the quantity of inputs. Also, when economic efficiency is achieved, production per-unit cost is at its minimum value. These three factors taken together actually point to a situation where a

Efficiency Loss

Efficiency loss is caused by too little or too much allocation of a resource to produce a good or service.

Efficiency Ratio

The efficiency ratio is non-interest expenses over the sum of net interest income before provision for loan losses plus non-interest income. It’s analogous to dividing operating expenses into revenues. What you get is the percentage of revenues you’re spending on operating expenses. The lower the ratio, the better. Numerically, 1 (the numeral 1) minus the efficiency ratio equals a bank’s operating

Efficiency Wages

Efficiency wages refer to wages paid out by employers that exceed market-clearing wage. In some markets, it has been found that wages are influenced by factors other than demand and supply. Higher wages are paid out by employers in order to increase productivity and efficiency. Increase in labour productivity offsets extra expenses incurred by the employer in paying out higher wages. Efficiency wages also

Efficient Frontier

The efficient frontier is the curve along all market securities which delivers the highest returns for the lowest risk. Any investment below the dotted line in the image (right) will deliver lower returns for the same amount of risk and is therefore not ideal. Investing on the right (upper) side of the frontier means using leverage, and of course, means higher risk.

Efficient Market Theory

Developed by University of Chicago professor Eugen Fama in the 1960s, the efficient market theory states that, at any given time, all available information is fully reflected in securities’ prices. The efficient market theory implies that no investor can consistently outperform the market since every stock is appropriately priced based on available information. The efficient

Efficient Markets Hypothesis

Share prices in a stock market react immediately to the announcement of new information.

Eggshell Skull

A hypothetical medical condition used to illustrate the idea that if you are at fault when you injure someone, you are responsible for all the consequences, whether you could have foreseen them or not. For example, if you cause an injury to a haemophiliac who begins to bleed severely, you are responsible for whatever happens


An exit, or the act of exiting. The most famous use of this word was by P.T. Barnum, who put up a large sign in his circus tent saying “This Way to the Egress.” Thinking an egress was some type of exotic bird, people eagerly went though the passage and found themselves outside the circus

Ejusdem Generis

‘Things of the same meta’. A principle of Statutory interpretation that guides the interpretation of passages like ‘tents, caravans and similar dwellings’. For example, ‘cats, dogs, and other pets’ probably excludes lions (as not being pets), but it is less clear whether ‘cats, dogs, and other animals’ would include lions. It may be necessary to infer this

Elasticity Of Demand

The elasticity of demand, also known as price elasticity of demand is a variation of demand. It can be categorized as unitary, elastic and inelastic. It is defined as how much the demand for a particular commodity change with a change of its price. Examples Elasticity In elastic demand, when the price changes the quantity demanded is highly

Elder Law
Elder-Ray Index

The Elder-Ray Index is a technical indicator developed by Alexander Elder. It measures the amount of buying and selling pressure in the market. The Elder-Ray Index consists of two separate indicators known as “bull power” and “bear power”. These figures allow a trader to determine the position of the price relative to a certain exponential

Election Of Remedies
Election Under The Will
Electronic Funds Transfer

Electronic funds transfer, or EFT, is a system for transferring money from one bank to another. In electronic funds transfer, there is no paper money involved. With electronic funds transfer, dollar amounts are transferred via the Automated Clearing House network, a system connecting all financial institutions in the United States. Funds can be transferred via

Electronic Funds Transfer Act

A US federal law that gives you certain rights in the event that mistakes occur on your ATM or bank statements or if your ATM card is lost or stolen. Generally, you have a duty to report the mistake or lost card–and the sooner the better. If you notify the bank in a timely manner,

Electronic Surveillance

A highly advanced form of eavesdropping. Electronic surveillance employs sophisticated electronic equipment to intercept private conversations or observe conduct that is meant to be private. It includes the use of radio equipment to intercept broadcast communications, the use of small radio transmitters or “bugs” to listen in on telephone or in-person conversations, the use of

Eligible Survivor

The eligible survivor can be both a lawful spouse who is eligible for benefits or a dependent child. The conditions to be an eligible survivor depend on the benefits awarded. The term is most frequently used to describe the survivor who is eligible to receive Social Security Administration (SSA) benefits. According to the SSA, to

Elliott Wave Theory

Elliott Wave Theory was developed by Ralph Nelson Elliott in the nineteen twenties. Initially, Elliott Wave Theory was drawn from social science trends, such as mass psychology that was prevalent at that time. Like many other formulations, the purpose of the Elliott Wave Theory was to create an organizing principle that would explain and predict


The act of freeing someone from restraint or bondage. For example, on January 1, 1863, slaves in the confederate states were declared free by an executive order of President Lincoln, known as the “Emancipation Proclamation.” After the Civil War, this emancipation was extended to the entire country and made law by the ratification of the


An official ban on trade or other commercial activity with a particular country.

Emergency Fund

An emergency fund is a self-funded insurance for an unplanned loss of income.

Emergency Protective Order

Any court-issued order meant to protect a person from harm or harassment. An emergency protective order is issued by the police, when court is out of session, to prevent domestic violence. An emergency protective order is a stop-gap measure, usually lasting only for a weekend or holiday, after which the abused person is expected to

Emerging Market

Emerging markets is a term that is used to illustrate the process of rapid economic growth. The process of rapid industrialization is depicted by the term emerging markets. Emerging markets are synonymous to emerging economies. To be more specific, Emerging markets are termed as Emerging Market Economy (EME). Emerging Market Economy (EME) was invented in the year

Eminent Domain

The power of the federal or state government to take private property for a public purpose, even if the property owner objects. The Fifth Amendment to the United States Constitution allows the government to take private property if the taking is for a public use and the owner is “justly compensated” (usually, paid fair market value) for his or her loss. A public use is virtually anything that is sanctioned by a federal or state legislative body, but such uses may include roads, parks, reservoirs, schools, hospitals or other public buildings. Sometimes called condemnation, taking or expropriation.


Total remuneration of an employee or director which includes salary and bonuses etc.

Emotional Distress

Emotional distress refers to mental anguish and suffering including fear, indignity and shock. Damages for emotional distress may be recovered under some conditions in a personal injury claim but generally must be accompanied by physical injuries. Emotional distress may, under some conditions, be recovered without physical injury but a claimant would have to prove intentional

Empirical Probability

In probability theory, the empirical probability is an estimated probability based upon previous evidence or experimental results. As such, the empirical probability is sometimes referred to as experimental probability, and we can distinguish it from probabilities calculated from a clearly-defined sample space. The empirical probability, relative frequency, or experimental probability of an event is the ratio of the number of outcomes in

Employee Retirement Income Security Act

In the US, a federal law introduced for the protection of participants in private pension plans.

Employee Stock Options

Employee stock options are compensation to an employee in the form of the right to buy shares of the employing company’s stock at a set price. It is assumed that the employee will only do this when the current stock price is much higher than his purchase price and that he will then immediately sell the shares, pocketing the difference.

Employee Stock Ownership Plan

Employee stock ownership plan (ESOP), also known as a stock purchase plan, is a program designed to promote purchasing of company stock by the employees. The distribution of stock through an employee stock ownership plan is facilitated by the employee stock ownership trust, which represents actual accounts through which stock is bought and sold. An

Employee Stock Purchase Plan

An Employee Stock Purchase Plan gives an employee the opportunity to purchase stock in the company where they work. Many companies offer an Employee Stock Purchase Plan and encourage employee participation. An Employee Stock Purchase Plan may be part of a qualified retirement plan or simply be a benefit offered by the company. The share

Employer’s Liability

An employer can be held liable for harm that befalls his employees at common law, and under various statutory provisions. This overview considers the common law provisions and the way in which these provisions are modified by statute. In addition, an employee may have a remedy against his employer for breach of the employer’s statutory

Employment Cost Index

The Employment Cost Index, or ECI, is a quantitative measure of the proliferation of wages and other employee compensation. The Employment Cost Index is an average figure calculated in units of one hour of labour. In addition to reflecting current employee wages, the Employment Cost Index also provides data on other forms of compensation, such

En Banc
Enabling Clause

The building of a structure entirely or partly on a neighbour’s property. Encroachment may occur due to faulty surveying or sheer obstreperousness on the part of the builder. Solutions range from paying the rightful property owner for the use of the property to the court-ordered removal of the structure.


An encumbrance on the Title to land or property is any interest — legal or equitable — that detracts from the owner’s ability to enjoy the land or property without hindrance. Encumbrances range from a long Lease made out of the property, to an Easement preventing the obstruction of light to other buildings. A prospective purchaser will be interested


Endogenous is a term mainly used in the application of economic theories. Any variable is termed as endogenous if it originates due to factors within organization. In other words, endogenous variables have explicit causes within model. In order to understand the concept of endogenous variables, a small example can be referred to. Supposing a model of


International financial reporting standards approved for use in Member States of the European Union through a formal process of endorsement.


An endorsee is a person or firm to whom a negotiable instrument (bill of exchange, bill of lading, delivery order, or another document of title) is transferred by endorsement. Also called a transferee or payee, the endorsee becomes a holder-in-due-course upon delivery of the endorsed document.

Endowment Insurance

Provides that an insured person who lives for the specified endowment period receives the face value of the insurance policy–that is, the amount paid at death. If the policy-holder dies sooner, the beneficiary named in the policy receives the proceeds.


Engagement is a measure of how actively a customer is using a digital service, normally a website. The more time a user spends on a site, and the more often they come back, the more engaged they are said to be. Traditional advertising has tended to focus on reach and frequency, that is getting to as many people as often as possible. Online

Engel’s Law

Engel’s law a significant aspect of economics literature and is mainly used in consumer behaviour theories. Engel’s Law defined by Ernst Engel states that as incomes increases, the proportion of income spent on consumption reduces. Engel’s Law can be identified as a fundamental principle of income and consumption theory. Engel’s Law states that as income rises, the percentage of income spent on consumption rises slower as compared

English Law

English law is the legal system of England and Wales and is the basis of common law legal systems used in most Commonwealth countries and the United States (as opposed to civil law or pluralist systems in other countries, such as Scots law). It was exported to Commonwealth countries while the British Empire was established


Enron or Enron Creditors Recovery Corporation was an energy company headquartered in Houston, Texas, USA. Enron was recognized as a preeminent American energy company. It had approximately 22,000 employees and was a leader in providing electricity, natural gas, and other energy services. Initially, Enron started off as a firm responsible for transmission and distribution of electricity and gas throughout the United


An entail (or ‘fee tail’) is an obsolete form of Freehold estate; it would be granted out of an estate by the Fee simple owner, and would subsist for the duration of the lineage of the grantee. In the event that the lineage came to an end, there was usually a Reversion to the fee simple owner. In the mediaeval and

Enter A Judgment

A business activity or a commercial project.

Enterprise Risk Management

Enterprise Risk Management or ERM is a discipline where a firm assesses, controls, finances, and monitors risks from all sources to increase the firm’s short and long term value to its stakeholders. ERM provides of framework for risk management which identifies specific events or circumstances relevant to the firm’s risks and opportunities and assess them in terms of likelihood and magnitude of impact.

Enterprise Value

Enterprise Value (EV), also called Total Enterprise Value (TEV), is used as a more accurate alternative to market capitalization. It represents the entire cost of a company if someone were to acquire it. Enterprise Value includes a number of important factors such as preferred stock, debt, and cash reserves that are excluded from simple market

Enterprise Zone

Enterprise zone is a specially designated area within which businesses are granted numerous advantages. Enterprise zone is commonly associated with such business incentives as income tax credits, equipment tax refunds, and property tax credits. At its core, the enterprise zone is a means of targeting a specific geographic area for economic revitalization. Creating an enterprise


Entitlements are government benefits provided by law to eligible individuals. Entitlements are typically for citizens only. In the US, major entitlements include the Medicaid, Medicare, and Social Security programs. As the name implies, entitlements tend to become politically difficult to change, as recipients come to feel entitled to what they have been receiving. Without changes,


that which is perceived or known or inferred to have its own distinct existence (living or nonliving)


a defense that claims the defendant would not have broken the law if not tricked into doing it by law enforcement officials


A self-motivated individual who forms, runs, and takes all the risks of starting a business.

Entry Of Judgment
Entry Price

The value of entering into acquisition of an asset or liability, usually replacement cost.

Environmental Impact Report
Environmental Law

An amalgam of state and federal statutes, regulations, and common-law principles covering air pollution, water pollution, hazardous waste, the wilderness, and endangered wildlife. Almost every aspect of life in the United States is touched by environmental law. Drinking water must meet state and federal quality standards before it may be consumed by the public. Car


EONIA stands for the Euro OverNight Index Average.


EPS is earnings per share, the net income a company makes in a given period for each outstanding share. EPS is perhaps the key measure of a company’s financial success because it reflects both the company’s bottom line (the numerator) and the ownership interests (the denominator) over which earnings must be spread. EPS is also

Equal Opportunity
Equal Protection

The constitutional guarantee that no person or class of persons shall be denied the same protection of the laws that is enjoyed by other persons or other classes in like circumstances in their lives, liberty, property, and pursuit of happiness. We hold these truths to be self-evident, that all men are created equal, that they

Equal Protection Of The Law
Equation Of Exchange

Equation of exchange is the equation: money supply times the velocity of money equals the price level times the physical volume of goods and services produced.


Equilibrium occurs when a balance between supply and demand is realized. Equilibrium in economics is referred to as a state of stability. In this state, the economic forces are in balanced form and there is no influence of external forces. Equilibrium is a state in which the economic variables do not change and there is an absence of externalities. Types

Equilibrium Price

Equilibrium price is the point on a supply and demand schedule where the supply curve and the demand curve intersect. In other words, it’s the price where supply and demand are equal for a particular good or service.

Equilibrium Quantity

Equilibrium quantity is the maximum profit a company can earn at a certain point on the supply and demand schedule.


Tangible property (other than land or buildings) that is used in the operations of a business. Examples of equipment include devices, machines, tools, and vehicles.

Equitable Distribution

A legal principle, followed by most US states, under which assets and earnings acquired during marriage are divided equitably (fairly) at divorce. In theory, equitable means equal, but in practice, it often means that the higher wage earner gets two-thirds to the lower wage earner’s one-third. If a spouse obtains a fault divorce, the “guilty”

Equitable Easement

An Easement that a court might be prepared to enforce, notwithstanding that it does not satisfy the requirements for a legal easement. Easements for a duration not equivalent to a freehold or a leasehold or which fall short of the formalities for a legal easement might be enforced as equitable easements.

Equitable Estoppel
Equitable Interest

An interest in land (see: Interest land and property) that is governed by the practices of Equity, rather than by the common law or legislation. Since the passage of the Law Of Property Act (1925), the relevance of equitable interests has probably increased because the 1925 legislation destroyed many of the large numbers of legal interests that existed

Equitable Lease

An equitable lease is created when one person contracts with another to assign or create a lease, in circumstances where the lease should be created by deed or registered. For most purposes, the lessee will be treated in litigation as if the formalities had been observed, under the equitable doctrine of ‘equity sees as done

Equitable Lien
Equitable Mortgage

An agreement which does not satisfy the formality requirements to be a legal mortgage, but which the courts might be prepared to enforce on equitable grounds. In particular, if the Mortgagor and the Mortgagee have a written contract to create a mortgage, but no Deed has been executed, this might constitute an equitable mortgage. The Mortgagee under and equitable mortgage is in a

Equitable Title

A form of title to trust property held by the beneficiary, where legal title resides in the trustee and the courts recognize certain rights in favour of the former. While the trustee’s interest in this property appears to be one of complete ownership and possession, the trustee does not have the right to receive any benefits from the property. Such


Equities is another name for shares or stocks. To have equity in an asset is to own a piece of it; equities is used more broadly to mean ownership interests in companies. Equities are distinguished from bonds, which represent loans to the issuer. Holders of equities may or may not receive dividends of varying size,

Equities Analyst

A professional who investigates and writes reports on ordinary share investments in companies (usually for the benefit of investors in shares).


A description applied to the ordinary share capital of an entity.

Equity Accounting

Reports in the balance sheet the parent or group’s share of the investment in the share capital and reserves of an associated company.

Equity Default Swap

A far out-of-the-money equity option structured much like a credit default swap.

Equity Interest

Equity interest is the ownership share of a shareholder in a business. For example, having a 25% equity interest in a company means that the shareholder owns a 25% stake in the business. An equity interest does not necessarily mean that a shareholder is entitled to a proportionate share of the income generated by an investee.

Equity Line Of Credit

Equity line of credit, also known as home equity line of credit, or HELOC, is a type of credit extension, that allows borrowing against home equity over a period of time. In other terms, equity line of credit can be looked at a deed of trust, backed by a borrower’s home. The total equity line

Equity Loan Rates

Equity loan rates are the interest rates charged on equity loans. An equity loan is a mortgage placed on residential or commercial real estate in exchange for cash. Home equity loans either have fixed equity loan rates or variable equity loan rates. Equity loan rates are generally tax-deductible. A home equity loan calculator can be

Equity Market

Equity market, or stock market, is a system through which company shares are traded. The equity market offers investors an opportunity to participate in a company’s success through an increase in its stock price. With enhanced opportunity, however, the equity market usually carries greater risk than debt markets. The U.S. equity market focuses on the

Equity Multiplier

Equity Multiplier is a ratio that indicates a company’s ability to use its debt for financing its assets. It is also referred to as the Leverage Ratio and the Financial Leverage Ratio. The Equity Multiplier ratio is calculated as total assets divided by the common stockholder’s equity. A company’s assets equal the sum of debt and

Equity Of Redemption

An old-fashioned term for the total package of rights that a Mortgagor has to redeem his Mortgage against the Mortgagee. See rights of mortgagor for more details.

Equity Portfolio

A collection of equity shares.

Equity REIT

An equity REIT is a company which owns a portfolio of income-producing real estate. REIT is an abbreviation of Real Estate Investment Trust. An equity REIT is one type of REIT; there are also mortgage REITs which own mortgages secured by properties. Congress passed legislation in the 1960s that helped create the modern equity REIT.

Equity Risk Premium

All securities are subject to market risks. Equities or stocks earn profits over definite time periods. Most of these securities earn a risk-free interest or generate a minimum assured income. Additional return equity gives over and above this minimum sum is termed ‘equity risk premium’. Equity risk premium in effect compensates relatively higher risk investors take when they invest in public securities or stocks. When higher

Equity Shares

Shares in a company which participate in sharing dividends and in sharing any surplus on winding up, after all liabilities have been met.

Equity Swap

An equity swap, a branch of derivative security, is a swap in which at least one party pays the return on a stock or stock index. where a set of future cash flows are exchanged between two counterparties. One of these cash flow streams will typically be based on an interest bearing reference asset. The

Equivalent Taxable Yield

The equivalent taxable yield is used by investors to compare the yield of a taxable bond (i.e. government bond or corporate bond) with that of a tax-free bond (i.e. municipal bond). When computing the equivalent taxable yield, an investor wants to determine the minimum yield required in order to receive the same return with both


A chart that compares price and volume and plots them together as one piece of data. The height of each bar represents the high and low for each period and the width represents the volume relative to the total shares traded over the time period being analyzed.


An error in printing or writing.

Errors And Omissions
Escalator Clause
Escape Clause

The reversion of property to the state, or (in feudal law) to a lord, on the owner’s dying without legal heirs.


Escrow is a contractual arrangement in which a third party receives and disburses money or property for the primary transacting parties, most generally, used with plentiful terms that conduct the rightful actions that follow.

Escrow Account

An escrow account is an account designated to hold escrow funds. The escrow accounts purpose is to keep funds held under an escrow agreement segregated from any other account of the escrow agent. The escrow agent has a fiduciary responsibility to disburse the funds in the escrow account according to the agreement. An escrow account

Escrow Agent
Escrow Instructions

The act or process of learning secret information through clandestine means.


A title appended to a lawyer’s surname.

Established Customary Standard Of Care

Established Customary Standard of Care, see also Duty, is the level of care and skill that the average doctor would provide to a patient who sought medical care. Personal injury claims are often brought against medical doctors who breached their duty by not providing this level of care. Negligence in the most general sense is


everything you own; all of your assets (whether real property or personal property) and liabilities

Estate Advisor

Estate Advisors determine how your assets will be distributed in the event of your death or physical or mental incapacitation. Without proper estate planning your assets may not be distributed to your heirs in the desired manner. Common elements include appointing a power of attorney and determining whether a trust should be set up. Creating a will keeps your assets out of the probate process. It is also important to know the pertinent tax implications.

Estate Agent

Estate Agent is a British term for a person or business that arranges the selling, renting or management of homes, land and other buildings, although an agent that specialises in renting is often called a Letting Agent. Estate agents are mainly engaged in the marketing of property available for sale and a Solicitor or Licensed

Estate Contract

A contract to convey an interest in land, or a contract creating the right to take an InterestInLand. If A makes a contract with B to sell him his house, then an estate contract arises in B’s favour. B now has an equitable interest (under a ConstructiveTrust) in A’s land. The question then arises what would

Estate In Land

An ‘estate in land’ is an interest in land that is endowed with certain rights and obligations, and carries a right to occupy or receive the benefit of the land. As well as estates in land, there are non-proprietary interests in land, such as licences (see: Licence). There are also proprietary interests that fall short of

Estate Planning

The art of continuing to prosper when you’re alive, and passing your property to your loved ones with a minimum of fuss and expense after you die. Planning your estate may involve making a will, living trust, healthcare directives, durable power of attorney for finances or other documents.

Estate Tax

The estate tax is simply a tax on assets charged by the government at one’s death, less liabilities. The total credit amount of the estate tax is applicable to the sum of the property transferred at death. When a death occurs, the estate tax is levied based on the fair market value of one’s property.

Estate Taxes

Taxes imposed by the state or federal government on property as it passes from the dead to the living. All property you own, whatever the form of ownership, and whether or not it goes through probate after your death, is subject to federal estate tax. Currently, however, federal estate tax is due only if your

Estimated Tax

Estimated tax is tax that a self-employed individual or a company must estimate and pay to the Internal Revenue Service. For non-self-employed people, taxes are withheld by the employer and then paid to the IRS each pay period. For the self-employed, such regularity is not required, though they must pay their estimated tax themselves. To


A legal principle that prevents a person from asserting or denying something in court that contradicts what has already been established as the truth.

Estoppel By Representation

A form of Estoppel in which one party acts to his detriment on a misrepresentation of fact by another. It does not refer to misrepresentations of points of law, not to promises of future action (see: Promissory estoppel).

Et Al.
Et Seq.
Et Ux.

ETF stands for Exchange Traded Fund. An ETF is registered with the SEC as an investment company, and it shares trade on a stock exchange intraday like any other public company. The ETF is like a mutual fund, however, in that its assets consist of a basket of stocks deposited by institutional investors. The American

Ethical Inheritance Tax

The Internal Revenue Service (IRS) has imposed inheritance tax of varying rates on estates of varying sizes in the past. Inheritance taxes are levied on the taxable estate of a deceased person that is passed on to another person. Ethical gray areas regarding inheritance tax range from questioning the validity of such a tax to

Ethical Investing

Ethical investing, also known as Socially Responsible Investment (SRI), is a practice of making investment decisions based on various moral, ethical, or religious principles. Ethical investing is an alternative investment strategy undertaken by both individuals and institutions. Individual ethical investing is not guided by any specific code other than a personal value judgment. Intuitions, on


A philosophical concept that determines the definition of “right” and “wrong”, especially when applied to interactions between people.


The EU, or European Union, is an inter-governmental, supranational organization of European states. Although the roots of the EU go back to predecessor organizations dating from the 1950s, the EU was established by treaty on February 7th, 1992, in Maastricht, Netherlands. The EU has several institutions, including the European Parliament, the European Commission, and the

EU Legislation

Primary EU legislation consists of treaties, together with their articles and provisions. The main forms of secondary EU legislation are regulations, directives and decisions. In addition, there are non-binding recommendations and opinions, which are merely hortatory or persuasive. As primary legislation, the collection of EU treaties over the years are effectively the constitutional law of


Also known as the European Atomic Energy Community (EAEC). It was established on 25 March 1957 along with the European Economic Community (EEC) by the Treat of Rome, and was taken over by the executive institutions of the EEC in 1967. This is an intergovernmental agency created to regulate the supply of raw materials for the nuclear


EURIBOR stands for the Euro Interbank Offered Rate. EURIBOR is one of the reference rates for interbank lending within the Eurozone (i.e. the Euro OverNight Index Average, EOINIA, is the other one). EURIBOR is an interest rate for term loans (i.e. 1 week to 12 months) within the eurozone and does not include overnight loans


The Euro (€) is the currency of 12 countries of the European Union: Germany, France, Italy, Belgium, Greece, Ireland, Luxembourg, the Netherlands, Spain, Austria, Portugal and Finland. A few other countries, like Monaco and Montenegro, have adopted the Euro as either its official or de facto currency. The only major European country that is not

Eurobond Market

A market in which bonds are issued in the capital market of one country to a non-resident borrower from another country.

Eurodollar Deposit

A deposit is a sum of money placed with a bank for safekeeping and possibly to earn interest. Individuals may be familiar with demand deposits, which they can place with a bank for no specific maturity. The money can be withdrawn at any time without penalty. A time deposit has a fixed maturity, and there


Eurodollars are large US Dollar deposits that are made in foreign bank accounts. Eurodollars can also be deposited within the US in an International Banking Facility by non-US residents and companies. Eurodollars emerged after World War II. Initially, Europe was the main market for eurodollars, hence the prefix “euro” in eurodollars. Although the market for

European Community

The European Community is a confederation of European nations which serves to enhance their economic, political, and social ties. The idea of a European Community extends back hundreds of years; but the modern history of the European Community dates to the founding of the European Coal and Steel Community in 1952, which included France, Germany,

European Financial Regulation

On November 1, 1993, the Maastricht Treaty went into effect, creating the European Union (EU) and establishing EU citizenship, which included rights to vote and to run for office. For decades, Europeans had worked towards political union and a European common market. These efforts had produced a number of legal entities that survived the Maastricht

European Option

A European option is an option that can only be exercised during a short period of time before its expiration date. A European option contrasts with an American option, in that an American option can be exercised anytime on or before expiration. This makes the European option less flexible than its American counterpart, which is

European Union

The politico-legal entity formed by the Treaty of Maastricht 1992, which extended the existing European Communities into a new ‘three-pillar’ structure. The first pillar encompasses the former European Communities, now renamed the ‘European Community’. The EC includes and is dominated by, the European Economic Community (EEC). The second pillar is a set of agreements on establishing a common foreign and

European-Style Option

A European-style option is an option that may be exercised only at expiration, or maturity. The European-style option is less difficult to price than otherwise identical American-style option because the later, unlike the European-style option, can be exercised before maturity. Consequently, the corresponding American option may have no analytic formula even when one exists for


EV/EBITDA Ratio is a very commonly used metric for estimating business valuation of companies.  This valuation metric compares the value of a company, inclusive of debt and other liabilities, to the actual cash earnings exclusive of the non-cash expenses. It measures the price (in the form of enterprise value) an investor pays for the benefit of

Evasion Of Tax
Evening Star

An evening star is a candlestick trading pattern that traders consider a reliable signal of a bearish reversal. A long white candle, followed by a very short candle that gaps above the white candle (i.e. 1st gap), followed by a long black candle that gaps below the short candle (i.e. 2nd gap), characterizes the evening

Events Triggering First Registration

If a piece of land is in a compulsory registration area (now the whole of England and Wales), and is unregistered (see unregistered land), then the proprietor has an obligation to register the land when certain events occur. The number of such events has increased over the years, but it now includes: Purchase of a Freehold estate for value, or


Removal of a tenant from rental property by a law enforcement officer. First, the landlord must file and win an eviction lawsuit, also known as an “unlawful detainer.”


to provide evidence for; to stand as proof of; to show by one’s behavior, attitude, or external attributes

Evidence In Chief Of Bad Character

In a criminal trial, it is often the case that the prosecution wishes to impugn the character of the defendant by, for example, drawing the jury’s attention to his or her previous criminal convictions (see evidence of bad character). There have been a number of striking cases in which the defendant was acquitted when he or

Evidence Of Disposition

Most people would agree that a person’s past behaviour is a good guide to his future conduct. The disagreement lies in assessing how good a guide it is. The problem is particularly acute in criminal trials, where the prosecution would frequently like to adduce evidence of a defendant’s bad character (see evidence of bad character) to

Evidence Of Good Character

If the defendant in a criminal trial leads evidence that he is a person of good character — and therefore more credible or less likely to have committed the offence — then this has certain consequences. This article describes the meta of evidence that is admissible as to the defendant’s good character, and the consequences

Evidence Of Untruthfulness

In criminal trials, the defendant does not always tell the truth. There is, in general, no objection to the prosecutions’ introducing evidence that shows that something the defendant said was untrue. For example, if the defendant claimed to be elsewhere at the time of the offence, the prosecution will normally be allowed to call a

Evidential Burden

A person who wishes to rely on certain facts in a court hearing generally has a duty to adduce sufficient evidence of those facts. This ‘evidential burden’ is also sometimes referred to as an ‘evidential burden of proof’, but this term is misleading. A party to a court hearing that has a burden of proof has a

Evolutionary Economics

Evolutionary economics is a school of economic thought motivated by evolutionary biology. This economic stream of thought emphasizes competition, growth, resource constraints and composite mutualities. The principal difference between evolutionary economics and conventional economics is that it does not accept distinguishing features of either decision-maker or option of objects as a given. Foundations Evolutionary economics is founded on

Ex Delicto
Ex Officio
Ex Parte
Ex Post Facto

Ex post facto laws or laws “after the fact” are expressly forbidden by the United States Constitution in Article 1, Section 9, Clause 3. Under this clause, a person cannot be convicted and punished for a crime if the action was legal at the time it was performed but has since been made illegal. For

Ex Rel.
Ex Turpi Causa

The principle of ex turpi causa may be invoked as a defence to many claims in Tort. The principle is a recognition that the law ought not to compensate people who have suffered a loss in the course of their own wrongful actions, even where the primary cause is attributable to someone else. For example, if


Ex-dividend means a stock is trading without the rights to a declared dividend. When a company declares a dividend, it also sets a record date: only shareholders of record on that date receive the dividend. Once the record date is set, stock exchanges or the National Association of Securities Dealers sets an ex-dividend date, which

Ex-Dividend Date

The ex-dividend date is the date on which sellers rather than buyers of a stock have a right to a declared dividend. When a company declares a dividend, it sets a date of record that determines which shareholders receive the dividend. After the record date is set, the stock exchanges or the National Association of

Excepted Estate

An estate that is exempt from the requirement to supply accounts to the Inland Revenue. At the time of writing, the conditions which must be met for an estate to be excepted are: the total value is less than 210,000, of which no more than 50,000 is held outside the UK, estate is passed by Will,

Exception In Deed
Excess Return

Excess Return is described as the amount of money that is the surplus of the risk-free rate of return encompassing a particular period of time. It also denotes the deviation between actual wealth and anticipated wealth at the end of that particular period. Excess return is thus calculated by: Excess return (N)= actual wealth – anticipated

Excess Returns

Excess returns are generally defined as the returns provided by a given portfolio minus the returns provided by a risk-free asset. Excess returns are those in excess of the riskless asset. Excess returns are associated with the Capital Asset Pricing Model which postulates that riskier investments must offer higher returns to compensate investors for added

Excessive Bail
Exchange Rate

An exchange rate is a price or ratio at which one nation’s currency can be converted into that of another. Simply put, the exchange rate is how much of one denomination it takes to pay for another. The exchange rate for every currency is different. That means that the exchange rate between the U.S. dollar

Exchange Rate Risk

Exchange rate risk is the risk that a position will become less valuable as a result of foreign exchange rate fluctuation. Exchange rate risk is also called currency risk. Companies that do business internationally face considerable exchange rate risk given the time it may take for an order to be filled and the receivable paid.

Exchange Traded Fund

An Exchange Traded Fund (ETF) is a type of security that performs much like an index fund but is traded on a stock exchange. Typical ETFs look to provide a similar return to that of a particular market index, but other types (Leverage ETFs, Inverse ETFs) try to mirror daily returns of a securities index. Actively managed ETFs are more transparent by publishing their portfolio holdings on a daily basis.

Exchange Traded Notes

Exchange-Traded Notes (ETN) are considered senior, unsecured debt securities. There is no coupon payment and no protection of the principal invested. Exchange-Traded Notes (ETN) track the returns of a particular market index, minus fees. Exchange-Traded Notes (ETN) are traded on market exchanges (i.e: NYSE, AMEX). There are Exchange Traded Notes (ETN) that track indices for


A tax levied on certain goods and commodities produced or sold within a country and on licenses granted for certain activities.

Excise Tax

An excise tax is the tax placed on production or quantity purchased of a certain product.

Exclusion Clause

In a Contract, an exclusion clause is a term that seeks to limit the liability of one or other party, in the event of there being some problem with the performance of the contract. The term ‘limitation clause’ is often used for a clause that limits, rather than excludes, liability; the distinction is not a technical

Exclusion Of Evidence

If a particular item of evidence is inadmissible as a matter of law, then the judge has, in principle, no discretion to admit it. Of course, it is for the judge to determine how the law should be applied to questions of admissibility, so the judge does have some discretion, although it is indirect. You

Exclusionary Rule

A rule of evidence that disallows the use of illegally obtained evidence in criminal trials. For example, the exclusionary rule would prevent a prosecutor from introducing at trial evidence seized during an illegal search.

Exclusive License

A valid contract in which a copyright owner authorizes another person or entity (called the licensee) to exclusively exercise one or more of the rights (or portion of such rights) that belong to the copyright owner under the copyright. The licensee is said to “own” the rights granted in the license and is referred to

Exclusive Right

In Anglo-Saxon law, an exclusive right is a de facto, non-tangible prerogative existing in law (that is, the power or, in a wider sense, right) to perform an action or acquire a benefit and to permit or deny others the right to perform the same action or to acquire the same benefit. Whilst a “prerogative”


Clearing of guilt or blame

Exculpatory Clause

A provision in a lease that absolves the landlord from responsibility for all damages, injuries or losses occurring on the property, including those caused by the landlord’s actions. Most US states have laws that void exculpatory clauses in rental agreements, which means that a court will not enforce them.

Excusable Neglect
Executive Clemency
Executive Compensation

Executive compensation is how top executives of business corporations are paid. Compensation System The compensation of every employee is decided by the company owners through the board of directors (in the case of the most highly compensated executive positions) and the management team (or “management committee”) (for everyone else). The board of directors may have

Executive Order
Executive Privilege

The privilege that allows the president and other high officials of the executive branch to keep certain communications private if disclosing those communications would disrupt the functions or decisionmaking processes of the executive branch. As demonstrated by the Watergate hearings, this privilege does not extend to information germane to a criminal investigation.


a person appointed by a testator to carry out the terms of the will.

Executory Consideration

Consideration (see: Consideration) in a contract which has not been completed, but which needs to be. For example, if A offers B £10,000 to build A a house, B’s consideration is executory until he has finished the work (see: Executed consideration).

Executory Interest

An old-fashioned term for a female executor–the person named in a will to handle the distribution of the deceased person’s property. Now, whether male or female, this person is called either the executor or the personal representative.

Exemplary Damages

Exemplary damages or punitive damages are compensation given in a personal injury case. They are damages which are greater than the loss suffered by the plaintiff and are used to punish the victim, not provide monetary compensation. The goal of exemplary damages is to warn other individuals and deter them from similar future actions. Generally,

Exempt Employees

An exempt employee is not covered by overtime laws. Usually salaried employees are exempt. The law does not require payment of overtime to them when they work more than 40 hours per week.

Exempt Income

Exempt income is any income that is not subject to taxation by federal, state or local taxing authorities. Examples of exempt income include welfare benefits, Social Security benefits, nontaxable pensions and certain life insurance benefits. Income from city and county municipal bonds are also a common form of exempt income. Expenses incurred to gain exempt

Exempt Property

The items of property you are allowed to keep if a creditor wins a lawsuit against you or if you file for Chapter 7 bankruptcy. Most states let you keep clothing, household furnishings, an inexpensive car (or an expensive car on which you still owe a bundle), Social Security payments you haven’t spent and other

Exemption From Criminal Liability

A person is automatically exempt from criminal liability if he or she: is under 10 years of age, or is classified as insane A person may be shown to be exempt from criminal liability if he or she: is under 14 years of age, and has not developed a sufficiently advanced understanding of right and

Exemption Trust

A bypass trust funded with an amount no larger than the personal federal estate tax exemption in the year of death. If the trust grantor leaves property worth more than that amount, it usually goes to the surviving spouse. The trust property passes free from estate tax because of the personal exemption, and the rest


Exercise. An option is the right to buy or sell a security or asset at a specified price at some future time. To exercise an option is to carry out the transaction specified in the option.

Exercise Price

The exercise price, or strike price, is the price at which the owner can exercise an option. A call entitles the holder to buy the underlying asset at the exercise price, and a put entitles the owner to sell the underlying at the exercise price. If the market price is significantly above the exercise price,

Exhaustion Gap

Exhaustion Gap is a technical term describing that the stock’s price opens up on a gap from the prior day’s high close marking the end of a bullish trend. An Exhaustion Gap occurs at the end of a strong upward movement in stock price. The gap is filled in after a period of time. Exhaustion Gap Interpretation


Eximbills is an integrated trade finance system for use in banks and financial institutions, designed to automate the range of Trade Finance activity as well as the communication needs. It is made by China Systems. Eximbills Client/Server: Programmed in C, uses Foxpro and SQL as its data sources. It is used worldwide in a lot


Existence is 1 of 5 audit assertions presented by Statement of Auditing Standards No. 31 (SAS 31). SAS 31 states, “Assertions about existence or occurrence deal with whether assets or liabilities of the entity exist at a given date and whether recorded transactions have occurred during a given period.” Unlike audit procedures for other assertions

Exit Value

A method of valuing assets and liabilities based on selling prices, as an alternative to historical cost.


Exogenous is a change produced or caused by factors external to the economic model and come from outside the model. Exogenous change is unexplained by the model. Examples of exogenous may be cited in the demand and supply model where variations in consumer preferences and tastes cannot be explained by the economic model. Alternatively, exogenous changes are those that involve


Expandability refers to the ability of a computer system to accommodate enhancements to its capacity or capabilities. From a hardware point of view, expandability may include extra or bigger hard disks, more memory, or a faster-dedicated graphics chip. From a software point of view, it may include the ability to support more network users, a

Expected Returns

Expected returns are an estimation of a particular investment’s value. This estimation includes the payment of dividends if any and price changes. Expected returns are computed from a probability distribution curve encompassing all probable rates of return. If a specific asset is considered risky, the risk-free rate of return plus risk premium is termed the


The action of spending funds.

Expenditure Tax

Expenditure tax is a tax, which is assessed on expenditure or amount spent. It is also known as a consumption tax. Tax is defined as a fee, which is charged and collected by a country’s government on a commodity, activity or income. Taxation is primarily for the financing of government expenditure. It is argued by some economists that an expenditure tax is complex and


An expense is caused by a transaction or event arising during the ordinary activities of the business which causes a decrease in the ownership interest.

Expense Ratio

The expense ratio measures the percentage of a mutual fund’s assets dedicated to running the fund. If the expense ratio is 1%, then each year the total money in the fund is reduced by 1% to pay expenses. The expense ratio comprises administrative costs, like record-keeping and mailing; the 12b-1 distribution fee, used for marketing,

Expert Testimony
Expert Witness

An expert witness is the person who has the knowledge or competence to offer an opinion in court on a specific topic including information of a legal, scientific or medical nature. The expert witness may also perform other tasks for a litigator over the course of the case including testifying at the deposition and trial,

Expiration Date

In derivatives markets, the expiration date is the date that a security with a finite life, such as a futures or option contract, expires. With a futures contract, either cash settlement or physical delivery occurs after the expiration date. With an options contract, if the option is not exercised by the end of the day

Explanatory Variable

An explanatory variable (also known as an independent variable), is a variable that can be manipulated so as to analyse the effect on another (or the dependent variable).

Exponential Moving Average

An exponential moving average is a more complicated form of a simple moving average, which calculates the average price of a security over a specific period of time. The exponential moving average gives more weight to the latest (most recent) price data and gives less weight to the older, more historical data. For example, in

Export Credit

Export credit is a type of credit, which an importer opens in an exporter’s country for financing exports. Export Credit Insurance It is an insurance, which grants protection to an exporter for the failure of payment on part of its foreign customer. However, this kind of insurance coverage excludes cases of product disputes. Credit insurance enables a seller to

Export Transaction

An export transaction is an increase in foreign currency to a nation’s economy after selling goods and services.

Express Contract
Express Trust

The express trust is the archetypal form of trust, and the one most commonly meant when the term ‘trust’ is used. An express trust is created intentionally by a person exercising his powers of ownership. The person who creates an express trust is usually referred to as the settlor, even when the trust is not strictly a settlement.

Express Warranty

taking out of an owner’s hands (especially taking property by public authority)


To intentionally destroy, obliterate or strike out records or information in files, computers and other depositories. For example, state law may allow the criminal records of a juvenile offender to be expunged