BurnhamSecurities,Inc.FuhrmanDivisionGlossaryofInvestmentTermsABCDEFGHIJKLMNOPQRSTUVWXYZAMERICANDEPOSITORYRECEIPTS(ADR)CertificatesissuedbyaU.S.DepositoryBank,representingforeignsharesheldbythebank,usuallybyabranchorcorrespondentinthecountryofissue.OneADRmayrepresentaportionofaforeignshare,oneshareorabundleofsharesofaforeigncorporation.IftheADR'sare"sponsored,"thecorporationprovidesfinancialinformationandotherassistancetothebankandmaysubsidizetheadministrationoftheADR's."Unsponsored"ADR'sdonotreceivesuchassistance.ADR'scarrythesamecurrency,politicalandeconomicrisksastheunderlyingforeignshare;thepricesofthetwo,adjustedfortheSDR/ordinaryratio,arekeptessentiallyidenticalbyarbitrage.AmericanDepositoryShares(ADS)areasimilarformofcertification.ANALYSTEmployeeofabrokerageorfundmanagementhousewhostudiescompaniesandmakesbuyandsellrecommendationsontheirstocks.Mostspecializeinaspecificindustry.ANNUALREPORTYearlyrecordofapubliclyheldcompany'sfinancialcondition.Itincludesadescriptionofthefirm'soperations,itsbalancesheetandincomestatement.SECrulesrequirethatitbedistributedtoallshareholders.Amoredetailedversioniscalleda10-K.ARBITRAGEProfitingfromdifferencesinthepriceofasinglesecuritythatistradedonmorethanonemarket.ARMSINDEXAlsoknownasTRadingINdex(TRIN):=(numberofadvancingissues/numberofdecliningissues)dividedby(totalupvolume/totaldownvolume).Anadvance/declinemarketindicator.Lessthan1.0indicatesbullishdemand,whileabove1.0isbearish.ASSIGNMENTThereceiptofanexercisenoticebyanoptionswriterthatrequireshimtosell(inthecaseofacall)orpurchase(inthecaseofaput)theunderlyingsecurityatthespecifiedstrikeprice.AT-THE-MONEYAnoptionisat-the-moneyifthestrikepriceoftheoptionisequaltothemarketpriceoftheunderlyingsecurity.Forexample,ifxyzstockistradingat45,thenthexyz45optionisat-the-money.AVERAGEAnarithmeticmeanofselectedstocksintendedtorepresentthebehaviorofthemarketorsomecomponentofit.OnegoodexampleisthewidelyquotedDowJonesIndustrialAverage,whichaddsthecurrentpricesofthe30DJIA'sstocks,anddividestheresultsbyapredeterminednumber,thedivisor.AVERAGEMATURITYTheaveragetimetomaturityofsecuritiesheldbyamutualfund.Changesininterestrateshavegreaterimpactonfundswithlongeraveragelife.BACKOFFICEBrokeragehouseclericaloperationsthatsupport,butdonotinclude,thetradingofstocksandothersecurities.Includesallwrittenconfirmationandsettlementoftrades,recordkeepingandregulatorycompliance.BANKER'SACCEPTANCEAshort-termcreditinvestmentcreatedbyanon-financialfirmandguaranteedbyabankastopayment.Acceptancesaretradedatdiscountsfromfacevalueinthesecondarymarket.Theseinstrumentshavebeenapopularinvestmentformoneymarketfunds.BASISThepriceaninvestorpaysforasecurityplusanyout-of-pocketexpenses.Itisusedtodeterminecapitalgainsorlossesfortaxpurposeswhenthestockissold.BASISPOINTSReferstoyieldonbonds.Eachpercentagepointofyieldinbondsequals100basispoints.Ifabondyieldchangesfrom6.25%to6.39%,that'sariseof14basispoints.BEARAninvestorwhobelievesastockortheoverallmarketwilldecline.Abearmarketisaprolongedperiodoffallingstockprices,usuallyby20%ormore.BEARRAIDAsituationinwhichlargetraderssellpositionswiththeintentionofdrivingpricesdown.BETA(STOCKS)Measureofastock'sriskinrelationtothemarket.0.7meansastockpriceislikelytomoveupordown70%ofthemarketchange;1.3meansthestockislikelytomoveupordown30%morethanthemarket.BETAEQUATION(STOCKS)Thebetaofastockisdetermine...
