The Financial Dictionary(Terms and meanings)

The Financial Dictionary(Terms and meanings)

Reading and coming across financial terms makes you wonder what it could mean??Don’t worry. Just have a glance at some weird and important financial terms in your very own financial dictionary.


1)Angelina Jolie Stock Index- Its an index from the companies having an association with Angelina Jolie of specific stocks.Some people believe that because of the popularity of the actor,these sompanies will outshine their rivals.

2)Annuity – An investment in which future payments are made for a specified time period.

3)Blue Chip -The stock of companies which are large,have a good financial history and are financially strong.

4)Bulldog market-This is the nickname of the market for bond in the United Kingdom in which securities are bought and sold of issuers not living in UK.

5)Capitalization – It’s the market worth of a company (no. of shares*value of each share)

6)Cockroach theory: This theory states that when a company gives some bad news to the public,there is more bad news behind it which may come out later.

7)Double Bottom Line -Business people have 2 motives-profit and fulfilling social responsibility

8)Dummy shareholder- A company which holds shares on behalf of some firm or individual who is the real owner of these shares in a public company.

9)Eat your own dog food- It is believed that this term originated in 1980s with Microsoft.Its basically a description of companies using their own products,services e.t.c. for their internal works.

10)Futures – A contract in which the securities are delivered in future at a pre-decided price and time.

11)Garbatrage- When there are high profile takeover in an industry,then its price and trading volume surges.

12)Holding Company – A company not only owning but also controlling another company.

13)Individual Retirement Account (IRA) – It’s a tax-deferred investment plan in which a wage earner can protect income from current taxation and save it for retirement.

14)Junior equity- It is an equity that ranks lower than other equity like the common stock in a company as compared to preferred stock because dividends are first paid on preferred stock and thereafter on common stock.

15)Leveraging – If you invest with borrowed funds with the intention of magnifying the rates of return,then this is known as leveraging.

16)Losing your shirt-A bad investment in which an investor loses all or even more that he has invested.

17)Mutual Fund – It’s a fund in which there is pooling of individual’s investments and that pool is used by some professional wealth manager to invest in stocks.


18)Net Asset Value – (Total assets-total liabilities)/no.of outstanding shares

19)Options – Rights to buy (call) or sell (put) a fixed amount of stock at a specified price within a particular period of time.

20)Poop-It’s a financial slang used to indicate inside information which is generally non public or people with insider information which they may use for their own benefit.

21)Quote- It basically relates to the last price at which the security was traded.

22)Revolver – A contract in which a bank lends some amount to a borrower and lends that same amount again once it has been repaid.

23)Sleeping beauty-A profitable company with good assets but bad management

24)Trading a ‘book’- Net position of an individual in the market.

25)Underwriting- An investment bank’s function to help companies issue securities to investors for a slightly high price on payment of a fee.

26)Volatility – The degree to which the price of security goes up or down over a given time period.

27)Whistleblower- A person(maybe an employee, client e.t.c.) who reports  illegal activities occurring in an organization.

28)Yield-The return on an investment

29)Zero Coupon Bonds Bonds sold at a discount from their face value and repaid o holders only on maturity.

30)Zombies-Companies that continue to operate even though they are insolvent or near bankruptcy.


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