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Dictionary of Finance and Investment Terms
John Downes, Jordan Elliot Goodman
Résumé
Covers stocks and bonds, banking, corporate finance, tax laws, mutual funds, and more in accordance with federal income tax revisions.
Charts and graphs.
Preface
People retiring in the early years of the 21st century, the baby boom generation, have witnessed a revolution in the world of finance and investment. The forces of globalization assure that their children, face a future just as dynamic.
Deregulation of the securities, banking, and savings industries, starting in the 1970s, made a vast range of financial and investment products and services available to people at all economic levels. It also led to abuses and financial losses that required government intervention and a modernization of investor safeguards.
Merger mania in the "roaring 1980s" saw many of America's best-known corporations embroiled in hostile takeovers or leveraged buyouts financed by junk bonds, giving rise to defensive tactics known by such colorful names as the "poison pill," the "Pac-Man strategy," or the "white knight." Insider trading scandals were one result, but another was the innovation of investment techniques designed to capitalize on the profit opportunities created by corporate takeovers.
The 1990s brought corporate downsizing and restructuring, massive stock buybacks, strategic mergers on a global scale, and a prolonged bull market fueled by corporate profitability, low inflation, and sustained economic growth.
With globalization, the world's economies, more free of trade and economic barriers, have become more interdependent and in some ways more vulnerable. On the eve of the new millennium, floundering Asian economies and a recession in Japan threatened markets in the United States and challenged the confidence of a new European Monetary Union with its common currency, the Euro, and its promise of expanded financial markets.
Advanced communications systems have created both greater simplicity and greater complexity in the more unified world of finance and investment. By linking markets and processing massive information, these systems have given rise to investment vehicles, transactions, and methods of managing risk not previously imaginable.
The generation produced by the baby boomers must plan its personal finances in an economy offering less assurance of future financial security. The restructurings of the 1990s made corporations more efficient but took their human toll, just as the demographics that earlier created surpluses in the Social Security system became less favorable for future recipients. The enormous growth of 401(k) and individual retirement accounts, addresses this problem but also points to its gravity.
The introduction of Roth IRAs, the lowering of long-term capital gains tax rates, and other provisions of the Taxpayer Relief Act of 1997 and the IRS Restructuring and Reform Act of 1998, also recognize the increasing importance of self-reliance in personal financial planning.
This thoroughly revised Dictionary of Finance and Investment Terms covers the 20th century's major developments in investments, taxation, economics, consumer and corporate finance, and related fields. Adding a more comprehensive global dimension, it defines and clarifies the language that will be used in financial decision-making in the new millennium.
We wish especially to acknowledge Roberta Yafie, whose fact-checking and research went well beyond the call of duty; Mary Falcon, Barron's editor, who ably and patiently coordinated an immense amount of detail; and our original Barron's editor, Tom Hirsch. Suzanne and Jason Goodman, Katie and Annie Downes, and Nancy Weinberg all sacrificed unselfishly at different stages of the project and we thank them.
We also thank Accounting Today, American Association of Individual Investors, American Bankers Association, American Council of Life Insurance, American Express Company, American Institute of Certified Public Accountants, American Society of CLU & ChFC (Chartered Life Underwriters), American Stock Exchange, Associated Credit Bureaus, Bankers Trust Company, A.M. Best & Company, The Bond Buyer, Bond Market Association, Boston Stock Exchange, Chase Manhattan Bank NA, Chicago Board of Trade, Chicago Board Options Exchange, Chicago Mercantile Exchange, Cincinnati Stock Exchange, Coffee, Sugar & Cocoa Exchange, COMEX, Commodity Futures Trading Commission, Dow Jones & Company, Employee Benefit Research Institute, 'Me European Commission, Fannie Mae, Federal Energy Regulatory Commission, Federal Reserve Bank of New York, Federal Trade Commission, FINEX, Frank Russell Company, Futures Industry Association, Goldman Sachs & Company, Health Insurance Institute of America, Hulbert Financial Digest, IBC Organization, I/B/E/S Incorporated, Insurance Information Institute, Intermarket Management Incorporated, Internal Revenue Service, International Petroleum Exchange, International Swaps and Derivatives Association, Investment Management Consultants Association, Investment Program Association, J.P Morgan, Kansas City Board of Trade, Richard J. Kittrell, Esq/ Kittrell & Kittrell P.C., Liquidity Financial Corporation, Mercer and Company, Merrill Lynch, Minneapolis Grain Exchange, Montreal Exchange/Bourse de Montreal, Morgan Stanley Dean Witter, Morningstar, Mortgage Bankers Association, Municipal Bond Investors Assurance Corporation, National Association of Investors Corporation, National Association of Real Estate Investment Trusts, National Association of Realtors, National Association of Securities Dealers, National Association of Variable Annuities, National Credit Union Administration, New York Cotton Exchange, New York Futures Exchange, New York Life Insurance Company, New York Mercantile Exchange, New York Stock Exchange, Office of Thrift Supervision, Options Clearing Corporation, Options Institute, Pacific Exchange, Pension Benefit Guaranty Corporation, Philadelphia Stock Exchange, Prudential Securities, Salomon Smith Barney, Securities and Exchange Commission, Securities Industry Association, Standard & Poor's, Toronto Stock Exchange, Trimedia Incorporated, U.S. Department of Commerce, U.S. Department of Labor, Value Line Investment Survey, Vancouver Stock Exchange, Visa International, The Weiser Group, Wheat First Butcher Singer Incorporated, Wilshire Associates, Winnipeg Commodity Exchange, World Gold Council, Wrap Industry Association, and Zacks Investment Research.
John Downes
Jordan Elliot Goodman MONOPSONY situation in which
one buyer dominates, forcing sellers to agree to the
buyer's terms. For example, a tobacco grower may have no
choice but to sell his tobacco to one cigarette company
that is the only buyer for his product. The cigarette
company therefore virtually controls the price at which it
buys tobacco. The opposite of a monopsony is a MONOPOLY.
MONTHLY COMPOUNDING OF INTEREST see COMPOUtradingND
INTEREST. MONTHLY INVESTMENT PLAN plan whereby an investor
puts a fixed dollar amount into a particular investment
every month, thus building a position at advantageous
prices by means of dollar cost averaging (see CONSTANT
DOLLAR PLAN). MONTREAL EXCHANGE/BOURSE DE MONTREAL Canada's
oldest stock exchange and second-largest in dollar value of
trading. In 1996, the ME and its sister Canadian exchanges
became the first in North America to introduce a decimal
pricing system of trading abandon the old "pieces of eight"
system. Stocks, bonds, futures and options are traded
through a specialist system combined with automated
systems, including the Electronic Order Book for
registering market and limit orders; MORRE, an electronic
order execution system; and Montreal Direct Access, which
provides access to the Electronic Order Board through
existing terminals for the trading desks of member firms.
Futures trading is conducted by traditional open outcry. A
system-to-system link between the Montreal Exchange (ME)
and the BOSTON STOCK EXCHANGE (BSE) enables ME member firms
to electronically route retail orders for U.S. securities
directly to BSE for automatic execution and confirmation at
the best prevailing price in the Intermarket Trading
System. The Canadian Market Portfolio Index (XXM) tracks
the market performance of the 25 highest capitalized stocks
traded on at least two Canadian exchanges, and is the ME'S
main index. Trading hours are 9:30 A.M. to 4 Pm. EST,
Monday through Friday; extended sessions of 8:15 A.M. to
9:15 A.M., and 4:15 P.M. to 5:15 Pm., are offered. In
addition, six sector indices track banking, forest
products, industrial products, mining and minerals, oil and
gas and utilities. In the derivatives market, the exchange
trades 10-year Government of Canada bond futures (CGB) and
options (OGB) and 3-3-month Canadian bankers' acceptance
(BAX) futures and options (OBX); 1-month Canadian bankers'
acceptance futures (BAR) and 5-year Government of Canada
bond futures (CGF); equity options and long-term equity
options; Canadian bond options; and LEAPS. Futures are
traded from 8 A.M. to 3 P.M.; options, from 8:20 A.M. to 4
Pm. Settlement for securities is the third business day
following the trade date; for futures and options, it is
the day after a transaction by direct payment to the
Canadian Derivatives Clearing Corporation. MOODY'S
INVESTMENT GRADE rating assigned by MOODY'S INVESTORS
SERVICE to certain municipal short-term debt securities,
classified as MIG-1, 2, 3, and 4 to signify best, high,
favorable, and adequate quality, respectively. All four are
investment grade or bank quality. MOODY'S INVESTORS SERVICE
headquartered with its parent company, Dun &
Bradstreet, in downtown Manhattan, Moody's is one of the
two best known bond rating agencies in the country, the
other being Standard & Poor's. Moody's also rates
commercial paper, preferred and common stocks, and
municipal short-term issues. The six bound manuals it
publishes annually, supplemented weekly or semiweekly,
provide great detail on issuers and securities. The company
also publishes the quarterly Moody's Handbook of Common
Stocks, which charts more than 500 companies, showing
industry group trends and company stock price performance.
Also included are essential statistics for the past decade,
an analysis of the company's financial background, recent
financial developments, and the outlook. Moody's rates most
of the publicly held corporate and municipal bonds and many
Treasury and government agency issues, but does not usually
rate privately placed bonds. MORAL OBLIGATION BOND
tax-exempt bond issued by a municipality or a state
financial intermediary and backed by the moral obligation
pledge of a state government. (State financial
intermediaries are organized by states to pool local debt
issues into single bond issues, which can be used to tap
larger investment markets.) Under a moral obligation
pledge, a state government indicates its intent to
appropriate funds in the future if the primary OBLIGOR, the
municipality or intermediary, defaults. The state's
obligation to honor the pledge is moral rather than legal
because future legislatures cannot be legally obligated to
appropriate the funds required. MORAL SUASION persuasion
through influence rather than coercion, said of the efforts
of the FEDERAL RESERVE BOARD to achieve member bank
compliance with its general policy. From time to time, the
Fed uses moral suasion to restrain credit or to expand it.
MORGAN STANLEY CAPITAL INTERNATIONAL INDICES indices
maintained and calculated by Morgan Stanley's Capital
International group (MSCI) which track more than 45 equity
markets throughout the world. The MSCI indices are market
capitalization weighted and cover both developed and
emerging markets. In addition to the country indices, MSCI
also calculates aggregate indices for the world, Europe,
North America, Asia, and Latin America. Most international
mutual funds and other international institutional
investors measure their performance against MSCI
indices....
Contents
- Preface to the Fifth Edition ..... iv
- How to Use This Book Effectively ..... vi
- Terms ..... 1
- Abbreviations and Acronyms ..... 717
L'auteur - John Downes
Editor, Beating the Dow; former Vice President, AVCO Financial Services, Inc.; Office for Economic Development, City of New York.
L'auteur - Jordan Elliot Goodman
Financial analyst, "NBC News at Sunrise"; author Everyone's Money Book; creator, The Money Answers Program; former Wall Street Correspondent, MONEY magazine, Time Warner Incorporated; former Business News Commentator, "Mutual Broadcasting System".
Caractéristiques techniques
PAPIER | |
Éditeur(s) | Barron's |
Auteur(s) | John Downes, Jordan Elliot Goodman |
Parution | 01/11/1998 |
Nb. de pages | 730 |
Format | 10,5 x 17,7 |
Couverture | Broché |
Poids | 478g |
Intérieur | Noir et Blanc |
EAN13 | 9780764107900 |
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