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Financial dictionary terms starting with “c”
C shares are a type of mutual fund share. They are distinguished from A shares and B shares by their load (fee) structure. See More.
A cabinet security is an inactive security (often a bond) that is listed on an exchange. See More.
Also called a tax-advantaged benefits plan, a cafeteria plan is a type of employee-benefit program recognized by section 125 of the Internal Revenue Code. See More.
CAGR, or compound annual growth rate, is a useful measure of growth over multiple time periods. It can be thought of as the growth rate that gets you from the initial investment value to the ending investment value if you assume that the in See More.
A caisse populaire is a Canadian financial institution that is owned and controlled by its members rather than shareholders. It is essentially a credit union. Most are in Quebec. See More.
A calamity call, also known as a clean-up call, is a feature of a collateralized mortgage obligation (CMO) that requires the issuer to pay off a portion of the CMO if the underlying mortgages don't generate enough cash to make the principal and i See More.
A calculation agent is a person or company that calculates how much the parties to certain derivatives owe each other. See More.
A calendar effect is a theory that stock prices will perform differently at different times of the year. See More.
In the insurance industry, a calendar year experience (also called accident-year experience or underwriting-year experience) is the difference between the premiums earned and the losses incurred during a calendar year. See More.
A call loan is a loan that the lender may force the borrower to repay at any time. See More.
The call loan rate is the interest rate charged on the call loans used by brokerage houses to fund clients' margin trading accounts. See More.
In a call market, buy and sell orders are grouped together and then executed at specific times, rather than executed one by one continuously. See More.
Call money is a very short-term bank loan that does not contain regular principal and interest payments. It is often used by brokerage firms to finance margin accounts. See More.
The call money rate is the interest rate on the loans banks make to brokerage firms that are borrowing to fund transactions in their clients' margins accounts. Sometimes the call money rate is also called the "broker loan rate," and it is See More.
A call on a call is a type of compound option. It is a call option on a call option. See More.
A call on a put is a type of compound option. It is a call option on a put option. See More.
A call option gives the holder the right, but not the obligation, to purchase 100 shares of a particular underlying stock at a specified strike price on the option's expiration date. See More.
A call premium is the price of a call option. It is not the same as the strike price. See More.
The call price is the price a bond issuer or preferred stock issuer must pay investors if it wants to buy back, or call, all or part of an issue before the maturity date. See More.
Call protection is a period of time during which a bond issuer cannot call, or buy back, a bond. See More.
A call provision is a clause in a bond's indenture granting the issuer the right to call, or buy back, all or part of an issue prior to the maturity date. See More.
A call ratio backspread is a trading strategy whereby an investor uses long and short option positions to simultaneously hedge against loss and maximize profit if stock prices go up. The strategy differs from butterfly spreads and condor spreads in t See More.
A call report is a quarterly report that banks and all regulated financial institutions must file with the Federal Financial Institutions Examination Council (FFIEC) See More.
Call risk is the risk that a bond issuer will redeem its bonds before they mature. See More.
The call rule is a rule that requires the official opening price of a cash commodity to be near the previous day's closing price of that commodity. See More.
Call warrants are securities that give the holder the right, but not the obligation, to buy a certain number of securities (usually the issuer's common stock) at a certain price before a certain time. See More.
A callable bond gives the borrower (issuer) the right to pay back the obligation to the lender (bondholder) before the stated maturity date. See More.
A callable certificate of deposit (callable CD) is a time deposit with a bank or financial institution. But unlike other CDs, callable CDs can be redeemed by the issuer before the maturity date. See More.
Callable common stock is an equity stake in a company where either the issuer or a third party has the right, but not the obligation, to repurchase the stock at a specific price after a certain date. See More.
Issuers of callable preferred stock have the right (but not the obligation) to repurchase the stock at a specific price after a certain date. See More.
A callable security gives the issuer or a third party the right but not the obligation to repurchase the security at a specific price after a certain time. See More.
"Called away" refers to an investing scenario in which one party to an options contract has the obligation to deliver an underlying asset to the other party to the contract. See More.
CalPERS is the abbreviation for the California Public Employees' Retirement System. It is the nation's largest pension fund. See More.
Camouflage compensation is compensation that is not fully disclosed or is hard to identify. See More.
CAN SLIM is an investing system that uses seven fundamental and technical traits to pick stocks. See More.
A Canada Learning Bond offers money to Canadian families to help them start saving for college. See More.
A Canadian income trust is a type of investment trust that holds stable, income-producing assets and pays out at least 90% of its net cash flows to its unitholders (shareholders are known as unitholders in trust lingo). These trusts usually hold asse See More.
Cancel former order is a specific type of trade order a client places with a broker in order to cancel an unfilled buy or sell order. See More.
In the finance world, a canceled order is an order that is deleted before it is executed. See More.
In the finance world, a cancellation is a notice informing a broker that a trade was made incorrectly. In the insurance world, a cancellation occurs when a policyholder stops paying the premium on an insurance policy and/or the insurance policy is no See More.
A cancellation bulletin is a list of credit cards that are reported stolen, canceled or compromised in some way. See More.
Cancellation of debt occurs when a lender tells a borrower that he or she no longer must repay a loan. See More.
Candlestick charts are often used in technical analysis to track price movements of securities, derivatives and currency over time. See More.
Capital is anything a business uses to generate income. In simple terms, capital is the potential for any item to create wealth. See More.
A capital account is a national account that shows the changes in a nation's assets. These assets can be physical or financial. See More.
Capital accumulation occurs when a company acquires assets. Capital accumulation also occurs when an institutional investor or other financial institution acquires a large position in a company over time. See More.
Capital appreciation (also called a capital gain) is an increase in the value of an investment. It is the difference between the purchase price (the basis) and the sale price of an asset. See More.
For firms, a capital asset is an asset that has a useful life longer than one year and is not intended for sale during the normal course of business.For individuals, capital asset typically refers to anything the individual owns for personal or inv See More.
The capital asset pricing model (CAPM) is used to calculate the required rate of return for any risky asset. Your required rate of return is the increase in value you should expect to see based on the inherent risk level of the asset. See More.
Capital budgeting is the process of figuring out which projects are financially worth an investment. See More.
Capital decay occurs when a company's revenue suffers due to its use of old technology or processes. See More.
A capital dividend account is a special account that companies use to pay tax-free dividends to shareholders. See More.
Capital expenditures, or capex, is money used to purchase, upgrade, improve, or extend the life of long-term assets. Long-term assets are typically property, infrastructure, or equipment with a useful life of more than one year. See More.
Capital flight is the movement of capital from one country to another, or sometimes from one investment sector to another, to capitalize on returns or mitigate risk. See More.
A capital gain is an increase in the value of an investment. It is the difference between the purchase price (the basis) and the sale price of an asset. See More.
Capital gains distributions are capital gains that are passed on to investment company shareholders. See More.
A capital gains tax is a tax on the increase in the value of an investment. See More.
Capital gains treatment refers to whether capital gains are taxed as short-term capital gains, long-term capital gains, or in another manner. See More.
In general, a capital improvement is a one-time expenditure for physical assets such as buildings, land, construction, landscaping or major equipment. See More.
A capital injection is an inflow of cash, stock or even debt into a company. See More.
Capital intensive refers to the degree that a company must invest money in physical or financial assets in order to produce a profit. See More.
A capital loss is a decrease in the value of an investment. It is the difference between the sale price and the purchase price (the basis) of an asset. See More.
The capital markets are a source of financing for companies around the world. The most famous of the capital markets are the stock market and bond market. See More.
Capital stock is the number of shares that a company's charter authorizes for issuance. See More.
Capital structure refers to the blend of debt and equity a company uses to fund and finance its operations. See More.
Capitalism is an economic and social system in which participants privately own the means of production -- called capital. Free market competition, not a central government or regulating body, dictates production levels and prices. See More.
In the business world, capitalization has two meanings. The first meaning, also called market capitalization, refers to the value of a company's outstanding shares. The formula for market capitalization is: Market Capitalization = Current St See More.
In real estate, a capitalization rate is a measure of return on investment. The formula for capitalization rate is: Capitalization Rate = (Expected Income from Property – Fixed Costs – Variable Costs)/Property Value See More.
Capitalizing refers to the accounting practice of characterizing the costs of an asset purchase as a long-term asset on the balance sheet instead of an expense on the income statement. See More.
A capitated contract is a health insurance policy that pays care providers a flat fee for each patient in the plan. See More.
Capitulation occurs when investors attempt to exit an investment or market so quickly that they are willing to surrender any and all gains to do so. Panicked behavior often causes a capitulation, and investors may attempt to liquidate most or all of See More.
The Car Allowance Rebate System (CARS), also known as "cash for clunkers," was a U.S. federal government funded program that provided economic incentives for people to purchase a more fuel-efficient car when trading in their old, less fuel-ef See More.
A car title loan is a short-term loan where a borrower uses the title of his or her car as collateral for the loan. See More.
A cartel is a group of companies, countries or other entities that agree to work together to influence market prices by controlling the production and sale of a particular product. See More.
The Case-Shiller Home Price Index refers to a set of indices released by Standard and Poor's that tracks changes in the value of residential real estate. See More.
Under cash accounting, a business records revenue and expenses in the period in which they are actually received or paid, rather than in the period in which they are incurred. See More.
A cash advance is a high interest loan typically taken out on a credit card or a line of credit from a bank. Interest on a cash advance begins accruing immediately upon disbursement. See More.
Cash and cash equivalents (CCE) are company assets in cash form or in a form that can be easily converted to cash. See More.
Cash budget is a review or projection of cash inflows and outflows. It can be used as a tool for analyzing the revenues and costs of a company or individual. See More.
The cash conversion cycle, also called the net operating cycle, is the number of days it takes a company to generate revenues with assets. See More.
A cash cow is a business unit, product line, or investment that has a return on assets (ROA) greater than the market growth rate. The idiom refers to the idea that it produces "milk" (profit) long after the cost of the investment has been rec See More.
A cash dividend is a cash payment made to the shareholders of a corporation. See More.
Cash flow is simply the cash expected to be generated by an investment, asset or business. See More.
Cash flow after taxes (CFAT) is a measure of a company's ability to generate positive cash flow after deducting taxes. See More.
The section of the cash flow statement titled Cash Flow from Financing Activities accounts for inflows and outflows of cash resulting from debt issuance and financing, the issuance of any new stock, dividend payments, and any repurchase of existing s See More.
Cash from investing activities is a section of the cash flow statement that provides information regarding a company's purchases or sales of capital assets. See More.
Cash flow from operating activities is a section of the cash flow statement that provides information regarding the cash-generating abilities of a company's core activities. See More.
A cash flow loan is a loan, usually to a company, intended to meet daily cash needs during times when cash flow is inconsistent. These loans are short-term in nature; borrowers usually must repay them in 30 to 180 days. See More.
Cash flow per share represents the portion of a company's cash flow allocated to each share of common stock. See More.
Cash flow plans are strategic documents companies make in order to forecast their cash inflows and outflows over several periods. In the insurance world, cash flow plans refer to coordinating the payment of insurance premiums with cash flow. See More.
The cash flow return on investment (CFROI) measures a company's cash return on invested assets. It is determined by dividing a company's gross cash flow by its gross investment. See More.
A cash flow statement is the financial statement that measures the cash generated or used by a company in a given period. See More.
Cash flow to capital expenditures is the ratio of a company's cash from operations to its capital expenditures for acquiring or upgrading assets, such as buildings or equipment, required to improve or maintain business operations. It is an im See More.
In the insurance business, cash flow underwriting is the equivalent of selling below cost. See More.
Also called the spot market or the physical market, a cash market is a market for securities or commodities in which the goods are sold for cash and for immediate delivery. In some cases, "immediate" means one month or less. Foreign exchange See More.
A cash out refinance (also called a cash out refinance loan or cash out refinance mortgage) is a type of mortgage loan that lets you to turn the equity you have in your home into cash, similar to a home equity loan or HELOC. A cash out refinance offe See More.
Also called the spot price or the current price, a cash price is the current price of a commodity if it were to be sold or purchased today. See More.
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. See More.
Cash-flow matching is an investing strategy for investors who need to fund a series of future cash needs. See More.
Cash back, or cashback, often refers to the cash benefit paid to a credit card user after a certain amount is charged on their credit card. The cash back reward is offered by card issuers as a loyalty program to encourage the cardholder to use their See More.
A cashier's check is a check that guarantees the availability of the underlying funds because it is drawn upon and issued by the bank itself. See More.
Catastrophe calls are provisions in bonds that allow the issuer to call the bonds if the item built or produced by the bond is destroyed. See More.
A category killer is a large, dominant company that is more efficient but less specialized than other merchants in a particular niche or industry. See More.
Caveat emptor is Latin for let the buyer beware, meaning the buyer assumes the risk in a transaction. See More.
A CD ladder is an investing strategy whereby the investor staggers the maturity of ("ladders") the certificates of deposit in his portfolio so that the proceeds can be reinvested at regular intervals. See More.
A central bank is an institution responsible for determining the monetary policy of a nation or group of nations. See More.
A certificate of deposit (CD) is a relatively low-risk debt instrument purchased directly through a commercial bank or savings and loan institution. See More.
A certified check is a check for which the issuing bank guarantees payment. See More.
Certified Financial Planner (CFP) is a professional designation attained by a person who has successfully completed the requirements of the Certified Financial Planner Board. See More.
A Certified Public Accountant (CPA) is an accounting professional who has passed the Uniform CPA examination and has also met additional state certification and experience requirements. See More.
The CFA Institute issues the CFA designation. CFA stands for Chartered Financial Analyst. A CFA charter signifies a mastery of investment management principles and usually takes at least three years to obtain. See More.
Chapter 10 (formally referred to as Chapter X) is a former portion of the bankruptcy code that dictated bankruptcy processes and procedures for companies and individuals. See More.
Chapter 11 bankruptcy refers to the section of U.S. bankruptcy law under which companies and individuals can attempt to restructure their debts in order to repay them. See More.
Chapter 13 refers to the section of U.S. bankruptcy law under which individuals may attempt to restructure their finances in order to repay their debts. See More.
Chapter 7 refers to the section of U.S. bankruptcy law under which companies and individuals liquidate their assets in order to repay their debts. See More.
Chapter X was a portion of the bankruptcy code that dictated bankruptcy processes and procedures for corporations. 1978 was the last year corporations were able to file bankruptcy under Chapter X. See More.
A charge card is a plastic card issued by a financial institution that allows the user to make purchases with funds borrowed from that financial institution. See More.
A chargeback protects cardholders from unsatisfactory sales and service by letting the cardholder demand a "refund" directly from the credit card issuer. If a customer successfully disputes a credit card charge, the account will be credited for the d See More.
Chartered Financial Analyst (CFA) is the designation attained by a person who has successfully completed all three phases of the Chartered Financial Analyst program. See More.
A Chartered Investment Counselor (CIC) is an individual certified by the Investment Counsel Association. The certification is available to CFA holders who are currently registered as investment advisors. See More.
A Chartered Market Technician (CMT) is an individual who has been certified by the Market Technicians Association. See More.
The Chartered Trust and Estate Planner (CTEP) accreditation is issued by the American Academy of Financial Management (AAFM) for financial professionals who have demonstrated expertise in dealing with trusts and estate planning. See More.
The Chicago Board of Trade (CBOT) is a commodity futures and options exchange. Several dozen types of contracts trade on the CBOT, and the exchange facilitates hundreds of millions of these trades each year. Note that the CBOT is not the same as the See More.
The Chicago Board Options Exchange (CBOE) is an exchange used for trading standardized options contracts, including stock options, LEAPS, interest rate options, foreign currency options, and index options. See More.
The Chicago Mercantile Exchange (CME) is a commodities futures and options exchange. Several dozen types of contracts trade on the CME, and the exchange facilitates hundreds of millions of these trades each year. See More.
The chief executive officer (CEO) oversees the entire operation of a company or organization. A CEO is responsible for coordinating effective operating, marketing, financial, cultural and legal strategies that maximize shareholder value. See More.
The chief financial officer (CFO) oversees the financial operation of a company or organization. See More.
The chief operating officer (COO) is responsible for executing and implementing the operational directives set by the CEO and the board of directors. Whereas the CEO is responsible for the overall leadership of the company, the COO is responsible for See More.
The child tax credit is a tax-bill reduction given to people with qualifying children under 17 years old. See More.
Also known balance sheet reserves, claims reserves are accounting entries that reflect money an insurance company sets aside to pay future claims. See More.
Class A shares are either 1) common stocks or 2) preferred stocks that offer enhanced benefits, such as greater voting rights and a higher dividend priority. See More.
Class action is a type of civil lawsuit brought by a group of people who are "similarly situated" -- that is, they have been harmed in a similar way. In the business world, this group is most often shareholders, customers or employees. See More.
Class B shares are either 1) common stocks or 2) preferred stocks that generally give fewer benefits to share holders than class A shares See More.
A clean-up call, also known as a calamity call, is a feature of a collateralized mortgage obligation (CMO) that requires the issuer to pay off a portion of the CMO if the underlying mortgages don't generate enough cash to make the principal and i See More.
A clearinghouse is an intermediary between buyers and sellers of financial instruments. See More.
A closed fund, also called a closed-end fund, is a publicly traded security that offers its shareholders partial ownership in an underlying portfolio of assets. See More.
A closed-end fund (CEF) is a publicly traded security that offers its shareholders partial ownership in an underlying portfolio of assets. See More.
Also called a walk-away lease, a closed-end lease is usually a kind of car lease that allows the lessee to return the car at the end of a lease period. See More.
The closing bell is a term used to describe the time that an exchange's daily trading session ends. See More.
Closing costs are fees and expenses paid by both the buyer and the seller when a transaction is completed. Closing costs are common expenses in real estate transactions. See More.
A closing price is the trading price of a security at the end of the trading day. In real estate, it is the price at which a piece of property sells. See More.
The CNN effect refers to a major negative impact on consumer spending as a result of breaking news. See More.
Also called tag-along rights, co-sale rights allow minority shareholders to sell their stakes in a company if a majority shareholder wishes to sell its stake in a company. See More.
Cockroach theory refers to the notion that unfavorable reports about a company will, once publicized, be followed by similar reports about other companies in the industry. See More.
Coinsurance, commonly used in health insurance, is the percentage that the insurer pays for a medical claim on behalf of the insured patient after the deductible has been met. Property coinsurance specifies a minimum percentage of the p See More.
A coinsurance clause in regards to property insurance specifies a minimum percentage of a property's assessed cash or replacement value that it must be insured for (typically 80% or 90%). If the insured property owner does not maintain that See More.
A collar option strategy, also known as a "hedge wrapper," is used to lock in the maximum gain and maximum loss of a stock. To execute a collar, an investor buys a stock and an out-of-the-money put option while simultaneously selling an out-o See More.
Collateral is an asset pledged by a borrower to a lender, usually in return for a loan. The lender has the right to seize the collateral if the borrower defaults on the obligation. See More.
Collateralization occurs when a company pledges an asset to a lender (usually in return for a loan). The lender has the right to seize the collateral if the borrower defaults on the obligation. See More.
A collateralized bond obligation (CBO) is a bond that uses a variety of high-yield junk bonds as collateral. These bonds are separated, or pooled, into tranches with higher and lower levels of risk. See More.
A collateralized debt obligation (CDO) is a security that repackages individual fixed-income assets into a product that can be chopped into pieces and then sold on the secondary market. They are called collateralized because the assets being packaged See More.
A collateralized mortgage obligation (CMO) is a fixed income security that uses mortgage-backed securities as collateral. Like other structured securities, CMOs are subdivided into graduated risk classes, called tranches that vary in degree bas See More.
The College Work Study Program (CWSP) is a type of financial aid that a school awards to a student who has completed a FAFSA and has demonstrated a financial need. The student is given a job (usually on-campus) and is paid by the school not to exceed See More.
Collusion, also known as price rigging or price fixing, occurs when several individuals and/or businesses agree to set the price for something. See More.
A combination trade is an option strategy where the trader takes a position in both call and put options in the same underlying stock. While there are multiple types of combination trades, in this section we will look at a very popular trade called a See More.
A commercial bank is a financial institution that offers checking accounts, demand deposits, business and personal loans, savings vehicles and a variety of other related financial services. See More.
A commercial mortgage-backed security (CMBS) is a fixed-income security, typically in the form of a bond, which uses commercial real estate loans as collateral. See More.
Commercial paper is an unsecured and discounted promissory note issued to finance the short-term credit needs of large institutional buyers. Banks, corporations and foreign governments commonly use this type of funding. See More.
Commercial real estate is any property that is exclusively used for business activity. See More.
A commission is a fee paid to an agent as compensation for executing a transaction. It is calculated either as a percentage of the transaction value or as a flat fee. See More.
Commodification refers to a good or service becoming indistinguishable from similar products. See More.
Commoditization refers to a good or service becoming indistinguishable from similar products. See More.
The Commodity Futures Trading Commission (CFTC), was established in 1974 as an independent government agency with the purpose of regulating commodity futures and options markets. See More.
A commodity index is an index of the prices of items such as wheat, corn, soybeans, coffee, sugar, cocoa, hogs, cotton, cattle, oil, natural gas, aluminum, copper, lead, nickel, zinc, gold and silver. See More.
A commodity market is a place where buyers and sellers can trade any homogenous good in bulk. Grain, precious metals, electricity, oil, beef, orange juice and natural gas are traditional examples of commodities, but foreign currencies, emissions cred See More.
Commodity parity price refers to the price of a commodity based on a single price or average of prices during a previous span of time. See More.
The Commodity Research Bureau Index (CRB) tracks the general trend of the commodities markets. See More.
A common-size balance sheet is a balance sheet in which each line item is expressed as a percentage of assets. See More.
A common-size financial statement is an income statement or balance sheet in which each line items are expressed as a percentage of sales or assets, respectively. See More.
A common-size income statement is an income statement in which each line item is expressed as a percentage of sales. See More.
A firm's comparative advantage is its ability to produce a good or service at a lower opportunity cost than another entity. See More.
In finance, to compound means to earn interest on principal plus interest that was earned earlier. See More.
Compound interest is interest earned on principal plus interest that was earned earlier. See More.
Compounding is the process of the exponential increase in the value of an investment due to earning interest on both principal and accumulated interest. See More.
A conglomerate is a corporation made up of several smaller, independently-run companies which may operate across several sectors and industries. See More.
A consensus estimate is a shared prediction of a company's quarterly or annual earnings per share. See More.
Consignment is an agreement between an owner and a third-party consignee whereby the consignee agrees to sell the owners goods in exchange for a fee. See More.
In the accounting world, to consolidate means to combine the financial statements of a company and all of its subsidiaries, divisions or suborganizations. See More.
Consolidated financial statements are the combined financial statements of a company and all of its subsidiaries, divisions, or suborganizations. See More.
Consolidated Reports of Condition are reports that are filed quarterly by banks and all regulated financial institutions with the Federal Financial Institutions Examination Council (FFIEC) See More.
In business, consolidation refers to the merger of several companies in a specific industry, which typically concentrates market share in the hands of a few large companies. See More.
Also called real GDP, constant-price gross domestic product (GDP) is inflation-adjusted GDP. See More.
The Consumer Confidence Index (CCI) is an index based on the monthly Consumer Conference Board survey that measures consumer sentiment regarding current and future economic conditions. Note that the CCI is not the same as the Consumer Sentiment Index See More.
Consumer cyclical refers to a stock or group of stocks that are affected by changes in the economic cycle. See More.
Consumer durables are a category of consumer products that do not have to be purchased frequently because they are made to last for an extended period of time (typically more than three years). They are also called durable goods or durables. See More.
The consumer price index (CPI) measures changes in consumer prices. The Bureau of Labor Statistics (BLS) calculates and publishes CPI data monthly. The CPI is the most recognized inflation measure in the U.S. See More.
Consumer staples are household necessities -- products that most of us use on an everyday basis and would continue to use with little regard to their cost or the overall economy. See More.
Contango occurs when the current futures price of an asset (as quoted in the futures market) is higher than the current spot price of the underlying asset. See More.
Also called a back-end load, a contingent deferred sales charge is a fee paid to sell a specific investment. It is expressed as a percentage of the amount invested, and may also be called an exit fee or a redemption charge. Mutual funds with continge See More.
Also called the Zaraba method, the continuous auction method is a method of trading securities. See More.
A contrarian is an investor that attempts to profit by deviating from conventional wisdom or "the herd." See More.
A conventional loan is a mortgage that is not insured or guaranteed by a government agency. Also known as a conventional mortgage, conventional loans are usually fixed-rate loans. Conventional mortgages make up around two-thirds of all US mortgage See More.
A conversion ratio is the number of one security given for another security (usually a convertible security). See More.
A convertible bond gives the bondholder the right to convert the bond into a fixed number of shares of common stock in the issuing company. See More.
Convertible preferred stock is preferred stock that holders can exchange for common stock at a set price after a certain date. See More.
In the bond world, convexity refers to the shape of the yield curve and how sensitive bond prices are to changes in interest rates. See More.
Core earnings are the net income a company generates from the principle products and services it provides. See More.
"Cornering the market" refers to the process of acquiring enough shares of a certain security or asset with the intention of illegally manipulating its price. See More.
Corporate bonds are debt instruments created by companies for the purpose of raising capital. They are called fixed-income securities because they pay a specified amount of interest on a regular basis. See More.
Also called articles of incorporation or a certificate of incorporation, a corporate charter is a legal document that sets forth a corporation's basic information, such as its location, profit/nonprofit status, board composition and ownership st See More.
Corporate governance is the process and rules under which a company is managed on the behalf of shareholders and stakeholders. The board of directors is primarily responsible for applying and maintaining a company's corporate governance. See More.
Corporate inversion is practice by U.S.-based companies of exchanging their registration with a subsidiary outside the U.S. in order to pay lower taxes. See More.
Corporate profit, also called net income, is the amount remaining after all costs, depreciation, interest, taxes, and other expenses have been deducted from total sales. Profit is also referred to as the bottom line, net profit or net earnings. The f See More.
Corporate Social Responsibility, or CSR, is a system of self-regulation for a business to become and remain socially accountable to its customers, employees, peers, and community. Under CSR, a company tracks its effect on the whole community See More.
A corporation is one of many ways to formally organize a business. Structuring a business as a corporation has a number of important legal requirements and consequences that impact investors. See More.
A correction refers to a price decline of at least 10% of any security or market index after a temporary increase in market prices. See More.
Correlation, as used in investing, is a measure of the return performance of two (or more) securities or asset classes relative to each other. Portfolio managers, traders, brokers, and stock analysts use correlation to estimate the effectiv See More.
Cost basis refers to the original price of an asset. Cost basis is sometimes called tax basis. See More.
Cost of capital refers to the opportunity cost of making a specific investment. It is the rate of return that could have been earned by putting the same money into a different investment with equal risk. Thus, the cost of capital is the rate of retur See More.
Cost of equity refers to a shareholder's required rate of return on an equity investment. It is the rate of return that could have been earned by putting the same money into a different investment with equal risk. See More.
Cost of goods sold (COGS) is an accounting term to describe the direct expenses related to producing a good or service. COGS is listed on the income statement. See More.
Cost per thousand (CPM) is a marketing term referring to the cost of a media vehicle reaching 1,000 members of an audience. The M in CPM is the Roman numeral for 1,000. See More.
Cost per unit is a measure of a company's cost to build or create one unit of product. See More.
A countercyclical stock is a stock whose price tends to move in opposition to the overall business cycle. When the market rises, the stock price falls, and when the market falls, the stock price moves higher. See More.
Country risk is the risk that a foreign government will default on its bonds or other financial commitments. Country risk also refers to the broader notion of the degree to which political and economic unrest affect the securities of issuers doing b See More.
A coupon bond, frequently referred to as a bearer bond, is a bond with a certificate that has small detachable coupons. The coupons entitle the holder to interest payments from the borrower. See More.
The coupon equivalent rate (CER), also known as the bond equivalent yield (BEY), is the effective yield on a zero-coupon bond when calculated as if it paid a coupon. See More.
The coupon equivalent yield is the effective annual interest rate earned on a bond. It is used to understand what the annual return is or would have been on an investment lasing less than one year. The formula for CEY is: (Interest Paid, in Dollars See More.
The coupon rate of a bond is the amount of interest paid per year as a percentage of the face value or principal. See More.
In the finance world, the coupon rate is the annual interest paid on the face value of a bond. It is expressed as a percentage. See More.
A covenant is a promise a company makes, usually in return for a loan or bond issue. See More.
A coverage ratio divides a company's income or cash flow by a certain expense in order to determine financial solvency. See More.
Formerly referred to as an Education IRA, a Coverdell Education Savings Account (or Coverdell ESA) is a tax-advantaged savings account intended to help parents and guardians prepare for the expense of their child’s education. See More.
A covered call is a call option that is sold against stock an investor already owns. See More.
Credit is an agreement whereby a financial institution agrees to lend a borrower a maximum amount of money over a given time period. Interest is typically charged on the outstanding balance. In the accounting world, a credit is also a journal entry See More.
A credit bureau is an agency that collects, organizes, and disseminates credit information to creditors and potential creditors. Credit bureaus generally collect information on individuals and small businesses. See More.
A credit card is an electronic, plastic card issued by a financial institution that lets an individual borrow money at the point of sale (i.e. checkout) to complete a purchase. See More.
The Credit Card Accountability, Responsibility, and Disclosure Act is better known as the Credit CARD Act. The law's main purpose is to prevent certain business practices in the credit card industry that were considered unfair or even deceptive to co See More.
A credit crunch occurs when loans are very expensive and difficult to obtain. See More.
A credit default swap (CDS) protects lenders in the event of default on the part of the borrower by transferring the associated risk in return for periodic income payments. See More.
A credit derivative is a financial instrument thats value is determined by the default risk of an underlying asset. See More.
A credit limit is the maximum amount that a person may charge on a credit card or borrow from a financial institution. See More.
Credit quality is a measure of an individual's or company's creditworthiness, which is ability to repay debt. See More.
In personal finance, the term credit rating commonly refers to a score issued by the Fair Isaac Corporation (a "FICO score"). A person's credit rating indicates how creditworthy he or she is. In corporate finance, a credit rating is a "grade" assi See More.
A credit report is a report detailing a person's financial history specifically related to their ability to repay borrowed money. See More.
Credit risk is the chance that a bond issuer will not make the coupon payments or principal repayment to its bondholders. In other words, it is the chance the issuer will default See More.
Credit score refers to the FICO score, which is created and calculated by the Fair Isaac Corporation and is a measure of an individual's creditworthiness. It is a mathematical summary of the information on a person's credit report. Note that See More.
A credit union is a financial institution that is owned and controlled by its members rather than shareholders. The members of the credit union pool their deposits and provide loans and other financial services to each other. See More.
The credit utilization rate is a calculation comparing an individual's total debt balances to total available credit. See More.
Credit utilization, commonly referred to as the credit utilization ratio or credit utilization rate, is a calculation comparing an individual's total debt balances to total available credit. See More.
Also called a bypass trust, a credit-shelter trust is a method of passing assets to beneficiaries without subjecting those assets to estate taxes. See More.
A creditor is an individual or institution that lends money or services to another entity under a repayment agreement. See More.
Critical mass refers to the size a company needs to reach in order to efficiently and competitively participate in the market. This is also the size a company must attain in order to sustain growth and efficiency. See More.
Cross-listing (also known as interlisting or dual listing) is the listing of any security on two or more different exchanges. See More.
The crowding out effect describes the idea that large volumes of government borrowing push up the real interest rate, making it difficult or close to impossible for individuals and small companies to obtain loans. See More.
A cumulative dividend is a dividend, usually on preferred shares, that must be paid before any other dividends on any of the issuer's other securities. Preferred stock that does not carry a cumulative dividend is referred to as "straight pref See More.
Currency risk is the potential risk of loss from fluctuating foreign exchange rates when an investor has exposure to foreign currency or in foreign-currency-traded investments. See More.
A current asset is cash or any asset that can be reasonably converted to cash within one year. See More.
The current portion of long-term debt (CPLTD) is the portion of a company's long-term debt payments that are due in less than one year. See More.
Current yield represents the prevailing interest rate that a bond or fixed income security is delivering to its owners. See More.
CUSIP stands for "Committee on Uniform Securities Identification Procedures" and refers to a 9-digit alphanumeric code assigned to all security issues approved for trading in the United States and Canada. See More.
A custodian is an institution or individual that can act as an agent and exercise legal authority over the financial assets of another individual or company. See More.
A cyclical industry is an industry whose performance (revenues, profits, etc.) is tied to the business cycle. Thus, when the economy is grows quickly, the industry does well and vice versa. See More.
Cyclical stocks are those that tend to move strongly higher and lower along with the overall business cycle. These stocks represent ownership in companies that are very sensitive to economic fluctuations. See More.