Glossary

Abandonment- The People who have control on the property give it up on there own!!

Abandonment Option- When a party cancels an investment prematurely or before time!!

ABC Agreement- a written contract between an employee & a brokerage firm emphasizing the clause that the firm can purchase an NYSE card for that employee!!

Ability to pay- The ability of a person in debt to make interest and principal payments on it.

Abnormal returns- It is a part of the return that is not affected in anyway by the market influences. It is actually the distinction between the actual return and the return which is decided by the movement in the markets.

Absolute advantage- Absolute advantage is a condition by virtue of which the output of all the goods and services produced for a lower input is higher than that of any other region or country.

Absolute form of purchasing power parity- It is in effect a theory that says that the prices and the rates of a particular product in two different countries should come out to be the same when measured by a common currency. Sometimes it is also known as the “law of one price”.

Absolute physical life- The period of a product beyond which it cannot be used or is unable to be used is called absolute physical life.

Absolute Priority- When there is a bankruptcy case, there is a rule that states that the senior creditors will be remunerated fully and then the junior creditors. That is called absolute priority.

Absorbed- it is a term that’s often used in general sense in equities. The market has reached a point where it cannot absorb more financial adjustments.

Abusive Tax Shelter- It is a partnership which is limitedly available and is dished out by the IRS judges to people who claim illegal tax deductions.

Accelerated cost recovery system (ACRS)- It is a schedule of rates that depreciated which is allowed exclusively for tax related issues.

Acceleration clause- It is a contract which clearly states that if a certain specific actions transpire, then the unpaid balance would be due and payable. These actions maybe varied. Like the failure to make the interest payments month to month.

Accelerated depreciation- A method of depreciation which is able to produce comparatively large deductions in the formative and early years of a product’s life is known as Accelerated depreciation.

Acceptance- It is a sort of a contract or a written agreement that is initiated when a person accepts the draft at the time of withdrawal and writes ACCEPTED on it. He is liable to be held responsible as the acceptor of the payment on its maturity.

Accommodative monetary policy- The Federal revenue system instigates a policy by virtue of which they increase the sum of money available with banks for public lending.

Account- If we are talking in terms of book keeping, and then it means that the ledger which depicts the assets, the liabilities is known as the account. If we talk about investment banking, then it might mean the status or the amount of securities owned & sold by both the clients to an underwriting authority. In the context of securities, it depicts the bond between a broker and a client, which makes the broker the buying and selling representative on behalf of the client.

Account ad valorem duty- it is an imported merchandise tax which is often expressed in the terms of a percentage.

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