Definitions of finance terms
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| Bonds | A long-term debt instrument
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| Certificate of deposit | Interest-earning time deposit at bank or other financial intermediary
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| Money market mutual fund | Pools of funds managed by investment co. that are primarily invested in short term assets
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| Par Value | The normal or face value of a stock or bond
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| Federal funds | Overnight loans from one bank to another
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| T-Bills | Discounted debt instruments issued by the govt.
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| Discounted securities | Securities selling for less than par value.
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| Common equity | The sum of the firms common stock paid in capital and retained earnings.
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| Negotiable CD | CD that can be traded to other investors prior to maturity
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| Bonds | A long-term debt instrument
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| Certificate of deposit | Interest-earning time deposit at bank or other financial intermediary
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| Money market mutual fund | Pools of funds managed by investment co. that are primarily invested in short term assets
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| Par Value | The normal or face value of a stock or bond
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| Federal funds | Overnight loans from one bank to another
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| T-Bills | Discounted debt instruments issued by the govt.
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| Discounted securities | Securities selling for less than par value.
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| Common equity | The sum of the firms common stock paid in capital and retained earnings which equals the common stockholders total investment in the firm stated at book value.
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| Negotiable CD | CD that can be traded to other investors prior to maturity
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| Additional paid in capital | The difference between the value of newly issued stock and its par value.
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| Call option | An option to buy shares of stock at a certain price within a specified period of time.
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| Call provision | a provision in a bond contract that gives the issuer the right to redeem the bonds under specified terms prior to the normal maturity date.
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| Additional paid in capital | The difference between the value of newly issued stock and its par value.
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| Call option | An option to buy shares of stock at a certain price within a specified period of time.
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| Call provision | a provision in a bond contract that gives the issuer the right to redeem the bonds under specified terms prior to the normal maturity date.
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| Commercial paper | a discounted instrument that is a type of promisory note, or legal IOU, issued by large, financially sound firm.
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| Convertible security | A security, usually a bond or preferred stock, that is exchangable at the option of the holder for the common stock of the issuing firm.
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| Debenture | A long term bond that is not secured by a mortgage on specific property
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| Financial asset | An asset that reprresents a promise to distribute cash flows at some time in the future.
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| Floating rate bond | A bond whose interest rate fluctuates with shifts in the general level of interest rates.
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| Growth stocks | Stocks that generally pay little or no dividends so as to retain earnings to help fund growth opportunities.
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| Indenture | A formal agreement or contract between the issuer of a bond and the bond holders.
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| Investment grade bond | A bond rated A or tripple-B; many banks and other institutional investors are permitted by law to hold only bonds rated investment grade or better.
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| Junk bond | A high-risk, high-yield bond used for finance mergers, leveraged buyouts, and troubled companies.
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| Mortgage bond | A bond backed by fixed assets. First mortgage bonds are senior in priority to claims of second mortgage bonds.
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| Municipal bonds | A bond issued by state or local governments.
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| Proxy | A document giving the authority for one person to act for another, typically the power to vote shares of common stock.
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| Put option | A option to sell shares of stock at specified price during a particular time period.
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| Real asset | A physically obsevable or touchable item
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| Restrictive covenant | A provision in a debt contract that constrains the actions of the borrower.
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| Sinking fund | A required annual payment designed to amoritize a bond or preferred stock issue.
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| Striking (exercise) price | The price that must be paid(buying or selling) for a sharer of common stock when an potion is exercised.
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| Subordinated debenture | A bond that has a claim on assets only after the senior debt has been paid off in the event of liquidation.
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| Term loan | A loan generally obtained from a bank or insurance company, on which the borrower agrees to make a series of payments consisting of interest and principal.
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