Appendix:Glossary of finance
This is a glossary of finance.
- banker's acceptance
- A negotiable instrument or time draft drawn on and accepted by a bank, that upon acceptance becomes an obligation of the bank and is a marketable money-market instrument.
- bear market
- A stock market where a majority of investors are buying ("bulls"), causing overall stock prices to rise.
- bill of exchange
- A document demanding payment from another party, especially used in international trade; draft.
- bull market
- A stock market where a majority of investors are selling ("bears"), causing overall stock prices to drop.
- A documentary obligation to pay a sum or to perform a contract; a debenture.
- cash instrument
- Any financial instrument whose value is determined directly by the market.
- capital market
- The market for long-term securities, including the stock market and the bond market.
- certificate of deposit
- A type of time deposit, which is insured, with a specific, fixed term, and, usually, a fixed interest rate.
- commercial paper
- A negotiable instrument with short maturity.
- Any interest payment made or due on a bond, debenture or similar (no longer by a physical coupon).
- credit default swap
- A credit derivative contract between two counterparties, whereby the buyer (seller of risk) makes periodic payments to the seller (buyer of risk) in exchange for the right to a payoff if there is a default or other credit event in respect of a third party called reference entity.
- credit event
- A significant default on a financial instrument or some other financial occurrence, such as bankruptcy, restructuring, repudiation, or moratorium, or failure to pay some other obligation, such as taxes.
- credit risk
- The risk of loss due to a debtor's non-payment of a loan or other line of credit.
- debt instrument
- A document evidencing a debt; the debt so evidenced.
- derivative instrument
- A security whose value is derived from one or more other, more fundamental, assets.
- A bill of exchange.
- face value
- The amount or value listed on a bill, note, stamp, etc.; the stated value or amount.
- financial instrument
- Any form of funding medium, mostly those used for borrowing in money markets, including cash instruments and derivative instruments.
- Able to be substituted for something of equal value.
- The price paid for obtaining, or price received for providing, money or goods in a credit transaction, calculated as a fraction of the amount or value of what was borrowed.
- market risk
- The risk that the value of an investment will decrease due to moves in market factors.
- money market
- A market for trading short-term debt instruments, such as treasury bills, commercial paper, bankers' acceptances, and certificates of deposit.
- negotiable instrument
- A right to receive payment of money which is unconditional (sometimes excepting loss or theft) and capable of transfer by negotiation.
- promissory note
- A document saying that someone owes a specific amount of money to someone else, often with the deadline and interest fees.
- A fungible, negotiable instrument representing financial value.
- A financial instrument that shows that you own a part of a company that provides the benefit of limited liability.
- The capital raised by a company through the issue of shares. The total of shares held by an individual shareholder.
- time deposit
- A deposit in a bank that cannot be withdrawn before a specified date.
- treasury bill
- A government obligation, sold at a discount, maturing in one year or less, and pays no interest prior to maturity.
- zero coupon bond
- A bond (e.g., corporate debenture or government debt) that has no coupon (i.e., pays no interest), during the life of the issue. Such a bond is initially sold at a deep discount to its face value.