The terms provided in this section are intended to empower the user to interact with a trained/licensed individual in an informed manner. The terms are not designed to replace the service of these individuals. The ECSRC strongly recommends that the user seeks professional advice before taking action on any investment matter.
Annualize means to convert a rate of return from a periodic basis to on an annual basis.
The annualized holding period yield, also known as the effective annual yield, is a yield measure used to facilitate comparison with other investments.
An asset means anything having commercial or exchange value that is owned by a business, institution, or individual. Financial instruments, in the form of securities, are classified as capital/financial assets.
A bond is an interest bearing or discounted government or corporate debt security that obligates the issuer (corporate or government entity) to pay the bondholder (investor).
Callable refers to a bond that may be redeemable by the issuer before the scheduled maturity date.
The call date is the date on which a bond may be redeemed before maturity. If called, the bond may be redeemed at par or at a slight premium to par.
Call Protection is the length of time during which a security cannot be redeemed by the issuer.
Capital Gain refers to the increase in the value of a financial asset.
Capital Gains Yield is the positive change in the price of an asset (capital gain) divided by the purchase price, expressed as a percentage.
Capital loss is the amount by which the proceeds from the sale of a capital asset are less than the price paid to acquire the asset.
In investment securities, cash flows represents cash revenues (cash inflows) and cash expenses (cash outflows), excluding non-cash items such as depreciation and unrealized gains or losses.
The compound annual average rate of return or compound annual growth rate is the year-over-year growth rate of an investment over a specified period of time.
The coupon represents the interest rate on a debt security the issuer promises to pay to the holder until maturity, expressed as a percentage of the bond's face value.
Current Yield is the annual interest on a bond divided by the current market price of the bond.
Reference is made to?cash flows?in investment securities. Discounted cash flows refer to the value of future or expected cash revenues or expenditures at a common date.
Dividend yield is the annual percentage of return earned by an investor on a common or preferred stock.
Dividend is the distribution of corporate earnings to investors, prorated by class of security, and may be paid in the form of money, stock or scrip.
Expected return or mean return is the average of all the likely returns of the investments comprising a portfolio of securities.
Face value is the par or nominal value of a bond, note or other security.
The financial health of a firm or individual speaks to the state of a firm or an individual's personal financial situation.
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