Business / Finance Glossary

Can Get : Convertible: Redeemed before maturity. Option: Call or put option exercised against the stockholder. Sale: Delivery required on a short sale.

Canadian Agencies: Refers to over-the-counter trading. 'I have a buyer who will pay for the stock'. Uusually a standard markdown (1/8) from is applied to this price in bidding the seller for its stock. Antit . . . View Full Definition

Canadian Dealing Network (CDN): Agency banks established by Canadian Banks in the U.S.

Canadian Exchange Group (CEG): The organized OTC market of Canada. Formerly known as the Canadian Over-the-Counter Automated Trading System (COATS), the CDN became a subsidiary of the Toronto Stock Exchange in 1991.

Cancel: The CEG is an association among the Toronto Stock Exchange, the Montreal Exchange, the Vancouver Stock Exchange, the Alberta Stock Exchange, and the Winnipeg Stock Exchange for the purpose o . . . View Full Definition

Cannot Compete: To void an order to buy or sell from (1) the floor, or (2) the trader/salesperson's scope. In Autex, the indication still remains on record as having once been placed unless it is expunged.

Cannot Complete: In the context of general equities, cannot accommodate customers at that price level (i.e., compete with other market makers), often because there is no natural opposite side of the trade.

Cap: In the context of general equities, inability to finish an order on a principal or agency basis, given prevailing price instructions and/or market conditions.

Capacity: An upper limit on the interest rate on a floating-rate note (FRN) or an adjustable-rate mortgage (ARM).

Capital: Credit grantors' measurement of a person's ability to repay loans.

Capital Account: Money invested in a firm.

Capital Allocation Decision: Net result of public and private international investment and lending activities.

Capital Asset: Allocation of invested funds between risk-free assets and the risky portfolio.

Capital Asset Pricing Model (CAPM): A long-term asset, such as land or a building, not purchased or sold in the normal course of business.

Capital Budget: An economic theory that describes the relationship between risk and expected return, and serves as a model for the pricing of risky securities. The CAPM asserts that the only risk that is pr . . . View Full Definition

Capital Budgeting: A firm's planned capital expenditures.

Capital Builder Account (CBA): The process of choosing the firm's long-term capital assets.

Capital Expenditures: A Merrill Lynch brokerage account that allows investors to access the loan value of his or her eligible securities to buy or sell securities. Excess cash in a CBA can be invested in a money . . . View Full Definition

Capital Flight: Amount used during a particular period to acquire or improve long-term assets such as property, plant, or equipment.

Capital Formation: The transfer of capital abroad in response to fears of political risk.

Capital Gain: Expansion of capital or capital goods through savings, which leads to economic growth.

Capital Gains Distribution: When a stock is sold for a profit, the capital gain is the difference between the net sales price of the securities and their net cost, or original basis. If a stock is sold below cost, the . . . View Full Definition

Capital Gains Tax: A distribution to the shareholders of a mutual fund out of profits from selling stocks or bonds, that is subject to capital gains taxes for the shareholders.

Capital Gains Yield: The tax levied on profits from the sale of capital assets. A long-term capital gain, which is achieved once an asset is held for at least 12 months, is taxed at a maximum rate of 20% (taxpay . . . View Full Definition

Capital Goods: The price change portion of a stock's return.

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