Business / Finance Glossary

Consumer Debenture: Federal legislation establishing rules for the disclosure of the terms of a loan to protect borrowers. See: Truth in lending.

Consumer Durables: An investment note issued directly to the public by a financial institution.

Consumer Goods: Consumer products that are expected to last three years or more, such as an automobile or a home appliance.

Consumer Interest: Goods not used in production but, bought for personal or household use such as food, clothing, and entertainment.

Consumer Price Index: Interest paid on consumer loans; e.g., interest on credit cards and retail purchases.

Contagion: The CPI, as it is called, measures the prices of consumer goods and services and is a measure of the pace of U.S. inflation. The U.S. Department of Labor publishes the CPI every month.

Contango: Excess correlation of equity or bond returns. For example, under usual conditions we might observe a certain level of correlation of market returns. A period of contagion would be associated . . . View Full Definition

Contingency Order: A market condition in which futures prices are higher in the distant delivery months.

Contingent Claim: In the context of general equities, order to buy one security, if the trader can sell another, usually given that certain price limits or conditions reach a certain level. Swap, switch order.

Contingent Deferred Sales Charge (CDSC): A claim that can be made only if one or more specified outcomes occur.

Contingent Immunization: The formal name for the load of a back-end load fund.

Contingent Pension Liability: An arrangement in which the money manager pursues an active bond portfolio strategy until an adverse investment experience drives the then-available potential return down to the safety net l . . . View Full Definition

Continuous Compounding: Under ERISA, a firm is liable to its pension plan participants for up to 39% of the net worth of the firm.

Continuous Net Settlement (CNS): The process of accumulating the time value of money forward in time on a continuous, or instantaneous, basis. Interest is earned constantly, and at each instant, the interest that accrues im . . . View Full Definition

Continuous Random Variable: Method of securities clearing and settlement using a clearing house, which matches transactions to securities available, resulting in one net receive or deliver position at the end of the day.

Contra Accounts: A random value that can take any fractional value within specified ranges, as contrasted with a discrete variable.

Contra Broker: Accounts, such as Accumulated Depreciation, that offset a related account, usually an asset. The contra account is subtracted from the related account to arrive at the net book value.

Contract: The broker on the buy side of a sell order or the sell side of a buy order.

Contract Month: A term of reference describing a unit of trading for a financial or commodity future. Also, the actual bilateral agreement between the buyer and seller of a transaction as defined by an exchange.

Contractual Plan: The month in which futures contracts may be satisfied by making or accepting a delivery.

Contramarket Stock: A plan in which fixed dollar amounts of mutual fund shares are purchased through periodic investments, usually featuring some sort of additional incentive for the fixed period payments.

Contrarian: In the context of general equities, stock that tends to go against the trend of the market as a whole, such as a commodities-related stock or one in an industry out of favor with investors i . . . View Full Definition

Contributed Capital: An investment style that leads one to buy assets that have performed poorly and sell assets that have performed well. There are two possible reasons this strategy might work. The first is a . . . View Full Definition

Contribution Margin: The total amount paid to the business for its common and preferred stock.

Control: The difference between revenue and the associated variable costs. This is an important concept in breakeven analysis.

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