Business / Finance Glossary

Agency Basis: A means of compensating the broker of a program trade solely on the basis of commission established through bids submitted by various brokerage firms.

Agency Cost View: The argument that specifies that the various agency costs create a complex environment in which total agency costs are at a minimum with some, but less than 100%, debt financing.

Agency Costs: The incremental costs of having an agent make decisions for a principal.

Agency Incentive Arrangement: A means of compensating the broker of a program trade using benchmark prices for issues to be traded in determining commissions or fees.

Agency Pass-Throughs: Mortgage pass-through securities whose principal and interest payments are guaranteed by government agencies, such as the Government National Mortgage Association (Ginnie Mae), Federal Home . . . View Full Definition

Agency Problem: Conflicts of interest among stockholders, bondholders, and managers.

Agency Securities: Securities issued by federally related institutions and U.S. government-sponsored entities. Such agencies were created to reduce borrowing costs for certain sectors of the economy, such as a . . . View Full Definition

Agency Theory: The analysis of principal-agent relationships, in which one person, an agent, acts on behalf of another person, a principal.

Agent: The decision-maker in a principal-agent relationship.

Aggregate Exercise Price: The exercise price multiplied by the number of shares in a put or call contract. The option premium is excluded in the aggregate exercise price. In tje case of options traded on debt instrum . . . View Full Definition

Aggregation: Process in corporate financial planning whereby the smaller investment proposals of each of the firm's operational units are aggregated and effectively treated as a whole.

Aggressive Growth Mutual Fund: A mutual fund designed for maximum capital appreciation that places its money in companies with high growth rates.

Aggressively: Used in context of general equities. For a customer it means working to buy or sell one's stock, with an emphasis on execution over price. For a trader it means acting in a way that puts the . . . View Full Definition

Aging Schedule: A table of accounts receivable broken down into age categories (such as 0-30 days, 30-60 days, and 60-90 days), which is used to determine if customer payments are keeping close to schedule.

Agreement Among Underwriters: A contract amoung participating members of a syndicate that defines the members' proportionate liability, which is usually limited to and based on the participants' level of involvement. The . . . View Full Definition

Ahead Of Itself: In context of general equities, refers to equities that are overbought or oversold on a fundamental basis.

Ahead Of You: Used for listed equity securities. At the same price but entered ahead of your order/interest, usually referring to the specialist's book. See: Behind, matched orders, priority, stock ahead.

AIBD: Association of International Bond Dealers

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