Ron Graham and Associates Logo




Tel. 780-429-6775
Fax. 780-424-0004
100, 10585 - 111 Street
Edmonton, Alberta  T5H 3E8

View Map

Get Directions


glossary


A | B | C | D | E | F | G | H | I | J | L | M | N | O | P | Q | R | S | T | U | V | W | Y | Z

Callable

May be redeemed (called in) upon due notice by the security's issuer.

Call Loan

A loan which may be terminated or "called" at any time by the lender or borrower. Used to finance purchases of securities.

Canadian Payments Association

Established in the 1980 revision of the Bank Act, this association operates a highly automated national clearing system for interbank payments. Membership includes chartered banks, trust and loan companies and some credit unions and caisses.

Capital

Has two distinct, but related meanings. To an economist, it means machinery, factories and inventory required to produce other products. To an investor, it may mean the financial assets the investor has invested in securities, the investor's home and other fixed assets, plus cash.

Capital Cost Allowance

An amount allowed to be deducted under the Income Tax Act, with respect to certain assets, in computing a taxpayer's income for a taxation year. It may differ from the amount charged for the period in depreciation accounting.

Capital Gain or Loss

The profit or loss resulting from the sale of a capital asset. Tax consequences may result.

Capital Stock

All shares representing ownership of a company, including preferred as well as common.

Capitalization or Capital Structure

Total dollar amount of all debt, preferred and common stock, contributed surplus, and retained earnings of a company.

Capitalize

The recording of an expenditure as an asset rather than an expense, which is then written off over a period of years. Examples are capitalized leases and interest.

Cash Flow

A company's net income for a stated period plus any deductions that are not paid out in actual cash such as depreciation, deferred income taxes, minority interests and amortization.

Central Bank

A body established by a national Government to regulate currency and monetary policy on a national-international level. In Canada, it is the Bank of Canada: in the United States, the Federal Reserve Board; in the U.K., the Bank of England.

Certificate

The document evidencing ownership of a bond, stock or other security.

Certificate of Deposit (CD)

A fixed-income debt security issued by most chartered banks usually in minimum denominations of $1,000 with maturity terms of 1 to 6 years.

Class A and B Stock

Class A stock is often similar to a participating preferred share with a prior claim over Class B for a stated amount of dividends or assets or both but without voting rights; the Class B usually has voting rights but no priority as to dividends or assets.

Closed-end Investment Company

An investment company whose stock is bought and sold on the stock market but whose capital remains relatively unchanged.

Collateral

Securities or other property pledged by a borrower to secure repayment of a loan.

Collateral Trust Bond

A bond secured by collateral deposited with a trustee. Collateral is often the stocks or bonds of companies controlled by the issuing company but may be other securities.

Comfort Letter

A letter filed with applicable Securities Commission(s) by a company's auditor when submitting unsigned financial statements for use in a prospectus. The letter says the final format of the statements should not be materially different from those presently being tiled. A letter is needed because the auditor does not sign his report before or when the financial statements are filed with the preliminary prospectus. The signing is done after the Securities Commission(s) has reviewed the prospectus and any required changes have been made.

Commercial Paper

Short-term negotiable debt securities issued by non-financial corporations with terms of a few days to a year.

Commission

The fee charged by a stock broker for buying or selling securities as agent on behalf of a client.

Common Stock

Securities which represent ownership in a company and carry voting privileges.

Company

See Corporation.

Compound Interest

Interest paid on an investment at periodic intervals and added to the amount of the investment; future interest payments are then calculated and paid at the original rate but on the increasing total of the original investment plus the interest which has been added to it. In simple terms, interest paid on interest.

Confirmation

A printed acknowledgement giving details of a purchase or sale of a security which is normally mailed to a client by the broker or investment dealer within 24 hours of an order being executed. Also called a "contract".

Conglomerate

A company directly or indirectly operating in a variety of industries, usually unrelated to each other. Conglomerates often acquire outside companies through the exchange of their own shares for the shares of the majority owners of companies they take over.

Consolidated Financial Statements

A combination of the financial statements of a parent company and its subsidiaries presenting the financial position of the group as a whole.

Constrained Share Companies

Include Canadian banks, trust, insurance, broadcasting and communication companies having constraints on the transfer of shares to persons who are not Canadian citizens or not Canadian residents.

Continuous Disclosure

In Ontario, a reporting issuer (which see) must issue a press release as soon as a "material change" occurs in its affairs and, in any event, within 10 days. A material change is one that is expected to have a significant effect on the market value of its securities. (See also Timely Disclosure.)

Convertible

A bond, debenture or preferred share which may be exchanged by the owner usually for the common stock of the same company, in accordance with the terms of the conversion privilege.

Corporation or Company

A form of business organization legally created under provincial or federal statutes which has a legal identity separate from its owners. The corporation's owners (shareholders) have no liability for its debts (limited liability).

Country Banks

A colloquial term for non-bank lenders who provide short-term sources of credit for investment dealers, e.g., corporations, insurance companies and other institutional short-term investors, none of whom is under the jurisdiction of The Bank Act. (See also Purchase and Resale Agreement.)

Coupon

A portion of a bond certificate entitling the holder to an interest payment of a specified amount when clipped and presented at a bank on or after its due date.

Cover

The act of buying a security previously sold short, i.e., one not owned by the seller at the time of the sale.

Cross on the Board

Also called a "put-through" or "contra" order. When a broker has both an order to sell and an order to buy the same stock at the same price, a "cross" is allowed on the exchange floor without interfering with the limits of the prevailing market.

Cum Dividend

With dividend. If you buy a share quoted cum dividend, you will receive an upcoming already-declared dividend up and until the "ex-dividend" date. If a share is quoted ex dividend (without dividend) the buyer is not entitled to the declared dividend.

Cum Rights

With rights. Buyers of shares quoted cum rights are entitled to forthcoming already-declared rights right up and until an "ex-rights" date. If shares are quoted ex rights (without rights) the buyer is not entitled to receive the declared rights.

Cumulative Preferred

A preferred stock having a provision that if one or more of its dividends are not paid, the unpaid dividends accumulate and must be paid before any dividends may be paid on the company's common shares.

Current Assets

Cash and assets which in the normal course of business would be converted into cash, usually within a year, e.g. - accounts receivable, inventories.

Current Liability

A debt due to be paid within a year.

Current Yield

The annual income from an investment expressed as a percentage of the investment's current value. On stock, calculated by dividing yearly dividend by market price; on bonds, by dividing yearly interest by current price.

CUSIP

(Committee on Uniform Security Identification Procedures) is the trademark for a standard system of securities identification (i.e. CUSIP numbering system) and securities description (i.e., CUSIP descriptive system) that is used in processing and recording securities transactions in North America.

Cyclical Stock

One in an industry that is particularly sensitive to swings in economic conditions.


A | B | C | D | E | F | G | H | I | J | L | M | N | O | P | Q | R | S | T | U | V | W | Y | Z