|Treasury Bill (T- Bill)
||A fixed-income security issued by the U.S. Government.
||The acquisition of control over a corporation by another
company, which normally ousts the current management. The takeover
can occur by means of a proxy fight or the acquisition of a controlling
quantity of common stock.
||The Exchange's computerized settlement system.
||A mutual fund containing bonds that mature in a single
year, giving the entire fund a terminal maturity in that year.
|Target Maturity Fund
||A fund that invests primarily in zero coupon U.S.
Treasury securities, or in coupon-bearing U.S. government securities
targeted to mature in a specific year.
|Tax Anticipation Bill
||Short-term security similar to a T bill that is accepted
at par in payment of corporate federal taxes.
|Tax Anticipation Note
||A municipal note issued in anticipation of revenues
from a future tax.
|Tax Exempt Bonds
||Municipal securities (whose interest is free from
federal income tax).
||Certain tax-related benefits that create unusual tax
savings, such as accelerated depreciation and tax-exempt interest
from certain municipal bonds.
||Tax treatment of certain products and investments
that results in income taxation only upon maturity or withdrawal of
|Tax-Deferred Life Insurance Cash Value
||Funds held in a life insurance policy that exceed
the amount used in the current year for administrative and mortality
expenses. Earnings on these funds are generally not taxed until withdrawn.
|Tax-Exempt Bond Fund
||A fund that invests in municipal bonds. While investors
do not pay federal income taxes on the income from these funds, they
may be subject to state or local taxes.
||Securities issued by states, cities and other public
authorities, the interest from which is either wholly or partly exempt
from federal income tax and possibly from state or local income taxes.
||The interest earned on tax-exempt securities is not
included in the investor's gross income for regular federal income
tax purposes. Depending on the original use of the money when the
security was issued, the interest may be subject to alternative minimum
tax. In most states, the income from municipal bonds issued within
that state is tax-exempt to residents of the state.
|Tax-Sheltered Annuity (TSA)
||A 403(b) plan that invests in an annuity. See 403(b)
|Tax-Sheltered Custodial Account (TSCA)
||A 403(b) plan that invests in mutual funds. See 403(b)
|Taxable Asset Status
||Assets that are not tax-exempt or tax-deferred are
considered "taxable." This means the income derived from
the asset is taxed in the year it is produced. Tax-deferred assets
include assets held in an IRA, 401(k) plan, 403(b) plan, non qualified
tax-deferred annuity, tax-deferred annuity, tax-deferred life insurance
cash value and other qualified assets.
|Taxable Equivalent Yield
||The yield that would have to be earned on a security
to pay as much, after tax, as what is earned from a tax-exempt bond.
||The amount of income used to compute tax liability.
It is calculated by starting with adjusted gross income, subtracting
itemized deductions or the standard deduction and then subtracting
the amount allowed for personal exemptions.
||A fund that invests primarily in the stocks of companies
engaged in the technology industry.
||The movement of an investor's funds from one mutual
fund to another on the basis of an order given via telephone.
|Tenancy by the Entirety
||Joint tenancy ownership between spouses. This type
of property ownership is used only in certain states. See Joint tenancy.
|Tenancy In Common
||Type of ownership of property by two or more persons
in which each owns an undivided interest in the whole. Upon the death
of a co-tenant, the deceased person's interest passes as part of the
estate through probate: the interest does not pass directly to the
||The offer made by one company or individual for shares
of another company. The offer may be in the form of cash or securities.
|Term Life Insurance
||Life insurance that provides financial protection
for a specified period of time. If death occurs during this period,
the face amount of the policy is paid to the beneficiary. If the insured
person survives through the period of coverage, no payment is made.
||Bonds of an issue all mature on the same date.
|Term Structure Of Interest Rates
||A graph representing the yield to maturity of Treasury
securities at identified years of maturity.
||A person who dies leaving a will. The female form
||An investment approach that first seeks to define
major economic and industry trends, and then proceeds to identify
specific companies that are likely to benefit from those trends. (See
||All income received during a year including taxable
income and tax-exempt income. It does not include tax-deferred income.
||A measure of a fund's performance that takes three
factors into account: income dividends, capital gains distributions,
and share price appreciation/depreciation.
||Written verification and information concerning a
transaction that is sent to the customer on or before the first business
day following the trade date.
||The date on which a purchase or redemption of mutual
fund shares is conducted.
||Transferable Options with the right to buy and sell
a standardized amount of a security at a fixed price within a specified
||Written permission for one to trade in another's account.
||The process by which securities are reregistered to
new owners. The old securities are canceled and new ones issued to
the new registrants.
||A commercial bank that retains the names and addresses
of registered securities owners and that reregisters traded securities
to the name of the new owners.
||Fixed income securities issued by the U.S. government.
||Obligations issued by the Department of the Treasury
maturing in 13, 26, or 52 weeks.
||Long-term (10 to 30 years), fixed interest government
||The program through which investors may purchase new
issues of Treasury bills, notes, and bonds directly from the Federal
||Medium-term (1 to 10 years), fixed interest government
|Triple Tax-Exempt Fund
||A municipal bond mutual fund whose dividends and interest
are exempt from federal, state and local income taxes for residents
of a particular state.
||A form of property ownership under which the legal
title to property is held by one person ("trustee") for
the benefit of another person ("beneficiary").
||A trust which may not be terminated after its creation
by the grantor
||A trust created by a person during his or her lifetime
|Trust (Revocable )
||A trust in which the grantor reserves the right to
terminate the trust.
||The rate at which the fund buys and sells securities
each year. For example, if a fund's assets total $100 million and
the fund bought and sold $100 million of securities that year, its
portfolio turnover rate would be 100%.
||An exchange member who executes orders from other
member firms and charges a fee for each execution.
||The security on which options are being bought or
||The organization that acts as the distributor of new
shares to broker/dealers and investors. In a municipal underwriting,
a brokerage firm or bank that acts as a conduit by taking the new
issue from the municipality and reselling it. In a corporate offering,
the underwriter must be a brokerage firm.
||The process by which investment bankers bring new
issues to the market.
||(1) In a negotiated underwriting, the investment banker
whose client is the corporation wanting to bring out a new issue.
(2) In a competitive underwriting, the lead firm in a group that is
competing with other group(s) for a new issue.
||A once-in-a-lifetime credit that may be applied against
an individual's federal gift or estate taxes. The current credit is
$192,800, which is equivalent to exempting $600,000 from federal gift
or estate taxes.
|Uniform Gift to Minors Accounts (UGMA)
||A method of securities ownership whereby parents or
other relatives may contribute cash or securities to children. Portions
of returns generated by the securities are taxed at the children's
tax bracket instead of parents' presumably higher bracket.
|Uniform Practice Code
||Part of the NASD rules that govern the dealing of
firms with each other.
||At issuance, a "package" of securities,
such as a bond and warrant, which become separable at a later date.
|Unit Investment Trust
||See Unit Trust
||An investment similar to a mutual fund (that is, the
trust receives money from investors and uses it to purchase a portfolio
of securities) that has a specific date on which the holdings will
be sold and all the earnings and gains returned to investors. Commonly,
the portfolio of securities is comprised of bonds and is left unchanged
after it is originally selected.
|Universal Life Insurance
||A type of permanent life insurance that permits the
owner to vary the amount of protection and premiums to reflect changing
needs. Earnings on the cash value accumulate tax-deferred.
|Unlisted Securities Market (USM)
||The Exchange's market for medium-sized companies which
do not qualify for, or do not wish to have a full listing.
||(1) A security which has not been admitted to the
Stock Exchange's Daily Official List. Usually the issuer will be an
unlisted company, but not always; it is not uncommon for a company
to apply for its Ordinary Shares to be listed but not its loan stocks,
or vice versa. (2) A security traded on the USM.
|Unrealized Gain or Loss
||Increases or decreases in the prices of securities
held by the fund. Unscheduled repayment of principal : can shorten
the maturity of the bonds. (See "Prepayment Risk.")
||An advanced option order that is used with the intention
of closing an existing Buy/Write or Sell/Write position.
||A listed equity trade at a price that is higher than
that of the last sale.
||A fund that invests primarily in securities issued
by companies in the utilities industry.
||The investment style of attempting to buy underpriced
stocks that have the potential to perform well and increase in price.
||A type of insurance contract that guarantees future
payments to the holder, or annuitant. Capital accumulates tax-free,
often through investment in a mutual fund, and is converted to an
income stream at a future date (usually retirement). All monies held
in the annuity accumulate on a tax-deferred basis.
|Variable Universal Life Insurance
||A type of permanent life insurance that permits the
owner to vary the amount of protection and premiums and also builds
cash value that can be invested in a variety of investment portfolios.
Investment earnings on the cash value accumulate tax-deferred and
the policy owner can transfer funds among investment portfolios with
||The amount by which the price of a security fluctuates
as market conditions change.
|Voluntary Accumulation Plan
||A plan to acquire additional shares in a mutual fund
on a more or less regular basis, at the discretion of the shareholder.
||The deposit of shares with a trustee to gain long-term
||A security that allows the owner to purchase the issuing
corporation's stock for a certain price over stated period. That period
could be 10 or 20 years, and the price of the conversion is much higher
than the current price of stock issue. A warrant is usually issued
with another security, such as one warranty plus one bond, both of
which form one unit.
|Weighted Average Maturity
||The arithmetic mean of maturities of securities held
by a mutual fund.
||A company that rescues another in financial difficulty,
especially one which saves a company from an unwelcome takeover bid.
|Whole Life Insurance
||Life insurance that provides protection for the entire
life of the insured person, generally with a fixed face amount and
||A document that directs how a person's property is
to be distributed after death. It may also be used to nominate a person
to serve as the guardian of minor children and the executor of the
||A program in which shareholders receive payments from
their mutual fund investments at regular intervals.
||Subject quote in which the trader estimates the price
at which he thinks the security can be bought or sold if given time
to find a market.
||Seller of an option contract to open.
||A term from microeconomics describing the difference
between the actual output cost of one unit of production and the minimum
attainable cost of one unit of that product. This difference may be
the result of management shortcomings, inefficient use of resources,
bureaucratic rigidities, motivation of employees etc.
||Wholesale quote sheet for corporate bonds used by
||The rate of return on an investment. There are as
many computations as there are different yields, such as current yield
and yield to maturity. For example, bonds provide income in the form
of interest, and stocks in the form of dividends.
||The additional income an investor will receive on
purchasing a convertible security instead of the ordinary share of
the same company assuming that the security can be converted into
those same ordinary shares. For the calculation to be meaningful,
allowance must be made for the conversion costs, reflected in the
differential between the conversion price and the current market price.
||A graph depicting yield as it relates to maturity.
If short-term rates are lower than long-term rates, it is called a
positive yield curve. If short-term rates are higher, it is called
a negative, or inverted, yield curve. If there is little difference,
it is called a flat yield curve.
||The point on the yield curve that indicates the year
at which the economy's highest interest rates occur.
|Yield To Call
||The percentage a bond will yield to the date at which
it is eligible to be redeemed by its issuer.
|Yield To Maturity (YTM)
||The effective annual rate of return earned by a bond
if held to maturity. This rate takes into account the amount paid
for the bond, the length of time to maturity, and assumes coupon payments
can be reinvested at the yield to maturity. <!-- End Index--><DL>
|Zero Coupon Bond
||Bond issued at a discount which accrues interest that
is paid in full at maturity.
|Zero Coupon CD
||A certificate of deposit that pays interest only upon
||A stock trade at a price equal to the preceding trade
but lower than the last different price.
||Term given to a sale made at the same price as the
trade that preceded it providing that the previous trade was above
the price of the sale it proceeded.
||A situation in which one party's gain is always equal
to the other party's loss. The gains and losses in this situation
always sum to zero, hence the term. A bet is a zero-sum game where,
if the punter makes a profit, the bookmaker makes an equivalent loss
(ignoring tax) and vice versa. This is the same for derivatives and
options where the punter is the investor and the bookmaker is the
writer, either another punter or an institution. It is, however, quite
different in physical markets, where actual stocks, bonds or tangible
assets are traded. If an investor buys a share and its value rises,
this is not matched by a corresponding loss but made up by an increase
in the intrinsic value of the holding and the worth of the yield or
dividend, which represents profits earned by a trading companywealth
is actually created in these circumstances. There is no net wealth
creation in a zero-sum game.