Fixed Income Glossary This fixed income glossary covers the most important bond terms and definitions required for financial analysts. These terms are covered in detail in CFI’s Fixed Income Fundamentals Course. Annuity An annuity is a series of payments in equal time periods, guaranteed for a fixed number of years. Arithmetic Mean An average calculated…
What are American Depositary Receipts (ADR)? American Depositary Receipts (ADR) are negotiable security instruments that are issued by a US bank that represent a specific number of shares in a foreign company that is traded in US financial markets. ADRs pay dividends in US dollars and trade like regular shares of stock. Companies can now purchase…
What are Treasury Bills (T-Bills)? Treasury Bills (or T-Bills for short) are a short-term financial instrument that is issued by the US Government’s Department of the Treasury. T-Bills have maturity periods ranging from a few days up to 52 weeks (one year) and are issued regularly by the US Treasury. They make up a large…
What is the 10-Year US Treasury Note? The 10-year US Treasury Note is a debt obligation that is issued by the Treasury Department of the United States Government and comes with a maturity of 10 years. It pays interest to the holder every six months at a fixed interest rate that is determined at the…
What is Asset-Based Valuation? Asset-based valuation is a form of valuation in business that focuses on the value of a company’s assets or the fair market value of its total assets after deducting liabilities. Assets are evaluated, and the fair market value is obtained. For example, landowners may collaborate with appraisers to work out a…
What is the 1933 Securities Act? The 1933 Securities Act was the first major federal securities law passed following the stock market crash of 1929. The law is also referred to as the Truth in Securities Act, the Federal Securities Act, or the 1933 Act. It was enacted on May 27, 1933 during the Great…
What are 2 and 20 (Hedge Fund Fees)? The 2 and 20 is a hedge fund compensation structure consisting of a management fee and a performance fee. 2% represents a management fee which is applied to the total assets under management. A 20% performance fee is charged on the profits that the hedge fund generates,…
Objective vs Subjective Trading Objective vs subjective trading: Most traders follow either an essentially objective or subjective trading style. Objective traders follow a set of rules to guide their trading decisions. They prefer to have buy and sell decisions essentially pre-planned. In contrast, subjective traders disavow using a strict set of rules, adapt to changing…
What are FTSE Indices? FTSE indices refer to several major UK stock market indexes. Stock indexes provide market analysts and investors with a gauge for monitoring the overall equity market. Specifically, the FTSE (Financial Times Stock Exchange) indices represent stocks traded on the London Stock Exchange (LSE). They reflect the performance of UK stock shares…
