Gates Institute of Tecchnology ::Gooty

1. Accrued Interest The interest earned on a bond between interest payment periods (generally twice a year). 2. Acquisition One company taking control o another by purchasing a ma!ority or all o the target company"s outstanding shares. An #un riendly# or #hostile# acquisition attempt is usually characteri$ed by an o er ar in e%cess o the market &alue o the shares' which is meant to induce current stockholders into selling. (. Annual )eport A publication that is issued yearly by all publicly held corporations and reely a&ailable to all shareholders. It re&eals the company"s assets' liabilities' re&enues' e%penses' and earnings or the past year' along with other inancial data. *. Audit +ommittee Appointed by the ,oard o -irectors and charged with monitoring the internal and e%ternal re&iews o the inances o the .%change and its subsidiaries' and o the .%change/s in ormation technology systems. 0. ,alance 1heet A condensed inancial statement showing the nature and amount o a company"s assets' liabilities and capital on a gi&en date. In dollar amounts the balance sheet shows that the company owned' what it owed' and the ownership interest in the company o its stockholders. 2. ,ear 3or generations' bulls and bears on 1tock e%changes ha&e re erred to two decidedly di erent types o in&estors 4 the bulls being those who e%pect stock prices to rise' the bears being those who belie&e prices are about to decline. 5. ,ear 6arket A term to describe a market o declining prices. 7. ,lue +hip A company known nationally or the quality o its products or ser&ices' its reliability' and its ability to operate pro itably in good and bad economic times.

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8. ,ankruptcy It/s a position where the liabilities o the company e%ceeds the assets o the company and the company is not in a position to pay its debts and unable to run the business. 10. "Bid"Price In the context of the over-the-counter market, the term "bid" refers to the highest price a market maker wi pa! at an! given time to purchase a specified number of shares of a stock. "he term "ask" refers to the owest price at which a market maker wi se the stock. The ask price (also known as the #o er# price) will almost always be higher than the bid price. 6arket makers make money on the di erence between the bid price and the ask price. That di erence is called the #spread#. 11. ,lank +heque +ompany A blank check company is a de&elopment stage company that has no speci ic business plan or purpose or has indicated its business plan is to engage in a merger or acquisition with an unidenti ied company or companies' other entity' or person. These &ery small companies typically in&ol&e speculati&e in&estments and o ten all within the 1.+/s de inition o #penny stocks# or are considered #microcap stocks.# 12. ,ond A debt secured by a specific asset of the issuing corporation. The term bond, debenture and note are often used interchangeably. All three represent debt obligations of the issuing entity. Stock and Bond Certificates, OldAn old stock or bond certi icate may still be &aluable e&en i it no longer trades under the name printed on the certi icate. The company may ha&e merged with another company or simply changed its name. 9ou can use the resources below to ind out i an old stock or bond certi icate has &alue. .&en i you learn that a certi icate has no &alue' you may ind that the certi icate itsel has &alue as a collectable. 1(. ,ook .ntry The #book entry# orm o ownership allows you to own securities without a certi icate. 1tock in direct in&estment plans' Treasury securities purchased directly rom the :.1. -epartment o the Treasury' and recently issued municipal bonds are held in book entry orm. 1*. +all Option A contract that gi&es the holder the right to buy the underlying stock at a speci ied price (the strike price) within a i%ed period o time. Prepared By P.Sravan Kumar MBA !Ph"# Page 2

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10. +apital 1tock All shares representing ownership o a business' including common and pre erred.

12. +ash 3low )eported net income o a corporation plus amounts charged or depreciation' depletion' amorti$ation' e%traordinary charges to reser&es' which are bookkeeping deductions and not paid out in actual dollars and cents. 15. +losed4end 3und +losed4end unds ha&e a i%ed number o shares outstanding. 3ollowing an initial public o ering' those shares trade throughout the day on an e%change between in&estors. 1hare prices are determined by the orces o supply and demand and can be more or less than the und"s net asset &alue (;A<). This di ers rom open4end unds' which continuously o er their shares to in&estors and whose share prices are based on their ;A<' determined at the close o each business day. 17. +ommercial =aper <ery short term IO:s written by reputable blue chip companies in need o short4term inancing. 18. +ommodities Articles o commerce or products that can be used or commerce. In a narrow sense' products traded on an authori$ed commodity e%change. Types o commodities include agricultural products' metals' petroleum' oreign currencies' inancial instruments and inde%es to name a ew. 2>. +ommon 1tock 1ecurities that represent an ownership interest in a corporation. I the company has also issued pre erred stock' both common and pre erred ha&e ownership rights. +ommon stockholders assume the greater risk' but generally e%ercise the greater control and may gain the greater award in the orm o di&idends and capital appreciation. The terms common stock and capital stock are o ten used interchangeably when the company has no pre erred stock. 21. +onglomerate A corporation that has di&ersi ied in operations usually by acquiring enterprises in widely &aried industries. 22. +onsolidated ,alance 1heet A balance sheet showing the inancial condition o a corporation and its subsidiaries.

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2(. +on&ertible ,ond A debt issue that may be e%changed' or con&erted' by the owner or a i%ed number o common shares' or other securities' usually o the same company' in accordance with the terms o the issue. +ompanies also issue con&ertible pre erred shares. 2*. +redit )ating An e&aluation o a debt issuer by a rating agency such as 6oodys and 1tandard and =oor/s. The e&aluation is based on the issuers credit history and its ability to pay its obligations. +urrent Assets Those assets o a company that are reasonably e%pected to be reali$ed in cash' or sold' or consumed during one year. These include cash' ?o&ernment bonds' recei&ables and money due usually within one year' and in&entories.

20.

22. +urrent @iabilities 6oney owed and payable by a company' usually within one year. 25. +apital ?ains and @osses In&estors contact the 1.+ asking about the ta% consequences when they sell securities. In particular' in&estors want to know whether they will ha&e to pay a capital gains ta% or can take a capital loss. The 1.+ does not regulate this area. The Internal )e&enue 1er&ice does instead 27. .%ecuti&e +ompensation The ederal securities laws require clear' concise and understandable disclosure about compensation paid to +.Os and certain other high4 ranking e%ecuti&e o icers o public companies. 1e&eral types o documents that a company iles with the +ommission include in ormation about the company"s e%ecuti&e compensation policies and practices. 9ou can locate in ormation about e%ecuti&e pay inA (1) the company"s annual pro%y statementB (2) the company"s annual report on 3orm 1>4CB and (() registration statements iled by the company to register securities or sale to the public. The easiest place to look up in ormation on e%ecuti&e pay is probably the annual pro%y statement. 28. 3ore% 4 3oreign +urrency Transactions The oreign e%change markets are sometimes re erred to as # ore%.# Operating 2* hours a day' the ore% market is highly liquid and most o the trading is conducted electronically or o&er the phone. ,anks' insurance companies' large corporations and other large inancial Prepared By P.Sravan Kumar MBA !Ph"# Page !

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institutions all use the ore% markets to manage the risks associated with luctuations in currency rates. In recent years' retail in&estors ha&e also looked to the ore% markets as yet another possible in&estment opportunity. The +ommodity 3utures Trading +ommission cautions in&estors to be wary o websites that purport to o er high yield in&estment opportunities in ore% transactions' because this is a common area o internet raud. (>. American -epositary )eceipt (A-)) A receipt that is issued by a :.1. depositary bank which represents shares o a oreign corporation held by the bank. ,ecause A-)s are quoted in :.1. dollars and trade !ust like any other stock' they make it simple or in&estors to di&ersi y their holdings internationally. (1. Arbitration Arbitration o ten allows you to resol&e disputes more quickly and cheaply than by going to court. Instead o !udges or !uries' arbitrators decide i wrongdoing occurred and how to correct or compensate you or it. Dhen the arbitration is o&er' the decisions o the arbitrators are inal. I you are unhappy with the result' you cannot go to court to try again. The arbitrators" decisions can only be appealed under &ery limited circumstancesE or e%ample' i you can demonstrate that an arbitrator was biased. I you want to appeal an arbitrator"s decision you must do so within three months or less in a #motion to &acate (2. +umulati&e <oting +umulati&e &oting is a type o &oting process that helps strengthen the ability o minority shareholders to elect a director. This method allows shareholders to cast all o their &otes or a single nominee or the board o directors when the company has multiple openings on its board. In contrast' in #regular# or #statutory# &oting' shareholders may not gi&e more than one &ote per share to any single nominee. ((. -eri&ati&es -eri&ati&es are inancial instruments whose per ormance is deri&ed' at least in part' rom the per ormance o an underlying asset' security or inde%. 3or e%ample' a stock option is a deri&ati&e because its &alue changes in relation to the price mo&ement o the underlying stock.

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(*. .mployee 1tock Options =lans 6any companies use employee stock options plans to compensate' retain' and attract employees. These plans are contracts between a company and its employees that gi&e employees the right to buy a speci ic number o the company/s shares at a i%ed price within a certain period o time. .mployees who are granted stock options hope to pro it by e%ercising their options at a higher price than when they were granted. (0. -ebenture -ebt not secured by a speci ic asset o the corporation' but issued against the issuer/s general credit. (2. -irector =erson elected by shareholders' usually during an annual meeting' to ser&e on the ,oard o -irectors o a corporation. The directors appoint the president' &ice president and all other operating o icers. -irectors decide' among other matters' i and when di&idends shall be paid. (5. @OA; 19;-I+ATIO; The process of involving numerous different lenders in providing various portions of a loan. Mainly used in extremely large loan situations, syndication allows any one lender to provide a large loan while maintaining a more prudent and manageable credit exposure because they aren't the only creditor. (7. T):1T..1 One, such as a bank, that holds legal title to property in order to administer it for a beneficiary. A member of a board elected or appointed to direct the funds and policy of an institution. A country responsible for supervising a trust territory. #. $hat is s!nerg!%

The idea that the &alue and performance of t'o companies combined 'ill be greater than the sum of the separate indi&idual parts This term is used mostly in the context of mergers and acquisitions. For example, if Company A has an excellent product but lousy distribution whereas Company B has a great distribution system but poor products, the companies could create synergy with a merger. Prepared By P.Sravan Kumar MBA !Ph"# Page (

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!). $hat is meant by iabi it! and #ontingent $iabi it!% *iability +legal debt or obligation estimated &ia accrual accounting Contingent *iability+An asset in 'hich the possibility of o'nership depends solely upon future e&ents uncontrollable by the company. An example might be a settlement from a lawsuit !1. $ho is a genera partner% partner in a business 'ho has unlimited liability. !2. $hat is imited $iabi it! #ompan!%

A corporate structure 'hereby the shareholders of the company ha&e a limited liability to the company,s actionsBasically, an LLC is a hybrid between a partnership and a corporation ! . $ho is %erchant Banker%

A bank that deals mostly in -but is not limited to. international finance, long+term loans for companies and under'riting. /erchant banks do not pro&ide regular banking ser&ices to the general public. !!. $hat is pub ic f oat% The total number of shares publicly o'ned and a&ailable for trading. The float is calculated by subtracting restricted shares from outstanding shares. For example, a company may ha e ! million outstanding shares, but only " million are trading on the stoc# mar#et. $o, the float would be " million. &'. (econdar! %arket A market on 'hich an in&estor purchases an asset from another in&estor rather than an issuing corporation. good example is the %ew &or# $toc# 'xchange. (ere all stoc# exchanges are part of the secondary mar#et, as in estors buy securities from other in estors instead of an issuing company.

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)*. +hat is balance of trade, The largest component of a country,s balance of payments. 1t is the difference bet'een e2ports and imports. 3ebit items include imports, foreign aid, domestic spending abroad and domestic in&estments abroad. Credit items include e2ports, foreign spending in the domestic economy and foreign in&estments in the domestic economy. A country has a trade deficit if it imports more than it e2ports, and the opposite scenario is a trade surplus. !0. $hat is ba ance of pa!ments% A record of all transactions made by one particular country during a certain period of time. 1t compares the amount of economic acti&ity bet'een a country and all other countries. This includes trade balance, foreign in estments, and in estments by foreigners among other things. )-. +hat is corporate governance, The relationship bet'een all the stakeholders in a company. This includes the shareholders, directors, and management of a company, as defined by the corporate charter, byla's, formal policy, and rule of la'. !#. $ho is a factor% financial intermediary that purchases receivables from companies "). 'hat is ).".* An international organi4ation dealing 'ith the global rules of trade bet'een nations. 1ts main function is to ensure that trade flo's as smoothly, predictably, and freely as possible. "1. $hat is dumping% 1n international trade, this occurs 'hen one country e2ports a significant amount of goods to another country at prices much lo'er than in the domestic market. "2. $hat is g oba i+ation% The tendency of in&estment funds and businesses to mo&e beyond domestic and national markets to other markets around the globe. 0(. -i&ersi ication 1preading in&estments among di erent types o securities and &arious companies in di erent ields.

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0*. -epreciation +harges against earnings to write o the cost' less sal&age &alue' o an asset o&er its estimated use ul li e. It is a bookkeeping entry and does not represent any cash outlay nor are unds earmarked or the purpose. 00. -i&idend The payment designated by the ,oard o -irectors to be distributed pro rata among the shares out4standing. 3or pre erred shares' the di&idend is usually a i%ed amount. 3or common shares' the di&idend &aries with the ortunes o the company and the amount o cash on hand' and may be omitted i business is poor or i the directors determine to withhold earnings to in&est in plants and equip4ment. 02. Income 1tatement A report on a company"s inancial status o&er a period o time. It totals pro its' subtracts e%penses and pinpoints how much money the company can rein&est. 05. 6arket Order =rocessing 1uper -ot"s market order system is designed to process member irms" market orders o up to (>'>88 shares. The system pro&ides or rapid e%ecution and reporting o market orders. In 188*' market orders were e%ecuted and reported back to the originating member irm on a&erage within 2* seconds. 07. 6arket =rice The last reported price at which the stock or bond sold' or the current quote. 08. ?oing =ri&ate A company #goes pri&ate# when it reduces the number o its shareholders to ewer than required and is no longer required to ile reports with the 1.+. A number o transactions can result in a company going pri&ate' includingA Another company or indi&idual makes a tender o er to buy all or most o the company/s publicly held sharesB The company merges with or sells the company/s assets to another companyB or The company can declare a re&erse stock split that not only reduces the number o shares but also reduces the number o shareholders. In this Prepared By P.Sravan Kumar MBA !Ph"# Page #

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type o re&erse stock split' the company typically gi&es shareholders a single new share in e%change or a blockE1>' 1>>' or e&en 1'>>> shares Eo the old shares. I a shareholder does not ha&e a su icient number o old shares to e%change or new shares' the company will usually pay the shareholder cash based on the current market price o the company/s stock. 2>. 3ace <alue The &alue o a bond that appears on the ace o the bond' unless the &alue is otherwise speci ied by the issuing company. 3ace &alue is ordinarily the amount the issuing company promises to pay at maturity. 3ace &alue is not an indication o market &alue. 1ometimes re erred to as par &alue. 21. 3iscal 9ear Any consecuti&e 124month period o inancial accountability or a corporation or go&ernment. 3or e%ample' because o the +hristmas rush many department stores ind it easier to wind up their yearly accounting on Fanuary (1 instead o -ecember (1. 3iscal year is o ten abbre&iated 39 with a date. 3or e%ample' 39 6ay (1 means that the company"s iscal year goes rom Fune 1 to 6ay (1 o the ollowing year. 22. 3i%ed +harges A company"s i%ed e%penses' such as bond interest' which it has agreed to pay whether or not earned' and which are deducted rom income be ore earnings in equity capital are computed. 2(. ?eneral 6ortgage ,ond A bond that is secured by a blanket mortgage on the issuing company"s property' though it may be outranked by one or more other mortgages. 2*. ?oing =ublic Dhen a company sells shares o itsel to the public to raise capital. 20. ?o&ernment ,onds Obligations o the ?o&ernment' regarded as the least risky' highest4 grade securities issues. The ma!or types o debt instruments issued by the go&ernment areA Treasury ,ills' 1a&ing ,onds' Treasury ;otes' and Treasury ,onds. 22. Gedging The purchase or sale o a deri&ati&e security (such as options or utures) in order to reduce or neutrali$e all or some portion o the risk o holding another security.

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25. Golding +ompany A corporation that owns a large number o shares in other companies. Golding companies use the &oting rights that come with their shares to e%ert in luence o&er the companies under them. 27. Initial =ublic O ering (I=O) An issue o new stock by a once pri&ate company to trans orm itsel into a publicly held one. I=Os are usually done to raise cash or growing young companies that need larger sources o capital than the pri&ate sector can pro&ide. The new shares are sold to one or more in&estment banks' which then sell them to the public. 28. Institutional In&estors Organi$ations whose primary purpose is to in&est their own assets or those entrusted to them by others. The most common are employee pension unds' insurance companies' mutual unds' uni&ersity endowments' and banks. 5>. In&estment ,anker One whose principal business consists o acting as in&estment ad&iser and rendering in&estment super&isory ser&ices. 51. In&estment +ounsel One whose principal business consists o acting as in&estment ad&iser and rendering in&estment super&isory ser&ices. 52. Issuer A corporation' go&ernment' or other authority' that borrows money through the sale o bonds or notes.

5(. Insider Trading #Insider trading# is a term that most in&estors ha&e heard and usually associate with illegal conduct. ,ut the term actually includes both legal and illegal conduct. The legal &ersion is when corporate insidersE o icers' directors' and employeesEbuy and sell stock in their own companies. Dhen corporate insiders trade in their own securities' they must report their trades to the 1.+. .%amples o insider trading cases that ha&e been brought by the 1.+ are cases againstA

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+orporate o icers' directors' and employees who traded the corporation"s securities a ter learning o signi icant' con idential corporate de&elopmentsB 3riends' business associates' amily members' and other #tippees# o such o icers' directors' and employees' who traded the securities a ter recei&ing such in ormationB 5*. @e&erage Any means o increasing &alue and return by borrowing unds or committing less o one"s own. 3or corporations' it re ers to the ratio o debt (in the orm o bonds and pre erred stock outstanding) to equity (in the orm o common stock outstanding) in the company"s capital structure. 50. @isted +ompanies +ompanies whose shares o stock trade on a securities market. 52. @ocked In In&estors are said to be #locked in# when a security they own is trading at a higher price than they paid or' but they choose not to sell in order to a&oid ha&ing their pro it become sub!ect to the capital gains ta%.

55. ;ew Issue or I=O A stock or bond sold by a corporation or the irst time. =roceeds may be used to retire outstanding securities o the company' or new plants or equipment' or additional working capital' or to acquire a public ownership interest in the company or pri&ate owners. 57. ;ew 9ork 1tock .%change (;91.) The ;91. marketplace blends public pricing with assigned dealer responsibilities. Aided by ad&anced technology' public orders meet and interact on the trading loor with a minimum o dealer inter erence. The result is competiti&e price disco&ery at the point o sale. @iquidity in the ;91. market is pro&ided by indi&idual and institutional in&estors' member irms trading or their own accounts' and assigned specialists. The ;91. is linked with other markets trading listed securities through the Intermarket Trading 1ystem (IT1). 58. ;ominating H ?o&ernance +ommittee Appointed by the ;91. ,oard o -irectors and charged with (i)recommending to the ,oard candidates or the ,oard o -irectors' the ,oard o .%ecuti&es and or Trustees o the ?ratuity 3und' (ii) re&iewing the .%change/s go&ernance principles and practices' (iii) establishing and o&erseeing sel 4assessment by the ,oard and the ,oard o Prepared By P.Sravan Kumar MBA !Ph"# Page 12

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.%ecuti&es' (i&) recommending director compensation' and (&) succession planning or the +hairman and +hie .%ecuti&e O icer o the .%change. 7>. ;et Asset <alue #;et asset &alue'# or #;A<'# o an in&estment company is the company/s total assets minus its total liabilities. 3or e%ample' i an in&estment company has securities and other assets worth I1>> million and has liabilities o I1> million' the in&estment company/s ;A< will be I8> million. ,ecause an in&estment company/s assets and liabilities change daily' ;A< will also change daily. ;A< might be I8> million one day' I1>> million the ne%t' and I7> million the day a ter. 6utual unds and :nit In&estment Trusts (:ITs) generally must calculate their ;A< at least once e&ery business day' typically a ter the ma!or :.1. e%changes close. A closed4end und' whose shares generally are not #redeemable#Ethat is' not required to be repurchased by the undEis not sub!ect to this requirement. 71. Gypothecation The pledging o securities as collateral or e%ample' to secure the debit balance in a margin account. 72. 6arket <alue The current resale &alue o a security. The market &alue o an issue is easily computed as the closing price multiplied by the shares outstanding. 7(. 6erger +ombination o two or more corporations. 7*. 6oney 6arket Account An account in which your money is rein&ested in short4term securities by the bank or in&estment irm managing the account. 70. 6utual 3und A port olio o stocks' bonds' or other securities administered by a team o one or more managers rom an in&estment company who make buy and sell decisions on component securities. +apital is contributed by smaller in&estors who buy shares in the mutual und rather than the indi&idual stocks and bonds in its port olio. The return on the und"s holdings is distributed back to its contributors' or shareholders' minus &arious ees and commissions. This system allows small in&estors to participate in the reduced risk o a large and di&erse port olio that they could not otherwise build themsel&es. They also ha&e the bene it o Prepared By P.Sravan Kumar MBA !Ph"# Page 1

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pro essional managers o&erseeing their money who ha&e the time and e%pertise to analy$e and pick securities. There are two types o mutual unds' open and closed4ended. 1hares in closed4end unds' some o which are listed on the ;ew 9ork 1tock .%change' are readily trans erable in the open market and are bought and sold' like other stock. These unds do not accept new contributions rom in&estors' but only rein&est the return on the e%isting port olio. Open4end unds sell their own new shares to in&estors' stand ready to buy back their old shares' and are not listed on e%changes. Open4end unds are so called because their capitali$ation is not i%edB they issue more shares as people want them. 6any open4ended unds allow contributors e%tra perks' such as the ability to write checks with their portion. 72. 6ortgage4,acked 1ecurities 6ortgage4backed securities (6,1) are debt obligations that represent claims to the cash lows rom pools o mortgage loans' most commonly on residential property. 6ortgage loans are purchased rom banks' mortgage companies' and other originators and then assembled into pools by a go&ernmental' quasi4go&ernmental' or pri&ate entity. The entity then issues securities that represent claims on the principal and interest payments made by borrowers on the loans in the pool' a process known as securiti$ation. 75. ;A1-AJ An automatic in ormation network that pro&ides brokers and dealers with price quotations on securities traded o&er4the4counter. 77. ;egotiable )e ers to a security title that is trans erable by deli&ery. 78. Odd @ots 1tock transactions that in&ol&e less than 1>> shares. 8>. O er The price at which a person is willing to sell a security. 81. Open Interest In options and utures trading' the number o outstanding option contracts at any gi&en time which ha&e not been e%ercised and ha&e not yet reached e%piration.

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82. Open4.nd In&estment +ompany A company or trust that uses its capital to in&est in other companies. There are two principal typesA the closed end and the open end' also known as mutual und. 1hares o closed4end in&estment companies' most o which are listed in the ;91.' are readily trans erable in the open market and are bought and sold like shares o stock. +apitali$ation o these companies remains the same unless action is taken in change' which is rare. Open4end unds sell their own new shares to in&estors' stand ready to buy back their old shares' and are not listed. Open4end unds are so called because their capitali$ation is not i%edB they issue more shares as people want them. 8(. O&er4the4+ounter (OT+) A market or securities made up o dealers who may or may not be members o a securities e%change. OT+ irms conduct business o&er the telephone and act either as principals or dealers (buying and selling stock rom their own in&entory and charging a markup) or as a broker or agent and charging a commission. 8*. Online Trading Although you may sa&e time and money trading online' it does not take the homework out o making in&estment decisions. To a&oid costly mistakes' in&estors who trade online should understand how our securities markets work and their options in placing trades in ast4 mo&ing markets when slow downs occur. Our publication' Dhat 9ou ;eed to Cnow About Trading In 3ast46o&ing 6arkets' pro&ides use ul tips or online traders. 80. =aper =ro it (@oss) An unreali$ed pro it or loss on a security still held. =aper pro its and losses become reali$ed only when the security is sold. 82. =ar <alue =ar &alue is ordinarily the amount the issuing company promises to pay' per bond' at maturity' typically I1'>>>. =ar &alue is not an indication o market &alue. Also re erred to as Face Value. 85. =assed -i&idend The omission by a company"s board o a regular or scheduled di&idend payment. 87. =enny 1tocks @ow4priced issues' o ten highly speculati&e' selling at less than I1 a share. 3requently used as a term o disparagement' although some penny stocks ha&e de&eloped into in&estment4caliber issues. Prepared By P.Sravan Kumar MBA !Ph"# Page 1"

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88. =ort olio The collection o di erent in&estment instruments owned by one indi&idual or institution. A port olio can consist o any combination o stocks' bonds' deri&ati&es and such. 1>>. =re erred 1tock A type o stock that pays a i%ed di&idend regardless o corporate earnings' and which has priority o&er common stock in the payment o di&idends. Gowe&er' it carries no &oting rights' and should earnings rise signi icantly the pre erred holder is stuck with the same i%ed di&idend while common holders collect more. The i%ed income stream o pre erred stock makes it similar in many ways to bonds. 1>1. =remium 3or bonds and pre erred stock' the premium is the amount by which the price e%ceeds the ace' or par' &alue. 3or options markets' the premium is synonymous with the option"s price. 1ee also Discount. 1>2. =rice Impro&ement Dhen a buy order is e%ecuted at a price lower than the current quoted o er' or when a sell order is e%ecuted at a price higher than the current quoted bid. In addition to quoting the best prices more than 8> percent o the time' the ;91. continuous auction market typically impro&es upon these quoted prices' allowing in&estors to get a better price or their shares. 1>(. =riceK.arnings )atio A popular measure or comparing stocks selling at di erent prices in order to single out o&er4 or under4&alued issues. The =K. ratio is simply the price per share di&ided by the company"s earnings per share. Gowe&er' =K. is not always an accurate guide to a stock"s quality. 1ome people tend to think that a stock is in lated and drastically o&er&alued i its price is many times its earnings. 9et that same stock may be quite accurately &alued to re lect the company"s rapid growth and potential or high uture earnings. Dhen comparing =K.s it is there ore important to choose stocks in the same industry that are likely to ace the same earnings prospects. 1>*. =ricing ,ond prices may be stated in LdollarM or yield terms. In dollars' the price is e%pressed as a percent o par &alue. Thus' a price o 8> means that the &alue o the bond is equal to 8>N o the (usually) I1'>>> ace amount o the bond' or I8>>. 9ield pricing e%presses the price in terms o yield to maturity.

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1>0. =rimary 6arket The process by which a corporation"s stock is issued or the irst time. It is then sold to the public on the secondary market. 1>2. =rime )ate The lowest interest rate charged by commercial banks to their most creditworthy and largest corporate customersB other interest rates such as personal' automobile' commercial and inancing loans are o ten pegged to the prime. 1>5. =ro it4Taking 1elling stock that has appreciated in &alue since purchase' in order to reali$e the pro it. The term is o ten used to e%plain a downturn in the market ollowing a period o rising prices. 1>7. =rospectus The issuer must pro&ide according to 1.+ regulations' the o icial documents to potential purchasers o a new securities issue. It highlights the much longer registration statement iled with the +ommission that gi&es in ormation on the inancial well being o the issuer and the speci ics o the issue itsel . =otential in&estors can consult this in ormation be ore buying. 1>8. =ro%y A ballot by which stockholders can transmit their &otes on corporate matters without needing to attend the actual shareholders meeting. A pro%y could also state the stockholder"s intention to trans er &oting rights to someone else. A company"s shareholders are commonly asked to &ote on such matters as electing a board o directors' appro&ing mergers and acquisitions' and sometimes on proposals that other stockholders ha&e submitted to management. One share generally equals one &ote. 11>. =rimary -istribution The sale o a new issue o securities by a company. Initial public o erings (I=Os) are primary distributions by companies that were not publicly traded prior to the o ering. 111. =ut Option A contract that gi&es the holder the right to sell the underlying stock' to the writer o the put' at a speci ied price (the strike price) within a i%ed period o time. 112. Juote The highest bid to buy and the lowest o er to sell any stock at a gi&en time. Prepared By P.Sravan Kumar MBA !Ph"# Page 10

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11(. )ate o )eturn In stocks and bonds' the amount o money returned to in&estors on their in&estments. Also known as yield. 11*. )ecord -ate K .%4-ate K =ay -ate The date on which you must be registered as a shareholder o a company in order to recei&e a declared di&idend or' among other things' to &ote on company a airs. 110. )edemption =rice The price at which a bond may be redeemed be ore maturity' at the option o the issuing company. )edemption &alue also applies to the price the company must pay to call in certain types o pre erred stock. 112. )egistrar :sually a trust company or bank charged with the responsibility o keeping a record o the owners o a corporation"s securities and pre&enting the issuance o more than the authori$ed amount. 115. )etained .arnings =ro its a company keeps or its operations' a ter paying ta%es and di&idends. 117. )ight to <ote The right o common stockholders to &ote on matters o corporate policy at an annual stockholder"s meeting. The impact o a stockholder"s &ote is proportionate to the amount o stock owned. 118. )ights Dhen a company wants to raise more unds by issuing additional securities' it may gi&e its stockholders the opportunity' ahead o others' to buy the new securities in proportion to the number o shares each owns. The piece o paper e&idencing this pri&ilege is called a right. ,ecause the additional stock is usually o ered to stockholders below the current market price' rights ordinarily ha&e a market &alue o their own and are acti&ely traded. In most cases they must be e%ercised within a relati&ely short period. 3ailure to e%ercise or sell rights may result in monetary loss to the holder. 12>. 1H= 0>> A capitali$ation weighted inde% o 0>> stocks. 1tandard and =oor"s 0>> inde% represents the price trend mo&ements o the ma!or common stock o :.1. public companies. It is used to measure the per ormance o the entire :.1. domestic stock market.

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121. 1arbanes4O%ley Act

The 1arbanes4O%ley Act o 2>>2 addresses a wide range o corporate4 accountability issues. Cey pro&isions o the legislation' which apply to both :.1. and oreign pri&ate issuers' willA +reate a =ublic +ompany Accounting O&ersight ,oard to establish auditing standards and regulate accountants who audit public companiesB =rohibit auditors rom pro&iding non4audit ser&ices to audit clients' e%cept with o&ersight board pre4appro&alB )equire +.Os and +3Os to certi y their companies/ annual and quarterly inancial reports' sub!ect to ci&il and criminal penaltiesB )equire +.Os and +3Os to or eit bonuses' incenti&e compensation or gains rom the sale o company securities during the 124month period a ter the initial publication o inancial statements that ha&e to be reinstated as a result o misconductB -emand real4time disclosure' in plain .nglish' o material changes to an issuer/s inancial condition or operationsB )equire public companies to ha&e an audit committee composed entirely o independent directorsB )equire public companies to disclose the adoption o ' and any changes to' corporate codes o ethicsB =rohibit issuers rom e%tending new personal loans to directors and e%ecuti&e o icersB Accelerate the reporting o insider transactions to within two business daysB =rohibit directors and e%ecuti&e o icers rom trading company stock during company bene it plan blackout periodsB =ro&ide criminal penalties or destroying audit records or alsi ying documentsB .nhance criminal penalties or &iolations o anti raud rules' ederal securities laws and other Lwhite4collarM crimesB

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=rotect employees o public companies against retaliation or whistle4 blowingB Increase the requency o 1.+ re&iews o public4company ilings to at least once e&ery three years. 122. 1ecurities and .%change +ommission (1.+) A watch4dog agency created by the :.1. +ongress to monitor the securities industry and en orce punishments o those that &iolate the industry"s regulations. 12(. 1eller"s Option A special transaction that gi&es the seller the right to deli&er the stock or bond at any time within a speci ied period' ranging rom not less than two business days to not more than 2> business days. 12*. 1hares Outstanding The number o authori$ed shares in a company that are held by in&estors' including employees and e%ecuti&es o that company. :nissued shares or treasury shares are not included in this igure. 120. 1inking 3und 6oney regularly set aside by a company to redeem its bonds' debentures or pre erred stock rom time to time as speci ied in the indenture or charter. 122. 1low 6arket The 6arket becomes LslowM or con&erts temporarily rom a Gybrid 6arket to an Auction 6arket only mode so as to enable specialists' loor brokers' and customers to interact with Juotes and Orders LmanuallyM' with the ob!ecti&e o enhancing liquidity and reducing &olatility. +ertain market conditions temporarily trigger a 1low 6arket including ?ap Juotes' Trading Galts or reaching @)=s. The 1low 6arket can be traded through. 125. 1ole =roprietorship Any business that is owned and operated by a single indi&idual. 127. 1peculation The employment o secondary actor. unds by a speculator. 1a ety o principal is a

128. 1pin4O The separation o a subsidiary or di&ision o a corporation rom its parent by issuing shares in a new corporate entity. 1hareowners in the

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parent recei&e shares in the new company in proportion to their original holding and the total &alue remains appro%imately the same. 1(>. 1tock Inde% A basket o stock used to track the market. Typically' this is used or long4term e&aluation. The per ormance o a group o stocks is a&eraged' and o&er time' that a&erage ser&es as an indicator o the market"s general mo&ement. 1(1. 1tock 1plit K 3orward 1plit K )e&erse 1plit Dhen a company increases the number o shares outstanding by splitting e%isting shares. A 24 or41 split means e&ery stockholder gets two new shares or each one they own' and a (4 or42 split means they get three shares or e&ery two they own. The price o an indi&idual share alls' but stockholders do not lose money because they are being gi&en the equi&alent number o new shares. In a re&erse stock split' a company reduces the number o the shares outstanding by consolidating e%isting shares. A 14 or40 re&erse split or e%ample' means that or each i&e shares owned one recei&es a single new share instead. The price o the new shares is i&e times higher' but only to re lect the shortened supply. I a company"s stock is trading at a &ery low price' this process makes the company look more attracti&e to in&estors 1(2. 1tockholder )ecord A stockholder whose name is registered on the books o the issuing corporation. 1((. 1wapping 1elling one security and buying a similar one at almost the same time to take a loss' usually or ta% purposes. 1(*. Tick The tick is the direction in which the price o a stock mo&ed on its last sale. An up4tick means the last trade was at a higher price than the one be ore it and a down4tick means the last sale price was lower than the one be ore it. A $ero4plus tick means the transaction was at the same price as the one be ore' but still higher than the nearest preceding di erent price. The tick becomes especially important when large market mo&ements trigger the implementation o certain circuit breakers meant to stabili$e the market. 1(0. Ticker 1ymbol A three or our letter abbre&iation used to identi y a security whether on the loor' a T< screen' or a newspaper page. Ticker symbols are part o Prepared By P.Sravan Kumar MBA !Ph"# Page 21

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the lore o Dall 1treet. They were originally de&eloped in the 17>>s by telegraph operators to sa&e bandwidth. One4letter symbols were there ore assigned to the most acti&e stocks. )ailroads were the dominant issues at the time' so they retain a ma!ority o the one4letter designations. Ticker symbols today are assigned on a irst4come' irst4ser&ed basis. .ach marketplace 44 the ;91.' the American 1tock .%change' and others 44 allocates symbols or companies within its pur&iew' working closely to a&oid duplication. A symbol used or one company cannot be used or any other' e&en in a di erent marketplace. 1(2. Trans er The legal change in ownership a ter the sale o a security. This task may in&ol&e the physical deli&ery o a stock certi icate or the change o ownership on the books o the corporation by the trans er agent. 1(5. Trans er Agent A trans er agent keeps a record o the name o each registered shareowner' hisKher address' the number o shares owned' and sees that the certi icates presented or trans er are properly cancelled and new certi icates issued in the name o the new owner. 1(7. Transparency

Accurate and timely in ormation regarding stock prices and &olume. 1(8. Treasuries -ebt obligations o the :.1. go&ernment. Treasuries are among the sa est in&estments' since the ull aith and credit o the go&ernment secure them. The interest o Treasuries is e%empt rom state and local ta%es but is sub!ect to ederal income ta%. There are three types o treasuriesA Treasury ,ills' with maturities o one year or lessB Treasury ;otes' with maturities ranging rom one to 1> yearsB and Treasury ,onds' long4term instruments with maturities o 1> years or more. 1*>. Treasury 1tock 1hares' ormerly outstanding' that were repurchased by the issuing company. +ompanies o ten repurchase stock to bene it e%isting shareholders. Those who sell recei&e a premium price rom the company or their shares' thus substituting a large capital gain or uture di&idends. This ploy is used when di&idend ta%es are higher than capital gains ta%es. )emaining in&estors who keep their shares bene it rom a tightened supply' which raises the share price. +ompanies may later resell treasury stock' or retire it according to a shareholder &ote. Page 22

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1*1. Turno&er )ate The &olume o shares traded in a year as a percentage o total shares listed on an .%change' outstanding or an indi&idual issue or held in an institutional port olio. 1*2. :nderlying The security that one has the right to buy or sell according to the terms o an option contract. 1*(. <oting )ight The common stockholders" right to &ote their stock in the a airs o a company. =re erred stock usually has the right to &ote when pre erred di&idends are in de ault or a speci ied period. The right to &ote may be delegated by the stockholder to another person. 1**. underwriter or options A person who assumes the obligation to sell (call) or buy (put) the underlying security at an option/s e%ercise 1*0. 9ield In stocks and bonds' the amount o money returned to in&estors on their in&estments. Also known as )ate o )eturn. 3or bonds' also seeA Current YieldB Yield-to-MaturityB and Yield-to-Call. 1*2. 9ield to 6aturity A yield calculated on the combination o the annual coupon (interest) payments to maturity' the reali$ed di erence between the (discount or premium) acquisition price o the issue and the par &alue at maturity. 3or interest bearing issues' the calculation includes the assumption that interest is earned on the interest recei&ed is at the same rate as the calculated yield to maturity. 1*5. Oero4+oupon ,onds ,onds that pay no interest but are priced' at issuance' at a discount rom their redemption par &alue' which usually is I1'>>>. The longer the term o the issue the greater the discount at issuance. 1*7. )e&erse 1tock 1plits

A re&erse stock split reduces the number o shares and increases the share price proportionately. 3or e%ample' i you own 1>'>>> shares o a company and it declares a one or ten re&erse split' you will own a total o 1'>>> shares a ter the split. A re&erse stock split has no a ect on the &alue o what shareholders own. +ompanies o ten split their stock when they belie&e the price o their stock is too low to attract in&estors to buy

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their stock. 1ome re&erse stock splits cause small shareholders to be #cashed out# so that they no longer own the company/s shares. 1*8. 1hort 1ales

A short sale is generally the sale o a stock you do not own. In&estors who sell short belie&e the price o the stock will all. I the price drops' you can buy the stock at the lower price and make a pro it. I the price o the stock rises and you buy it back later at the higher price' you will incur a loss. Dhen you sell short' your brokerage irm loans you the stock. The stock you borrow comes rom either the irm/s own in&entory' the margin account o another o the irm/s clients' or another brokerage irm. 10>. 1top Order

A stop order is an order to buy or sell a stock once the price o the stock reaches a speci ied price' known as the stop price. Dhen the speci ied price is reached' your stop order becomes a market order. ,uy 1top Order E In&estors typically use a stop order when buying stock to limit a loss or protect a pro it on short sales. The order is entered at a stop price that is always abo&e the current market price. 1ell 1top Order E A sell stop order helps in&estors to a&oid urther losses or to protect a pro it that e%ists i a stock price continues to drop. A stop order to sell is always placed below the current market price. 101. Treasury 1ecurities

Treasury securitiesEincluding Treasury bills' notes' and bondsEare debt obligations issued by the :.1. -epartment o the Treasury. Treasury securities are considered one o the sa est in&estments because they are backed by the ull aith and credit o the :.1. go&ernment. The income rom Treasury securities is e%empt rom state and local ta%es' but not rom ederal ta%es. 102. 3O)61 !"# !"#() !"+ " " " #uarterly report pursuant to sections $ or %&d' Optional form for *uarterly and transition reports of small business issuers under section Annual report pursuant Page 2!

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!+() ,"+ .!"/ 0!"/ /orms (" 1 ("$ /orms 3" 1 3" A " " " " " Optional form for annual and transition reports of small business issuers -urrent report filing Annual and transition report of foreign private issuers Annual reports filed by certain -anadian issuers 2egistration statement for face"amount certificate companies 2egistration statement for open"end management investment companies -ertified annual shareholder report of registered management investment companies

"

/orm 3-(2 " 10(.

A;;:A@ 6..TI;? meeting of shareholders that the law re*uires a corporation to hold each year for the election of directors and the transaction of other business 1=.+IA@ 6..TI;?

10*.

A meeting held for a special and limited purpose4 specif A corporate meeting held occasionally in addition to the annual meeting to conduct only business described in a notice to the shareholders 100. 1TO+CGO@-.) One who owns a share or shares of stock in a company. Also called stockowner 102. 1TAC.GO@-.)

One who has a share or an interest, as in an enterprise. 105. 1TO+C +.)TI3I+AT.

A certificate establishing ownership of a stated number of shares in a corporation's stock.

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107. +@A11 -I).+TO)1 The 5irectors are appointed with specified tenure in the office. /or instance, if three directors are appointed for a period of three years and two more directors appointed for period of two year, each of the group will be classified as two different classes.

. 108.

,.;.3I+IA@ OD;.)

A person who en6oys the benefits of ownership even though title is in another name. 12>. ,9. @AD1 O3 A +O6=A;9 . A law or rule governing the internal affairs of an organi7ation. .. A secondary law. 121. I;-.=.;-.;T -I).+TO)1 A director who does not have any other material pecuniary relationship with the company apart from drawing his remuneration. 122. .P.+:TI<. A;- ;O; .P.+:TI<. -I).+TO)1 An 8xecutive 5irector is a person who is Member of the )oard of 5irectors and also part of the company's management team. 9e looks after the Management functions apart from being the Member of the )oard of 5irectors. A non 8xecutive 5irector is a person who is Member of the )oard of 5irectors and is not part of the management team. The purpose of having 3on"8xecutive 5irectors is to provide unbiased and impartial perspectives on issues brought to the board. 9e does not hold any 8xecutive positions in the company. 12(. .P.+:TI<. A;- ;O; .P.+:TI<. +GAI)6A;

9e is one of the )O5 The presiding officer of a meeting, committee, or board 9e could be 8xecutive -hairman or 3on 8xecutive -hairman An 8xecutive -hairman is an employee of the -ompany but not the 3on 8xecutive -hairman :t is his or her responsibility to determine the final agenda for each meeting and to conduct the )oard Meetings and ;eneral Meetings Prepared By P.Sravan Kumar MBA !Ph"# Page 2(

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The chairman has to be fair to all A good listener and a good communicator 3ext to -hairman is -o" -hairman and <ice -hairman -o" -hairman or <ice -hairman shares the duties along with the chairman 12*. I;T.);A@ A:-ITO)1 :nternal auditor is a person appointed as per statutory re*uirements and audits the day to day financial and accounting transactions of the -ompany. 120. -I).+TO) ;O6I;.. 9e is a person whose name is proposed for the directorship of the company and his chances of becoming director depend upon the election in the meeting 9e is not a director and only a proposed candidate for future 5irectorship in the company. 122. ;O6I;.. -I).+TO) A nominee director is a person appointed by the financial institution or banks or such other government bodies to protect in their interest. (uch person would be employee of those organi7ations. 125. DGO I1 A =)OP9 A person authori7ed to act for another4 an agent or substitute. The authority to act for another. The written authori7ation to act in place of another. 127. ?.;.)A@ +O:;1.@

A lawyer at the head of a legal department (as of a corporation or government agency) COMMITTEES A group of people officially delegated to perform a function, such as investigating, considering, reporting, or acting on a matter. 128. ;O; 6A;A?.6.;T -I).+TO)1 3on executive directors 15>. @I1TI;? 1TA;-A)-1 The norms specified the concerned stock exchange to get a company listed. 151. I;-.=.;-.;T =:,@I+ A++O:;TA;T1 The independent public accountants are the external auditors to the company who shall report to the shareholders of the -ompany 152. A;;:A@ 3I;A;+IA@ 1TAT.6.;T1 Page 20

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)alance sheet, =rofit and loss account, cash flow statement are the annual financial statements. They are prepared to once in a year to find out the net profit and to list out the assets and the liabilities of a company. 15(. +A1G 3@OD 1TAT.6.;T

One of the *uarterly financial reports any publicly traded company is re*uired to disclose to the (8- and the public. The document provides aggregate data regarding all cash inflows a company receives from both its ongoing operations and external investment sources, as well as all cash outflows that pay for business activities and investments during a given *uarter. 15*. J:A)T.)@9 ).=O)T A *uarterly report is a document re*uired by all public companies, reporting the results for the *uarter 150. .P+.)+I1A,@. O=TIO;1

Options matured and yet to be converted in stock. 152. .@.+TIO; A;- ). .@.+TIO; O3 A -I).+TO)

The shareholders once a year in Annual Meeting shall elect the 5irectors of the -ompany for a certain period of time at the end of which they have to retire. The 5irectors who retire are eligible to be reappointed as directors and their proposal is put to vote for reelection. 155. A@T.);AT. -I).+TO) A person is appointed in the place of a 5irector who stays away from the place where )oard Meetings are usually held. 157. A--ITIO;A@ -I).+TO) A person appointed by the )oard of 5irectors. 158. 1.+).TA)9 A;- @.?A@ +O:;1.@

An officer of a business concern who may keep records of directors' and stockholders' meetings and of stock ownership and transfer and help supervise the company's interests. 9e acts as a liaison officer between the )oard of 5irectors and the share holders. >ooks after as the meetings of the )oard of 5irectors and committees An attorney. 17>. 6A;A?.6.;T ,OA)Page 25

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The management board is in charge of the management of the company according to its own business 6udgment and represents the company in its business dealings and in litigation. 171. 1:=.)<I1O)9 ,OA)(upervisory )oard functions like that of )oard of 5irectors. :n the 5ual )oard system that exist in ;ermany, /rance and other 8uropean countries, these )oards assume the supreme position of the management of the -ompany. 172. ,OA)- O3 1TAT:TO)9 A:-ITO)1 There )oards are common in ?apan and :taly. These are the auditors elected by the members of the -ompany in Annual Meeting to oversee the audit aspects, supervision of decisions of the -ompany and assist in appointment of the :ndependent Auditors. 17(. +GAI)6A; .6I).T:1 8meritus is an honorific title given to a retired -hairman or other professional The term is used when persons of importance in a given profession retires. 17*. @.A- -I).+TO) @hen in a company, same person holds both -hairmanship of the )oard and -hief 8xecutive officer =osition, in order to monitor the acts of such person one of the board members will be appointed as >ead 5irector. :n order to be appointed as >ead 5irector, the person should be an :ndependent 5irector. 170. =).1I-.;T A;- +GAI)6A; The chief officer of an organi7ation &as a corporation or institution' usually entrusted with the direction and administration of its policies and 5ecision making and he is called as president 9owever in countries like ;ermany a =resident is like a chairman of )oard of 5irectors 9e is one of the )O5 The presiding officer of a meeting, committee, or board 9e could be 8xecutive -hairman or 3on 8xecutive -hairman An 8xecutive -hairman is an employee of the -ompany but not the 3on 8xecutive -hairman 172. =)OP9 +A)-

=roxy card is a form &card' to appoint a proxy on behalf of a stock holder to attend a annual or special meeting. 175. 1:,1I-IA)9 A;- DGO@@9 OD;.- 1:,1I-IA)9

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A company whose voting stock is more than %!A controlled by another company, usually referred to as the parent company. A subsidiary whose parent company owns !!A of its common stock. 177. A33I@IAT.1

A corporation may be referred to as an a iliate of another when it is related to it but not strictly controlled by it, as with a subsidiary relationship, or when it is desired to avoid the appearance of control. This is sometimes seen with multinational companies that need to avoid restrictive laws &or negative public opinion' on foreign ownership. 178. T).A1:).) Many organi7ations, particularly not"for"profit organi7ations such as charities unions and churches, appoint treasurers, are responsible for generating income for the group, whether this be through pricing of a product, organi7ing sponsorship, or arranging fundraising events. The treasurer would also be part of the group which would oversee how the money is spent, either directly dictating expenditure or authori7ing it as re*uired. 18>. +.)TI3I+AT. O3 I;+O)=O)ATIO; A;- +.)TI3I+AT. O3 6.)?.)

A certificate issued by a state's secretary of state that shows acceptance of a corporation's articles of incorporation. -ertificate confirming the merger of two entities by the concerned regulating authority. 181. =)I;+I=A@ .P.+:TI<. O33I+.) A;- +GI.3 .P.+:TI<. O33I+.) The highest"ranking executive in an organi7ation. 8mployed by and accountable to its board of directors. 9e has the ultimate executive responsibility or authority within an organi7ation responsible for carrying out the policies of the board of directors on a day"to"day basis Although it is possible to have more than one -8O in a company, generally the 6ob is not shared. All other management other than )O5 reports to the -8O. 182. +GI.3 3IA;A;+IA@ O33I+.) A;- +GI.3 O=.)ATI;? A++O:;TI;? O33I+.) This is the senior manager who is responsible for overseeing the financial activities of an entire company. This includes signing checks, monitoring cash flow, and financial planning. )y comparison of -8O with -/O as strategic business partner and statutory Page )

Prepared By P.Sravan Kumar MBA !Ph"#

Gates Institute of Tecchnology ::Gooty

duties under (8- and (arbanes"Oxley Act, both are e*ual ranking top executive and separate posts. -hief operating officer &or -OO' is a corporate officer responsible for management of day"to"day activities of the corporation. The -OO is one of the highest ranking members of an organi7ation, monitoring the daily operations of the company and reporting to the chief executive officer directly. The -OO in some companies is also the president, but they are usually an executive or senior vice president 18(. ATTO);.94I;43A+T

attorneys4in4 act An attorney who may or may not be a lawyer who is given written authority to act on another's behalf esp. by a power of attorney compare 18*. =OD.) O3 ATTO);.9

A legal instrument authori7ing one to act as another's attorney or agent. 180. ).@AT.- =A)T9 T)A;1A+TIO;1

A business deal or arrangement between two parties who are 6oined by a special relationship prior to the deal. /or example, a business transaction between a ma6or shareholder and the corporation, such as a contract for the shareholder's company to perform renovations to the corporation's offices, would be deemed a related"party transaction. 182. <.;T:). +A=ITA@

Money made available for investment in innovative enterprises or research, especially in high technology, in which both the risk of loss and the potential for profit may be considerable. Also called risk capital. 185. =O)T3O@IO 6A;A?.6.;T

The art and science of making decisions about investment mix and policy, matching investments to ob6ectives, asset allocation for individuals and institutions, and balancing risk vs. performance. thereby increasing the interconnectedness of different markets

Prepared By P.Sravan Kumar MBA !Ph"#

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