Absolute spread

The absolute spread represents the difference between the bid and ask price and varies in
particular depending on the issuer, the multiplier, the moneyness and the volatility of the
warrant market or the markets of the underlyings (see also homogenised spread)

Accrued interest
The seller of a bond is entitled to receive the pro-rata coupon for the period during which he
owns the bond. The accrued interest is paid by the buyer of the bond to the seller. The buyer
receives the full coupon on the interest due date. In the case of bonds with an extended
coupon period the accrued interest is only calculated in the first year on the basis on a full
interest year and not on the extended interest year (e.g. issue 14.07.2004, first interest
payment on 11.11.2005). The actual amount of the accrued interest can be obtained from the
yield calculator. In the case of variable interest rate bonds and stepped interest rate bonds the
accrued interest cannot be calculated purely on the nominal amount.

Actively managed funds

Actively managed funds try to outperform the value movement of one or several benchmark
indices in order to generate a better yield as a result. The composition of the fund portfolio is
monitored and reviewed by a fund manager and is adjusted depending on the market situation
(see also passively managed funds).

Agencies
Under the term agencies are included national and supranational institutions that have a
special public promotional mandate such as the L-Bank or the Kreditanstalt für
Wiederaufbau. The issuers in this market segment are of a very good credit quality and their
rating is very stable.

Allotment
A) If orders can only be partially executed a determination is made within the applicable
rules and regulations as to whether and in what amount execution is to be carried out. This
process is called allotment. Price determinations on which there was an allotment are
highlighted with a price add-on (e.g. bG or bB). This indicates which orders were possibly
not fully executed. A special form of allotment is the limited rationing (price add-on ratG or
ratB). In this case all executable orders are possibly affected by an allotment. B) On the
subscription for securities there is an allotment if the subscription volume exceeds the issue
volume.

American-style
Warrant that can be exercised at any point in time during its life. (see also European-style and
Bermudan-style)

Ancillary rights
exBR = first quote after discounting a right to subscribe for equities, warrants etc.
exBA = first quote after discounting for bonus equities
exA = first quote after interest distribution (in particular for participating certificates)
exD = first quote after discounting for discounts
exZS = first quote after interest payment on bonds on which accrued interest is not calculated
exAZ = first quote after an equalisation payment (in particular for equities)
exBO = first quote after payment of a bonus right (in particular for equities)
HL = notice of cancellation (must be specified in detail in the notification)
HA = notice of discount (must be specified in detail in the notification)
ex abc = first quote after discounting 2 or more ancillary rights
ex SP = first quote after an equity split

Annual General Meeting

Meeting of the equityholders of a public limited company and its highest decision-making
body. Based on his equityholding each equityholder is entitled to cast his votes in the Annual
General Meeting; if he is unable to attend he can appoint his custodian bank to represent him.
Among its most important powers is the appointment of the supervisory board, the decision
regarding the appropriation of profits and the discharge of the supervisory board and the
board of directors.

Approved for sale

For reasons of transparency and investor protection exchange traded funds require approval
in Germany to be traded on a German stock exchange.

Ask price
The ask price is the price at which the investor can buy a product on the exchange.

At the money
If the strike price and the current price are the same the warrant has no intrinsic value. In this
case the warrant is "at the money".

Auction principle
In addition to the market maker principle the auction principle is one of the two methods
under which trades in securities are concluded. Under the auction principle orders of different
market participants are collected from which a price can then be determined. In this case the
orders of all market participants are treated in competition with each other.The price fixed as
the exchange price is that price at which the highest turnover can be generated on the given
order book level.

Backwardation
Backwardation is the term used to describe the situation where the price of distant commodity
futures contracts is lower than that of the nearer futures contracts. This means that price
expectations regarding the relevant commodity is negative up to the maturity of the distant
futures contract. The reasons for this could be that the different market participants think that
the current prices are inflated or that there will be an unexpected sudden supply shortage (for
instance because the actual harvest is smaller than expected), resulting in excess demand that
inevitably leads to higher prices both on the spot market and for nearer futures contracts.
Furthermore, if only a temporary supply shortage is expected, because the next harvest is
considered to be secure or at least not in danger, the price of distant futures contracts will be
cheaper. Contango is the term used to describe the "normal situation" where distant maturities
are quoted at a higher price than prices of nearer futures contracts.

BaFin
In addition to the Trading Surveillance Office and the Exchange Supervisory Office located
within the Baden-Württemberg Department of Trade and Industry the Federal Financial
Services Authority is responsible for the monitoring of trading on the Stuttgart Stock
Exchange. All three monitoring bodies have extensive investigative and discovery rights.
Bank bonds
Bonds issued by credit institutions are called bank bonds. In this connection a distinction is
made between so-called covered bonds and uncovered bonds.

Bank holiday trading

On the Stuttgart Stock Exchange trading takes place on some bank holidays, which are shown
here.

Basis point
100 basis points is equivalent to one percent.

Basket
This product does not comprise a single underlying but a basket of different equities. This
basket is put together in a certain way and in the majority of cases is only composed of
equities of a single sector.

Benchmark
A benchmark represents a reference or comparative value that can be used to determine the
success of an investment. Indices such as the DAX®, Eurostoxx 50® or a sector index are
mostly used for determining the price movement of exchange traded funds.

Bermudan-style
The Bermudan option type describes an option on a derivative security that can only be
exercised on certain dates during its life. It derives its name from the fact that its exercise
characteristics are a hybrid of the American- and European-style options - Bermuda lies
geographically between America and Europe. Bermudan-style derivative products of
Citigroup can be exercised in each case on the last business day of a month.

Best Execution
As part of the enactment of the MiFID into the Securities Trading Act (WpHG) the legislator
prescribes a series of requirements for the execution of customer orders that have to be met
by the respective financial services institutions. Every financial services institution has to
establish a best execution policy. In the event that customers do not issue express instructions
to the securities companies on issuing the order as to which stock exchange or trading
platform the order is to be routed the best execution rules shall apply in order to achieve the
best possible result on the execution of the order.

Best order
Unlimited sell order.

Best price principle

As a result of the involvement of market makers or reference market quotes in the price
determination process the investor receives at a minimum the price that he would have
obtained on these reference markets and which is consequently a fair and market driven
exchange price. Due to the bundling of the available liquidity based on the respective order
situation the investor also has the opportunity to obtain a quote that lies within the market
maker or reference market quote and as a result a better exchange price.
Best size principle
As a result of the involvement of market makers or reference market quotes in the price
determination process the investor receives at a minimum the price that he would have
obtained on these reference markets and which is consequently a fair and market driven
exchange price. Due to the bundling of the available liquidity based on the respective order
situation the investor also has the opportunity to obtain a quote that lies within the market
maker or reference market quote and as a result a better exchange price.

Bid price
The bid price is the price at which the investor can sell a product on the exchange.

Black Scholes
Model used to determine the theoretical and fair value of an European-style option on
equities (which can only be exercised on a specified date). Under this model the price of an
option depends primarily on the equity price and the residual maturity.

Blue chips
Term used to describe equities of large internationally well-known companies that constitute
a significant proportion of the total exchange turnover and whose prices are also included in
the calculation of the customary indices.

Bobl future
The basis of the Euro Bobl future (in short: Bobl future) is a notional medium-term German
government bond with a coupon of 6 percent and a residual maturity of 5 years. The owner of
a Bobl futures contract has the right to buy or sell on an agreed date a German government
bond underlying this contract with a residual maturity of from 4 1/2 to 5 1/2 years in a
nominal amount of Euro 100,000. Four maturities are traded in each year that end in March,
June, September and December, respectively. The current futures price exactly tracks the
price that would have to be paid in the market for a German government bond with an exact
maturity of 5 years and a coupon of 6%.

Bond funds
Investment funds that invest in fixed interest-bearing securities. As a rule bond funds are
considered a form of investment that involves a lower risk.

Bond-X
The quality trading segment for bonds at the Stuttgart Stock Exchange. Private investors can
trade bonds in Bond-X at prices that are hardly different to those for institutional investors.
Binding buy and sell prices within a narrow spread apply from the smallest tradeable unit to
each bond included in the segment. The published prices are binding on lot sizes of up to a
nominal amount of Euro 500,000. Bond-X prices are valid between the hours of 9.00 and
18.00.

Bond-X market maker

Bond-XXL
Bond-XXL is a trading initiative, which is making the Stuttgart Bond Trade, next to private
investors for institutional and semi professional investors still more attractive. The trading
quality of selected Bond-X bonds is enhanced once more for a limited period with Bond-
XXL. Hence, the competent quality liquidity provider (QLP) at the Stuttgart Stock Exchange,
Euwax AG, is committed to provide bond issues in Bond-XXL for a trading volume of 1
Million Euro (against 500, 000 Euro in Bond-X).

Bondbox
The bondbox is a trading initiative for bonds that are highly liquid and popular. The objective
is to bring such bonds more into the focus of the investor. Binding buy and sell prices from
the smallest tradeable unit are quoted by a market maker for each bond included in the
segment. You can obtain further information here.

Bonds
Bonds are so-called securitised promises to repay (IOUs) through which its issuer obtains a
loan in the capital markets. The credit terms (terms and conditions of the bond), such as the
interest rate, the maturity or the repayment, are fixed on the issue date. In the case of fixed
interest-bearing bonds the interest rate is constant throughout the life, in the case of variable
interest-bearing bonds it is adjusted periodically in accordance with the terms and conditions
of the bond. On maturity the bonds are normally repaid at 100%.

Bonus certificates
Bonus certificates consist of three elements. Firstly they provide the opportunity to benefit
from the positive performance of an underlying – for example an index or an equity.
Secondly a bonus is paid at maturity in the form of a type of guaranteed interest. However
this is only paid if, thirdly, a price barrier (security level) set significantly below the initial
value of the respective underlying is not reached nor undershot during the total life. The
investor has therefore a risk cushion up to the security level. However if this security level is
reached or undershot during the life of the certificate the product changes at that point in time
into a classic index or participation certificate. The original guaranteed interest, i.e. the bonus
amount, is lost. However the investor still has the opportunity to benefit from any renewed
increases in the price of the underlying.

Bonus level
The bonus level is determined on issue, as is the security level, and remains unchanged
throughout the total life. In principle it is fixed above the price of the underlying on the issue
of the certificate. If the underlying closes below the bonus level on the exercise date of the
certificate the investor receives a guaranteed payment specified in the issue terms and
conditions of the certificate. This is equivalent to the bonus level (value of the underlying on
the issue of the certificate plus a bonus payment). However the precondition for this is that
the security level specified in the issue terms and conditions is not breached during the life. If
the underlying closes above the bonus level on the exercise date the investor also participates
in the movement in value of the underlying above this level. As a rule this is paid in full and
is not limited, however this can also be on a pro-rata basis or subject to an upper limit (cap).

Bonus yield p.a. (bonus certificates)

The "bonus yield p.a." is the yield expressed as a percentage and calculated on an annualised
basis on the payment of the bonus income on maturity. In mathematical terms the "bonus
yield p.a." is the "distance to the upper barrier (bonus level) in %" divided by the residual
maturity in years.
Bund future
The Euro Bund future (in short: Bund future) is a future on an ideal type of a German
government bond. The basis is a notional instrument that is standardised to a nominal interest
rate of six percent and a term of ten years. The owner of a Bund futures contract has the right
to buy or sell on an agreed date a German government bond underlying this contract with a
residual maturity of from 8 1/2 to 10 1/2 years in a nominal amount of Euro 100,000. Four
maturities are traded in each year that end in March, June, September and December,
respectively. The current futures price exactly tracks the price that would have to be paid in
the market for a German government bond with an exact maturity of 10 years and a coupon
of 6%.

C.O.R.A. (Central Order Routing Access)

The orders received by the order flow provider (OFP) are accepted via C.O.R.A. (Central
Order Routing Access) and forwarded to the trading system. The execution confirmations are
transmitted via C.O.R.A. to the order flow provider (OFP).

Call
A call is a security with a fixed maturity that gives its owner the right to acquire an
underlying instrument at a predetermined price - the strike price. As a rule exercise - i.e. the
actual delivery of the underlying on payment of the strike price - is not usual. In practice the
investor is instead put in the same position through the payment of the positive difference
between the current price of the underlying and the strike price.

Cancellation right on securities

On some securities the issuer has the right to cancel prior to maturity. In this case repayment
is made in accordance with the respective issue terms and conditions.

Cap
Specified maximum amount up to which the investor can benefit from the increase in the
price of the underlying. For example this limit is reimbursed through a so-called discount in
the case of certificates.

Capital markets
Trading in money market instruments and securities take place in the so-called capital
markets.

Cash market
The cash market is referred to as the area of the stock exchange in which a securities order is
executed and settled within a short space of time of each other. In contrast there is a specified
time period between the conclusion and settlement of an order on the Futures market.

Cash settlement
Instead of delivering the underlying instrument (e.g. equities) the difference between the
current price of the underlying on the exercise date and the strike price is paid.

Cash settlement price

The price of securities traded on a "cash settlement" basis. This is fixed from 11.30 a.m. In
the past it was of particular importance as any lot size could be traded at this price, whereas
only so-called "round lots" (e.g. 50 units or a multiple thereof) were tradeable in continuous
trading. The time at which the quoting of unit prices for individual products starts can be
obtained here. Cash settlement prices are no longer fixed for equities. In this regard one talks
of unit prices.

Certificate funds
A certificate fund is a type of umbrella fund that invests in certificates rather than individual
funds. These funds should remove from the investor the complex selection of products that
meet his specified strategy.

CGAX®
The CGAX® is an Index Tracker of Citigroup. The DAX indication of the Citigroup is used
as the basis for its calculation. The price of the Tracker tracks the movement of the Indication
on a 1:1 basis. The CGAX® is published on a realtime basis on the Internet page of the
Stuttgart Stock Exchange between the hours of 9.00 and 20.00.

Cheapest order
Unlimited buy order.

Chooser
A chooser is a product whose value is based and consequently its effective redemption
amount on the movement in value of two underlyings. This usually involves equities of two
different companies. On the maturity of the product the holder of a chooser receives a number
of equities in one of these two companies that is specified in the issue terms and conditions or
a maximum cash amount determined by the issuer. This decision rests with the issuer.

Clean Price
The clean price of a bond is the price without accrued interest (see also dirty price)

Clearing
Clearing of claims and liabilities arising on securities transactions (cash or delivery of units),
in particular between banks, through reciprocal clearing via a central institution (clearing
house) with the aim of only transferring the resultant balances.

Contango
The "usual status" of most commodity futures is called contango. This means that more
distant contracts are more expensive than those with shorter maturities. This results from the
fact that a commodity that is to be delivered at a later date has to be stored and as a result is
traded at a mark-up. Higher storage costs are incurred that must be appropriately reimbursed
to the producer through a higer price, for if this were not the case, the producer would sell his
goods directly thus saving storage and interest costs. The opposite to contango - when longer
maturities are traded at a discount - is called backwardation.

Continuous auction
In the continuous auction a price is determined on the basis of the existing limited and
unlimited orders, at which the largest order volume can be executed with a minimal backlog.
In theory the continuous auction enables the prices to be determined on an unlimited basis
throughout the trading hours of an exchange.

Contract note
In accordance with the HGB (German Commercial Code) each trade allotment is documented
for the buyer and seller through a contract note. These are produced during the exchange
trading hours.

Convertible bonds
Convertible bonds are interest-bearing bonds that securitise the right of the investor to
acquire equities or other fungible (tradeable) assets in a warrant that is detachable from the
bond. This warrant can itself be traded. Equities can be applied for through converting the
warrant under predetermined conditions. A cash settlement can also be made instead of the
delivery of the equities. The convertible bond itself is not exchanged but remains in existence
until it is repaid.

Corporate Bonds
Bonds issued by German and international companies or foreign subsidiaries are called
"corporates" or "corporate bonds". Industrial companies often issue bonds as an alternative to
obtaining a conventional loan from a bank. As a rule additional collateral is not required for
corporate bonds as is the case, for example, for mortgage bonds.

Coupon
The interest rate on the bond that the investor receives on the nominal amount. (nominal
interest rate)

Covered bonds
Since 1999 products similar to mortgage bonds have been issued in other European countries
in benchmark amounts that are subject to the same standardised issue terms and conditions as
Jumbo mortgage bonds. This group of bonds is included under the term covered bonds.

Covered warrant
At the start of the warrant market and also today the so-called "covered warrants" are still
understood to be equity warrants that securitise the right to the physical delivery of equities
that are held in a segregated securities safekeeping account during the life of the warrant.

Credit default swap (CDS)

A credit default swap (CDS) transfer the default risk on a credit position to a contractual
party who is paid a premium for the assumption of the risk. The fee is based on the level of
the potential loss and the loss probability - i.e. the credit quality of the loan obligor - and is
paid in instalments. If a credit event (default) occurs during the life of the CDS a payment
obligation is triggered for the purchaser of the risk. The CDS ends in the event of an
occurrence of a credit event and the premium payments cease as a result. If a credit event
does not occur by maturity the CDS expires.

Credit linked notes

Credit linked notes are securities whose repayment profile for example is dependent on the
occurrence of a so-called credit event at one or several reference obligors. If the reference
obligor cannot meet its payment obligations this default is transferred to the bond creditor. If
a credit event does not occur the investor enjoys an attractive yield.

Credit quality
The credit quality describes the creditworthiness of an obligor and his ability to repay his
debts. See also rating.
Credit risk
The credit risk describes the risk regarding the future creditworthiness of the obligor. A
deterioration in the credit quality of the obligor results in a corresponding reduction in the
price of the affected securities due to the increased risk. The credit quality of the obligor can
deteriorate to such an extent during the life of the securities that he becomes insolvent or
illiquid. In this event interest and principal payments may not be made on their due dates. The
worst scenario is a total default.

Current yield
Current yield on fixed income instruments already in circulation that are fixed by the
Bundesbank on a daily basis. The average yield in the secondary market is determined as a
key figure for yield changes in the capital markets from, for example, the yields on secondary
market bonds with a maturity of between 3.5 and 10 years. The current secondary market
yields can be accessed

Custody account
A custody account is a type of account maintained at a bank to which the securities purchased
are booked.

Date of payment
On the date of payment the money for the securitised derivatives is credited to the investor's
account or, in the event of an offer, the underlying instrument is posted to his security deposit
account.

Delivery
In reverse convertibles the issuer has the right to deliver a pre-determined number of units of
the underlying instead of making a cash payment in the event that on maturity the price of the
underlying is below the strike price. If this results in the delivery of equities the number of
equities to be delivered is fixed in advance. For instance, a ratio of 5000/274 means that 274
equities are delivered for each nominal amount of Euro 5,000.

Delta
The Delta of a warrant or a knock-out product specifies by how many Euros the respective
product will theoretically change in value if the price of the underlying changes by one Euro.
The Delta must be weighted by the respective multiplier of the derivative. For example, the
Delta of an option right specifies the theoretical price change - i.e. the change in value of a
warrant converted to a multiplier of 1:1 - on changes in the price of the underlying. The value
of a warrant changes by the "Delta" amount if the price of the underlying changes by the
amount of one. The Delta fluctuates between "0" and "1" on a call warrant and between "0"
and "-1" on a put warrant. Consequently a Delta of 0.65 (-0.65) means that a call (put)
converted to a multiplier of 1:1 will increase in value by Euro 0.65 if its underlying increases
(decreases) by one Euro. The Delta is a dynamic key ratio that changes on movements in the
price of the underlying.

Derivatives
Generic term for all financial instruments whose price is determined based on the price
movement of an underlying and which are therefore not discrete investments.

Differences to the coordinated universal time (UTC)

The coordinated universal time (UTC) is the current Greenwich Mean Time. The time zones
are specified as a positive or negative difference from the UTC (for example UTC+1 is
equivalent to CET (Central European Time) and UTC+2 to CEST (Central European
Summer Time).

Dirty price
The dirty price is the price of a bond inclusive of accrued interest. (see also clean price)

Discount
In the case of warrants: the amount in percent by which the subscription to the equity via the
purchased warrant is cheaper than a direct purchase of an equity (opposite: premium). In the
case of knock-out put products: a discount arises on knock-out put products as the underlying
is sold but only a portion of the total value is received immediately. In this case interest is not
received. However the discount compensates for these costs. Discount on securities: On issue
the sum of money by which the issue price is below the nominal value or the amount by
which the exchange price is below the intrinsic value. (see also premium)

Discount certificate
Compared to a direct investment discount certificates guarantee the investor a discount on the
selected underlying. In return for this cheaper investment an predefined upper limit - called a
cap - is set on the participation of the investor in the price movement of the underlying. If on
maturity the price of the underlying is the same or lower than the cap, the amount paid is
based on the multiplier, otherwise an amount equivalent to the cap is paid.

Discount in % (discount certificates)

The "discount in %" is the percentage discount by which the acquisition of an underlying via
a discount certificate is cheaper than a direct investment in the underlying. The "discount in
%“ is calculated as quotient from the current selling price (bid price) of the underlying and
the current buy price (ask price) of the certificate.

Discount in € (discount certificates)

The "discount in €“ is the absolute amount by which the acquisition of an underlying via a
discount certificate is cheaper than a direct investment in the underlying. The "discount in €“
is calculated as the difference between the current selling price (bid price) of the underlying
and the current buy price (ask price) of the certificate.

Distance to the knock-out barrier in % (knock-out products)

The "distance to the knock-out barrier in percent" is the percentage difference between the
knock-out barrier of a knock-out product and the current selling price (bid price) of the
underlying.

Distance to the knock-out barrier in € (knock-out products)

The "distance to the knock-out barrier in €" is the absolute amount between the current
selling price (bid price) of the underlying and the knock-out barrier of a knock-out product.

Distance to the lower barrier (security level) in % (bonus certificates)

The "distance to the lower barrier (security level) in %" is the percentage value between the
security level specified in the issue terms and conditions of the certificate and the current
selling price (bid price) of the underlying. Consequently this amount is equivalent to the
maximum absolute value that the respective underlying may lose until the respective bonus
certificate is converted into a participation certificate.
Distance to the lower barrier (security level) in € (bonus certificates)
The "distance to the lower barrier (security level) in €" is the absolute amount between the
current selling price (bid price) of the underlying and the security level specified in the issue
terms and conditions of the certificate. Consequently this amount is equivalent to the
maximum absolute value that the respective underlying may lose until the respective bonus
certificate is converted into a participation certificate.

Distance to the upper barrier (bonus level) in % (bonus certificates)

The "distance to the upper barrier (bonus level) in percent" is the percentage value that lies
between the bonus amount and the current selling price (bid price) of the respective
underlying. This bonus amount is paid at a minimum on the maturity of a bonus certificate
provided that the security level was not reached or undershot at any point during the term of
the certificate.

Distance to the upper barrier (bonus level) in € (bonus certificates)

The "distance to the upper barrier (bonus level) in €" is the absolute amount between the
bonus amount and the current selling price (bid price) of the respective underlying. This
bonus amount is paid at a minimum on the maturity of a bonus certificate provided that the
security level was not reached or undershot at any point during the term of the certificate.

Distribution
In funds and ETFs a distinction is made between products that retain or distribute profits. In
the case of funds that retain profits income such as interest and dividends is not paid out but
are directly reinvested in the fund assets. In distributing funds the income received is paid out
to the investor.

Diversification
Diversification of investments into a number of different securities for the purposes of
reducing risk. Diversification can be achieved through investing in different types of
investments (equities, fixed income securities, real estate, precious metals etc.), different
sectors and regions as well as through varying the investment time horizon.

Dividend reinvestment
In the case of a dividend reinvestment the distributions in form of dividends are not paid
directly to the investor but are re-invested in the relevant security which should reventually
result in the increase in the price of the security. Indices that incorporate a dividend
reinvestment are called performance indices. They are always quoted higher than their
corresponding price indices.

Dividend yield
The dividend yield is calculated by dividing the dividends paid by the company with the
current price of the equity. This key ratio can be calculated on the basis of the dividends
currently paid or on the basis of expected future dividends.

Dividends
A dividend is a profit equity that the public limited company distributes to equityholders. The
amount and the data payable is decided by the Annual General Meeting.
Duration
Duration represents the average lock-up period for the capital employed. Bonds with a high
coupon have a lower duration than bonds with a lower coupon because the capital employed
is repaid quicker through the higher coupon payments. Duration is the measure of the average
maturity date of income flows; it is also described as the "time centre" of a bond. The
investor should select a bond whose duration meets his investment time horizon.

Eligibilty for the premium reserve

The German Insurance Supervision Act (VAG) requires insurance companies to create a
segregated asset account (premium reserve) to provide security for the claims of the
policyholders. This premium reserve is to be created from current premium income. The
insurance company may also invest this premium reserve in securities that must however
meet specific requirements with regard to security, liquidity and yield. The list of securities
eligible for the premium reserve is regulated by the German Insurance Supervision Act.
Public sector bonds, mortgage bonds and municipal bonds and other bonds that are
guaranteed by the Goverment or a Federal state or for which they stand surety are incuded in
the group of bonds eligible for the premium reserve.

Eligible gilt-edged securities

For the purposes of protecting assets of individuals held under a custodianship agreement the
law only allows a series of investment forms in which such monies may be invested. These
gilt-edged securities include public sector bonds, mortgage bonds and municipal bonds and
other bonds that are guaranteed by the Goverment or a Federal state or for which they stand
surety.

Emerging countries
The World Bank includes all countries in South America and the continent of Africa as well
as parts of Asia and Eastern Europe in the emerging countries category, also called emerging
markets (in total 120 countries). For example Brazil, Argentina and Turkey. Bonds of these
issuers are regarded as speculative.

Emerging market bonds

Emerging market bonds are bonds issued by the so-called "emerging countries". These bonds
have high coupon and yield features. The lower rating of the issuer is a decisive factor for the
high yields. They are only suitable for speculative investors as under certain circumstances
they are subject to large price fluctuations as well as to a higher risk of default.

Equity / share
A equity is a certificate that securitises for the holder a share in the total assets of a public
limited company. The holder of an equity, the "shareholder", is consequently a "part owner"
of the assets of the public limited company, i.e. a co-owner. As a result he has voting rights in
the Annual General Meeting and is entitled to participate in the profits of the company. His
rights are protected by company law regulations.

Equity funds
Investment funds whose assets consist of equities. The equities can be selected, for example,
based on regional or sector criteria.
ETCs
From a legal perspective ETCs (Exchange Traded Commodities) are collateralised open-
ended bonds and are unlimited with regard to the volume. They can be continuously traded
on the exchange in the same way as, for example, equities. In contrast to ETFs ETCs are not
special assets of the issuer. Through ETCs investors can participate in the movement in value
of individual commodities as well as in baskets of commodities.

ETFs
Exchange traded funds (ETFs) are investment funds that can be continuously traded on the
exchange in the same way as, for example, equities. An issue premium on the purchase of
conventional fund products by the bank or other intermediaries is not incurred as a rule. The
price for an ETF unit is equivalent for the most part to a fraction of the fund assets specified
by the issuer. A distinction is made in principle between actively and passively managed
funds.

EURIBOR
Abbreviation for European Interbank Offered Rate. Interbank 1 week money market rate as
well as for 1 to 12 month money. It is valid throughout the EMU and is used as a reference
interest rate for many variable interest-bearing bonds.

Euro interest method

The Euro interest method under which the accrued interest days of a bond are calculated. The
exact number of days in a month and a year are taken into account, in contrast to the "German
interest calculation method" under which 30 days and 360 days for a month and a year,
respectively, are used in the calculation.

Euronext
Euronext was set up in September 2000 through the merger of the cash and futures exchanges
located in Amsterdam, Brussels and Paris. Since then the Euronext exchange association has
further grown through the Portuguese BVLP cash and futures exchange and the LIFFE (The
London International Financial Futures and Options Exchange).

European-style
Warrant that can only be exercised on its expiry date. (see also: American-style and
Bermudan-style)

EUWAX
The EUWAX (European Warrant Exchange) trading segment is a special segment of the
Regulated Unofficial Market of the Baden-Württembergische Wertpapierbörse in which
securitised derivatives in particular are traded under special and transparent rules.

Exchange segment
Trading areas on the stock exchange set up under the Exchange Rules that differ from each
other through different listing procedures and obligations of the issuers and traders. In
Germany these include the Regulated Market and the Regulated Unofficial Market (Open
Market).

Exchange Supervisory Office

In Baden-Württemberg this function is the responsibility of the Department of Trade and
Industry. In collaboration with the Trading Surveillance Office and the Federal Financial
Services Authority (BaFin) this Exchange Supervisory Office monitors trading on the
Exchange and the settlement of the stock exchange trades.

Exchange trade
A stock exchange trade is a contract that is entered into on the Exchange by two trading
participants with regard to a stock exchange product. A distinction is made between cash
settlement, futures, options trades and a combination thereof. Such trades can be settled by
the Exchange or by an independent organisation that provides such settlement services.

Exercise style
A distinction is made between three exercise types of securitised derivatives: the European-,
American- and Bermudan-style. The European-style can only be exercised on the last day of
the life of the security. The American-style option can be exercised at any time during the life
of the security. The Bermudan option type describes an option on a derivative security that
can only be exercised on certain dates during its life.

Federal Debt Registry / Federal debt register

The Federal Debt Registry administers the so-called registered debt register. If you buy
German government instruments and have them registered at the Federal Debt Registry you
are entered into the register as the obligee.

Fees
Additional costs such as management fees and issue premiums can be incurred on securitised
derivatives and ETFs.

Fill-or-Kill order (FOK order)

A fill-to-kill order is an order to be executed immediately in full or not at all.

Final valuation day

(also known as maturity or expiry date). The reference price, upon which the nature and
amount of remuneration of a securitised derivative is dependent, is defined on the last
valuation day. This is how decisions are taken in the case of reverse convertibles, for
example, on whether the repayment is to take place as a nominal value or by providing the
corresponding underlying instrument, e.g. of equities. Between the last day of trading on the
exchange and the final valuation date, derivative products may still be traded on the outside
market via the issuers.

Financing level
When purchasing knock-out products only part of the respective underlying is paid for by the
investors themselves, giving rise to so-called leverage. The difference between the actual
price of the underlying and the price of the knock-out product is referred to as the financing
level. When the call is exercised, this corresponds to the current strike price of the security,
for which the issuer takes out a loan. When knock-out calls are exercised, the investor pays
the interest and an interest margin calculated by the issuer, in order to pay for the financing
level. In the case of knock-out puts, the investor is credited with the interest payments less the
interest margin, since the position corresponds to a short sale of the underlying. These
financing costs are calculated using the financing level and reflected in the price of the
products, once prior to trading for fixed maturity products and on a monthly or daily basis for
products without a fixed maturity date.
Fixed price trade
Also called net trade. The net trade method is used for over the counter trades with banks. A
price is agreed with the trading participant in which all costs are already included. This also
applies to the bank commission to be paid. This method is non-transparent for the investor
because he normally does not know what fees he has paid to the bank. It is different in an
exchange trade where all fees and commissions are disclosed in detail on the contract note.

Fixing
The Bundesbank intervenes in German government bonds once a day between the hours of
11.00 and 13.00 during the fixing (fixing of the cash settlement price). The highest possible
liquidity for all German government bonds is thereby ensured. Orders must be received in the
order book of the QLP at the latest by the fixing of the unit price.

Flat rate withholding tax

At the beginning of 2009 a new tax law applies to capital income. Interest rates, dividends
and revenues generated by investments with securities will be charged with a tax of 25 %
plus solidarity tax contribution and if applicable church tax. Both, top-earners and basically
all investors who avail their exemption order for capital gains, can benefit from this new
regulation due to the fact that interest earnings above the exemption order for capital gains
had been charged with the individual income tax rate which amounts up to 45 %. The rule,
implying that stock market returns which result from securities held for more than one year
are exempt from taxation, will be abolished in 2009. However, investors can, as the case may
be, benefit from the old rule (tax-free stock price gains) by purchasing a bond quoted below
100 per cent (low-coupon bond) with a minimum holding period of one year before 2009.

Floating rate notes

Floating rate notes (in short "floaters") do not have a fixed but a variable interest income.
After each interest period, for example, after the expiry of 3, 6 or 12 months the issuer of the
bond pays the interest; at the same time he announces the interest rate for the new interest
period. In the majority of cases this interest rate is based on money market rates such as
EURIBOR (European Interbank Offered Rate) or LIBOR (London Interbank Offered Rate).

Foreign currency bonds

Foreign currency bonds are fixed income bonds that are not listed in Euro or DM. All bond
types (such as corporate bonds, emerging market bonds) can be listed in different currencies.
As the exchange rates can be subject to more severe fluctuations the foreign exchange risk
must be taken into account and allowed for in such an investment.

Foreign exchange risk

Risk that the value of a product changes based on the change of the currency up to maturity
or on sale and as a result postively or negatively effects the re-exchange into Euro.

Futures
Futures are standardised forward contracts on a specific good. They obligate the buyer to
purchase commodities or financial products at a specified date. The seller of a futures
contract is required to deliver the corresponding underlying. Futures are standardised with
regard to the contract size, type and the goods of the contract. A
future is the underlying of many securitised derivatives. Examples: DAX® Future, Bund
Future.

Futures market
In the futures market a trade is settled at a pre-agreed future point in time. However the price,
amount and date are agreed on entering into the trade.

Gamma
As the Delta dynamic key ratio reacts strongly to changes in the price of the respective
underlying it is important to be able to estimate these changes in the Delta. The Gamma
dynamic key ratio is used for this purpose. It specifies by what absolute amount the Delta of
an option changes if the price of the respective underlying changes by the amount of one. If
the warrant has a Delta of 0.65 and a Gamma of 0.05 the Delta will increase to 0.7 if the
underlying increases by one Euro.

German government bonds

Governments use a range of capital market instruments to finance their capital requirements.
Included among them are public sector bonds issued by the State (i.e. the Federal Republic of
Germany), its special assets (e.g. the German Railways) as well as the bonds issued by
regional authorities (Federal States, cities and municipalities).The Government issues
German government bonds (term 10 to 30 years), Federal medium-term notes (term approx. 5
years) and State treasury notes (term of up to approx. 2 years) and also Federal saving bonds
as well as finance notes. The last two mentioned forms of bonds are not traded on the
Exchange.

Government bonds
Synonym: Eurobonds. Government bonds are issued by countries within the Euro zone. Since
1 January 1999 these securities have been traded exclusively in Euro on the Stuttgart Stock
Exchange.

Greeks
The word "Greeks" is used in the area of securitised derivatives in connection with a series of
key ratios, whose names, with the exception of "Vega", come from the Greek alphabet. In
addition to "Vega" these include "Delta“, "Gamma“, "Omega“, "Rho“ und "Theta“. In the
broadest sense "Leverage" also belongs to the so-called Greeks. All these key ratios are
dynamic whose value can change over time. The "Delta“, "Leverage", "Omega“, "Theta“ and
„Vega“ are calculated for warrants on an almost real-time basis on the Internet page of the
Stuttgart Stock Exchange.

Guaranteed certificate (100%)

In 100% guaranteed certificates the repayment of at a minimum 100% of the capital invested
at the time of the issue is guaranteed by the issuer. In addition to the fixed amount investors
participate on maturity in any positive movement of the underlying above this guaranteed
level.

Guaranteed product
A product with a guarantee on the issue value of the respective product. The guarantee ranges
from a 100% protection of the issue value to partial protection amounts, which, where
applicable, can be linked to conditions. More detailed information can be obtained from the
respective issue terms and conditions.

Half income taxation system

The half income taxation system has replaced the former system for the taxation of profit
distributions. Only half of the income and capital gains arising on participations (equities,
GMBH equities, equities in cooperatives) is subject to tax. As a result only half of the
income-related expenses incurred are then deductible. In addition there is also the option that
the then withholding tax of 25 percent is to be charged in full to the equityholder. The tax
free income is no longer taken into account at any later stage - for instance as part of the
progression proviso. The half income taxation system is only applicable if the equityholder is
a natural person and not an incorporated company.

Hedge funds
A hedge fund invests in different types of securities (e.g. equities or bonds, up to option and
futures transactions). In contrast to other funds a hedge fund has a lot more freedom with
regard to its investment strategy. There is a higher risk in investing in hedge funds compared
to classical investment funds.

Hedging
Hedging is the term used for the limiting of risk on existing security positions through, for
example, the purchase or sale of the underlying, options or warrants on the respective
underlying.

High yield bond

High yield bonds are bonds that have an above-average high coupon, but also have an above-
average high risk. Based on the assessment of their creditworthiness as non-investment grade
the issuing companies must pay a high yield compared to the current market interest rate
level.

Historical volatility
The implicit volatility is taken into account in the theoretical option price valuation models
for valuing warrants. As a rule historical volatility is used as a rough guide for implicit
volatility, however it is only possible to a limited extent to forecast future volatility based on
historical data.

Homogenised spread
The homogenised spread is equivalent to the absolute difference between its buying price
(bid price) and its selling price (ask price) - the absolute spread - converted to a multiplier of
1:1. A security with a spread of one cent and a multiplier of 10:1 has a homogenised spread
of 10 cents. It is important to homogenise the spread in order to make securities of different
issuers comparable.

Hybrid bonds
Hybrid bonds are corporate bonds with an indefinite or an extremely long maturity. The yield
on these for the most part subordinated bonds are significantly higher than that on
conventional bonds. The issuer has the right at the earliest after ten years to cancel the bond
and redeem it at its nominal value. If the issuer waives this right the fixed interest rate paid in
the first years is converted into a variable rate for the subsequent years. (For example 3
month Euribor plus a spread). If the bonds have certain characteristics they are regarded as
equity capital by the rating agencies.

IF-X
IF-X is a special trading segment for fund units within the Regulated Unofficial Market of the
Baden-Württembergische Wertpapierbörse. Quality standards for the trading of these fund
units are standardised through the regulations defined in the guidelines of the Regulated
Unofficial Market which enable private investors in particular to continuously trade securities
at fair prices. More detailed information can be obtained here.

IF-X category
For all funds in the IF-X trading segment the QLP, taking into account the quote provided by
the market maker, is obligated to adhere to the maximum spreads between bid and ask prices
allocated to one of the following categories: category 1: money market funds and highly
liquid other funds: maximum spread: 0.5% for a volume of up to Euro 100.000, category 2:
bond funds and liquid other funds: maximum spread: 1% for a volume of up to Euro 100,000,
category 3: other funds: maximum spread: 2% up to a volume of Euro 25,000.

Implicit bid price volatility

The "implicit bid price volatility" is equivalent to the fluctuation intensity of an underlying
based on the selling price (bid price) of a derivative assumed by the issuer to last until the
maturity of the product.

In the money
A warrant has an intrinsic value if on a call (put) the current price of the underlying is above
(below) the strike price. In this case the warrant is "in the money".

Index / participation certificate

Index and participation certificates are suitable for conservative investors who are looking for
a more cost-efficient alternative to the classic fund investment. Index and participation
certificates track the performance of an underlying – for example an index or a commodity –
on a one to one basis. As a result the certificate always performs in exactly the same way as
the underlying instruments. In the majority of cases index certificates are issued with a
multiplier of 100:1. Consequently a certificate represents one hundredth of the respective
index. As a rule these index and participation certificates are based on underlyings in which a
participation would not be possible in any other way or only at a very high cost. Risk
reduction is a common reason for buying index and participation certificates. In this simple
way investors can diversify their investment and spread the risk of their acquisition across
individual or fewer equities.

Index equity
Index equities are also called passively managed, exchange traded index funds that track an
underlying index on an exact basis. They can be traded continuously similarly to an equity.
Index funds
Index funds, also mutual funds, that exactly simulate a pre-selected index in the selection of
its instruments and its weighting. Some index funds are traded continuously on the exchange
like equities, these are then called exchange traded index funds or ETFs. Other funds can
only be purchased through the investment company.

Index ratio
Specifies for ETFs and securitised derivatives the ratio in which the security is included in
the underlying index. A ratio of 0.1 means that the underlying security represents one tenth of
the index.

Index tracker
Index trackers, such as index and participation certificates, track the performance of an index
on a one to one basis, so that this is identical to the movement in value of the underlying
index.

Inflation indexed bonds

These bonds enable investors to protect themselves against inflation, i.e. depreciation in the
value of money, as the nominal value of these bonds are linked to the movement in the
consumer price index. For example, if the cost of living increases by five percent the nominal
amount of the bond and thereby the repayment amount are increased by the same amount.
The coupon is indeed fixed, but as it is based on the nominal amount of the bond, the yield
also increases in line with inflation. However investors "purchase" the inflation protection
through a lower yield than that on comparable bonds without inflation protection.

Interest rate risk

The risk that the buyer of a bond has if interest rates increase. In such a case the price of the
bond falls and a loss is incurred if the bond is sold prior to final maturity. The price of a fixed
interest-bearing security is adjusted to current market interest rate levels through changes in
its price.

Intraday trading
Purchase and sale of a security on the same day.

Intrinsic value
On a call option the intrinsic value is the difference between the current price of the
underlying and the strike price. However, on a put option the intrinsic value is the difference
between the strike price and the current price of the underlying. In principle the intrinsic
value specifies the income that would be realised if the option was exercised immediately. As
there is no obligation to exercise options the intrinsic value of an option cannot be negative.

Investment certificate
Investment certificates are securities that securitise the participation in the price movement of
the respective underlyings (e.g. equities or indices). As a rule these certificates are not riskier
than a direct investment in the respective underlying and through the multitude of their
features serve to meet the requirements of all types of investors. Investment certificates are
bonds issued by banks with or without a fixed maturity that do not pay any current income
and have a specified repayment amount that is based on the price of one or several
underlyings.

ISIN
International Securities Identification Number (see also WKN)

ISMA method
The yield on fixed income securities is calculated in accordance with the ISMA method
taking into account daily accrued interest. In general the length of the period between two
interest payment dates is assumed to be one year. Different actual interest periods on
individual securities result in small differences between the yield given and the actual yield.
Formula used to calculate the yield under ISMA (AIBD):

IF-X
IF-X is a special trading segment for fund units within the Regulated Unofficial Market of
the Baden-Württembergische Wertpapierbörse. Quality standards for the trading of these
fund units are standardised through the regulations defined in the guidelines of the
Regulated Unofficial Market which enable private investors in particular to continuously
trade securities at fair prices. More detailed information can be obtained here.

IF-X category
For all funds in the IF-X trading segment the QLP, taking into account the quote provided
by the market maker, is obligated to adhere to the maximum spreads between bid and ask
prices allocated to one of the following categories: category 1: money market funds and
highly liquid other funds: maximum spread: 0.5% for a volume of up to Euro 100.000,
category 2: bond funds and liquid other funds: maximum spread: 1% for a volume of up to
Euro 100,000, category 3: other funds: maximum spread: 2% up to a volume of Euro
25,000.

Implicit bid price volatility

The "implicit bid price volatility" is equivalent to the fluctuation intensity of an underlying
based on the selling price (bid price) of a derivative assumed by the issuer to last until the
maturity of the product.

In the money
A warrant has an intrinsic value if on a call (put) the current price of the underlying is above
(below) the strike price. In this case the warrant is "in the money".

Index / participation certificate

Index and participation certificates are suitable for conservative investors who are looking
for a more cost-efficient alternative to the classic fund investment. Index and participation
certificates track the performance of an underlying – for example an index or a commodity
– on a one to one basis. As a result the certificate always performs in exactly the same way
as the underlying instruments. In the majority of cases index certificates are issued with a
multiplier of 100:1. Consequently a certificate represents one hundredth of the respective
index. As a rule these index and participation certificates are based on underlyings in which
a participation would not be possible in any other way or only at a very high cost. Risk
reduction is a common reason for buying index and participation certificates. In this simple
way investors can diversify their investment and spread the risk of their acquisition across
individual or fewer equities.

Index equity
Index equities are also called passively managed, exchange traded index funds that track an
underlying index on an exact basis. They can be traded continuously similarly to an equity.

Index funds
Index funds, also mutual funds, that exactly simulate a pre-selected index in the selection of
its instruments and its weighting. Some index funds are traded continuously on the
exchange like equities, these are then called exchange traded index funds or ETFs. Other
funds can only be purchased through the investment company.

Index ratio
Specifies for ETFs and securitised derivatives the ratio in which the security is included in
the underlying index. A ratio of 0.1 means that the underlying security represents one tenth
of the index.

Index tracker
Index trackers, such as index and participation certificates, track the performance of an
index on a one to one basis, so that this is identical to the movement in value of the
underlying index.

Inflation indexed bonds

These bonds enable investors to protect themselves against inflation, i.e. depreciation in the
value of money, as the nominal value of these bonds are linked to the movement in the
consumer price index. For example, if the cost of living increases by five percent the
nominal amount of the bond and thereby the repayment amount are increased by the same
amount. The coupon is indeed fixed, but as it is based on the nominal amount of the bond,
the yield also increases in line with inflation. However investors "purchase" the inflation
protection through a lower yield than that on comparable bonds without inflation protection.

Interest rate risk

The risk that the buyer of a bond has if interest rates increase. In such a case the price of the
bond falls and a loss is incurred if the bond is sold prior to final maturity. The price of a
fixed interest-bearing security is adjusted to current market interest rate levels through
changes in its price.

Intraday trading
Purchase and sale of a security on the same day.

Intrinsic value
On a call option the intrinsic value is the difference between the current price of the
underlying and the strike price. However, on a put option the intrinsic value is the difference
between the strike price and the current price of the underlying. In principle the intrinsic
value specifies the income that would be realised if the option was exercised immediately.
As there is no obligation to exercise options the intrinsic value of an option cannot be
negative.

Investment certificate
Investment certificates are securities that securitise the participation in the price movement
of the respective underlyings (e.g. equities or indices). As a rule these certificates are not
riskier than a direct investment in the respective underlying and through the multitude of
their features serve to meet the requirements of all types of investors. Investment certificates
are bonds issued by banks with or without a fixed maturity that do not pay any current
income and have a specified repayment amount that is based on the price of one or several
underlyings.

ISIN
International Securities Identification Number (see also WKN)

ISMA method
The yield on fixed income securities is calculated in accordance with the ISMA method
taking into account daily accrued interest. In general the length of the period between two
interest payment dates is assumed to be one year. Different actual interest periods on
individual securities result in small differences between the yield given and the actual yield.
Formula used to calculate the yield under ISMA (AIBD):

Issue
The issue of new securities.

Issue premium
On issuing investment units a fee is charged by the company that is to cover the selling
costs. In the case of funds the issue premium is expressed mostly as a percentage of the
redemption price. Some of the recently established funds or ETFs have in the meantime
waived a premium on the issue of units. For the most part an annual management fee is paid
by the investor in this case.

Issue volume
The issue volume is the total nominal amount or the total number of units of an issued
security.

Issuer
Issuer of a security.