Investments glossary terminology
An unintentional tort is a type of unintended accident that leads to injury, property damage, or financial loss. In the event of an unintentional tort, the person who caused the accident did so inadvertently and typically because they were not being careful. The person who caused the accident is considered negligent because they failed to exercise the same degree of care that a reasonable person would have in the same situation.
A market is a place where two parties can gather to facilitate the exchange of goods and services. The parties involved are usually buyers and sellers. The market may be physical like a retail outlet, where people meet face-to-face, or virtual like an online market, where there is no direct physical contact between buyers and sellers.
Organizational behavior (OB) is the academic study of the ways people act within groups. Its principles are applied primarily in attempts to make businesses operate more effectively.
A distribution-in-kind, also referred to as a distribution-in-specie, is a payment made in the form of securities or other property rather than in cash. A distribution-in-kind may be made in several different situations, including the payment of a stock dividend or inheritance, or taking securities out of a tax-deferred account. It can also refer to the transfer of an asset to a beneficiary over the option of liquidating the position and transferring the cash.
The 11th District Cost of Funds Index (COFI) is a monthly weighted average of the interest rates paid on checking and savings accounts offered by financial institutions operating in Arizona, California, and Nevada. It is one of many indices used by mortgage lenders to adjust the interest rate on adjustable rate mortgages (ARM) and was launched in 1981. With an ARM mortgage, the interest rate on a mortgage moves up and down along with some standard interest rate chosen by the lender, and COFI is one of the most popular indices in the western states.
An asset swapped convertible option transaction (ASCOT) is a structure in which an option on a convertible bond is used to separate a convertible bond into its two components. The components being separated are the bond with its regular coupon payments and the equity option that functions as a call option. The ASCOT structure allows an investor to gain exposure to the option within the convertible without taking on the credit risk represented by the bond.
XD is a symbol used to signify that a security is trading ex-dividend. It is an alphabetic qualifier that acts as shorthand to tell investors key information about a specific security in a stock quote. Sometimes X alone is used to indicate that the stock is trading ex-dividend. Qualifiers can vary depending on where the stock is quoted, because the various news and market data services that provide stock quotes may use different qualifiers. These symbol letters may occur as part of a display on a broker’s trading platform, on a charting program or in a timely published report.
Underinsured Motorist Coverage Limits Trigger is one of the two triggers that can be specified by an insured party to protect against losses caused by an accident with a driver who has insufficient insurance. The underinsured motorist coverage limits trigger ensures that in the event of an accident caused by a driver with inadequate insurance, the underinsured motorist coverage comes into effect when the underinsured driver’s liability limit is lower than that of the insured person or policy holder. The other trigger for underinsured motorist coverage is the damages trigger.
A contra account is used in a general ledger to reduce the value of a related account when the two are netted together. A contra account’s natural balance is the opposite of the associated account. If a debit is the natural balance recorded in the related account, the contra account records a credit.
Underinsured Motorist Coverage Limits Trigger is one of the two triggers that can be specified by an insured party to protect against losses caused by an accident with a driver who has insufficient insurance. The underinsured motorist coverage limits trigger ensures that in the event of an accident caused by a driver with inadequate insurance, the underinsured motorist coverage comes into effect when the underinsured driver’s liability limit is lower than that of the insured person or policy holder. The other trigger for underinsured motorist coverage is the damages trigger.