Investments glossary terminology
The S&P GSCI is a composite index of commodities that measures the performance of the commodity market. The S&P GSCI is the commodity equivalent of stock indexes, such as the S&P 500 and the Dow Jones. The S&P GSCI was simply called the Goldman Sachs Commodity Index (GSCI) before it was purchased by Standard & Poor’s in 2007. Investing in a GSCI fund provides a broadly diversified, unleveraged, long-only position in commodity futures.
A linear relationship (or linear association) is a statistical term used to describe a straight-line relationship between a variable and a constant. Linear relationships can be expressed either in a graphical format where the variable and the constant are connected via a straight line or in a mathematical format where the independent variable is multiplied by the slope coefficient, added by a constant, which determines the dependent variable.
A nonresident alien is a noncitizen who has not passed or is exempt from the Green Card or substantial presence tests.1 Nonresident aliens must pay taxes on income earned in the U.S. Typical examples of nonresident aliens are teachers, people seeking medical treatment, and students.2
GBP is the abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories of South Georgia, the South Sandwich Islands, and British Antarctic Territory and the U.K. crown dependencies the Isle of Man and the Channel Islands. The African country of Zimbabwe also uses the pound. Many other currencies are pegged to the British pound, including the Falkland Islands pound, Gibraltar pound, Saint Helenian pound, Jersey pound (JEP), Guernsey pound (GGP), Manx pounds, Scotland notes. and Northern Ireland notes.
A complementary good or service is an item used in conjunction with another good or service. Usually, the complementary good has little to no value when consumed alone, but when combined with another good or service, it adds to the overall value of the offering. A product can be considered a complement when it shares a beneficial relationship with another product offering, for example, an iPhone and the apps used with it.
Certified Management Accountant (CMA) is an accounting designation that signifies expertise in financial accounting and strategic management. This certification builds on financial accounting proficiency by adding management skills that aid in making strategic business decisions based on financial data.
Asymmetric information, also known as information failure, occurs when one party to an economic transaction possesses greater material knowledge than the other party. This typically manifests when the seller of a good or service possesses greater knowledge than the buyer; however, the reverse dynamic is also possible. Almost all economic transactions involve information asymmetries.
A no-load fund is a mutual fund in which shares are sold without a commission or sales charge. This absence of fees occurs because the shares are distributed directly by the investment company, instead of going through a secondary party. This absence of a sales charges is the opposite of a load fund—either front-load or back-load—which charges a commission at the time of the fund’s purchase or sale. Also, some mutual funds are level-load funds where fees continue for as long as the investor holds the fund.
The money supply is all the currency and other liquid instruments in a country’s economy on the date measured. The money supply roughly includes both cash and deposits that can be used almost as easily as cash.
Wire rooms are facilities used by financial institutions to process fund transfers and order requests on behalf of clients. Typical tasks performed by wire room staff include receiving trade orders from brokers and other registered representatives, transmitting those orders to the exchange floor or the firm’s trading department, and relaying notices of executed trade orders back to the brokers involved.