Profiting on interest rate differentials. For instance, borrowing money at a relatively low short-term rate and lending it out a higher long-term rates.
Archives
Generally Accepted Accounting Principles (GAAP)
Accounting rules and procedures established by the Financial Accounting Standards Board, an independent self-regulating organization.
Cash
A special term attached to an equity order that requires the trade to be settled either the same day or the following business day for cash.
Geographic Funds
Mutual funds specializing in a specific geographic area such as Europe.
Cash & Cash Equivalents
Cash in bank and all securities that can readily be converted to cash within three months or less.
Future Inflation Gauge
A private-sector index (1992=100) that attempts to predict the direction of inflation over the next 6 to 12 months.
Capitalization Weighted Index
Largest companies have most influence on index price action.
Gain-on-sale accounting
A company estimates the future profitability of a trade made today and books a profit today based on the present value of those estimated future profits.
Capped Indices
Indices for which there is a maximum relative weight by market capitalization for any one constituent. Any individual constituent of the index can represent no more than a specified percent of the index. The individual constituents of the S&P/TSX Capped Composite and S&P/TSX Capped 60 indices are capped at 10%, while the individual constituents of the S&P/TSX Capped sector indices are capped at 25%.
GARP
Growth at a reasonable price. A strategy of buying stocks whose price/earnings ratio is equal to or less than the estimated annual earnings growth rate.