i-Dictionary

 

Alpha: A measure of the performance of an investment compared to a market index.

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AMFI Registration Number (ARN): A unique identification number assigned to mutual fund distributors by the Association of Mutual Funds in India (AMFI).

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Auditor: A professional who conducts an independent examination of a company's financial records and reports to provide an opinion on their accuracy.

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Accrued: Interest or income that has been earned but not yet paid or received.

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Accreted Value: The increase in value of a bond or other fixed-income security as it approaches maturity.

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Acts of God: Unforeseeable natural disasters or events that are beyond human control and can result in financial losses.

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Actuary: A professional who uses statistical methods to evaluate and manage financial risk, particularly in insurance and pension plans.

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Algo-trading: The use of algorithms to execute trades automatically based on predefined rules and market conditions.

 

Amortization: The gradual reduction of a debt or other obligation through regular payments over time.

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Angel Investor: A high net worth individual who invests in startup companies or early-stage businesses in exchange for ownership equity.

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Annuitant: The person who receives payments from an annuity.

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Annuity: A financial product that provides a series of regular payments to an individual in exchange for an initial lump sum payment.

 

Anti Money Laundering (AML): Regulations and procedures aimed at preventing the illegal practice of disguising the proceeds of crime as legitimate funds.

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Appreciation: An increase in the value of an asset over time.

 

APY (Annual Percentage Yield): The total amount of interest earned on a deposit or investment over one year, expressed as a percentage of the initial investment.

 

Arbitrage: The practice of taking advantage of price differences between two or more markets to make a profit with minimal risk.

 

Arbitrage Pricing Theory (APT): A financial model that attempts to explain the relationship between the expected returns of an investment and various market factors.

 

Asset: A resource with economic value that an individual or organization owns or controls.

 

Asset Allocation: A strategy of dividing investment portfolios among different asset categories to achieve specific investment objectives.

 

Asset Management Company (AMC): A company that manages and invests funds on behalf of its clients in various financial assets.

 

Asset Under Management (AUM): The total market value of assets that an investment company or financial institution manages on behalf of its clients.

 

Association of Mutual Funds in India (AMFI): An industry association of mutual funds in India that aims to promote the growth of the mutual fund industry.

 

Authorised Participants (APs): Entities authorized by exchange-traded funds (ETFs) to create or redeem shares of the ETFs.

 

Averaging: An investment strategy that involves regularly investing a fixed amount of money at predetermined intervals regardless of market conditions.

 

AY (Assessment Year): The year following the financial year in which income is earned and on which income tax is assessed and paid.

 

Bad Credit: A situation where a borrower has a poor credit history and is deemed high-risk by lenders.

 

Bad Debt: A debt that is unlikely to be paid back by the borrower, typically due to insolvency or bankruptcy.

 

Balanced Mutual Funds/ Balanced funds: Mutual funds that invest in a mix of stocks and bonds, with the goal of providing investors with both growth and income.

 

Bankrupt: A person or business that has been legally declared unable to pay their debts.

 

Bankruptcy: The legal process through which a person or business declares that they are unable to pay their debts and seeks protection from creditors.

 

Basis Points: A unit of measure used in finance to express differences in interest rates or yields.

 

Basis Price: The price at which a security or commodity is traded on a specific day.

 

Bayes' Theorem: A mathematical formula used in probability theory to calculate the likelihood of an event based on prior knowledge or assumptions.

 

Bank Fixed Deposits (BFD's): A type of savings account offered by banks that typically offer higher interest rates than regular savings accounts.

 

Bear Market: A market condition in which prices of securities are falling, typically by 20% or more.

 

Benchmark: A standard against which the performance of an investment is measured.

 

Benchmark index: A specific index of securities used as a benchmark for evaluating investment performance.

 

Beta: A measure of a stock's volatility in relation to the overall market.

 

Beta Coefficient: A numerical value that indicates the degree of a stock's volatility in relation to the overall market.

 

Beta Ratio: The ratio of a stock's volatility to the volatility of the overall market.

 

Billing: The process of preparing and sending invoices to customers for products or services rendered.

 

Bond: A debt security in which the issuer borrows money and promises to repay the principal and interest to the bondholder.

 

Bond Swap: The exchange of one bond for another, typically with different interest rates, maturity dates, or other terms.

 

Bonus: An additional payment or reward given to an employee or investor.

 

Bookkeeping: The process of recording financial transactions and maintaining financial records.

 

Broker: An individual or firm that acts as an intermediary between buyers and sellers in financial transactions.

 

Bull Market: A market condition in which prices of securities are rising, typically by 20% or more.

 

Blue-chip Stocks: Stocks of large, established companies with a history of stable earnings and dividends.

 

Bid-ask Spread: The difference between the highest price a buyer is willing to pay for a security and the lowest price a seller is willing to accept.

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Capital appreciation: The increase in the value of an asset over time.

 

Call Price: The price at which a bond can be redeemed before its maturity.

 

Capital: Money or assets invested in a business or venture to generate income.

 

Capital Asset Pricing Model (CAPM): A model used to determine the expected return on an investment based on its risk.

 

Capital expenditures (Capex): Funds spent by a company on acquiring or upgrading physical assets.

 

Carpet Area: The actual usable area within a property, excluding common spaces like stairs, lift, etc.

 

Cash Flow: The movement of money in and out of a business or investment.

 

Cash reserve Ratio (CRR): The percentage of deposits that banks are required to keep with the central bank as a reserve.

 

CDSC (Contingent Deferred Sales Charge): A fee charged by mutual funds for selling the shares before a specified period.

 

Churning: Excessive buying and selling of securities to generate commissions for the broker.

 

Circular (CIR): A communication or notification issued by a regulatory authority to the industry participants.

 

Closed ended: A type of investment fund where investors can buy and sell shares only during a limited period.

 

Collateral: An asset pledged by a borrower to secure a loan.

 

Commercial Paper: Short-term debt instrument issued by corporations to meet their working capital requirements.

 

Commission: A fee charged by brokers or agents for their services.

 

Commodities: Raw materials or products traded in the market, such as gold, silver, oil, etc.

 

Commodity markets: Platforms where commodities are traded, like the MCX or NCDEX in India.

 

Cost Averaging: A strategy of investing fixed amounts of money at regular intervals to reduce the impact of market volatility.

 

Coupon: The interest rate paid on a bond or fixed income security.

 

Common Stock: A type of equity security that represents ownership in a company.

 

Company Fixed Deposits (CFD): Fixed deposits offered by companies to investors for a specified period at a fixed rate of interest.

 

Code of Conduct: A set of guidelines or ethical standards that regulate the behavior of market participants.

 

Compound Annual Growth Rate (CAGR): The average rate of return on an investment over a specified period.

 

Compound Interest: Interest earned on the principal amount as well as the accumulated interest.

 

Consolidated Account Statement (CAS): A statement that shows all investments held by an investor across multiple securities depositories.

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Consumer Price Index (CPI): An indicator of the average change in the prices of a basket of goods and services consumed by households.

 

Contra Funds: Mutual funds that invest against prevailing market trends.

 

Correlation: The degree to which two or more securities move in relation to each other.

 

Cosigner: A person who signs a loan or credit application along with the borrower and shares the responsibility of repaying it.

 

Credit History: A record of an individual's borrowing and repayment history.

 

Credit rating: An evaluation of the creditworthiness of a borrower, based on their financial history and ability to repay debts.

 

Crypto Currency: A digital currency that uses cryptography for security and operates independently of central banks.

 

Currencies: Units of exchange used in international trade, such as the US Dollar, Euro, or Indian Rupee.

 

Currency Calculator: A tool used to convert one currency to another at current exchange rates.

 

Currency Market: A market where currencies are traded, such as the Forex market.

 

Current Account Deficit: A situation where a country's imports are greater than its exports, leading to a net outflow of currency.

 

Current Account Surplus: A situation where a country's exports are greater than its imports, leading to a net inflow of currency.

 

Custodian: A financial institution that holds and safeguards assets on behalf of clients.

 

Cut-off time: The time before which a transaction must be completed to be processed on the same day.

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Debt Financing: A method of raising funds by borrowing money from lenders or investors.

 

Debt Mutual Funds/Debt Funds: Investment funds that primarily invest in debt securities like bonds, treasury bills, and other fixed-income instruments.

 

Debt hybrid funds: Investment funds that invest in both debt and equity securities.

 

Default: A failure to repay a loan or meet an obligation as per the terms agreed upon.

 

Deflation: A decrease in the general price level of goods and services over time.

 

Delinquency: A failure to make a payment or fulfill a financial obligation on time.

 

Depreciation: A decrease in the value of an asset over time due to wear and tear, age, or obsolescence.

 

Derivatives: Financial contracts whose value is based on an underlying asset or set of assets.

 

Dilution: A reduction in the ownership percentage of existing shareholders due to the issuance of new shares.

 

Discounted Cash Flow (DCF): A method of valuing an investment by calculating the present value of its expected future cash flows.

 

Diversification: Spreading investments across multiple assets or classes to reduce risk.

 

Dividend: A payment made by a corporation to its shareholders as a distribution of profits.

 

Dividend Distribution Tax (DDT): A tax on the dividend paid by a company to its shareholders.

 

Dividend Frequency: The frequency at which a company pays out dividends to its shareholders.

 

Dividend Yield: The percentage of the stock price that a company pays out in dividends per year.

 

Domestic institutional investors (DII): Institutional investors based in India that invest in the Indian financial markets.

 

Dow Jones Industrial Average (Dow Jones): An index of 30 large publicly traded companies in the United States.

 

Drawdown: The maximum loss experienced by an investment or portfolio from its peak value to its lowest value.

 

Due Diligence: The process of investigating and verifying the financial and operational details of a potential investment or acquisition.

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EBIT: A financial metric that shows a company's operating profit before interest and taxes.

 

Earthquake Insurance: An insurance policy that provides coverage for damages and losses caused by earthquakes.

 

Electronic Clearing Service (ECS): An electronic payment system that allows for the transfer of funds from one bank account to another.

 

Emerging markets: Countries that are in the process of developing their economy and financial systems.

 

Employee Stock Ownership Plan (ESOPs): A program that allows employees to own a portion of the company they work for through the purchase of company stock.

 

Entry Load: A fee charged to investors when they enter a mutual fund.

 

EPS (Earning Per Share): A financial metric that shows the amount of profit a company generates per outstanding share of common stock.

 

Equated Monthly Installment (EMI): A fixed payment amount made by a borrower to repay a loan or debt over a set period of time.

 

Equity: The ownership interest in a company or property.

 

Equity Financing: A method of raising capital for a company by selling shares of ownership to investors.

 

Equity Mutual Funds/Equity Funds: A mutual fund that primarily invests in stocks.

 

Equity Index Funds: A type of mutual fund that tracks the performance of a specific stock market index.

 

Equity hybrid: A type of investment product that combines features of both equity and debt instruments.

 

Equity-Linked Savings Schemes (ELSS): A type of mutual fund that offers tax benefits to investors who hold their investment for a specified period.

 

Exchange Earners' Foreign Currency Account (EEFC): An account that allows Indian exporters to keep their foreign exchange earnings in a designated bank account.

 

Exchange Traded Funds (ETF): A type of investment fund that trades on a stock exchange and tracks the performance of an underlying asset or index.

 

Expense Ratio: The fee charged by a mutual fund for managing and operating the fund.

 

Exit Load: A fee charged to investors when they exit a mutual fund.

 

Exposure: The amount of risk that an investor or business is willing to take on in their investments or operations.

 

Finance: The management of money and investments.

 

Fair market value (FMV): The price at which an asset would be sold in a transaction between a willing buyer and a willing seller.

 

Fama French Three Factor Model: A model that explains the returns of a portfolio based on three factors: market risk, size, and value.

 

Financial Planning: The process of setting financial goals and creating a plan to achieve them.

 

First In First Out basis (FIFO): A method of valuing inventory in which the first items purchased are assumed to be the first sold.

 

Fiscal Year: A 12-month period used for accounting and financial reporting purposes by a company or government.

 

Fixed Asset: A long-term tangible asset, such as property, plant, and equipment, used in the production or supply of goods and

services.

 

Fixed Deposit (FD): A type of investment in which money is deposited with a financial institution for a fixed period of time at a fixed

interest rate.

 

Fixed Income: An investment in which the issuer of the security promises to pay a fixed rate of interest over a set period of time.

 

Fixed Interest Rates: A rate of interest that remains constant for the entire term of a loan or investment.

 

Fixed Maturity Plans: Mutual fund schemes that invest in debt instruments with a fixed maturity.

 

Floatation: The process of a company issuing new shares to the public through an initial public offering (IPO).

 

Floating Interest Rates: A rate of interest that changes based on market conditions and is typically tied to a benchmark rate.

 

Folio Number: A unique identifier assigned by mutual funds to individual investor accounts.

 

Follow On Public Offer (FPO): The process of a company issuing additional shares to the public after an IPO.

 

Foreclosure: The legal process in which a lender takes possession of a property from a borrower who has defaulted on their loan.

 

Foreign Account Tax Compliance Act (FATCA): A United States law that requires foreign financial institutions to report information

about accounts held by US taxpayers.

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Foreign Exchange (Currency Market) (FOREX): The market where currencies are traded.

 

Foreign institutional investors (FII): Institutional investors that invest in the financial markets of a country other than their own.

 

Forex Market: The market where currencies are traded.

 

FPIs: Foreign Portfolio Investors that invest in the Indian securities market.

 

FDI: Foreign Direct Investment, investment made by a company or individual in one country into business interests located in another

country.

 

Free Cash Flow (FCF): The cash generated by a company after deducting capital expenditures and other cash outflows.

 

Fund analysis: The process of evaluating mutual funds or other investment funds to determine their strengths and weaknesses.

 

Fund Category Mutual Funds: Mutual funds categorized by their investment objectives and the types of assets they invest in.

 

Fund Family: A group of mutual funds managed by the same company.

 

Fund Manager: The person responsible for making investment decisions for a mutual fund or other investment fund.

 

Fund of Funds (FoF): A mutual fund that invests in other mutual funds.

 

FoF scheme: A mutual fund scheme that invests in other mutual funds.

 

Fund Tracker: An investment strategy that seeks to replicate the performance of a specific index or benchmark.

 

Fundamental Analysis: An investment analysis approach that involves analyzing a company's financial statements and other economic

data to determine its intrinsic value.

 

Funds Under Management (FUM): The total value of assets managed by a fund manager.

 

Fund ratings and reviews: Ratings and reviews of mutual funds provided by independent rating agencies and investment research

firms.

 

Financial Year: A 12-month period used for accounting and financial reporting purposes by a company or government.

 

Flexi-cap Fund: A mutual fund that invests in stocks across market capitalization without any restriction.

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Gross Domestic Product (GDP): The total value of all goods and services produced within a country's borders during a specific period.

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Gross National Product (GNP): The total value of all goods and services produced by a country's citizens, regardless of their location, during a specific period.

 

GDP Growth: The percentage increase in the GDP over a certain period.

 

GDP Contraction: The percentage decrease in the GDP over a certain period.

 

Garnishment: A legal process where a portion of a person's wages or assets is withheld to pay off a debt.

 

GCM: Global Clearing Member, an entity authorized to clear trades in multiple countries.

 

Global Indexes: A benchmark index that tracks the performance of stocks or bonds from multiple countries.

 

Grace Period: A period of time after a payment deadline during which no late fees or penalties are imposed.

 

Grandfathering: A provision in a new law that exempts certain existing entities or practices from the new regulations.

 

Gross Profit: The revenue minus the cost of goods sold.

 

Group of Funds: A collection of mutual funds managed by the same company.

 

Growth funds: Mutual funds that invest in stocks of companies with strong growth potential.

 

Growth Investing: A strategy of investing in stocks of companies with strong growth potential.

 

Guarantor: A person or organization that provides a guarantee or security for a loan or other financial obligation.

 

Gilt Fund: A type of mutual fund that invests in government securities with long-term maturity.

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Hedge Fund: A type of investment fund that uses aggressive investment strategies to generate high returns.

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Hedging: A risk management strategy used to reduce or eliminate the risk of adverse price movements in an asset or portfolio.

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High Quality Liquid Assets (HQLA): Assets that can be easily and quickly converted into cash without significant loss in value, used to ensure financial stability.

 

Historical Dividends: The past dividend payments made by a company, used to assess its dividend-paying ability and potential future

payouts.

 

Hit rate: A measure of the success rate of a particular strategy or investment approach.

 

Human Life: A financial concept used in insurance to assign a monetary value to an individual's life based on their age, health, and

other factors.

 

Hybrid Funds: Investment funds that combine the characteristics of both equity and debt funds, providing investors with a blend of

income and capital appreciation.

 

Hypothecation: A process of pledging an asset as collateral for a loan, where the ownership of the asset remains with the borrower.

 

Investment: The act of allocating money or resources with the expectation of generating income or profit.

 

Inception Date: The date on which a mutual fund or investment product begins to operate and accept investments.

 

Incremental Investment: An additional investment made in an existing investment product or company.

 

Index: A statistical measure that tracks the performance of a specific group of stocks, bonds, or other assets.

 

Index Funds: Investment funds that aim to replicate the performance of a specific market index.

 

Individual Retirement Fund (IRA): A retirement savings account that provides tax advantages to individuals in India.

 

Inflation Risk (IR): The risk that the purchasing power of an investment will decline due to inflation.

 

Information Ratio (IR): A measure of the consistency of an investment's excess returns compared to a benchmark.

 

Initial Public Offer (IPO): The first time a company offers its shares to the public through a stock exchange.

 

Insider Trading: The illegal practice of using non-public information to make trades or gain an unfair advantage in the market.

 

Intangible Asset: Non-physical assets, such as intellectual property or brand value, that can contribute to a company's value.

 

Internal Rate of Return (IRR): A financial metric used to measure the profitability of an investment.

 

International Monetary Fund (IMF): An international organization that promotes international monetary cooperation, exchange stability,

and sustainable economic growth.

 

Intraday: Transactions or trades that occur within the same trading day.

 

Inventory: A list of goods and materials that a business holds in stock.

 

Investment horizon: The time period during which an investor expects to hold an investment.

 

Investment Advisor: A professional who provides investment advice and guidance to clients.

 

Investment Criteria: The standards or guidelines used to evaluate and select investment opportunities.

 

Investment Multiples: A financial metric used to determine the value of an investment by comparing it to similar investments.

 

Investment Objective/Investment goals: The desired outcomes that an investor hopes to achieve through their investment activities.

 

Investment strategies: The approaches and methods used to manage and allocate investment funds.

 

Investment options: The various types of investment products and vehicles available to investors.

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KYC: KYC is a process of verifying a customer's identity and address to prevent financial fraud.

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KIID: KIID is a document that provides essential information about mutual fund schemes to investors.

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Large-cap fund: Large-cap fund is a type of mutual fund that primarily invests in large-cap companies with a market capitalization of

over Rs. 10,000 crore.

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Lump sum investment: Lump sum investment refers to investing a large amount of money in a mutual fund scheme at once.

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Leveraged Management Buyouts (LMBO): LMBO is a type of leveraged buyout where the management of a company borrows money

to purchase a controlling stake in the same company.

 

Lien: Lien is a legal right to keep possession of property belonging to another person until a debt owed by that person is discharged.

 

Liquid funds: Liquid funds are a type of mutual fund that primarily invests in debt and money market instruments with a maturity of up

to 91 days.

 

Liquidity: Liquidity refers to the ability of an asset to be quickly converted into cash without affecting its market price.

 

Liquidity Coverage Ratio (LCR): LCR is a metric used by banks to assess their ability to meet short-term liquidity needs in case of an

adverse economic scenario.

 

Load: Load is a fee charged by mutual funds when investors buy or sell units in the fund.

 

Loan to Value (LTV): LTV is the ratio of the amount of loan taken to the value of the property pledged as collateral.

 

Long Term Debt: Long-term debt refers to debt that matures in more than one year.

 

Long-term investment strategy: Long-term investment strategy involves investing in securities with a long-term investment horizon of

more than five years.

 

Lower Circuit: Lower circuit is a price limit set by stock exchanges below which trading in a particular stock is not allowed.

 

LTCG tax (Long term Capital gains): LTCG tax is a tax levied on profits made by investors on the sale of securities held for more than

one year.

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Maturity: The date when a financial instrument or investment becomes due for payment.

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Management Buy-Outs (MBO): The process of purchasing a company by its current management team.

 

Market Cap: The total value of all outstanding shares of a publicly traded company.

 

Market cycles: The recurring pattern of ups and downs in the stock market over time.

 

Market Makers: Entities that facilitate the buying and selling of securities by providing liquidity to the market.

 

Master Circular: A comprehensive document issued by the Reserve Bank of India that consolidates all existing instructions and

regulations for a particular topic.

 

Market Risk: The risk of financial loss due to changes in market conditions or factors such as interest rates, exchange rates, or

commodity prices.

 

Merger: The combination of two or more companies to form a single entity.

 

MICR code: A code used by banks to process cheques that contains information such as the bank's branch and account number.

 

Micro Finance: The provision of financial services, such as loans and savings accounts, to low-income individuals and small

businesses.

 

Minimum Investment: The minimum amount required to invest in a particular financial instrument or fund.

 

Mid-cap Fund: A mutual fund that primarily invests in medium-sized companies.

 

Multi-cap Fund: A mutual fund that invests in companies across different market capitalizations.

 

Modified Duration: A measure of a bond's sensitivity to changes in interest rates.

 

Monetization (MNT): The process of converting an asset into cash.

 

Mutual Funds: An investment vehicle that pools money from multiple investors to invest in a diversified portfolio of stocks, bonds, or

other securities.

 

Money Market Fund: A mutual fund that invests in short-term, low-risk debt securities such as treasury bills and commercial paper.

 

Multi asset funds: A mutual fund that invests in a variety of asset classes, such as stocks, bonds, and commodities.

 

Municipal Bond: A debt security issued by a state or local government to fund public projects such as infrastructure or schools.

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National Automated Clearing House (NACH): NACH is an electronic payment system in India that enables paperless, automated

clearing of payments.

 

National Payments Corporation of India: National Payments Corporation of India is a payment systems organization that facilitates

electronic payment and settlement systems in India.

 

National Electronic Funds Transfer (NEFT): NEFT is an electronic funds transfer system in India that enables individuals and

businesses to transfer funds between bank accounts.

 

National Securities Depository Ltd & Central Depository Services (NSDL): NSDL and CDSL are depositories in India that provide

electronic holding of securities in dematerialized form.

 

NAV (Net Asset Value): NAV is the value of a mutual fund's assets minus its liabilities, divided by the number of units outstanding.

 

Net Present Value (NPV): NPV is the present value of expected future cash flows minus the initial investment, used to determine the

profitability of an investment.

 

Non-Performing Asset (NPA): NPA is a classification of an asset that has ceased to generate income for a lender due to default by the

borrower.

 

Non-Banking Financial (NBFC): NBFCs are financial institutions that provide banking services without holding a banking license.

 

Notional Amount: Notional Amount is the nominal or face value of a financial instrument, used for calculation of payments and fees.

 

Net Stable Funding Ratio (NSFR): NSFR is a regulatory requirement that measures a bank's ability to withstand funding stress over a

one-year period.

 

No Load Fund: No Load Fund is a mutual fund that does not charge a sales commission or load fee.

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Open-end Fund: Open-end Fund is a mutual fund that issues and redeems shares at the request of investors and adjusts its net asset

value accordingly.

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Operating Cash Flow (OCF): Operating Cash Flow is the cash generated by a company's core business operations.

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Over Weighing: Over Weighing is an investment strategy that involves allocating a higher percentage of a portfolio to a particular investment than its weighting in the benchmark index.

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Passive Investing: An investment strategy that involves holding a diversified portfolio of securities that track a market index rather than trying to outperform it.

 

Portfolio Management: The art and science of managing an investor's portfolio of investments to maximize returns while minimizing

risk.

 

Portfolio diversification: The practice of investing in a variety of different assets to reduce the risk of loss.

 

Public Information Book: A document that provides information on the financial status and activities of a publicly traded company.

 

Ponzi Scheme: A fraudulent investment scheme in which returns are paid to earlier investors using the capital of newer investors.

 

Portfolio: A collection of financial assets such as stocks, bonds, and other investments.

 

Portfolio Tracker: A tool or software that allows investors to monitor the performance of their investment portfolio.

 

Preferred Provider Organization (PPO): A type of health insurance plan that provides discounted rates for medical services obtained

from a network of healthcare providers.

 

Prepaid Payment Instruments (PPIs): Payment instruments such as gift cards or electronic wallets that are loaded with a fixed amount

of money and can be used for transactions.

 

Price to Book Value Ratio (P/BV Ratio): A financial ratio that compares a company's market value to its book value.

 

Price-to-Earnings Ratio (P/E Ratio): A financial ratio that compares a company's stock price to its earnings per share.

 

Price/Book Ratio (P/B Ratio): A financial ratio that compares a company's market value to its book value.

 

Prime Rate: The interest rate that commercial banks charge their most creditworthy customers.

 

Private Placement: The sale of securities directly to institutional or individual investors, rather than on a public exchange.

 

Pro-Rata: A proportional distribution of benefits or expenses based on each individual's share of ownership.

 

Prospectus: A legal document that provides information about a company's securities and financial information to potential investors.

 

Profit Earning Capacity Value (PECV): The present value of a company's future earnings potential.

 

Profit Sharing Plan (PSP): A type of retirement plan in which employers contribute a portion of their profits to a pool that is distributed

among eligible employees.

 

Public Sector Undertaking (PSU): A PSU is a company owned and operated by the government of India.

 

Purchasing Managers Index (PMI): PMI is an economic indicator that measures the level of activity in the manufacturing sector.

 

Private Wealth Management: Private Wealth Management involves the management of financial assets and investment portfolios of

high net worth individuals by a professional wealth manager.

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Quick Ratio: A measure of a company's ability to meet short-term financial obligations with its most liquid assets.

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Returns: The profit earned on an investment over a specified period of time, expressed as a percentage of the initial investment.

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Retirement Planning: The process of setting aside funds and making investment decisions to ensure financial security in retirement.

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Redemption: The process of redeeming or buying back an investment or security.

 

Real Estate Investment Trust (REIT): A company that owns or finances income-producing real estate and offers investors a way to

invest in a diversified portfolio of properties.

 

Real Estate Regulation and Development Act (RERA): A legislation that aims to protect the interests of homebuyers and promote

transparency in the real estate sector.

 

Real Time Gross Settlement (RTGS): A payment system that enables real-time funds transfer between banks on a gross basis.

 

Rebalancing: The process of adjusting the allocation of assets in a portfolio to maintain the desired level of risk and return.

 

Recapitalization: The process of increasing a company's capital base by issuing new shares or other securities.

 

Recession: A significant decline in economic activity that lasts for an extended period of time.

 

Reflation (RFL): A policy aimed at stimulating economic growth by increasing the money supply or reducing taxes.

 

Registered Bond: A bond that is registered with the issuer, making it easier to track ownership and process payments.

 

Registered Investment Advisor: A professional who provides investment advice to clients and is registered with the Securities and

Exchange Board of India (SEBI).

 

Regression: A statistical method used to analyse the relationship between two or more variables.

 

Reinvestment option: An option for investors to reinvest the earnings from an investment back into the same investment.

 

REPO Rate (REPO): The rate at which the Reserve Bank of India (RBI) lends money to commercial banks for short periods.

 

Return on investment (ROI): The amount of profit or loss generated on an investment relative to the amount invested, expressed as a

percentage.

 

Reverse Repo Rate (RRR): The rate at which the RBI borrows money from commercial banks for short periods.

 

Revocable Beneficiary: A beneficiary designation that can be changed or revoked by the policy owner at any time.

 

Right of Survivorship: A legal principle that transfers ownership of an asset to the surviving owner upon the death of one owner.

 

Risk: The likelihood of an adverse event occurring that affects financial outcomes.

 

Risk tolerance: The degree of uncertainty that an investor is willing to accept in pursuit of returns.

 

Risk neutrality: A state of mind in which an individual is indifferent to taking risks in investment decisions.

 

Risk-adjusted return: A measure of investment performance that considers the level of risk taken to achieve the return.

 

Risk management: The process of identifying, assessing, and prioritizing risks, and implementing strategies to mitigate or avoid them.

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Savings: The amount of money that is not spent and kept aside for future use.

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Scheme overview: A brief summary of an investment scheme's key features, investment objectives, and risks.

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Scheme performance: The investment returns generated by a particular scheme over a specified time period.

 

Scheme returns: The total gains or losses of an investment scheme over a given period.

 

Scheme sector: The broad category of industries or businesses in which a particular scheme invests.

 

Sector breakdown: A detailed analysis of a scheme's holdings by sector or industry.

 

Sectoral funds: Mutual funds that focus on a specific sector or industry.

 

Secured debt: Debt that is backed by collateral and offers a lower risk to lenders.

 

Semi standard deviation (SD): A measure of investment risk that captures the volatility of returns below a certain threshold.

 

SIP (Systematic Investment Plan): An investment plan that allows investors to invest a fixed amount at regular intervals is called the

SIP or Systematic Investment Plan.

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SIP purchase: The process of investing a fixed amount in a scheme at regular intervals through a systematic investment plan (SIP).

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SIP returns: The returns generated by an investment made through a systematic investment plan (SIP).

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SLR: Statutory Liquidity Ratio is the percentage of deposits that banks must maintain in safe and liquid assets.

 

Small-cap Fund: A type of mutual fund that invests primarily in small-cap stocks, which have a smaller market capitalization than larger

companies.

 

SMEs: Small and Medium Enterprises are businesses with a certain level of turnover and employment, but below the thresholds of

large corporations.

 

Sole Proprietor: A type of business ownership where one individual owns and manages the entire business.

 

Solvency Ratio: The Solvency Ratio is a financial metric that measures a company's ability to meet its long-term financial obligations.

 

Sortino: The Sortino Ratio is a risk-adjusted performance measure that evaluates an investment's return in relation to the downside

risk.

 

Sovereign Gold Bond Scheme (SGBs): The SGBs scheme is a government-run investment scheme in India where individuals can

invest in gold in a non-physical form.

 

Speculation: Speculation refers to the act of trading securities, commodities, or other assets in the hope of making a profit, without

necessarily knowing or caring about the underlying fundamentals.

 

Split: A corporate action where a company divides its existing shares into multiple shares, effectively increasing the number of

outstanding shares.

 

Stagflation (SFL): Stagflation is a condition of slow economic growth and high inflation.

 

Statement of additional information (SAI): SAI is a document that provides additional information about a mutual fund that is not

included in the fund's prospectus.

 

Statutory liquidity ratio (SLR): The SLR is a regulation in India that requires banks to maintain a certain percentage of their deposits in

safe and liquid assets.

 

Stock: A stock represents a share in the ownership of a company, and buying a stock means buying a small piece of that company.

 

Strike Price: The price at which an option holder can buy or sell the underlying asset.

 

SWOT Analysis: A strategic planning technique that helps identify a company's Strengths, Weaknesses, Opportunities, and Threats.

 

Systematic risk: The risk inherent in the overall market or economy, affecting all securities or assets.

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Systematic Withdraw plan (SWP): An investment strategy where an investor withdraws a fixed amount of money at regular intervals

from an investment account.

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Tariff: A tax on imports or exports.

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Tax Deducted at Source (TDS): Tax collected by an individual or organization on behalf of the government at the time of payment to

the recipient.

 

Tax Saving: Reducing the amount of tax payable through various deductions and exemptions.

 

Tax Evasion: The illegal act of not paying taxes or underreporting income to avoid taxes.

 

Tax-exempt income: Income that is not subject to taxation.

 

Turnover Ratio: A financial ratio that measures the efficiency of a company in managing its assets.

 

Top five detractors: The top five investments that have caused a decrease in the value of a portfolio.

 

Term Loan: A loan that is repaid in regular installments over a set period.

 

Third-Party: A party outside of a transaction between a buyer and a seller.

 

Time Weighted Average Price (TWAP): A trading algorithm that executes trades at regular intervals to achieve a benchmark price.

 

Times Interest Earned Ratio (TIER) Ratio: A financial ratio that measures a company's ability to meet its interest payments.

 

Top-Down Investing Approach: An investment strategy that begins with analysing the overall economy before selecting specific stocks

or sectors.

 

Top-performing funds: Mutual funds or exchange-traded funds (ETFs) that have delivered the highest returns over a certain period.

 

Tracking Error: The deviation of a portfolio's returns from its benchmark.

 

Tranche: A portion of a loan or security that is divided into smaller pieces.

 

Transfer agent: An organization that maintains records of a company's stockholders and facilitates the transfer of shares.

 

Treynor Ratio: A financial ratio that measures the excess return earned by a portfolio over the risk-free rate per unit of systematic risk.

 

Unit Linked Insurance Plans (ULIP): Insurance products that offer both life cover and investment opportunities.

 

Unit: A part or share of a mutual fund, exchange-traded fund (ETF), or other investment fund.

 

Unitholder: A person or entity that owns one or more units of a mutual fund, ETF, or other investment fund.

 

Unsecured Loans: Loans that are not backed by collateral or assets.

 

Unsystematic risk: The risk that comes from factors specific to a particular company or industry.

 

Upper Circuit: The maximum percentage increase allowed in the price of a stock during a trading session.

 

Valuation: The process of determining the worth of an asset or security.

 

Value investing: A strategy that involves buying undervalued stocks with the potential for long-term growth.

 

Vega: A measure of the sensitivity of an option's price to changes in volatility.

 

Volatility: The degree of variation of an asset's price over time.

 

Volume-Weighted Average Price (VWAP): A trading benchmark that measures the average price a security traded at during a given

time period.

 

Volume weighted average price: A calculation that takes into account the volume of trades when determining the average price of a

security.

 

Wealth Management: A professional service that helps individuals and families manage their wealth and achieve their financial goals.

 

Wash Sale Rule: A tax rule that prevents investors from claiming a loss on a security that they sell and then buy back within a short

time frame.

 

Watch-List: A list of securities that an investor is monitoring for potential investment opportunities.

 

Weeks 52-High/Low: The highest and lowest prices a security has traded at over the past 52 weeks.

 

Wholesale Price Index (WPI): An index that measures the changes in the prices of goods sold in bulk by wholesalers.

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Winner's Curse: The tendency for the winner of an auction to pay too much for the item they have won.

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Working Capital: The amount of money a company has available to cover its day-to-day expenses.

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World Market Indices: Indices that track the performance of stock markets around the world.

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Yield: The rate of return on an investment, usually expressed as a percentage of the initial investment.

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Year to Date (YTD): The period starting from the beginning of the calendar year up to the current date.

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Yield To Maturity (YTM): The total return anticipated on a bond if held until its maturity date.

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Yield Curve: A graph that plots the interest rates of bonds with different maturities, typically used to predict economic conditions.

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Zero-coupon bond: A bond that pays no interest but is issued at a discount and redeemed at face value.