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Abandonment
Allow an option to expire worthless.
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Accrued Income Scheme
The tax rules which specify how accrued interest on gilts and other bonds is to be taxed or relieved.
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Accrued Interest
The amount of interest accumulated but not paid between the most recent interest payment and the value date of transaction. For most types of bond, gross accrued interest is added to the price, in which case the price is said to be clean. When a bond is traded ex-dividend and settlement is prior to the interest date, a rebate for negative accrued interest may be deducted from the price. Accrued interest is not added to the price of preference shares or domestic convertibles and, in this case, the price is said to be dirty.
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Acquisition
A corporate action in which a company buys most, if not all, of the target company's ownership stakes in order to assume control of the target firm. Acquisitions are often made as part of a company's growth strategy whereby it is more beneficial to take over an existing firm's operations and niche compared to expanding on its own. Acquisitions are often paid in cash, the acquiring company's stock or a combination of both.
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Administrator (Insolvency)
An administrator may be appointed when a company or partnership gets into financial trouble, with the aim of getting the company out of trouble and trading again.
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Administrator (probate)
A personal representative appointed by the probate registry either if there is no will or if there is a will but no executor appointed or willing to act.
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Advisory Service
A firm advises the client but the investment decision is made by the client.
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Alternative Investment Market (AIM)
The second tier or junior market established by the London Stock Exchange in 1995 to provide trading facilities in the shares of smaller companies.
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American-style exercise
An option that may be exercised at any time prior to expiry.
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Amortisation
The process of decreasing or accounting for an amount over a period of time.
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Annual Equivalent Yield
The annual representation of the redemption yield on a bond which pays interest more than once a year. It can be used to compare the yields of semi-annual bonds (e.g. Gilts) with those on bonds paying annually (e.g. Eurobonds), although in practice the reverse is more common.
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Annual General Meeting (AGM)
The required annual meeting of shareholders. At these meetings shareholders will usually receive the accounts, appoint directors and vote on resolutions put to the meeting.
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Annual Report and Accounts
The law requires all limited companies to prepare an annual report each year. It should include their financial statements and directors’ and auditor’s reports. It must also contain a five year summary of results. It must be sent to shareholders and to the Registrar of Companies. Once it has been received by the Registrar, it becomes a public document and anyone can look at it.
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Articles
The Articles of Association is a document which governs the running of a company. It sets out voting rights of shareholders, conduct of shareholders and directors’ meetings, powers of the management etc.
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Ask Price
Sometimes referred to as the offer price. It is the price (up to a specified quantity of shares) at which market makers are prepared to sell stock and therefore the price at which investors usually buy stock.
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Association of Private Client Investment Managers and Stockbrokers (APCIMS)
APCIMS is the trade association in Europe representing the private client investment community.
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At best order
An instruction given to a stockbroker to buy or sell securities at the best possible price available at the time.
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At-the-money
A call/put option where the exercise price is approximately the same as the current market price of the underlying security.
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Authorised Corporate Dealer (ACD)
A corporate body and an authorised person given powers and duties under FSA regulations to operate a unitised collective investment scheme.
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Authorised Unit Trust
Unit trust that meets the requirements of the Financial Services Authority to allow it to be freely marketable. Permitted to use derivatives for some strategies subject to Trustees approval.