Glossary List A

Accrued interest

Accrued interest stands for the interest that has been earned but not collected. This generally happens because of difference in the accounting cycle and cash flow cycle.

Actively managed funds

Investment companies and the fund sponsors do manage some funds in an effort to generate higher returns over the Index managed funds. The funds managed are known as actively managed funds.

Algorithmic trading

Algorithmic Trading is also known as Black box trading , Automated trading or Algo Trading simply. It is a type of trading in which computer are programmed to place trades in some identified fashions and in a high speed which is impossible for humans to operate at.

AMC

AMC stands for Asset Management Company. AMC is an entity which invests its clients pooled funds into different investment instruments so as to attain various objectives of the clients.

American depository receipt(ADR)

An American Depository receipt is a negotiable instrument issued by a US Bank representing a no of shares/single share which are being traded on the US Stock Exchange. These are basically instrument for those who are not entitled to trade directly on US Stock Exchange. ADRs are traded in dollar denomination only.

AMFI

AMFI stands for association of mutual funds in India. It is an Industry Standard Organisation with an aim to develop Indian Mutual Funds Industry at professional & Ethical Lines & view to promote and protect the Investors rights.

AMFI registration number(ARN)

AMFI has allotted all its employees a unique identification number, who are registered with AMFI. It is known as AMFI registration no.

Amortization

Amortization is process of paying of an financial obligation in regular installments over a fixed interval of time. Amortization becomes more convenient and specific in case of Intangible Assets

Annual Interest Rate

It is the effective interest that is paid or earned on a loan, financial instrument due to the compounding over a given period of time. It is also known as Effective Annual Interest Rate

Annualized premium

Premiums can be paid at different time intervals like monthly, bi-annually, quarterly, etc. Combined premium paid per annum is known as annualized premium

Annual report

Annual report is an annual publication that publicly listed companies have to publish for their investors mentioning the activities that company has been doing in the year as well as elaborate the financial condition of the company.

Anti-Money laundering

Anti-money laundering refers to the set of procedures that are to be used so as to ban the income generation through illegal measures

Arbitrage

Arbitrage is the process of simultaneously transacting in various securities in different markets or different forms(Spot Market, Derivatives Market, Cash Market etc.) so as to get an advantage of the Price differentials

Arbitrage fund

Arbitrage funds are a type of Mutual Funds which have those investments in their portfolio which can lead to generation of returns based on the price differential in Cash market and Derivatives Market. These type of funds can be broadly classified into Hybrid funds

Arbitrators

Arbitration is the mechanism to resolve the dispute between the investors and brokers or brokers & brokers. It is overlooked by a body which is known as arbitrators. The decision made by arbitrators are considered to be final.

Articles of association (A/A)

Articles of Association is document for a company which lists all the policies by which the company shall operate.

Ask price

Ask price is the price at which seller is willing to sell. The lowest the ask price better it is for the Buyer

Asset allocation

Asset allocation is a process of managing the investment portfolio so as to maximize the returns based on the risk appetite of the investor considering the time frame of the Investment and the goals of the Investment

Asset Valuation

It is the process of assessing the value of any item in worth like real estate, company, etc.

At par

It is commonly used in case of debt obligations, stock or bonds. It implicates that the security is trading at its face value only

Auction

Auction is a process where prospective willing buyers place bids so as to get the rights for the Asset or Service in question. Highest competitive bid is given the rights for the same.

Audit

Audit in financial context is referred to as an official inspection of a company and its financial statements by a third party body so as to ensure that there is no Inconsistency

Auditors

Auditors in finance refer to the personnel who are responsible for validating the reliability of the financial statements of an Organization.