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Market Basics & Instruments

52-Week High

The highest price at which a security has traded during the preceding fifty-two weeks.

52-Week High = maximum traded price over the trailing 52 weeks, adjusted for corporate actions
Market Basics & Instruments

52-Week Low

The lowest price at which a security has traded during the preceding fifty-two weeks.

52-Week Low = minimum traded price over the trailing 52 weeks, adjusted for corporate actions
Financial Statements & Accounting

Accrual Accounting

The convention of recording revenue when it is earned and expenses when they are incurred, regardless of when cash moves.

Test: the transaction is recognised in the period in which the economic event occurs, not the period in which cash is received or paid qualitative
Bonds & Fixed Income

Accrued Interest

Interest earned on a bond since the last coupon payment but not yet paid out.

Accrued Interest = Coupon Payment x (Days Since Last Coupon / Days in the Coupon Period)
Indicators & Oscillators

Accumulation/Distribution Line

A running total of volume weighted by where each period's close sat within its own range.

Money Flow Multiplier = ((Close - Low) - (High - Close)) / (High - Low); A/D = Previous A/D + Multiplier x Volume shares
Corporate Actions, Dividends & Governance

Acquisition

One company obtaining control of another by buying its shares or assets, with the target continuing to exist.

Test: the acquirer obtains control, defined in India as 25% of voting rights or the right to appoint a majority of directors qualitative
Market Psychology & Behavioural Finance

Action Bias

The tendency to prefer doing something over doing nothing, even when action has no expected benefit.

Test: activity is undertaken without evidence that it improves the expected outcome qualitative
Funds, ETFs & Index Investing

Active Investing

An approach that selects securities in an attempt to earn more than the index return.

Test: holdings deviate deliberately from the benchmark on the basis of judgement, and success is measured against the benchmark net of fees qualitative
Indian Market, Regulation & Taxation

Additional Surveillance Measure

An exchange framework placing restrictions on securities showing unusual price or volume behaviour.

Test: the security meets criteria on price variation, volume, delivery percentage, concentration or valuation over the review period qualitative
Corporate Actions, Dividends & Governance

Adjusted Price

A historical price restated to account for corporate actions, so that a price series is comparable over time.

Adjustment Factor for a bonus or split = 1 / (New Shares per Old Share); historical prices are multiplied by the cumulative factor
Indian Market, Regulation & Taxation

Advance Tax

Income tax paid in instalments during the financial year rather than as a lump sum at the end.

Instalments: 15% by 15 June, 45% by 15 September, 75% by 15 December and 100% by 15 March, cumulative of the estimated liability
Indicators & Oscillators

Advance-Decline Line

A running total of the number of advancing securities minus the number of declining securities each period.

A/D Line = Previous Value + (Number of Advancing Securities - Number of Declining Securities) ratio (x, times)
Orders, Execution & Market Structure

After-Market Order

An order placed outside trading hours that is queued by the broker and released to the exchange when the next session opens.

Test: the order is accepted after the close and submitted to the exchange at or just before the next session's start qualitative
Orders, Execution & Market Structure

Algorithmic Trading

The use of computer programs to generate and manage orders according to predefined rules, without manual intervention on each order.

Test: order generation, timing or routing is determined by a program rather than by a human decision on each individual order qualitative
Orders, Execution & Market Structure

All-or-None Order

An order that must execute in full or not at all, prohibiting partial fills.

Test: the order executes only if the entire quantity can be matched; otherwise nothing is executed qualitative
Risk & Portfolio Management

Alpha

The return earned above what an asset's risk exposure would have predicted.

Alpha = Actual Return - [Risk-Free Rate + Beta x (Market Return - Risk-Free Rate)] %
Fundamental Analysis & Valuation

Altman Z-Score

A weighted combination of five financial ratios that estimates a company's likelihood of financial distress.

Z = 1.2 x (Working Capital/Total Assets) + 1.4 x (Retained Earnings/Total Assets) + 3.3 x (EBIT/Total Assets) + 0.6 x (Market Value of Equity/Total Liabilities) + 1.0 x (Sales/Total Assets) ratio (x, times)
Derivatives, Futures & Options

American Option

An option that may be exercised at any time up to and including its expiry date.

Test: the holder may exercise on any trading day up to expiry, and the writer may be assigned at any time qualitative
Indian Market, Regulation & Taxation

AMFI

The Association of Mutual Funds in India, the industry body that sets standards and publishes industry data.

Test: the entity is a SEBI-registered mutual fund and a member of the association qualitative
Financial Statements & Accounting

Amortisation

The systematic write-off of an intangible asset's cost over its useful life, the intangible equivalent of depreciation.

Annual Amortisation = Cost of Intangible Asset / Useful Life in Years ₹ crore
Market Psychology & Behavioural Finance

Analysis Paralysis

The inability to reach a decision because of excessive information gathering and deliberation.

Test: additional information is sought after the point at which it stops changing the decision qualitative
Indian Market, Regulation & Taxation

Anchor Investor

A qualified institutional buyer allotted shares in an IPO a day before the issue opens to the public, at a fixed price.

Test: the investor is a qualified institutional buyer allotted within the anchor portion, subject to a minimum application size and a lock-in qualitative
Indicators & Oscillators

Anchored VWAP

A volume-weighted average price calculated from a chosen starting point rather than from the beginning of the session.

Anchored VWAP = Sum of (Price x Volume) from the anchor date / Sum of Volume from the anchor date
Market Psychology & Behavioural Finance

Anchoring Bias

The tendency to rely too heavily on an initial reference number when making subsequent judgements.

Test: estimates shift systematically toward an arbitrary starting value that carries no information about the answer qualitative