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Terms starting with C

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Market Psychology & Behavioural Finance

Confirmation Bias

The tendency to seek and favour information that supports an existing view while discounting information that contradicts it.

Test: evidence supporting the held position is sought and accepted readily, while contrary evidence is scrutinised or dismissed qualitative
Fundamental Analysis & Valuation

Consensus Estimate

The average of analysts' forecasts for a company's future earnings, revenue or other metric.

Consensus Estimate = Mean or Median of Contributing Analysts' Individual Forecasts
Funds, ETFs & Index Investing

Consolidated Account Statement

A single statement showing an investor's holdings across all mutual funds and demat accounts, linked by PAN.

Test: holdings across all fund houses and depositories are aggregated under one permanent account number qualitative
Financial Statements & Accounting

Consolidated Financial Statements

Accounts that combine the parent company and all its subsidiaries as if they were a single economic entity.

Test: subsidiaries are line-by-line consolidated with intra-group transactions eliminated and non-controlling interests shown separately qualitative
Technical Analysis & Chart Patterns

Consolidation

A period in which price moves within a bounded range without establishing a directional sequence.

Test: successive highs and lows fall within a defined band, with neither the higher-high nor lower-low condition satisfied qualitative
Economy, Macro & Market Cycles

Consumer Price Index

An index tracking the price of a fixed basket of goods and services bought by households.

CPI = (Cost of the Basket in the Current Period / Cost of the Basket in the Base Period) x 100 index points
Derivatives, Futures & Options

Contango

A condition in which futures prices are above the spot price, and later expiries are priced above nearer ones.

Test: Futures Price > Spot Price, with successively distant contracts priced progressively higher qualitative
Financial Statements & Accounting

Contingent Liability

A possible obligation whose existence depends on an uncertain future event, disclosed in the notes rather than recognised on the balance…

Test: an outflow is possible but not probable, or the amount cannot be measured reliably; disclose rather than provide ₹ crore
Market Basics & Instruments

Contract Note

The legally binding document a broker must issue after each trading day, itemising every trade executed and every charge levied.

Net Amount = Trade Value +/- Brokerage + STT + Exchange Charges + SEBI Fees + Stamp Duty + GST
Derivatives, Futures & Options

Contract Value

The notional value of the underlying that one derivative contract controls.

Contract Value = Lot Size x Current Price of the Underlying
Market Psychology & Behavioural Finance

Contrarian Investing

Deliberately taking positions against prevailing sentiment, on the argument that consensus is already in the price.

Test: the position is taken because sentiment is one-sided, with an independent basis for believing the consensus is wrong qualitative
Bonds & Fixed Income

Convertible Bond

A bond that can be exchanged for a fixed number of the issuer's shares at the holder's option.

Conversion Value = Conversion Ratio x Current Share Price; Conversion Premium = (Bond Price - Conversion Value) / Conversion Value
Bonds & Fixed Income

Convexity

The curvature in the relationship between a bond's price and its yield, correcting duration's straight-line estimate.

Price Change % = -Modified Duration x Change in Yield + 0.5 x Convexity x (Change in Yield) squared ratio (x, times)
Economy, Macro & Market Cycles

Core Inflation

Inflation excluding food and fuel, whose prices are volatile and driven largely by supply conditions.

Core Inflation = Headline Inflation computed on the basket excluding food and fuel components %
Corporate Actions, Dividends & Governance

Corporate Action

Any event initiated by a company that changes its securities or affects its shareholders' holdings.

Test: the event alters the number, value, or form of the shares held, or distributes something to holders on a record date qualitative
Bonds & Fixed Income

Corporate Bond

A debt security issued by a company to borrow from investors rather than from banks.

Corporate Bond Yield = Government Security Yield of the same maturity + Credit Spread qualitative
Corporate Actions, Dividends & Governance

Corporate Governance

The system of rules and practices by which a company is directed and held accountable to its shareholders.

Test: independent board oversight, transparent disclosure, fair treatment of minority shareholders, and effective audit and risk functions qualitative
Economy, Macro & Market Cycles

Correction

A decline of roughly 10% or more from a recent peak, short of the 20% that defines a bear market.

Test: the index has fallen between 10% and 20% from its prior high %
Risk & Portfolio Management

Correlation

A measure from -1 to +1 of how closely two assets' returns move together.

Correlation = Covariance of A and B / (Standard Deviation of A x Standard Deviation of B) ratio (x, times)
Indian Market, Regulation & Taxation

Cost of Acquisition

The amount treated as having been paid for an asset, used as the base against which a capital gain is computed.

Capital Gain = Sale Consideration - Cost of Acquisition - Transfer Expenses
Derivatives, Futures & Options

Cost of Carry

The net cost of holding the underlying until a derivative's expiry, comprising financing cost less any income received.

Futures Fair Value = Spot x (1 + Risk-Free Rate x Days to Expiry / 365) - Dividends Expected before Expiry %
Fundamental Analysis & Valuation

Cost of Equity

The return shareholders require for bearing the risk of owning a company's shares.

Cost of Equity = Risk-Free Rate + Beta x Equity Risk Premium %
Financial Statements & Accounting

Cost of Goods Sold

The direct cost of producing the goods or services actually sold during a period, principally materials and direct labour.

COGS = Opening Inventory + Purchases - Closing Inventory ₹ crore
Risk & Portfolio Management

Counterparty Risk

The risk that the other party to a contract fails to perform its obligations.

Test: performance of the contract depends on a specific party's solvency, with no guarantor standing behind it qualitative