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Home >> Glossary > Wednesday, April 16, 2014  


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Call

Capital gain

Capital

CAPM

Cash management

CEBES

Clearing House

Close Price

CNBV

Coefficient of determination

Commodity

Common Stock

Complementary Dividend

Continuous market

Convertible Bond

Convertible Currency

Correlation Coefficient

Coupon

Covariance

Currency

Currency appreciation

Currency market

Currency risk

Currency swap

Call. An option contract that gives the holder the right to buy a certain quantity (usually 100 shares) of an underlying security from the writer of the option, at a specified price (the strike price) up to a specified date (the expiration date). Also called call option.

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Capital gain. The amount by which an asset's selling price exceeds its initial purchase price. A realized capital gain is an investment that has been sold at a profit. An unrealized capital gain is an investment that hasn't been sold yet but would result in a profit if sold.

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Capital. Definition 1: Cash or goods used to generate income either by investing in a business or a different income property. Definition 2: The net worth of a business; that is, the amount by which its assets exceed its liabilities. Definition 3: The money, property, and other valuables, which collectively represent the wealth of an individual or business.

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CAPM. An economic model for valuing stocks by relating risk and expected return. Based on the idea that investors demand additional expected return (called the risk premium) if asked to accept additional risk.

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Cash management. Refers to the efficient Management of Cash in a business in Order to put the cash to work more quickly and to keep the cash in applications that produce income. Cash needs to be managed in such a way so as not to compromise the ability of the company to pay.

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CEBES. Certificates of deposit of the Bank of Spain. The central bank of Mexico auctions these deposits, which are used to fix monetary policy, and decide the quantity of money to be injected in to the economy.

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Clearing House. An agency associated with an exchange, which settles trades and regulates delivery.

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Close Price. The price of the last transaction for a given security at the end of a given trading session. Also called last price

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CNBV. National Banking and Securities Commission. A public entity charged with the task of supervising and inspecting the securities market, to authorize the admission of securities for listing, providing the authorization for companies and securities brokers, to watch out for the transparency and for the protection of the market, and to supervise and inspect the derivatives market and disseminate information.

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Coefficient of determination. A measure of the correlation between the dependent and independent variables in a regression analysis.

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Commodity. A physical substance, such as food, grains, and metals, which is interchangeable with another product of the same type, and which investors buy or sell, usually through futures contracts. The price of the commodity is subject to supply and demand. Risk is actually the reason exchange trading of the basic agricultural products began. For example, a farmer risks the cost of producing a product ready for market at sometime in the future because he doesn't know what the selling price will be.

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Common Stock. A security representing ownership of a corporation's assets. Voting rights are normally accorded to holders of common stock.

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Complementary Dividend The result of subtracting the total dividend received by the shareholder and the dividend in the account.

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Continuous market. The market in which more liquid names are traded in four Spanish bourses. Trading is executed by means of an electronic system known as SIB (Sistemas de Interconexion Bursatil). Grading in this market take place between 10 am and 5 pm from Monday to Friday.

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Convertible Bond. A bond that can be converted into a predetermined amount of the company's equity at certain times during its life, usually at the discretion of the bondholder.

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Convertible Currency. Currency that can freely be exchanged for another currency.

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Correlation Coefficient. A statistical measure of the interdependence of two or more random variables. Fundamentally, the value indicates how much of a change in one variable is explained by a change in another. Used in portfolio analysis and modeling.

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Coupon. The interest rate on a fixed income security, determined upon issuance, and expressed as a percentage of par.

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Covariance. Statistical measure used for the valuation of the relationship between different variables.

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Currency. Any form of money that is in public circulation

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Currency appreciation. An increase in the value of one currency relative to another currency. Appreciation occurs when, because of a change in exchange rates; a unit of one currency buys more units of another currency.

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Currency market. A market in which the exchange of currency takes place, setting the exchange rate for immediate or future delivery.

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Currency Risk. The risk that a business' operations or an investment's value will be affected by changes in exchange rates.

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Currency swap. An arrangement in which two parties exchange specific amounts of different currencies initially, and a series of interest payments on the initial cash flows are exchanged. Often, one party will pay a fixed interest rate, while another will pay a floating exchange rate (though there may also be fixed-and floating-arrangements). At the maturity of the swap, the principal amounts are exchanged back. Unlike an interest rate swap, the principal and interest are both exchanged in full in a currency swap.

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