An Introduction to International Capital Markets: Products, Strategies, Participants, Second Edition

Glossary of Financial Terms

Accounts payable

Invoiced amounts owed by a business to its suppliers. In UK accounting known as creditors. Included amongst current liabilities in the company’s balance sheet.

 

Accounts receivable

Invoiced amounts owed to a business. In UK accounting known as debtors. Included amongst current assets in the company’s balance sheet.

 

Accreting swap

A swap in which the principal increases in each time period.

 

Accruals accounting

A fundamental principle in accounting. Revenues and costs are recorded in the income statement in the period in which they are earned or incurred rather than when cash is actually received or paid.

 

Accrued interest

Interest on a bond or swap or other financial instrument that has accrued but has not yet been paid out.

 

Actuary

A specialist in financial mathematics and statistics responsible for estimating the future claims on insurance companies and pension schemes. Firms of consulting actuaries are also used by the trustees of pension funds to help evaluate the performance of asset managers and to help allocate investment management mandates.

 

Aftermarket

Dealings in a security after it has been launched in the primary market (the market for new issues).

 

Agency cross

When a broker acts as an agent for both the buyer and the seller in a share transaction.

 

Agent

Someone authorized to transact business on behalf of a client.

 

AGM

Annual general meeting.

 

Alpha

A share or portfolio with returns that exceed its required return ...