1. Asked Price: The lowest price which a seller of a stock is willing to accept for a share of that given stock.

2. Bid Price: The highest price a buyer of a stock is willing to pay for a share of that given stock.

3. Call Option: A financial contract between two parties, the buyer and the seller of this type of option, often simply labeled a "call". The buyer of the call option has the right, but not the obligation to buy an agreed quantity of a particular commodity or financial instrument (the underlying) from the seller of the option at a certain time (the expiration date) for a certain price (the strike price). The seller (or writer) is obligated to sell the commodity or financial instrument should the buyer so decide. The buyer pays a fee (called a premium) for this right. 4. Closed End Investment: A collective investment scheme with a limited number of shares. It is called a closed-end fund (CEF) because new shares are rarely issued once the fund has launched, and because shares are not normally redeemable for cash or securities until the fund liquidates. 5. Direct Placement (Private Placement) : The sale of securities directly to an institutional investor, such as a bank, mutual fund, insurance company, pension fund or foundation. Direct placement does not require SEC registration, provided the securities are bought for investment purposes rather than resale, as specified in the investment letter. 6. Euro Bond : A bond issued in a currency other than the currency of the country or market in which it is issued. 7. Euro Market : The market that includes all of the European Union member countries many of which use the same currency, the EURO. All tariffs between Euro market member countries have been abolished and import duties from all non-member countries have been fixed for all of the member countries. The Euro market also has one central bank for all of the member countries, the European Central Bank (ECB). 8. Euro Dollar : Any large dollar denominated deposit accepted by banks outside United States.

9. European Option: An option that can only be exercised at the end of its life, at its maturity. European options tend to sometimes trade at a discount to its comparable American option. This is because American options allow investors more opportunities to exercise the contract. 10. American Option: An option that can be exercised anytime during its life. The majority of exchange-traded options are American. 11. Factoring: A financial transaction whereby a business job sells its accounts receivable (i.e., invoices) to a third party (called a factor) at a discount. 12. Financial Derivative: The Financial instruments created from previously existing security.

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13. Financial Engineering: Creation of new and improved financial products through innovative design or repackaging of existing financial instruments. 14. Forward Exchange Rate: Rate at which a bank is willing to exchange one currency for another at some specified future date. 15. Forward Transaction: A non-standardized contract between two parties to buy or sell an asset at a specified future time at a price agreed today. Forward contract is simply called a forward. 16. Hedging: Making an investment to reduce the risk of adverse price movements in an asset. Normally, a hedge consists of taking an offsetting position in a related security, such as a futures contract. 17. IPO : Initial Public Offering. First time offering of shares by a specific firm to the general public. 18. Interbank Deposit: Making an investment to reduce the risk of adverse price movements in an asset. Normally, a hedge consists of taking an offsetting position in a related security, such as a futures contract. 19. Investment Bank: An individual or institution which acts as an underwriter or agent for corporations and municipalities issuing securities. Most also maintain broker/dealer operations, maintain markets for previously issued securities, and offer advisory services to investors. Investment banks also have a large role in facilitating mergers and acquisitions, private equity placements and corporate restructuring. Unlike traditional banks, investment banks do not accept deposits from and provide loans to individuals. 20. Long Position: Buying a security such as a stock, a commodity or currency, with the expectation that the asset will rise in value. 21. Market Maker: A broker-dealer firm that accepts the risk of holding a certain number of shares of a particular security in order to facilitate trading in that security. Each market maker competes for customer order flow by displaying buy and sells quotations for a guaranteed number of shares. Once an order is received, the market maker immediately sells from its own inventory or seeks for an offsetting order. This process takes place in mere seconds. 22. Merchant Banking: Banking that deals mostly in (but is not limited to) international finance, long-term loans for companies and underwriting. Merchant banks do not provide regular banking services to the general public. 23. Mutual Fund: An investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets. Mutual funds are operated by money managers, who invest the fund's capital and attempt to produce capital gains and income for the fund's investors. A mutual fund's portfolio is structured and maintained to match the investment objectives stated in its prospectus.

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24. Off Shore Banking: Banking at a locality outside the country of residence of the depositor, typically in a low tax jurisdiction (or tax haven) that provides financial and legal advantages. 25. Open End Investment: A collective investment scheme which can issue and redeem shares at any time. An investor will generally purchase shares in the fund directly from the fund itself rather than from the existing shareholders. 26. Over The Counter (OTC) Market: A decentralized market of securities not listed on an exchange where market participants trade over the telephone, facsimile or electronic network instead of a physical trading floor. There is no central exchange or meeting place for this market. 27. Primary Market: A market that issues new securities on an exchange. Companies, governments and other groups obtain financing through debt or equity based securities. Primary markets are facilitated by underwriting groups, which consist of investment banks that will set a beginning price range for a given security and then oversee its sale directly to investors. 28. Put-Option: An option contract giving the owner the right, but not the obligation, to sell a specified amount of an underlying security at a specified price within a specified time. This is the opposite of a call option, which gives the holder the right to buy shares. 29. Repurchase Agreement: A form of short-term borrowing for dealers in government securities. The dealer sells the government securities to investors, usually on an overnight basis, and buys them back the following day. 30. Secondary Market: A market where investors purchase securities or assets from other investors, rather than from issuing companies themselves. 31. Securitization: The process through which an issuer creates a financial instrument by combining other financial assets and then marketing different tiers of the repackaged instruments to investors. The process can encompass any type of financial asset and promotes liquidity in the marketplace. 32. Short Position: The sale of a borrowed security, commodity or currency with the expectation that the asset will fall in value. 33. Stock Index: A stock index is a compilation of stocks constructed in such a manner to track a particular market, sector, commodity, currency, bond, or other asset. 34. Swap: Traditionally, the exchange of one security for another to change the maturity (bonds), quality of issues (stocks or bonds), or because investment objectives have changed. Recently, swaps have grown to include currency swaps and interest rate swaps. 35. Swift: Society for worldwide interbank financial telecommunication.

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36. Third Market: Trading by non-exchange-member brokers/dealers and institutional investors of exchange-listed stocks. In other words, the third market involves exchange-listed securities that are being traded over-the-counter between brokers/dealers and large institutional investors. 37. Junk Bond: A bond rated 'BB' or lower because of its high default risk. 38. Leveraged Buyouts: The acquisition of another company using a significant amount of borrowed money (bonds or loans) to meet the cost of acquisition. Often, the assets of the company being acquired are used as collateral for the loans in addition to the assets of the acquiring company. The purpose of leveraged buyouts is to allow companies to make large acquisitions without having to commit a lot of capital. 39. Centralized Market: A financial market structure that consists of having all orders routed to one central exchange with no other competing market. The quoted prices of the various securities listed on the exchange represent the only price available to investors seeking to buy or sell the specific asset. 40. Book Building: The process by which an underwriter attempts to determine at what price to offer an IPO based on demand from institutional investors. 41. Replacement Risk: The risk that a contract holder will know that the counterparty will be unable to meet the terms of a contract, creating the need for a replacement contract. 42. Operational Risk: A form of risk that summarizes the risks a company or firm undertakes when it attempts to operate within a given field or industry. Operational risk is the risk that is not inherent in financial, systematic or market-wide risk. It is the risk remaining after determining financing and systematic risk, and includes risks resulting from breakdowns in internal procedures, people and systems. 43. Carry: Return obtained from holding an asset (if positive) or the cost of holding it (if negative). 44. Underwriting: The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 45. Finance Company : An organization that originates loans for both businesses and consumers. Much like a bank, a typical finance company acts as a lending entity by extending credit. However, the main difference between a bank and a finance company is that, unlike a bank, a finance company does not accept deposits from the public. Instead, a finance company may draw funding from banks and various other money market resources. A finance company may extend credit to individuals for various consumer purchases, as well as to corporations for commercial use. A finance company may also specialize in providing financing for a variety of installment plan sales. A finance company may also be affiliated with a manufacturing firm or a holding company.

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