Investment and Finance

A bond that is assigned a rating in the top 4 categories by commercial credit rating companies. Standard & Poors classifies investment-grade bonds as BBB or higher, and Moody's classifies investment grade bonds as Ba or higher.

The "Big Board" is a nickname for the New York Stock Exchange. It is also known as "The Exchange". As of the year 2000, more than 2,000 common and preferred stocks are traded. It was founded in 1792, the New York Stock Exchange is the oldest exchange in the U.S., and the largest. It is located on Wall Street in New York City.

Basis point in the bond market is the smallest measure used for quoting yields. Each percentage point of yield in bonds equals 100 basis points. Basis points also are used for interest rates. An interest rate of 6% is 50 basis points higher than an interest rate of 5.5%. In the bond market, the smallest measure used for quoting yields is a basis point. Each percentage point of yield in bonds equals 100 basis points. Basis points also are used for interest rates. An interest rate of 5% is 50 basis points higher than an interest rate of 4.5%. In the bond market, the smallest measure used for quoting yields is a basis point. Each percentage point of yield in bonds equals 100 basis points. Basis points also are used for interest rates. An interest rate of 5% is 50 basis points higher than an interest rate of 4.5%.

Basket options packages that involve the exchange of more than 2 currencies against a base currency at expiration. The basket option buyer purchases the right, but not the obligation, to receive designated currencies in exchange for a base currency, either at the prevailing foreign exchange market rate or at a prearranged rate of exchange. Multinational corporations with multicurrency cash flows frequently use basket options because it is generally cheaper to buy an option on a basket of currencies than to buy individual options on each of the currencies that make up the basket.

Arbitrage bonds are municipality issued bonds issued intended to gain an interest rate advantage by refunding a higher rate bond in ahead of their call date. Lower rate refunding issue proceeds are invested in Treasuries until the first call date of the higher rate issue.

It is a feature allowing fund holders to use an earlier date on a letter of intent to invest in a mutual fund in exchange for a reduced sales charge. It Gives retroactive value to purchases from the earlier date.

A Banker's acceptance is a short term credit investment created by a nonfinancial firm and guaranteed by a bank as to payment. Acceptances are traded at discounts to face value in the secondary market. These instruments have been a popular investment for money market funds. They are commonly used in international transactions.

The Barron's confidence index is an index measuring the ratio of the average yield on 10 top grade bonds to the average yield on 10 intermediate grade bonds. The difference between high rated top grade bonds and low rated bond yields, establishes a measure that is believed to be indicative of investor confidence.

A " Alligator spread " is a term used to describe a spread in the options market that generates such a large commission to a broker that the client is unlikely to make a profit even if the markets move as the investor anticipated.