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Boa Investment Glossary

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Investment Vocabulary
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Accretion of a Discount: A type of portfolio accounting in which there is a straight-line accumulation of capital gains on discount notes and bonds. Accrued Interest: The interest accumulated on a security since the issue date or since the last coupon payment. The buyer of the security pays the market price plus accrued interest. Active Market: A securities market in which a high volume of trading activity takes place. Advance Refunding: A treasury operation that offers owners of outstanding federal obligations the opportunity to exchange securities for longer-term issues that may bear a higher yield to maturity. Advance refunding on a municipal bond refers to the sale of a refunding issue several years prior to the issue's first call date, with the proceeds being held in trust. Also called prerefunding. Advancing Market: A market in which prices are generally rising. Agent: Executes an order for or acts on behalf of someone else, the principal. The agent, whether a firm or an individual, is subject to the control of the principal and does not have title to the principal's property. The agent may charge a fee or commission for this service. All or None (AON): An all or none order requires that none of the order be executed unless all of it can be executed at the specified price. An AON order usually involves an offering of new securities. American Stock Exchange: A leading securities exchange located in New York City. Also called AMEX or ASE. Amortization: The gradual reduction of a debt by means of equal periodic payments sufficient to meet current interest charges and to pay off the debt at maturity. Amortization of Premium: The periodic charges made against the interest received on bonds in order to offset any premium price paid for the bonds. Arbitrage: Effecting sales and purchases simultaneously in the same or related securities to

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