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Glossary - CISI Introduction to Securities and Investment Exam Questions and Answers
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Glossary - CISI Introduction to Securities and Investment Exam
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Glossary - CISI Introduction toSecurities and Investment Exam
Annual General Meeting (AGM) - Answer -Yearly meeting or shareholder. Mainly used
to vote on dividends, appoint directors and approve financial statements.
Approved Persons - Answer -Employees in controlled functions, who must be approved
by the regulator.
Articles of Association - Answer -The legal document which set out the internal
constitution of a company. Will include details of shareholding voting Reigate &
company borrowing powers
Authorised Corporate Director (ACD) - Answer -Fund Manager of an OEIC
Balance of Payments - Answer -A summary of all the transactions between a country
and the rest of the world
Bid Price - Answer -Price at which dealers buy stock. It is also the price quoted by unit
trusts that are dual-priced for sales of units.
Bonus Issue - Answer -A free issue of shares to existing shareholders. No money is
paid. The share price falls pro rata. Also known as a capitalisation or scrip issue.
Call Option - Answer -Option giving its buyer the right to buy an asset at an agreed
price.
Convertible Bond - Answer -A bond that is convertible, at the investor's choice, into the
same company's shares
Coupon - Answer -Amount of interest paid on a bond
Credit Creation - Answer -Expansion of loans which increases the money supply.
Closing - Answer -Reversing an original future position by, for example, selling what you
have previously bought.
Debt Management Office (DMO) - Answer -The agency responsible for issuing gilts on
behalf of the Treasury.
, Dividend Yield - Answer -Most recent dividend expressed as a percentage of current
share price.
Bonds - Answer -Interest-bearing securities which entitles holders to annual interest and
repayment at maturity - commonly issued by both companies and governments
CAC 40 - Answer -Index of the price of 40 major French company shares
CGT - Answer -Tax payable by individuals on profit made on the disposal of certain
assets
Central Bank - Answer -Typically have responsibility for setting a nation or regions
short-term interest rate, controlling money supply, acting as banker and lender of the
last resort and managing national debt
Certificates of Deposit (CDs) - Answer -Certificates issued by a bank as evidence that
interest-bearing funds have been deposited with it. CDs are traded within the money
market.
Close-Ended - Answer -Organisations such a companies which are a fixed sized as
determined by their share capital. Commonly used to distinguish investment trusts
(close-ended) from OEICs (open-ended)
Commercial Paper (CP) - Answer -Money market instrument issued by large corporates
Debt Management Office (DMO) - Answer -The agency responsible for issuing gilts on
behalf of the Treasury.
Dematerialised (Form) - Answer -System where securities are held electronically
without certificates
Derivatives - Answer -Options, futures and swaps. Their price is derived from an
underlying asset
Dilution Levy - Answer -An additional charge levied on investors buying or selling units
in a single-priced fund to offset any potential effect that large purchases or sale can
have on the value of a fund.
Diversification - Answer -Investment strategy of spreading risk by investing in a range of
investments
Dividend - Answer -Distribution of profits by a company
Dual Pricing - Answer -System in which a unity trust manager quotes two prices at
which investors can buy and sell
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