User:BiP Spring 2008

BiP Spring 2008 -- Glossary of Terms: Addendum

Please post your definitions for the terms listed below:

Initial Public Offering (IPO): IPO is the first stock prices with the number of shares when a private company decides to go public in order to expand their capital by attracting investors. (John Park)

Earnings per Share (EPS): EPS is a ratio used in share valuations. It shows how much of the company's profits, after tax, each shareholder owns. It is calculated by dividing a company's earnings by the number of outstanding shares. [Raymond Lee]

Economic Liberalization: Refers to fewer government regulations and restrictions in the economy in exchange for greater participation of private entities. [Tiffany Lin]

Market Capitalization: AKA market cap. Market capitalization is a measure of the total market value of a company. Market capitalization is calculated by multiplying the number of shares outstanding by the current market price. [Jackson]

Cognitive Dissonance [Han Ma]: Psychological state in which one experiences uncomfortable tension from two or more simultaneous conflicting thoughts. Psychological conflict resulting from incongruous beliefs and attitudes held simultaneously [Han Ma].

Triple Bottom Line [Han Ma]: A spectrum of values and criteria, expanded from the original 'Bottom Line,' for measuring the success of an organization or corporation. The Triple Bottom Line includes: Environment, Social, and Revenue/Profit [Han Ma].

Normative Ethics [Han Ma]: A branch of philosophy concerned with classifying actions as right or wrong. Normative ethical theories include Consequentialism, Deontology, and Virtue Ethics [Han Ma].

Utilitarianism [Han Ma]: A form of consequentialism, utilitarianism is the idea that the moral worth of a course of action is determined by the overall contribution to the happiness derived from such action (utility) [Han Ma].

Consequentialism [Han Ma]: Idea that the morality in a course of action depends on the consequences of such action. In other words, a consequentialist determines whether an act is moral depending on the final outcomes [Han Ma].

Deontology [Han Ma]: Opposed to consequentialism, deontology is an approach to ethics that focuses on the rightness or wrongness of the actions themselves, emphasizing duties and rules, rather than on that of the outcomes/consequences [Han Ma].

Virtue Ethics [Han Ma]: Rivaling deontology and consequentialism, virtue ethics is an approach to ethics that emphasizes the virtues or moral contrast in an action [Han Ma].

Structured Finance [Han Ma]: Structured finance encompasses all advanced private and public financial arrangements that serve to efficiently refinance and hedge any profitable economic activity beyond the scope of conventional forms of on-balance sheet securities (debt, bonds, equity) in the effort to lower cost of capital and to mitigate agency costs of market impediments on liquidity. In other words, it is a broad term to describe a sector of finance created to help transfer risk using complex legal and corporate entities [Han Ma].

Proxy: It is a document that a company provides, required by the SEC, to inform the investors about the matters regarding the status of the company so the investors can make informed decisions. [Jackson Yang]

Parochialism [Han Ma]: Being provincial, being narrow in scope, or considering only small sections of an issue. Parochialism can relate directly to culture and economics in regard to a local culture or geographic area's government making decisions based on personal relationships instead of uniformity. Leading to governmental corruption and deterring real economic health and outside investment, parochialism reinforces an insular society and economy, many times detrimental the citizens who are the willful victims of parochialism. [Han Ma]

Shares Outstanding (Float): Stock currently held by investors, including restricted shares owned by the company's officers and insiders, as well as those held by the public. Float is the total number of shares publicly owned and available for trading. The float is calculated by subtracting restricted shares from outstanding shares. [Tiffany Lin]

Par Value: The nominal dollar amount assigned to a security by the issuer. For an equity security, par value is usually a very small amount that bears no relationship to its market price.[Raymond Lee] 'Has anyone researched how "par value" applies to the prices of bonds and debt-related securities? [Professor Wosnitzer]'

Capital MarketsThe capital market refers to the stock market and the bond market in which companies and the government raise long-term funds. [Seo Yeong Hwang]

Curriculum Vitæ (C.V.) [Han Ma]: A résumé. [Han Ma]

Debt: Money, goods, or services owed by an individual, firm, or government to another individual, firm, or government. [Ayla Schermer]

Equity: The financial value of an asset after all debts associated with that asset are paid off. [Ayla Schermer]

Capital Structure: It refers to the way a corporation organizes the constituents of its liabilities (equity, debt, and hybrid securities) in order to finance said corporation’s assets. [Candace Singh]

Syndicate: refers to a group of individuals or organizations combined in a joint effort to undertake a specific duty, transaction, or negotiation; more commonly referred to in the business world as a group of capitalists and bankers joined together to carry out a project that requires large resources of capital [Lu Wang]

World Trade Organization Established in 1995 and currently consisting of 151 members, the WTO is responsible for the development and policing of the multilateral trading system along principles concluded under the General Agreement on Tariffs and Trade. In addition, it provides the resources and legal status for the resolution of trade disputes through independent panels. Failure of a member country to accept it's ruling subjects it to trade sanctions. (Bannock, Baxter, and Davis 2003) [Elijah Emen]

International Monetary Fund (IMF): An international organization that focuses upon the stabilization of exchange rates and facilitation of world trade. Founded in 1945, the IMF is comprised of 185 nations that contribute to a pool of funds which can be lent to troubled economies. The IMF often comes under criticism for its "conditionalities" that are automatically imposed if a nation borrows funds; critics perceive the organization's success as narrow and its set of preconditions as self-serving. [Gillian Kemmerer]

World Bank: An international bank that offers monetary funds and loans to developing nations with the goal to reduce poverty. [Brian Lee]

National Debt: The sum of all federal deficits. A federal deficit occurs when the government spends more in a fiscal year than it receives. [Candace Singh]

Price mechanism The mechanism that sends prices up when demand is in excess and prices down when supply is in excess. The mechanism is not controlled from a central authority, but by the disparate decisions made by independent agents. The importance of the price system is: (a) that it serves as a means of rationing limited supplies among consumers, and (b) that it signals to producers where money is to be made and thus what they ought to be producing. (Bannock, Baxter, and Davis 2003) [Elijah Emen]

Perfect competition The most competitive market imaginable. A model of industrial structure in which many small firms compete in the supply of a single product. Three primary features characterize a perfectly competitive industry: (a) there is a multitude of firms (buyers and sellers) that are all too small to have any individual impact on market price, resulting in marginal revenue and price being equal; (b) all firms aim to maximize profit, and (c) firms can costlessly enter and exit the industry. Output is maximized and price minimized but products traded are usually homogeneous. (Bannock, Baxter, and Davis 2003) [Elijah Emen]

First-mover The first entrant in a particular market segment. The first-mover can gain an advantage in several ways including patent protection, greater market share, and control of resources. The first-mover may be at a disadvantage due to risk, costs of initial marketing and public education, costs of research and development that may benefit second-movers, and vulnerability to displacement and supersession by second-movers. (Liebermann and Montgomery 1988 & 1998) [Elijah Emen]

Central Bank The bank that authorizes a national monetary policy. It is in charge of creating a uniform currency, stabilizing the country's money supply, overseeing foreign exchange and gold reserves, and creating an established interest rate. [Annie Gao]

Federal Reserve The Federal Reserve, often referred to as The Federal Reserve System is the central banking system of the United States. [Seo Yeong Hwang] Established in 1913, it is composed of twelve regional Reserve banks, twenty-five branches, and eleven offices controlled by a board of governors constitutionally and financially independent of Congress. As a central bank it determines monetary policy: the regulation of money supply by trading securities on the open market, setting banking reserve requirements, and setting short term interest rates. It is an influential force in controlling inflation, maximizing employment, minimizing shocks, and supervising banking practice and management (e.g. applications for merger). (Bannock, Baxter, and Davis 2003) [Elijah Emen]

Trade Deficit: An economic measure of a negative balance of trade in which a country's imports exceeds its exports. A trade deficit represents an outflow of domestic currency to foreign markets.[Tiffany Lin]

Bullish market [Jackson]: Most indexes (S&P, Dow...) are on the climb and the prices of the stock market in general is expected or currently going up. [Jackson]

Bearish market [Jackson]: Opposite of a bull market. Stock market is labeled bearish usually when most stock indexes (S&P, Dow) go down more than 15%. [Jackson]

Correction [Jackson]: Usually a drop of at least 10% in a stock, bond, commodity or index. A correction is temporary decline that interrupts the general up-trend of the market. Most investors and experts consider corrections to be quite innocuous in the long run. [Jackson]

Tariffs: Taxes set on imported goods. They are often used to increase government revenue, protect industries from foreign competition, and prevent certain goods from being imported completely.

Treasury Bonds: Government bonds that serve as a debt financing instrument of the government and usually mature in a long period of time (10 to 30 years). They are traded on the liquid secondary markets and are often representative of long term interest rates in general. [Garth Englund]

Blue Chip [Jackson]: It refers to a very well-run, financially sound, and most often nationally known company. These are usually the firms that have steady growth rates and are reliable even in times of economic downturns. Examples include IBM and Proter & Gamble. Interestingly, Enron was once considered a blue chip company. [Jackson]

venture capital business [Jerina Martinaj]: Investment company that invests its shareholders' money in developing firms that are potentially profitable. [Candace Singh]

Free Trade [Candace Singh]: In its pure form, it refers to the sales of goods or services that are made between countries and are not restricted by any government regulation which may include but is not limited to tariffs, quotas, and taxes. [Candace Singh]

GDP Gross Domestic Product. Measure in currency units of total value of goods and services produced within the borders of a nation, excluding international investments, incomes, or products and services. (Sachin Shukla)

gross margin A company's total sales revenue minus its cost of goods sold. [Tiffany Lin]

inflation A result in loss of purchasing power of money caused by growth of the amount of money in circulation and highly increasing demand. It is reflected in a rise in prices without a proportionate increase in value of the things purchased. (Sachin Shukla)

Class A Shares (Katerina Gonzalez): A classification of common stock that may be accompanied by more or less voting rights than Class B shares. Although Class A shares are often thought to carry more voting rights than Class B shares, this is not always the case. Companies will often try to disguise the disadvantages associated with owning shares with less voting rights by naming those shares "Class A", and those with more voting rights "Class B". (Katerina Gonzalez)

Class B Shares (Katerina Gonzalez): A classification of common stock that may be accompanied by more or less voting rights than Class A shares. Although Class A shares are often thought to carry more voting rights than Class B shares, this is not always the case. Companies will often try to disguise the disadvantages associated with owning shares with less voting rights by naming those shares "Class A", and those with more voting rights "Class B". (Katerina Gonzalez)

Leveraged Buyout (LBO) [Arjun Sirrah]: A method of acquisition which entails using a significant amount of borrowed money in the form of bonds and loans, thus allowing companies to make large acquisitions without using very significant amounts of capital. Often, the assets of the company being acquired are used as collateral for the loans in addition to the assets of the acquiring company. Often there is a ratio of approximately 70% debt to 30% equity; although the amount of debt can reach as high as 90% to 95% of the total capitalization. [Arjun Sirrah]

Credit Default Swap [Jackson Yang]: The buyer of a credit swap receives credit protection, whereas the seller of the swap guarantees the credit worthiness of the product. By doing this, the risk of default is transferred from the holder of the fixed income security to the seller of the swap. [Jackson Yang]

as per Professor Sylla:

"Sixes" Sometimes called "Sixes of 1790" and "Original Sixes," "Sixes" were a type of bond which provided 6 percent annual interest rate, initiated as a part of Alexander Hamilton's monetary reform. It was redeemable at the pleasure of government, and government paid its interest quarterly. The total of 30 million dollars worth of "Sixes" was issued. The United States Government converted the interest rate to 8% in 1796 for purposes of retirement of 2 percent per annum. "Sixes" were fully redeemed in 1818. [Sung H. Kang]

"Threes": When Alexander Hamilton proposed the legislation to assume the states' debt, "Threes" were one of the three types of bonds issued to help the federal government. "Threes" paid 3 percent annually in quarterly installments. A total of $19.7 million worth of bonds were issued. They were redeemable at the discretion of the government, but were not fully redeemed until 1832. [Vivek Pandya]

"Louisiana 6's": Six percent treasury bonds maturing in a 15 year period. ($11.25 million in Louisiana 6s were used by Thomas Jefferson to purchase the Louisiana Territory from France. [Garth Englund]

"Tripe Bottom Line" Reporting: captures an expanded spectrum of values and criteria for measuring organizational (and societal) success; economic, environmental and social. (Carol Ann Peterson)

"Fundamentalism": The term "fundamentalism" was originally coined to describe a narrowly defined set of beliefs that developed into a movement within the US Protestant community in the early part of the 20th century. These religious principles stood in opposition to the modernist movement and espoused the strict adherence to and faith in religious "fundamentals". [Seo Yeong Hwang]

Exchange-Traded Funds (ETFs) [Lisa Phan]:Exchange Traded Funds (or ETFs) have been available in the US since 1993 and in Europe from 1999. The idea of ETFs is to put funds and stock exchange trading into one product. Traditionally, funds or cash and stock exchange investments have been carefully kept apart to reflect liquidity issues. An ETF is a pool fund invested with a stated investment objective, for example, a tracker fund for the energy sector or geographical area. Shares owned in this fund by investors are in turn traded on an exchange.[Seo Yeong Hwang]

Closed-End Fund [Lisa Phan]: A closed-end fund is more closely related to a stock than to a conventional mutual fund. It is a publicly traded investment company that is traded like a stock on a stock exchange. [Paul Katsnelson]

Mutual Fund [Lisa Phan]: company that allows many investors to combine their money which is used to invest in a predetermined stock. The fund manager is in charge of investing the money. [Jerina Martina]

Securities and Exchange Commission (SEC) [Lisa Phan]: The mission of the U.S. Securities and Exchange Commission is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation. It is a United States government agency responsible for enforcing the federal securities laws and regulating the securities industry/stock market. Christopher Cox is the current chairman of the SEC. He was appointed by President George W. Bush. [Eldar Slobodyan]

Securities Act of 1933 A federal piece of legislation enacted as a result of the market crash of 1929. The legislation had two main goals: (1) to ensure more transparency in financial statements so investors can make informed decisions about investments, and (2) to establish laws against misrepresentation and fraudulent activities in the securities markets. [Tiffany Lin]

Sarbanes-Oxley Act United States corporate reform legislation enacted in 2002 following a number of corporate and accounting scandals. The act outlined standards, responsibilities, and penalties regulating corporate governance and financial disclosure. In addition, it created a new regulatory agency for the accounting industry: the Public Company Accounting Oversight Board. [Elijah Emen]

Securities Exchange Act of 1934: a law governing what is and is not legal in the secondary trading of securities (stocks, bonds, and debentures). Contrasted with the Securities Act of 1933, which regulates these original issues, the Securities Exchange Act of 1934 regulates the secondary trading of those securities between persons often unrelated to the issuer. (Carol Ann Peterson)

Backdating: Backdating is the practice of marking a document with a date that precedes the actual date, because the option value is higher if the exercise price is lower, executives prefer to be granted options when the stock price is at its lowest. Backdating allows executives to choose a past date when the market price was particularly low, thereby inflating the value of the options. [Gabrielle Low]

"EBIT" - Earnings before interest and taxes (John Park)

GAAP (Generally Accepted Accounting Standards)- (Mr Boggle referred to it as GAA Principles) the term that applies to all the broad concepts and detailed practices to be followed in preparing and distributing financial statements. It includes all the conventions, rules, and procedures that together comprise accepted accounting practice. (John Park) Correction: GAAP actually stands for Generally Accepted Accounting Principles, which is why it is GAAP, not GAAS. That is also why Mr Bogle said "principles," not "standards." (Harrison Rodriguez)

Interim Periods - the time spans established for accounting purposes that are less than 1 year (John Park)

International Accounting Standards Board (IASB)- an international body established to develop, in the public interest. a single set of high-quality, understandable. and enforceable global accounting standard (John Park)

Stock Option [Lisa Phan]: A privilege, sold by one party to another, that gives the buyer the right to buy or sell a stock at an agreed-upon price within a certain period of time. Stock options are often an incentive used for long-term retention. [Ayla Schermer]

Index Fund [Lisa Phan]: Mutual funds that attempt to copy the performance of a stock market index. The most common index fund tries to track the S&P 500 by purchasing all 500 stocks using the same percentages as the index. [Raymond Lee]

Insider Trading [Lisa Phan]: Insider trading occurs when someone makes an investment decision based on information that is not available to the general public. [Raymond Lee]

Economies of Scale [Paul Katsnelson]: An increase in production efficiency that results from an increase in the quantity of goods or services being produced or offered. Since fixed costs are spread over a larger number of goods, businesses that achieve economies of scale generally see a drop in the average cost per unit produced. [Paul Katsnelson]

Bond market [Annie Gao]: A financial market where people can buy or sell debt securities as bonds, which the issuer must pay back with interest.[Annie Gao]

Revolving door [Annie Gao]: A political concept describing the rotation between or the simultaneous holding of jobs in an industry and jobs in government related to that industry, creating a conflict of interest. [Annie Gao]

Think tank [Annie Gao]: An organization that oversees research and advocates a certain issue, influencing government policy. Think tanks are usually non-profit and obtain funds from private donors. [Annie Gao]

Soft Incentives [Tiffany Lin]:

Externaility [Ayla Schermer]: An unforseen or unintended consequence of an economic activity that is experienced by unrelated third parties. Externalities can be either positive or negative. [Ayla Schermer]

Hurdle Rates [Ayla Schermer]: The minimum amount of return that a person requires before they will make an investment in something. In other words, the rate of return that will get someone "over the hurdle" before investing their money. [Ayla Schermer]

Monopsony the market condition that exists when there is one buyer (Carol Ann Peterson).

Subprime Mortgage type of mortgage that is normally made out to borrowers with lower credit ratings. As a result of the borrower's lowered credit rating, a conventional mortgage is not offered because the lender views the borrower as having a larger-than-average risk of defaulting on the loan. Lending institutions often charge interest on subprime mortgages at a rate that is higher than a conventional mortgage in order to compensate themselves for carrying more risk (Carol Ann Peterson).

Vertical Integration [Paul Katsnelson]: A vertically integrated company is one that has expanded its business to produce a range of goods or services along the same production path. The Carnegie Steel company, which controlled its own mills, mines, and ships, is an example of a vertically integrated company. Benefits from vertical integration may include economies of scale, economies of scope, and the reduction of threat from powerful suppliers. [Paul Katsnelson]

Democracy- The etymology is the "rule of the people" or the majority rules. It assumes equality among everyone and can take many different forms. (Micah Timen, Daniel Redlich, Anthony Allen, Chase Matthew)

Communism- A form of government that seeks to dissolve the class system in order to eliminate the gap between the upper class and lower class. It establishes social equality through the distribution of wealth and abolishes the principle of private property. Instead, most aspects of communal life are under government ownership. (Alex Lazar, Ben Funk, Leslie Kim, Ambica Buddhavarapu)

Fascism- A form of government that deals with imposing state control over all aspects of life such as political, social, cultural, and economic, by a strong, single-party government. A brutal milita enforces the laws and they even engage in torture and execution if citizens don't cooperate. Citizens ruled under a fascist government have very limited freedom. Fascism eliminates “class struggle,” and instead replaces it with “class collaboration.” It promotes nationalism and tries to unify the people of the country, eliminating conflicts between people. (Bilal Memon, Herman Singh)

Socialism- A form of government that incorporates aspects of both communist and capitalist governments. Its goal is to ensure the commonwealth basic necessities such as food, clothing, housing, health care, free education, recreation, and transportation. Although socialism is envisioned as a successful system that would benefit the economy, in practice it doesn't necessarily work in a large-scale economy. Scholars have noted that the distribution of goods and services becomes increasingly difficult with a larger economy. (Pranav Ahuja, Katherine Araujo, Riddhima Hinduja, Teresa Tran)

Strike Price [Jerina Martinaj]: Price at which you can exercise a contract. Usually it refers to stock and index options. [Jerina Martinaj]

Hedge Fund [Jerina Martinaj]: A group of private investors combine their money together in a portfolio that is to be managed in hopes of generating a large profit. It's similar to a mutual fund, yet unlike a mutual fund, the investors are allowed to operate with less regulations. [Jerina Martinaj].

short-dated paper[Jerina Martinaj]: A document due in a short period of time (ex: short term loan)[Katerina Gonzalez]

Commercial paper [Katerina Gonzalez]: An unsecured, short-term loan issued by a corporation, typically for financing accounts receivable and inventories. It is usually issued at a discount reflecting prevailing market interest rates. [Katerina Gonzalez]

EBITDA [Mingzhou Lin]: Earnings Before Interest, Taxes, Depreciation, and Amortization. EBITDA is a non-GAAP metric that can be used to evaluate a company's profitability. [Mingzhou Lin]

Amortization [Mingzhou Lin]: Write-off of an intangible asset investment over the projected life of the assets. [Mingzhou Lin]

Management Buyout [Mingzhou Lin]: A type of acquisition through which a part or sometimes whole of a company is acquired by existing managers. [Mingzhou Lin]

Leveraged Buyout [Mingzhou Lin]: An investor acquires some or majority of a company 's equity via borrowed money or debt. [Mingzhou Lin]

Corporate Charter [Gabrielle Low]: The charter bestows rights to the company from the government. It describes things like the purpose of the company or place of business. Companies are formed around the grounds set in the document. It can also be called articles of incorporation. [Gabrielle Low]

WACC [Tony Tianyuan Song]: Weighted Average Cost Of Capital, A calculation of a firm's cost of capital in which each category of capital is proportionately weighted. All capital sources - common stock, preferred stock, bonds and any other long-term debt - are included in a WACC calculation. Basically it is the composition of equity and debt of a compnay, i.e., its capital structure. [Tony Tianyuan Song]

Discounted Cash Flow [Tony Tianyuan Song]: Commonly known as DCF. A valuation method used to estimate the attractiveness of an investment opportunity. There are many variations when it comes to what you can use for your cash flows and discount rate in a DCF analysis. Despite the complexity of the calculations involved, the purpose of DCF analysis is just to estimate the money you'd receive from an investment and to adjust for the time value of money. [Tony Tianyuan Song]

Retailers[Seo Yeong Hwang]: A business that sells products or services to consumers for personal or family use. It is the final business in the distribution channel and links manufacturers with consumers. [Gabrielle Low]

Loans default[Seo Yeong Hwang]: Loans default occurs when one does not make a payment when due or does not comply with the promissory note’s other terms. [Andy Choung]

Liquidity Crisis[Seo Yeong Hwang]: It occurs when a business lacks cash that is required to meet debt, pay for costs or to continue to grow. One response to a liquidity crisis is to "trade through". Through delaying payment of creditors, issuing bonds, making additional loands, selling assets or encouraging more promt payment from customers, companies hope to find the additonal cash flow needed. [Gabrielle Low]

Main Street vs. Wall Street[Seo Yeong Hwang]: Main Street symbolizes the interests of small businessmen (shops and retailers) whereas Wall Street symbolizes the interests of corporate capitalism. [Andy Choung]

Write-down[Seo Yeong Hwang]: A write down is often a result of the subprime crisis at financial institutions. It is very similar to a "write-off". One similarity is that in both, the loaned money has no chance of being recovered. A write-down reduces the value of the loan on the balance sheet. [Gabrielle Low]

Run-on-the-bank[Seo Yeong Hwang]: Run-on-the bank happens when there is a panic and a large number of customers of a bank withdraw their money because they believe or fear that the bank will soon become insolvent. This in its self, may cause the bank to become insolvent. As a result, the bank may face bankruptcy. [Gabrielle Low]

One-shot dilemmas[Gabielle Low]:Its a social dilemma that arises among parties in which one is faced with the chance to cheat or take part in other opportunistic activities. This can hinder otherwise beneficial business interactions among groups.[Jerina Martinaj]

Redlining [Annie Gao]: A form of discrimination in which people of a certain area, usually because the majority of residents are of a certain race, are denied or forced to higher rates for insurance, health care, jobs, etc. [Annie Gao]

World Economic Forum [Annie Gao]: A place where business leaders, politicians, intellectuals, and journalists meet annually to speak about significant social and economic issues. [Annie Gao]

Energy Security [Gabrielle Low] The idea that a country is vulnerable because of it's energy (oil, natural gas, coal etc.) needs. Things like a significant increase in energy prices, suspension or termination of supply by an oligopoly or monopoly supplier, cartel or country can cause multiple effects on a country's economy and politics. Also included is the idea that a country might support a country that supports terrorism becuase it buys a large amount of oil from it. [Gabrielle Low]

AFL-CIO [Mingzhou Lin] Acronym for American Federation of Labor, Congress of Industrial Organizations. AFL-CIO is the largest federation of labor unions consisting of 54 national and international unions. As of 2006, there are over 9 million members. AFL-CIO officially merged in 1955; however, AFL dated back to 1886, during post-American Civil War Reconstruction. [Mingzhou Lin]

United Nations Global Compact [Annie Gao]: A campaign urging businesses to be sustainable and socially responsible, and to report on them. The Global Compact offers a setting in which governments, businesses and labor, and activist organization can connect and have discussions. [Annie Gao]

Floating Interest Rate [Tony Tianyuan Song]: An interest rate that is allowed to move up and down with the rest of the market or along with an index. This contrasts with a fixed interest rate, in which the interest rate of a debt obligation stays constant for the duration of the agreement. [Tony Tianyuan Song] Cats And Dogs [Tony Tianyuan Song] A slang term referring to speculative stocks that have short or suspicious histories for sales, earnings, dividends, etc. The origin for this term may have stemmed from the use of "dog" to refer to an underperforming stock. [Tony Tianyuan Song]

Globalization [Seo Yeong Hwang]Globalization in its literal sense is the process of globalizing, transformation of some things or phenomena into global ones. It can be described as a process by which the people of the world are unified into a single society and functioning together. [Seo Yeong Hwang]

Outsourcing [Seo Yeong Hwang] Outsourcing is subcontracting a process, such as product design or manufacturing, to a third-party company. The decision to outsource is often made in the interest of lowering firm costs, redirecting or conserving energy directed at the competencies of a particular business, or to make more efficient use of labor, capital, technology and resources. [Seo Yeong Hwang]

audit [Gabrielle Low] the examination by an independent third party of the financial statements of a company or any other legal entity (including governments), resulting in the publication of an independent opinion on whether or not those financial statements are relevant, accurate, complete, and fairly presented. [Gabrielle Low]

CDO [Gabrielle Low] Is similar in structure to a collateralized mortgage obligation (CMO) or collateralized bond obligation (CBO). CDOs are different from CMOs and CBOs in that they are different types of debt and credit risk. For CDOs the debt is often referred to as 'tranches' or 'slices'. Each slice has a different maturity and risk associated with it. [Gabrielle Low]

Mark to Market[Jerina Martinaj]: the act of assigning a value to an asset based on the current market price. [Jerina Martinaj]

Brown-nose someone who adds terms to the glossary for participation points without actually having checked the original glossary for the class, which already includes terms such as IMF, triple-bottom line, World Bank, monopsony, economies of scale, etc. Also, LBO is on the list twice. Is anyone actually reading this?

Hedging [Gabrielle Low]:Hedging against investment risk means strategically using instruments in the market to offset the risk of any adverse price movements. In other words, investors hedge one investment by making another that has a negative correlation with the first. [Gabrielle Low]

Mark to Market Accounting [Tiffany Lin]: The act of assigning a value to a position held in a financial instrument based on the current market price for that instrument or similar instruments. [Tiffany Lin]

"Value Added Tax (VAT)" [Matthew Pfalzer]: A tax placed on the value that a transaction generates, i.e. a sales tax. [Matthew Pfalzer]

Oversight: management by overseeing the performance or operation of a person or group (Carol Ann Peterson)