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Accounting for Investments, Equities, Futures and Options, Volume 1 by R. Venkata Subramani

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APPENDIX D

Glossary of Technical Terms

American Depositary Receipts (ADRs) Certificates issued by a U.S. depository bank, representing foreign shares held by the bank in the country of issue. Each ADR can represent a fraction of a share, a single share, or multiple shares of foreign stock. If the ADRs are sponsored, the corporation provides financial information and other assistance to the bank and may subsidize the administration of the ADRs. Unsponsored ADRs do not receive such assistance.

American-style option An option contract that can be exercised at any time between the date of purchase and the expiration date.

amortized cost The amount at which a financial asset or liability is measured at initial recognition less principal repayments, plus or minus the cumulative amortization of any premium or discount, and minus any write-down for impairment.

arbitrage The simultaneous buying and selling of a security at two different prices in two different markets, resulting in profits without risk.

arm’s-length price The price at which two unrelated and non-desperate parties would agree to a transaction.

Asian option Option based on the average price of the asset during the life of the option.

ask price The quoted offer, or the lowest price an investor will accept to sell a stock to a buyer; also called the offer price.

asset-backed security A security that is collateralized by loans, leases, receivables, or installment contracts on personal property, not real estate.

at-the-money ...

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