Appendix A. Glossary

The financial pages are a minefield of jargon: you need to have a working knowledge of the lingo to get you through to the other side unscathed. This glossary gives you explanations for over 100 terms you'll come across along the way.


The Alternative Investment Market, a more lightly-regulated division with the London Stock Exchange which is designed for smaller and growing companies.


A permanent return from a one-off cash investment. Annuities often form the main payout mechanisms for pension funds after retirement.

AER (Annual Equivalent Rate):

A tightly-defined representation of the true interest rate that you can expect to receive on a cash investment. Because all AERs are calculated in the same way, they make it easier to compare the various rates on offer.

APR (Annual Percentage Rate):

Similar in spirit to AERs, but directed toward borrowers rather than investors A tightly-defined representation of the true interest rate that you can expect to pay on a loan, etc. As with AERs, APRs make it easier to compare the rates on offer.


The practice of buying stocks, bonds, currencies etc in one kind of market and then selling them another market, in the hope of exploiting a difference between the prices quoted in those markets.

Balance Sheet:

One of the three main parts of a company's financial statements. The balance sheet shows the company's assets and sets them against its liabilities to produce a figure known as the Net Asset Value.


Strictly ...

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