Amortization Accounting procedure that gradually reduces the
cost value of a limited life asset or intangible asset through periodic
charges to income. The purpose of amortization is to reflect the resale
or redemption value. Amortization also refers to the reduction of
debt by regular payments of interest and principal to pay off a loan by
Annuity For the recipient, an arrangement whereby the individual
receives a pre-specified payment annually for a pre-specified number
Ask price Price at which a market-maker will sell stock. Also
known as the offer price.
Assets Everything of value that is owned or is due: fixed assets
(cash, buildings and machinery) and intangible assets (patents and
Assignment The process by which the holder of a short option
position is matched against a holder of a similar long option position
who has exercised his right.
Authentication agent A bank putting a signature on each physical
bond to certify its genuineness prior to the distribution of the
definitive bonds on the market.
Bank of England The UK’s central bank which undertakes policy
decided by the Treasury and determines interest rates.
Bankers’ acceptance Short-term negotiable discount note,
drawn on and accepted by banks which are obliged to pay the face
value amount at maturity.
Bargain Another word for a transaction or deal. It does not imply
that a particularly favourable price was obtained.
Base currency Currency chosen for reporting purposes.
Basis (gross) The difference between the relevant cash instrument
price and the futures price. Often used in the context of hedging the
Basis (value or net) The difference between the gross basis and
Basis point (BP) A change in the interest rate of one hundredth of
one per cent (0.01%). One basis point is written as 0.01 when 1.0
Relationship and Resource Management in Operations128