The sterling/dollar exchange rate. Usually quoted in terms of dollar a pound...more on Cable
CAGR
The average growth rate over a period of several years: the geometric average of annual growth rates....more on CAGR
Call auction
Trading securities in batches: orders are collected, a price fixed that maximises the volume traded, and whatever orders can trade at that price execute....more on Call auction
Call option
An option that gives the holder the right to buy a security....more on Call option
Cannibalisation
Increasing one revenue stream at the at the cost of losing these revenues from elsewhere: what happens if new products or outlets compete with older ones....more on Cannibalisation
Capex
An abbreviation of capital expenditure. The amount spent on buying fixed assets, other than as a part of an acquisition....more on Capex
Capital adequacy
The ratio of a bank's capital to its assets. Regulators set minimum levels to protect both depositors and the economy....more on Capital adequacy
Capital asset pricing model
A method of valuing securities or an investment using a discounted cash flow (DCF) using a risk adjusted discount rate....more on Capital asset pricing model
Gains made by increases in the value of an investment, as opposed to the income it generates....more on Capital gains
Capital intensive
Requiring high capital investment relative to the size of the business. Such businesses will tend to face high depreciation charges and operational gearing....more on Capital intensive
Capital markets
Markets in financial assets such as shares and debt, where long term funding can be raised....more on Capital markets
The particular combination of debt, equity (shares) and other sources used by a company to finance its long term requirement for capital....more on Capital structure
The addition to the balance sheet as an asset of an amount that could otherwise have been treated as an expense...more on Capitalisation
Capitalisation issue
The issue of new shares to existing shareholders at no charge in proportion to their existing shareholdings. It is basically a bookkeeping exercise....more on Capitalisation issue
CAPM
A method of valuing securities or investments: a discounted cash flow (DCF) using on a risk adjusted discount rate....more on CAPM
Carrier pre-select
A regulator imposed system that allows customers of an incumbent telecoms network to choose to route all their calls through another network....more on Carrier pre-select
Carry trade
A forex trade that exploits differences in interest rates....more on Carry trade
Cartel
A group of firms acting together to restrict prices. Most commonly, a group of producers agree not to sell below a given price to give themselves monopoly pricing power....more on Cartel
Cash conversion
The cash conversion rate measures the proportion of profits that are converted to actual cash flow: cashflow ÷ profits...more on Cash conversion
Cash cost
The cost of a unit of a mines output, including all cash operational costs at site level....more on Cash cost
Cash cycle
The length of time it takes to get from paying cash for stock (inventory) to getting cash after selling it: stock days + debtor days - creditor days....more on Cash cycle
Cash flow
The amount of cash a company actually receives or pays. There are several measures in common use....more on Cash flow
Operating cash flow ÷ interest paid. A measure of a company's ability to meet interest payments....more on Cash interest cover
Cash return on invested capital
A measure of cash returns (as opposed to accounting profit) relative to total capital investment (as opposed to accounting assets) made in a business....more on Cash return on invested capital
Cash shell
A company with some assets or cash, but whose main value nonetheless lies in its listing....more on Cash shell
Cashflow statement
A statement which shows the movement of cash (i.e. spent and received) during a given period....more on Cashflow statement
Catastrophe bonds
Securities whose value falls if certain events take place. An alternative to insurance and a way of securitising insurance....more on Catastrophe bonds
Cathode metal
Cathode refining is the purification of 99.5% of pure copper by electro-refining to produce 99.99% pure copper cathode....more on Cathode metal
Central counterparty
A financial institution that acts as an intermediary between security market participants....more on Central counterparty
CER
An abbreviation of constant exchange rates, an adjustment used to strip out the effect of currency fluctuations on sales and profits to give a better indication of underlying trends....more on CER
Chartered financial analyst: a qualification for analysts linked to membership of a professional organisation...more on CFA
CFD
An abbreviation of contract for difference. An agreement to pay an amount based on the change in some underlying number, not necessarily a security....more on CFD
CFI code
An international standard coding system for classifying financial securities....more on CFI codes
Chartist
A user of technical analysis, investing on the basis of share price movements rather than fundamentals....more on Chartist
Chinese wall
Operational arrangements (rules, physical separation, IT systems) designed to prevent confidential information leaking from one department of a financial institution to another....more on Chinese wall
Churn
The number of new subscribers who replacing those who have cancelled the service as a proportion of the total number of subscribers....more on Churn
Churning
Trading more often benefits a client, usually in order to inflate commissions...more on Churning
Claims payable as a percentage of premium income. The equivalent of gross profit margin for an insurance business....more on Claims ratio
Clean price
The clean price of a bond is the dirty price less the accrued interest....more on Clean price
Clearing & settlement
The processes that take place after a trade to arrange and carry our payment and transfers of ownership...more on clearing & settlement
Clearing house
A provider of settlement services that deals with the transfers of ownership necessary after a securities trade takes place...more on Clearing house
Clinical trials
The testing new of drugs and vaccines by administering them to people in order to demonstrate their safety and effectiveness to regulators. A key part of the approval process....more on Clinical trials
Close period
The period prior to the release of results during which directors and other insiders are not allowed to trade in a company's shares....more on Close period
Closet tracker
A fund that is not officially a tracker fund, but which is nonetheless run like one...more on Closet tracker
Cockroach Theory
The idea that one piece of bad news is likely to be followed by further bad news...more on Cockroach Theory
What happens when a product loses its differentiation; when buyers care less what supplier, model or brand they buy....more on Commoditisation
Commodity
An undifferentiated product; one that can be bought in identical form from many suppliers giving no supplier a chance to sell at margins that would generate above normal returns....more on Commodity
Company secretary
The officer of a company responsible for ensuring that a company fulfils certain legal responsibilities....more on Company secretary
Complementary goods
Goods which are used together, so a reduction in the price of one leads to an increase in demand for the other....more on complementary goods
Compliance
Anything to do with following laws, regulations, standards or internal procedures....more on Compliance
The difference between what the businesses within a comglomerate would be worth seperately, and the lower price at which conglomerate trades....more on Conglomerate discount
The reduction in the number of shares a company has, giving each shareholder fewer, but more valuable shares....more on Consolidation
Constant currencies
An adjustment used to strip out the effect of currency fluctuations on sales and profit...more on Constant currencies
Constant exchange rates
An adjustment to strip out the effects of exchange rate fluctuations when comparing sales or profits with previous periods....more on Constant exchange rates
Contango
The price of a futures contract being greater than the spot price of the underlying (usually a commodity)....more on Contango
Contingent liabilities
Contingent liabilities are possible future liabilities which will become certain on the occurrence or non-occurrence of a future event....more on Contingent liabilities
Continuing operations
A number (generally turnover and profits) which excludes the effects of disposals but not those of acquisitions....more on Continuing operations
Contract for difference
An agreement to pay an amount linked to the change in some underlying number, not necessarily a security....more on Contract for difference
An investment strategy that combines large conservatively run core portfolio, with a smaller, higher risk , satellite holdings....more on Core and satellite
Core business
A company's main business; the business that it has real expertise in and can focus on....more on Core business
The systems used to control corporations, and in particular deal with conflicts of interest between shareholders and managers (agency problems)....more on Corporate governance
A fall in a financial market, that is comparatively small, and which does not have more than a brief effect on the behaviour of the market...more on corrections
Correlation coefficient
A mathematical measure of how much one number (such as a share price) is influenced by changes in another (such as an index)....more on Correlation coefficient
Cost of capital
The return required to compensate providers of capital for risk and the time value of money....more on cost of capital
Cost of sales
The accrued cost of the goods (or services) supplied in a period; the difference between sales and gross profit....more on Cost of sales
Cost-plus
Cost-plus prices and contract payments are a fixed or percentage mark-up on the supplier's costs...more on cost-plus
A coupon is a single interest payment on a interest paying security such as a bond....more on Coupon
Covariance
A measure of the strength of the relationship between two numbers...more on Covariance
Cov-lite
Corporate debt that is raised without the usual debt covenants....more on Cov-lite
Covered
A synonym for hedged, but usually only used in certain contexts....more on Covered
Covered interest arbitrage
An arbitrage strategy that exploits inconsistencies between currency depreciation and differences in interest rates....more on Covered interest arbitrage
Derivatives very similar to options, giving the holder the right to buy or sell underlying securities at a fixed price; not the same as company issued share warrants....more on Covered warrants
CPI
The consumer price index. The UK measure is another name for the EU's HICP...more on CPI
Crash
A downward movement in the market that has lasting effects, particularly on sentiment...more on crashes
Creative accounting
Manipulation of financial numbers, usually within the letter of accounting rules...more on Creative accounting
Ratings of the riskiness of debt and the credit-worthiness of corporate and sovereign borrowers. They are issued by a small number of agencies....more on Credit rating
Credit risk
The risk that the cash flows due from a debt instrument will not be paid, or will be paid late....more on Credit risk
Creditor days
How long, on average a company takes to pay its creditors: ((trade creditors ÷annual purchases) ×365...more on Creditor days
CRM
The way in which a company manages its relationships with customers. Often used to describe software used for such purposes....more on CRM
CROIC
A measure of cash returns (as opposed to accounting profit) relative to total capital investment (as opposed to accounting assets) made in a business....more on CROIC
Cross elasticity
Change in demand or supply of one good as a result of a change in something related to another product....more on Cross elasticity
Cross licensing
Exchange rights to patent portfolios, which reduces litigation and R & D costs, while simultaneously erecting barriers to entry....more on Cross licensing
Cross selling
The sale of a product to customers who already purchase a different product from the supplier....more on Cross selling
Crude oil
A mixture of liquid hydrocarbons. Prices vary with grade and density....more on Crude oil
CSR
Corporate social responsibility: the responsibility corporations have to wider society...more on CSR
Cum-dividend
A share is said to be trading cum-dividend when the payment of a dividend is due in the near future and investors who buy the share now will receive the dividend....more on Cum-dividend
Cum-rights
Shares are said to be trading cum-rights as long as buyers will be entitled to a forthcoming rights issue....more on Cum-rights
Those assets which are expected to be used (sold or consumed) within a year (unlike fixed assets) are known as current assets....more on Current assets
Liabilities which are expected to be settled in less than a year are known as current liabilities....more on Current liabilities
Custodian
A custodian holds securities on behalf of an institutional investors. This can reduce administrative expenses and can help safeguard assets....more on Custodian
Cyclical
Cyclical businesses are those that are sensitive to the economic cycle....more on cyclical