CSC (AACN) key terms

An umbrella body of Canada's provincial and territorial securities regulators that drafts harmonized national rules and policies, while each provincial commission adopts and enforces them within its own jurisdiction.

A private organization that regulators authorize to create and enforce rules governing its members' conduct and capital. Canada's investment dealers were long overseen by IIROC, now merged into CIRO.

A not-for-profit protection fund that covers client assets held by member investment dealers up to set limits if a dealer becomes insolvent. It does not compensate for market losses.

The market in which an issuer sells newly created securities directly to investors to raise capital, as happens in an initial public offering or a new bond issue.

The market where investors trade securities already issued, providing liquidity and price discovery. Proceeds go to the selling investor, not to the original issuer.

The ease and speed with which a security can be bought or sold at a fair price without substantially moving its market value. Cash is the most liquid asset of all.

A formal disclosure document filed with regulators that describes a securities offering, the issuer's business, its risks and financial statements, so investors can decide with full information.

The ongoing duty of public companies to publish material information promptly, including financial statements and reports of material changes, so that all investors have equal access to facts.

An equity security representing ownership in a company, usually carrying voting rights and a residual claim on earnings and assets after all other obligations are satisfied.

An equity security that normally pays a fixed dividend and ranks ahead of common shares for dividends and assets, but generally carries no voting rights.

A debt security through which an issuer borrows money from investors, promising periodic interest payments and repayment of the principal amount on the maturity date.

A bond whose holder may exchange it for a set number of the issuer's common shares, combining regular interest income with potential gains from a rising share price.

A pooled investment vehicle that collects money from many investors and hires professional managers to run a diversified portfolio, with units priced at net asset value.

A pooled fund whose units trade on an exchange like a stock, usually tracking an index and offering low fees, intraday trading and instant diversification.

The value of a fund's total assets minus its liabilities, divided by the number of units outstanding. It sets the price at which fund units are bought or redeemed.

A contract giving its buyer the right, but not the obligation, to buy or sell an underlying asset at a stated price on or before an expiry date.

A contract giving its holder the right to buy an underlying asset at a specified strike price within a set period. The buyer pays a premium for that right.

A contract giving its holder the right to sell an underlying asset at a specified strike price within a set period, often used to protect against price declines.

A standardized, exchange-traded agreement to buy or sell an asset at a set price on a future date. It is marked to market daily and cleared through a clearinghouse.

Estimating a security's worth by studying the business behind it: financial statements, management, industry conditions and the economy, then comparing that value with the market price.

Forecasting price direction by studying charts of past market data such as price and volume, on the belief that trends and recurring patterns can signal future moves.

An analyst's estimate of what a security is genuinely worth based on its fundamentals, used to judge whether the current market price is too high or too low.

A company's share price divided by its earnings per share. It shows how much investors pay for each dollar of profit and helps compare valuations across companies.

A company's net income divided by the number of common shares outstanding, showing the profit attributable to each share and forming the denominator of the P/E ratio.

A model that estimates an investment's required return as the risk-free rate plus a premium for systematic risk, which is measured by the investment's beta.

A measure of how strongly a security's returns move relative to the overall market. A beta above one means the security is more volatile than the market.

A measure of a bond's sensitivity to interest rate changes, expressed in years. It also approximates the weighted average time until the bond's cash flows arrive.

The annual return an investor would earn by buying a bond at its current price and holding it to maturity, assuming every coupon is reinvested at that same rate.

An independent agency's opinion of a borrower's ability and willingness to repay debt, expressed as a letter grade that affects the interest rate investors demand.

The amount of investment loss an investor can bear both financially and emotionally, shaped by goals, time horizon, income, obligations and comfort with volatility.

A written statement of a client's objectives, constraints, risk tolerance and permitted investments that guides portfolio decisions and sets a benchmark for reviewing results.

Dividing a portfolio among asset classes such as equities, fixed income and cash. This split is a major driver of the portfolio's long-run risk and return.

Spreading money across many holdings, sectors and regions so that weak results in one area can be offset by others, lowering the portfolio's overall risk.

A statistic between minus one and plus one showing how closely two investments move together. Lower correlation between holdings increases the risk-reducing benefit of diversification.

A statistical measure of how widely returns vary around their average. Investors commonly use it as a gauge of an investment's total volatility.

A risk-adjusted performance measure equal to return above the risk-free rate divided by standard deviation, showing how much excess return each unit of risk produced.

The regulatory duty to gather and keep current information on a client's finances, objectives, time horizon, risk tolerance and investment knowledge before making any recommendation.

The requirement that each recommendation fit the client's documented profile, goals and circumstances, and be explained clearly enough for the client to make an informed decision.

A return measure that reflects both investment performance and the size and timing of the client's deposits and withdrawals, showing what the investor actually experienced.

A behavioural tendency to feel losses more sharply than equivalent gains, which can lead investors to hold losing positions too long or avoid sensible risks.