An unsecured bond. A certificate of indebtedness of a government or company backed only by the general credit of the issuer and unsecured by mortgagor lien on any specific assets.

An obligation to repay a sum of principal, plus interest. In corporate terms, debt often refers to bonds or similar securities.

(1) The failure to pay interest or principal promptly when due. (2) The failure to perform on a futures contract as required by an exchange.

A method of portfolio allocation and management aimed at minimizing the risk of losing principal. Defensive investors place a high percentage of their investable assets in bonds, cash equivalents and stocks that are less volatile than average.

A stock of a company with a record of stable earnings and continuous dividends, which has demonstrated relative stability in poor economic conditions.

An annuity under which payments begin some time after the annuity is purchased. Benefits begin after a given number of years or at optional ages specified in a contract purchased with a single premium or annual premiums.

The gain in the value of an investment (either in interest, dividends or both) that is not taxed until a later date (for example, when you sell a home and reinvest the proceeds in a new home).

A form of tax sheltering that results from an investment that offers deductions during the investor's high-income years, and/or postpones capital gains or other income until after retirement or during another period when the income level is expected to change.

A plan which enables a company to share profits on a tax assisted basis with non-shareholder employees. Contributions to DPSP are tax-deductible for the company and tax-sheltered for the employee until withdrawn from the plan.

The shortfall between government revenues and budgetary spending in any given year. A surplus occurs when annual revenues exceed expenditures.

A company-sponsored pension plan in which retirement benefits are usually determined by a formula based salary and years of service. In most cases, these plans are "contributory" because employees must make regular contributions. The alternative, in which the company pays the total bill, is "non-contributory".

The principal amount, or value at maturity, or a debt obligation. Also known as the par value or face value.

Charges made against earnings to write off the cost of a fixed asset over its estimated useful life. Depreciation does not represent a cash outlay. Itis a bookkeeping entry representing the decline in value of an asset that iswearing out.

An investment contract based on an underlying investment called an "instrument." The most common type of derivative is an option contract, which involves the right to buy or sell the underlying instrument at an agreed price. Futures contracts are also derivatives.

Reducing the actual or potential earnings per share by issuing more shares or giving options to obtain them.

The amount by which a bond sells on the secondary market at less than its par value or face value.

A brokerage that charges less than a full-service brokerage because it does not offer investment advice from analysts and brokers. Typically, discount brokers buy and sell stocks for their customers without recommending choices. However, they may offer general investment advice as well as news and some other services. They usually offer their services over the phone, the Internet, and at their offices.

A risk management technique that mixes a wide variety of investments within a portfolio, thus minimizing the impact of any one security on overall portfolio performance.

A portion of a company's profit paid out to common and preferred shareholders, the amount having been decided on by the company's board of directors. A dividend may be in the form of cash or in additional stock. A preferred dividend is usually a fixed amount, while a common dividend fluctuates according to the earnings of the company. It may be omitted if business is poor or the directors withhold earnings to invest in plant and equipment.

The annual rate of return on a common or preferred stock investment. The yield is calculated by dividing the annual dividend by the purchase price of the stock.

A program in which a current stockholder can reinvest the dividends from those shares for additional shares. This bypasses the broker, and any attached commissions.

An income tax credit available to investors who earn dividend income through investments in the shares of Canadian Corporations.

A mutual fund that invests primarily in bonds issued by Canadian companies.

A mutual fund that invests primarily in stocks issued by Canadian companies.

Often known as "the Dow," this average is one of the most frequently quoted market indexes in the news. It refers to a weighted average of 30 widely-traded blue chip stocks (such as IBM and Coca-Cola). The closing prices of these 30 stocks are added and then divided by a factor that accounts for stock splits and other market changes. (The number refers to points, not dollars.) Because these stocks are in a variety of sectors and are actively traded, they are considered a good reflection of the market.

A theory of market analysis based upon the performance of the Dow Jones Industrial and Transportation Averages. The theory is that the market is in a basic upward trend if one of these averages advances above a previous important high, accompanied or followed by a similar advance in the other. When both averages dip below previous important lows, this is regarded as confirmation of a basic downward trend.

The careful investigation by the underwriters that is necessary to ensure that all material information pertinent to an issue has been disclosed to prospective investors.

Dumping is the sale of a product for export at a price which is less than the price charged in the ordinary course of trade for the same product when sold in the domestic market of the exporting country. When there are no domestic sales in the ordinary course of trade or when domestic sales are of a low volume, dumping is deemed to occur when the price for export is less than i) the cost of production plus a reasonable amount for general selling and administrative costs and profits, or ii) the price charged on exports to a third country.

Duration measures the change in the value of a bond's servicing for the next incremental change in interest rates. A negative duration means that values fall when rates fall (just the opposite of a bond). Duration alone does not fully explain changes in value over large changes in interest rates.