| E | Fifth letter of a Nasdaq stock symbol specifying that an issue has not met the reporting date for the company's SEC regulatory filing requirements. |
| Each way | A broker'scommission from his or her involvement on both the purchase and the sale side of a security. |
| EAFE index | See: European Australian and Far East index |
| Early distribution | See: Premature distribution |
| Early Exercise (assignment) | The exercise or assignment of an option contract before its expiration date. |
| Early withdrawal | See: Premature distribution |
| Early withdrawal penalty | Penalty paid by the holder of a fixed-term investment penalizing an investor who withdraws money before the agreed-upon maturity date. |
| Earned income | Compensation earned from employment, which includes wages, salary, tips, and compensation. |
| Earned income credit | A tax credit for taxpayers with children. |
| Earned surplus | See: Retained earnings |
| Earnest money | Money given to a seller by a buyer to demonstrate the buyer's good faith. If the deal falls through, the deposit is usually forfeited. |
| Earning asset | An asset that generates income, e.g., income from rental property. |
| Earning power | Earnings before interest and taxes (EBIT) divided by total assets. |
| Earnings | Net income for the company during a period. |
| Earnings before interest after taxes (EBIAT) | A financial measure defined as revenues less cost of goods sold and selling, general and administrative expenses. In other words, operating and nonoperating profit before the deduction of interest plus cashincome taxes. Equivalent to EBIT minus cash taxes. |
| Earnings before interest and, taxes (EBIT) | A financial measure defined as revenues less cost of goods sold and selling, general, and administrative expenses. In other words, operating and nonoperating profit before the deduction of interest and income taxes. |
| Earnings before interest, taxes, and depreciation (EBITD) | A financial measure defined as revenues less cost of goods sold and selling, general, and administrative expenses. In other words, operating and nonoperating profit before the deduction of interest and income taxes. Depreciationexpenses are not included in the costs. |
| Earnings before interest, taxes, depreciation, and amortization (EBITDA) | A financial measure defined as revenues less cost of goods sold and selling, general, and administrative expenses. In other words, operating and nonoperating profit before the deduction of interest and income taxes. Depreciation and amortization expenses are not included in the costs. |
| Earnings before taxes (EBT) | A financial measure defined as revenues less cost of goods sold and selling, general, and administrative expenses. In other words, operating and nonoperating profit before the deduction of income taxes. |
| Earnings momentum | An increase in the earnings per share growth rate from one reporting period to the next. |
| Earnings per share (EPS) | A company'sprofit divided by its number of common outstanding shares. If a company earning $2 million in one year had 2 million common shares of stockoutstanding, its EPS would be $1 per share. In calculating EPS, the company often uses a weighted average of shares outstanding over the reporting term. The one-year (historical or trailing) EPS growth rate is calculated as the percentage change in earnings per share. The prospective EPS growth rate is calculated as the percentage change in this year's earnings and the consensus forecast earnings for next year. |
| Earnings response coefficient | A measure of relation of stock returns to earnings surprises around the time of corporate earnings announcements. |
| Earnings retention ratio | Plowback rate. |
| Earnings surprises | Positive or negative differences from the consensus forecast of earnings by institutions such as First Call or IBES. Negative earnings surprises generally have a greater adverse effect on stockprices than a reciprocal positive earnings surprise. |
| Earnings yield | The ratio of earnings per share, after allowing for tax and interest payments on fixed interest debt, to the current share price. The inverse of the price-earnings ratio. It is the total twelve months earnings divided by number of outstandingshares, divided by the recent price, multiplied by 100. The end result is shown in percentage terms. We often look at earnings yield because this avoids the problem of zero earnings in the denominator of the price-earning ratio. |
| Earnings-price ratio | See: Earnings yield |
| Earn-out | Refers to an additional payment in a merger or acquisition that is not part of the original acquisition cost, which is based on the acquiredcompany's future earnings relative to a level determined by the merger agreement. |
| EASD | See: European Association of Securities Dealers |
| Easement | A right that attaches to a piece of land (the dominant tenement) exercisable over a second piece of land (the servient tenement). A common example is a right of way. |
| Easy money | See: Tight money |
| Eating stock | When an underwriter can't find buyers for a stock and therefore has to buy them for his own account. |
| EBIAT | See: Earnings Before Interest after Taxes |
| EBIT | See: Earnings Before Interest and Taxes |
| EBITD | See: Earnings Before Interest, Taxes and Depreciation |
| EBITDA | See: Earnings Before Interest, Taxes, Depreciation, and Amortization |
| EBRD | See: European Bank for Reconstruction and Development |
| EBT | See: Earnings Before Taxes |
| EC | The two-character ISO 3166 country code for ECUADOR. |
| ECA | See: Export Credit Agency |
| ECB | European Central Bank. |
| ECGD | See: Export Credit Guarantee Department |
| Eclectic paradigm | A theory that posits three types of advantages benefiting a multinational corporation: ownership-specific, location-specific, and market internalization advantages. |
| ECN | Electronic Communications Network. Defined under Rule 11Ac1- 1(a)(8) under the U.S. Securities Exchange Act of 1934. |
| ECN | See: Emerging company marketplace |
| Econometrics | The quantitative science of modelling the economy. Econometric models help explain and predict variables of interest. |
| Economic assumptions | General market environment a firm expects to operate in over the life of a financial plan. |
| Economic defeasance | See: In-substance defeasance |
| Economic dependence | When the costs and/or revenues of one project depend on those of another. |
| Economic earnings | The real flow of cash that a firm could pay out forever in the absence of any change in the firm's productive capacity. |
| Economic exposure | The extent to which the value of a firm will change because of an exchange rate change. |
| Economic growth | An increase in the nation's capacity to produce goods and services. Usually refers to real GDP growth. |
| Economic growth rate | The annual percentage rate of change in the Gross National Product. |
| Economic income | Cash flow plus change in present value. |
| Economic indicators | The key statistics of the economy that reveal the direction the economy is heading in; for example, the unemployment rate and the inflation rate. |
| Economic Life | The time period over which an asset'sNPV is maximized. Economic life can be less than absolute physical life for reasons of technological obsolescence, physical deterioration, or product life cycle. |
| Economic order quantity (EOQ) | The order quantity that minimizes total inventory costs. |
| Economic rents | Profits in excess of the competitive level. |
| Economic risk | In project financing, the risk that the project's output will not be salable at a price that will cover the project's operating and maintenance costs and its debt service requirements. |
| Economic shock | Events that impact the economy which originate from outside it. They are unexpected and unpredictable (e.g., Hurricane Andrew in 1991, the rise in oil prices by OPEC). |
| Economic surplus | For any entity, the difference between the market value of all its assets and the market value of its liabilities. |
| Economic union | An agreement between two or more countries that allows the free movement of capital, labor, and all goods and services, and involves the harmonization and unification of social, fiscal, and monetary policies. |
| Economic value added (EVA) | A method of performance evaluation that adjusts accounting performance for investors' required return on investment. Suppose a division produces a 12% return on capital invested. Given the risk of the division's business line, if investors would usually require 14% on capital invested for this level of risk, the division destroyed shareholder value by the EVA metric. This Stern-Stewart has a trade mark on this term. |
| Economics | The study of the economy. See also: Macroeconomics; microeconomics; Keynesian economics, monetarism, and supply-side economics. |
| Economies of scale | Achievement of lower average cost per unit through increased production. |
| Economies of scale | The decrease in the marginal cost of production as a firm's extent of operations expands. |
| Economies of scope | Scope economies exist whenever the same investment can support multiple profitable activities less expensively in combination than separately. |
| Economies of vertical integration | Produced by achieving lower operating costs by owning all components of production and sometimes sales outlets rather than contracting with companies in the outside marketplace. |
| ECS | The ISO 4217 currency code for the Ecuadorian Sucre. |
| ECU | See: European Currency Unit |
| EDC | See: Export Development Corp. |
| EDGAR (Electronic Data Gathering and Retrieval) | The Securities & Exchange Commission uses Electronic Data Gathering and Retrieval to transmit company documents such as 10-Ks, 10-Qs, quarterly reports, and other SEC filings, to investors. |
| EDGAR Electronic Data Gathering, Analysis and Retrieval System | The system through which companies electronically file reports and registration statements with the SEC. This requires converting the paper or word-processing document to be filed into a universal ASCII format, a process known as EDGAR-izing the document. The filings can then be accessed by the public through the SEC's Web site on the Internet. |
| Edge Act corporation | Corporationchartered by the Federal Reserve to engage in international banking. The Board of Governors acts on applications to establish Edge Act corporations and also examines the corporations and their subsidiaries. Named after Senator Walter Edge of New Jersey, who sponsored the original legislation to permit formation of such organizations. See also: agreement corporation. |
| Edge corporations | Specialized banking institutions, authorized and chartered by the Federal Reserve Board of Governors in the U.S., that are allowed to engage in transactions of a foreign or international character. They are not subject to restrictions on interstate banking. Foreign banks operating in the U.S. are permitted to organize and own an edge corporation. |
| EDI | See: Electronic Data Interchange |
| Education IRA | A type of individual retirement account enabling the contribution of up to $500 per year tax free for each child up to the age of 18 by the parents in the family. |
| EE | The two-character ISO 3166 country code for ESTONIA. |
| EEK | The ISO 4217 currency code for the Estonian Kroon. |
| Effective annual interest rate | An annual measure of the time value of money that fully reflects the effects of compounding. |
| Effective annual yield | Annualizedinterest rate on a security computed using compound interest techniques. |
| Effective call price | The strike price in a marketredemption provision plus the accrued interest to the redemption date. |
| Effective convexity | The convexity of a bond calculated using cash flows that change with yields. |
| Effective date | In an interest rate swap, the date the swap begins accruing interest. |
| Effective debt | The total debt owed by a firm to its creditors. |
| Effective duration | The duration calculated using the approximate duration formula for a bond with an embedded option, reflecting the expected change in the cash flow caused by the option. Measures the responsiveness of a bond's price - taking into account that expected cash flows will change as interest rates change due to the embedded option. |
| Effective Interest Rate | The annual rate at which an investment grows in value when interest is credited more often than once a year. |
| Effective margin (EM) | Used with SAT performance measures, the amount equal to the net earned spread, or margin of income, on assets in excess of financing costs for a given interest rate and prepayment rate scenario. |
| Effective net worth | Net worth plus subordinated debt. |
| Effective rate | A measure of the time value of money that fully reflects the effects of compounding. |
| Effective sale | A sale based on the most recent round-lot price, which determines the price of the next odd lot. The difference created between the last round-lot price and the odd-lot price is referred to as the odd-lot differential. |
| Effective spread | The gross underwritingspread adjusted for the impact that a common stockoffering's announcement has on the firm's share price. |
| Effective tax rate | The net rate a taxpayer pays on income that includes all forms of taxes. It is calculated by dividing the total tax paid by taxable income. |
| Effective yield | Yield or return on a short-terminvestment after adjustment for the change in exchange rates over the period of concern. |
| Efficiency | The degree and speed with which a market accurately incorporates information into prices. |
| Efficient capital market | A market in which new information is very quickly reflected accurately in share prices. |
| Efficient diversification | The organizing principle of portfolio theory, which maintains that any risk-averseinvestor will search for the highest expected return for any particular level of portfoliorisk. |
| Efficient frontier | The combinations of securitiesportfolios that maximize expected return for any level of expected risk, or that minimizes expected risk for any level of expected return. Pioneered by Harry Markowitz. |
| Efficient market | Market in which prices correctly reflect all relevant information. |
| Efficient Market Hypothesis | States that all relevant information is fully and immediately reflected in a security'smarket price, thereby assuming that an investor will obtain an equilibriumrate of return. In other words, an investor should not expect to earn an abnormal return (above the market return) through either technical analysis or fundamental analysis. Three forms of efficient market hypothesis exist: weak form (stockprices reflect all past information in prices), semistrong form (stock prices reflect all past and current publicly available information), and strong form (stock prices reflect all relevant information, including information not yet disclosed to the general public, such as insider information). |
| Efficient markets theory (EMT) | Principle that all assets are correctly priced by the market, and that there are no bargains. |
| Efficient portfolio | A portfolio that provides the greatest expected return for a given level of risk (i.e., standard deviation), or, equivalently, the lowest risk for a given expected return. |
| Efficient set | Graph representing a set of portfolios that maximize expected return at each level of portfolio risk. |
| Efficient surface | In meanvarianceskewness analysis, the set of portfolios that result from investor's preference for higher means, lower variance and higher (positive) skewness. The efficient surface is analogous (in three dimensions, mean, variance and skewness) to the efficient frontier (in two dimensions, mean and variance). |
| EFIC | See: Export Finance Insurance Corp. |
| EFTPOS | Acronynm for Electronic Funds Transfer at Point of Sale. Payment is transferred usually from a checking account at the point of sale. |
| EG | The two-character ISO 3166 country code for EGYPT. |
| EGP | The ISO 4217 currency code for the Egyptian Pound. |
| Egress | The process or means of leaving a property. Usually used as the counterpart to access, for example ‘a right of way for access to and egress from the property’. |
| EH | The two-character ISO 3166 country code for WESTERN SAHARA. |
| Eighth[-ed] | Historical term used in the context of general equities. A specialist or another broker is bidding higher or offering lower than we are, often topping or undercutting us by an eighth. |
| Either/or facility | An agreement permitting a bank customer to borrow either domestic dollars from the bank's head office or Eurodollars from one of its foreign branches. |
| Either-or order | Used in the context of general equities. See: Alternative order. |
| Either-way market | In the interbankEurodollar deposit market, an either-way market is one in which the bid and offered rates are identical. |
| Elasticity of an option | Percentage change in the value of an option given a 1% change in the value of the option's underlyingstock. Related: delta. |
| Elasticity of demand | The degree of buyers' responsiveness to price changes. Elasticity is measured as the percent change in quantity divided by the percent change in price. A large value (greater than 1) of elasticity indicates sensitivity of demand to price, e.g., luxury goods, where a rise in price causes a decrease in demand. Goods with a small value of elasticity (less than 1) have a demand that is insensitive to price, e.g., food, where a rise in price has little or no effect on the quantity demanded by buyers. |
| Elasticity of supply | The degree of producers' responsiveness to price changes. Elasticity is measured as the percent change in quantity divided by the percent change in price. A large value (greater than 1) of elasticity indicates sensitivity of supply to price, e.g., luxury goods, where a rise in price causes an increase in supply. Goods with a small value of elasticity (less than 1) have a supply that is insensitive to price, e.g., food, where a rise in price has little or no effect on the amount that producers supply. |
| Elect | The conversion of a conditional order into a market order. |
| Election Period | The period of time during which the holder can elect to extend and extendible bond, or to retract a retractable bond. |
| Electronic data interchange (EDI) | The direct exchange of information electronically, from one firm's computer to another firm's computer in a structured format. |
| Electronic depository transfers | The transfer of funds between bank accounts through the Automated Clearing House (ACH) system. |
| Electronic funds transfer (EFT) | Transfer of funds electronically rather than by check or cash. The Federal Reserve's Fedwire and automated clearninghouse services are EFT systems. |
| Electronic Funds Transfer Systems | A variety of systems and technologies for transferring funds (money) electronically rather than by check. Includes Fedwire, automated clearringhouses (ACHs) and other automated systems. |
| Electronic Queriable Carrier | A transporter of goods which allows tracking of goods in transit electronically using a waybill number such as United Parcel, Federal Express, etc. |
| Elephants | A term used to refer to large institutional investors. |
| Eleven bond index | An index based on the averageyield of 11 municipal bonds that mature in 20 years and carry an average AA rating. The eleven bonds used to calculate the index are also found in the 20 bond index, which serves as a benchmark in tracking municipal bondyields. |
| Eligible bankers' acceptances | In the BA market, an acceptance may be referred to as eligible because it is acceptable by the Fed as collateral at the discount window and/or because the accepting bank can sell it without incurring a reserve requirement. |
| Eligible liabilities | The liabilities on which banks calculate the cash ratio deposits they are required to lodge at the Bank of England. Eligible liabilities are largely a measure of a bank’s sterling deposits with other non-banks and buildings societies. The phrase most usually arises where a bank is trying to pass on to a customer any increase in the costs of funds occasioned by the Bank of England, FSA or other regulatory authority increasing the amount required to be lodged. |
| Elliott Wave Theory | Technical market timingstrategy that predicts price movements on the basis of historical price wave patterns and their underlying psychological motives. Robert Prechter is a famous Elliott Wave theorist. |
| Elves | A term the host uses to refer to guests on the PBS television show, "Wall Street Week", who are technical analysts attempting to predict the direction of stock prices over the next six months. |
| EM | See: Effective margin |
| Embedded option | An option that is part of the structure of a bond that gives either the bondholder or the issuer the right to take some action against the other party, as opposed to a bare option, which trades separately from any underlying security. |
| Emergency fund | A reserve of cash kept available to meet the costs of any unexpected financial emergencies. |
| Emergency Home Finance Act of 1970 | The federal legislation creating the Federal Home Loan Mortgage Corporation, a partially government-run program initiated to stimulate the development of a secondary mortgage market and expand mortgages available to veterans and other groups. |
| Emerging Company Marketplace (ECM) | A service once offered by the American Stock Exchange to help small growth companies fulfill special listing requirements. The service is no longer available. |
| Emerging markets | The financial markets of developing economies. |
| Emerging Markets Free index (EMF) | A Morgan Stanley Capital Internationalindex created to track stock markets in selected emerging markets that are open to foreign investment like Argentina, Chile, Jordan, Malaysia, Mexico, Philippines, and Thailand. |
| Emerging markets fund | A mutual fund that invests primarily in countries with developing economies (that is, those that are becoming industrialized). Emerging markets funds tend to be more volatile than domestic stock funds due to currency fluctuation and political instability. Consequently, fund prices can fluctuate dramatically. |
| Employee contribution | An employee's own deposit to a companyretirement plan. |
| Employee Retirement Income Security Act (ERISA) | The law that regulates the operation of private pensions and benefit plans. |
| Employee stock fund | A firm-sponsored program that enables employees to purchase shares of the firm's common stock on a preferential basis. |
| Employee stock ownership plan (ESOP) | A company contributes to a trust fund that buys stock on behalf of employees. |
| Employee Stock Purchase Plan (ESPP) | A plan usually linked to a corporation's payroll deduction system allowing employees to purchase shares at a discount from current market value. |
| Employer matching contribution | The amount, if any, a company contributes on an employee's behalf to the employee's retirement account, usually tied to the employee's own contribution. |
| Employment rate | The percentage of the labor force that is employed. The employment rate is one of the economic indicators that economists examine to help understand the state of the economy. See also: Unemployment rate. |
| Empty head and pure heart test | Securities and Exchange Commission rule that allows only the bidder of a tender offer to trade in the stock while possessing inside information. |
| EMS | See: European Monetary System |
| Enabling work | Works of construction or demolition necessary to permit the main project to be undertaken, for example the installation of infrastructure. |
| Encumbered | A property owned by one party on which a second party reserves the right to make a valid claim, e.g., a bank's holding of a home mortgageencumbers property. |
| End-of-year convention | Treating cash flows as if they occur at the end of a year as opposed to the date convention. Under the end-of-year convention, the present is time 0, the end of year 1 occurs one year hence; and so on. |
| Endogenous uncertainty | Describes factors within the control of the firm, such as a decision to reveal information about price or input costs. Converse of exogenous. |
| Endogenous variable | A value determined within the context of a model. Related: Exogenous variable. |
| Endorse | Transferring asset ownership by signing the back of the asset'scertificate. |
| Endowment | Gift of money or property to a specified institution for a specified purpose. |
| Endowment funds | Investment funds established for the support of institutions such as colleges, private schools, museums, hospitals, and foundations. The investment income may be used for the operation of the institution and for capital expenditures. |
| Energy mutual fund | Mutual fund investing in energy stocks only, e.g., oil and gas companies. |
| Engineering risk | The risk associated with the impact on a project's cash flows from deficiencies in design or engineering. Also known as design risk. |
| Enhanced indexing | Also called indexing-plus, an indexingstrategy whose objective is to exceed or replicate the total return performance of some predetermined index. |
| Enhancement | An innovation that has a positive impact on one or more of a firm's existing products. |
| Enterprise | A business firm. |
| Enterprise Value | The market capitalization of a firm'sequity plus the market value of the firm's debt. Often the value of assets that are non-core are excluded from the final calculation. |
| Entrepreneur | A person starting a new company who takes on the risks associated with starting the enterprise, which may require venture capital to cover start-up costs. |
| Entropy | The level of disorder in a system. |
| Envelope transaction | A transaction involving the sale of the shares in a subsidiary or SPV that owns the asset to be disposed of rather than the asset itself. Increasingly popular as stamp duty rates for share transfers are currently lower than the rates payable on the transfer of property. |
| Environmental fund | A mutual fund that invests strictly in stocks of companies that are environmentally friendly and/or have the goal of environmental betterment. The investors are trying to support and profit from opportunities related to the environmental movement. |
| Environmental risk | The risk associated with economic or administrative consequences of slow or catastrophic environmental pollution. |
| EOE | See: European Options Exchange |
| EOQ | See: Economic Order Quantity |
| Epitome | A formal statement of the owner’s title to real property consisting of copies of the title deeds. Contrast with an abstract of title where the statement is in abbreviated form. |
| EPS | See: Earnings per share |
| Equal dollar swap | Selling common stock/convertibles in one company and reinvesting the proceeds in as many shares of (1) another type of securityissued by the company, or (2) another security of the same type but of another company -- as can be bought with the proceeds of the sale. See: Equal shares swap. |
| Equal percentage contribution rule (EPCoR) | Principle that each assetcontributes the same proportion to the equilibriumportfolio rate premium and risk. |
| Equal shares swap | Applies mainly to convertible securities. Selling the underlying common and reinvesting the proceeds in as much of the convertible as can be converted into the number of shares of common just sold. See equal dollar swap. |
| Equalizing dividend | Special dividends received by investors of a firm for income the investor lost because the firm altered the dividends payment schedule. |
| Equilibrium | The stable state of the system. See: Attractor. |
| Equilibrium exchange rate | Exchange rate at which demand for a currency is equal to the supply of the currency in the economy. |
| Equilibrium market price of risk | The slope of the capital market line (CML). Since the CML represents the expected return offered to compensate for a perceived level of risk, each point on the line is a balanced market condition, or equilibrium. The slope of the line determines the additional expected return needed to compensate for a unit change in risk. The equation of the CML is defined by the capital asset pricing model. |
| Equilibrium price | The price at which the supply of goods matches demand. |
| Equilibrium rate of interest | The interest rate that clears the market. Also called the trade-clearing interest rate. |
| Equipment leasing partnership | A limited partnership that receives income and tax benefits such as depreciation costs by purchasing equipment and leasing it to other parties. |
| Equipment trust certificates | Certificatesissued by a trust that is formed to purchase an asset and lease it to a lessee. When the last of the certificates has been repaid, title and ownership of the asset transfers to the lessee. |
| Equitable charge | A form of charge that does not confer on the chargee a legal estate. Often an equitable chargee will not have a power of sale or the power to appoint a receiver. Considered less attractive than a legal charge. |
| Equitable owner | The beneficiary of a property held in a trust. |
| Equity | Used in a property finance context to mean: an ownership interest in the property itself and therefore in the profit or loss which might result from a particular transaction, or the value of the property after deducting the sums secured by all mortgages on it. |
| Equity | Ownership interest in a firm. Also, the residual dollar value of a futurestrading account, assuming its liquidation is at the going trade price. In real estate, dollar difference between what a property could be sold for and debts claimed against it. In a brokerage account, equity equals the value of the account'ssecurities minus any debit balance in a margin account. Equity is also shorthand for stock marketinvestments. |
| Equity cap | An agreement in which one party, for an up-front premium, agrees to pay the other at specific time periods if a designated stock marketbenchmark tops a predetermined level. |
| Equity carve out | Usually occurs when a company decides to IPO one of their subsidiaries or divisions. The company usually only offers a minority share to the equity market. Also known as carve out. |
| Equity claim | Also called a residual claim; a claim to a share of earnings after debtobligations have been satisfied. |
| Equity collar | The simultaneous purchase of an equity floor and sale of an equity cap. |
| Equity contribution agreement | An agreement to contribute equity to a project under certain specified conditions. |
| Equity floor | An agreement in which one party agrees to pay the other at specific time periods if a specific stock marketbenchmark falls below a predetermined level. |
| Equity funding | An investment consisting of a life insurance policy and a mutual fund. The insurance policy is paid by the collateral value of fund shares, giving the investor the advantages of insurance protection with the growth potential of a mutual fund. |
| Equity kicker | Stockwarrantsissued attached to a new debt, preferred or common stock issue to improve the salability of the issue. |
| Equity market | Related: stock market |
| Equity multiplier | Total assets divided by total commonstockholders' equity; the total assets per dollar of stockholders' equity. |
| Equity of redemption | The right to a property (or the proceeds of sale of it) once the mortgage on it has been discharged. |
| Equity options | Securities that give the holder the right (but not the obligation) to buy or sell a specified number of shares of stock, at a specified price for a certain (limited) time period. Typically one option equals 100 shares of stock. |
| Equity REIT | A Real Estate Investment Trust that assumes ownership status in the property it invests in enabling investors of the REIT to earn dividends on rental income from the property and appreciation in property resale. Antithesis of a Mortgage REIT. |
| Equity swap | A swap in which the cash flows exchanged are based on the total return on some stock marketindex and an interest rate (either a fixed rate or floating rate). Related: Interest rate swap. |
| Equityholders | Stockholders; those holding shares of the firm'sequity. |
| Equity-linked Eurobonds | A Eurobond including a convertibility option or warrant. |
| Equity-linked policies | Related: Variable life |
| Equivalent annual annuity | The amount per year for some number of years that has a present value equal to a given amount. |
| Equivalent annual benefit | The annual annuity with the same value as the net present value of an investment project. |
| Equivalent annual cash flow | Annuity with the same net present value as the company's proposed investment. |
| Equivalent annual cost | The cost per year of owning an asset over its entire life. |
| Equivalent bond yield | Effective annual yield on a short-term, noninterest-bearing security calculated for comparison to yields quoted on coupon securities. |
| Equivalent loan | Given the after-tax stream associated with a lease, the maximum amount of conventional debt that the same period-by-period after-tax debt service stream is capable of supporting. |
| Equivalent taxable yield | The yield that must be offered on a taxable bondissue to give the same after-tax yield as a tax-exempt issue. |
| ER | The two-character ISO 3166 country code for ERITREA. |
| ERM | See: Exchange Rate Mechanism |
| Erosion | A negative impact on one or more of a firm's existing assets. |
| ERP | Estimated realisation price. Defined by the Red Book. Assumes the sale will take place in the future after a proper period for marketing. |
| ERRP | Estimated restricted realisation price. Defined in the Red Book. Generally the value will be given on the basis of a defined period for marketing. In a depressed market or with unusual property the ERRP may be somewhat lower than the OMV or ERP. |
| ES | The two-character ISO 3166 country code for SPAIN. |
| Escalator clause | A provision for rent review that increases the rent in accordance with a formula rather than according to market value. |
| Escalator clause | Provision in a contract allowing cost increases to be passed on. In an employment contract, for example an escalator clause may call for wage increases in line with inflation. |
| Escheat | Reversion of monies or securities to the state in which the securityholder was last known to reside, when no claim by the securityholder has been made after a certain period of time fixed by state law. This is known as the holding period or cut-off date. |
| Escheat Period | The period of elapsed time required by applicable state law for property to be presumed abandoned. |
| Escheatment | The process of turning over unclaimed or abandoned property to a state authority. Escheatment laws require mutual funds to turn over uncashed or returned check dollars and/or client account fund shares if the owner cannot be located within a length of time determined by each state. |
| Escrow | Used of a deed which is complete but only becomes effective on the occurrence of a further event. Often this is simply dating. Strictly, an escrow agreement can only apply to a deed, but it is commonly applied to other documents. |
| Escrow | Property or money held by a third party until the agreed upon obligations of a contract are met. |
| Escrow receipt | A document provided by a bank in optionstrading to guarantee that the underlying security is on deposit and available for potential delivery. |
| Escrowed to Maturity (ETM) | Holding of the proceeds from a new bondissue to pay off an existing bondissue at its maturation date. |
| ESOP | See: Employee Stock Ownership Plan |
| ESP | The ISO 4217 currency code for the Spanish Peseta. |
| Essential purpose (or function) bond | See: Public purpose bond |
| Estate planning | The preparation of a plan to carry out an individual's wishes as to the administration and disposition of his/her property before or after his/her death. |
| Estate tax | A federal or state tax imposed on an individual's assets inherited by heirs. |
| Estimated rental value | The estimated achievable rent if a rent review or new letting of a property were to take place immediately. |
| Estimated tax | Tax to be paid quarterly on income that is not subject to withholding tax, including self-employed income, investment income, alimony, rent, and capital gains. |
| ET | The two-character ISO 3166 country code for ETHIOPIA. |
| ETB | The ISO 4217 currency code for the Ethiopian Birr. |
| ETF | See Exchange Traded Fund. |
| Ethical fund | See: Social conscious mutual fund. |
| Ethics | Standards of conduct or moral judgment. |
| EU | See: European Union |
| Euclidean Geometry | The Plane geometry learned in high school, based upon a few ideal, smooth, symmetric shapes. |
| EUR | The ISO 4217 currency code for Euro. |
| EUREX | The European derivatives exchange formed in 1998 by a merger of the Deutsche Terminbörse (DTB) and the Swiss Options and Financial Futures Exchange (SOFFEX). |
| Euro | The currency of Euroland currently running alongside pre-existing national currencies but intended ultimately to replace those currencies. |
| Euro | Originally, the term for a deposit made outside one's home country but denominated in the home country currency. This terminology is confusing now since the new European Currency unit, also called the Euro, was introduced on January 1, 1999. |
| Euro CDs | CDsissued by a U.S. bank branch or foreign bank located outside the U.S. Almost all Euro CDs are issued in London. |
| Euro lines | Lines of credit granted by banks (foreign or foreign branches of U.S. banks) for Eurocurrencies. |
| Euro straight | A fixed-rate couponEurobond. |
| Euro.NM | Created on March 1, 1996, Euro.NM is a pan- network of regulated markets dedicated to growth companies, regardless of their sector of activity or country of origin. Euro.NM member exchanges and their respective new markets consist of the Paris Stock Exchange (Le Nouveau Marché), the Deutsche Börse AG (Neuer Markt), the Amsterdam Exchanges (NMAX), and the Brussels Stock Exchange (Euro.NM Belgium). |
| Eurobank | A bank that regularly accepts foreign currency-denominated deposits and makes foreign currency loans. |
| Eurobond | A bond denominated in a globally recognised currency which is not the currency of the country in which the bond is issued. For example, a German company issuing a bond in Germany denominated in GBP. Technical |