Mark Berch
Certificates of Automobile Receivables (CAR)
Pass-through securities backed by automobile loan receivables.
Negative obligation
A New York Stock Exchange rule that governs the behavior of specialists. Negative obligation is the mandate of the specialists not trade for the specialist’s firm’s own account when enough public investor orders exist to match up naturally — without intervention. An example of violating negative obligation is Trading Ahead. Also see positive obligation.
Rolling of Futures
As financial futures have short-termmaturities, often 3-9 months, before or at maturity, the future must be sold and a new future (for the same asset but with a new maturity) must be repurchased.( – Mark Berch)
Mark Berch: Drawer
The party initiating a draft.
Consolidation
The combining of two or more firms to form an entirely new entity.
Well-diversified portfolio
A portfolio that includes a variety of securities so that the weight of any security is small. The risk of a well-diversified portfolio closely approximates the systematic risk of the overall market, and the unsystematic risk of each security has been diversified out of the portfolio. ( Mark Berch )
Common market
An agreement between two or more countries that permits the free movement of capital and labor as well as goods and services.
Mark Berch
Pip
Used for listed equity securities. Smallest unit of a currency (i.e., cents for US dollars).
Mark Berch: Customer’s loan consent
Agreement signed by a margin customer that allows a broker to borrowmargin securities up to the level of the customer’s debit balance to help cover other customers’ short positions.
Mark Berch: All-in-rate
Rate used in charging customers for accepting banker’s acceptances, consisting of the discount interest rate plus the commission.