Abandonment option
The option of terminating an investment earlier than originally planned.
ABC agreement
A contract between an employee and a brokerage firm outlining the rights of the firmpurchasing an NYSE membership for that employee.
Ability to pay
Refers to the borrower's ability to make interest and principal payments on debts. See:Fixed charge coverage ratio.In context of municipal bonds, refers to the issuer's present and future ability to createsufficient tax revenue to fulfill its contractual obligations, accounting for municipalincome and property values.In context of taxation, notion that tax rates should be determined according to income orwealth.
Abnormal returns
The component of the return that is not due to systematic influences (market-wideinfluences). In other words, abnormal returns are above those predicted by the marketmovement alone. Related: excess returns.
Above par
See: Par.
Absolute priority
Rule in bankruptcy proceedings requiring senior creditors to be paid in full before juniorcreditors receive any payment.
Absorbed
Used in context of general equities. Securities are "absorbed" as long as there arecorresponding orders to buy and sell. The market has reached the absorption point whenfurther assimilation is impossible without an adjustment in price. See: Sell the book.
Abusive tax shelter
A limited partnership that the IRS judges to be claiming tax deductions illegally.
Accelerated cost recovery system (ACRS)
Schedule of depreciation rates allowed for tax purposes.
Acceleration clause
A contract stating that the unpaid balance becomes due and payable if specific actionstranspire, such as failure to make interests payments on time.
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Thanks a ton mate :)