BANKING TERMS

Absolute advantage: The capability of a nation, entity, corporation, or state to generate a product or service at a
lesser price per unit than the price at which any other unit generates that product or service. For instance: The
generation capacity of Japan in producing television sets is more as compared to other nations and is considered to
have an absolute advantage in this aspect.

Accrued Interest: The interest amount collected on purchase of an equity share/ bond or debenture since the
preceding coupon imbursement, excluding the completion date. Accrued interest is included to the indenture price of
a bond contract. There are two ways for computing accrued interest:

• (a) On the basis of 360-day a year, employed for commercial and public shares
• (b) On the basis of 365-day a year, employed for government shares.

Advance Payment: Compensation made to the indemnified person by the insurance firm prior to the completion
date is called the advance payment. For instance, if the maturity dates of the claim is premeditated on July 1, 2002
and the insurance firm forfeits the petitioner before the settlement date, the payment is considered as an advance
payment.

Allotment: Distribution of shares or bonds in support of new concerns is termed as Allotment. In other words
securities allocated to associates of a countersigning consortium for the reselling to shareholders/investors.

Alternative Investments: A phrase indicating to any kind of non-conventional property with hidden fiscal value
that cannot be discovered in an ordinary investment portfolio. Because of the exceptional features of these
investment properties, assessment may arise as an issue.

Amalgamation: Amalgamation or consolidation is the procedure of merging or joining of two business entities into
one new entity. The permutation can be an outcome of one business entity obtaining the other, uniting of two or more
business entities, or either by suspension of obtainable firms and creation of a new firm to control the merged entities.

Amortization: Also known as diminution, liquidation, or approval of an obligation, Amortization refers to the
amount utilized for meeting that need. In short, it is the distribution of an approximate amount during various
durations, especially for mortgages and other type of investment which incorporates associated interest or other
monetary charges. Amortization is generally used in determining the investment cost of securities.

Authorized Signer: An individual employed by the account holder to sign and deliver cheques, demand drafts,
receipts or any other form of payment in cash or kind is known as an Authorized Signer.

Automated Clearing House (ACH): An online money-transfer method established by the National Automated
Clearing House Association is known as Automated Clearing House. This compensation method transacts in context
of payroll, undeviating investment, tariff reimbursements, customer invoices, tax fee and other payment facilities. The
usage of online payment houses is to assist online fund-transfers and accelerate competence and suitability of
government and commercial dealings

BAD DEBT If a particular bank or creditor fails to recover money from a borrower or a debtor, it is termed as bad
debt. The bad debt is considered as an expense on the part of the bank. Nevertheless, the bank, in concern, can
always opt for legal proceedings to recover the amount that has been declared as 'bad debt'.

BALANCE TRANSFER

Balance transfer is an option included in the application form of credit card. This option can be selected afterwards as
well. This facility is very useful for the person, who is holding more than one card. On availing this facility, the user
can transfer the balance payable amount to the other card, if he/she is not able to make full payment that is due on a
particular card. Nevertheless, the person has to make payment of the transferred amount on a scheduled time as
stated by the bank that gave him/her the other card. One needs to pay fee for the balance amount that has been
transferred. The balance transfer facility is useful in reducing interest outgo.

BANK STATEMENT

The savings account holders receive passbook mostly. The passbook helps the account holder to keep a track over
his/her transactions. If the user has not been given a passbook, he/she is sent an account statement by the bank on
regular intervals at the mailing address. The account statement is nothing but like a passbook features all the
transaction details on the person's account for a particular time period. In order to apply for a loan, one needs to
produce a bank statement of the last 6 months to the concerned lending institution.

BANKING OMBUDSMAN

The banking ombudsman scheme is an efficient and cost-effective forum, which has been formed to resolve
complaints registered by the customers in case of any services provided by the bank. The central bank of India
namely Reserve Bank of India (RBI) has introduced this scheme under Section 35A of banking regulation Act, 1949.
The scheme came into effect in the year 1995. RBI appoints the banking ombudsman, a senior official, to look into
customer complaints in case of a particular banking service and resolve them. Presently, we have 15 banking
ombudsmen. The offices are mostly found in the state capitals. One can find the address of a particular banking
ombudsman at the bank branch.

BOUNCED CHEQUE CHARGES

A cheque can bounce on several accounts including inadequate cash in the account, signature mismatch and
mismatch between the numerals and words. And if a cheque has bounced or has been dishonored, the person who
had drawn it needs to pay bounced cheque charges in that case. The charges for the bounced cheque can be
compensated by seeking court's assistance. However, this is allowed only when the cheque has been returned due
to insufficient fund in the account.

CASH-RESERVER RATIO

The part of the total deposits that is maintained in cash by the banks is referred to as CRR or Cash-Reserve Ratio.
The banks in India do not keep this part of their deposits with themselves. They need to submit this amount to RBI or
currency chests. RBI has the right to decide on the minimum ratio of the deposits that need to be maintained by the
banks.

CASHBACK

The term 'cashback' is used in case of credit cards. Some of the banks that issue credit cards give back some money
to the card holder, if he/she uses the credit card to make payments at some particular retailers or merchandise
stores. In the credit card statement, the user would get to know about the amount of cash back offered to him/her.
The final amount, that is due on the credit card, is calculated by subtracting the payments that have been made
during the billing cycle along with the cash back amount.

CO-BRANDED CARD

These credit cards are just like any other credit cards and can be availed from retailers or airlines apart from banks.
These cards have some user benefits. A co-branded card user can gain travel points or avail attractive discounts
related to the product. These cards are available in the sectors like telecom, travel, petrol pump, entertainment and
retail. Nowadays, banks are offering co-branded debit cards also.

CLEARING HOUSE

When a cheque is deposited in the bank, the receiving bank has to actualize the amount from the drawee bank
before it is transferred to the concerned person's account. The drawee bank is presented with the cheque in the
clearing house by the receiving bank. The clearing house is a main collection area for the banks to deal in financial
securities including drafts, cheques and others. This activity is carried out during working days on daily basis.
COLLATERAL

A loan seeker needs to provide collateral or the security to the lending institution. For example, in case of education
loans, the seeker needs to furnish the lender with the collateral beyond a fixed amount. A collateral security can be
referred to as the security that falls outside the limit of the loan.

CREDIT APPRAISAL
If a person applies for a particular loan, the lending institution runs a complete check on his/her credit profile to gather
information on residence, age, occupation, service experience and the years of service as applicable to present job.
Among these, the institution will also check if the person has taken any other loan. This entire process is referred to
as credit appraisal.

CREDIT HISTORY

Credit History is a record of an individual's credit payment including borrowing and refunding of any kind of loans,
credit cards, mortgages and any kind of debt that needs to be repaid. The credit history contains records on open
accounts, status of loans and credit card accounts. From credit history, a lender can know if the borrower had any
late payment, bankruptcy or loan default issues. The Credit Information Bureau India ltd (Cibil) maintains these
records and a lender can gain access to these details from Cibil as credit information report (CIR). A person needs to
pay fee for this.

CREDIT RISK

When a lending institution grants loan to a customer, it assumes this risk. The banks ask for collaterals from the
borrowers because of this risk factor. This risk factor is high in case of personal loans or any other form of unsecured
loans. In addition, in case of secured loans such as home loans, the lender asks the borrower to share some portion
of the risk, giving margin money. The interest rates are decided depending on credit risk. Interest rates are kept high,
if loan involves high risk factor.

DEBIT CARD/ CREDIT CARD

An ATM-cum-debit card allows an individual to purchase anything for the cash available in his/her account that is
joined with the card e.g. if a person has Rs 5000 in his/her bank account, he/she can use his card to the maximum
limit of Rs 5000 only. On the contrary, credit card helps the user to do shopping till the assigned credit limit on that
particular card.

DEBT-EQUITY RATIO

It helps in calculating the financial leverage of any bank or organization. To measure this, one needs to divide the
total liabilities of the banks by stakeholders' equity. This in turn gives an idea of the ratio of equity and the debt used
by the bank in financing the assets.

DEFAULT

If a person wants to continue his/her credit account, he/she either needs to give equated monthly installments (EMIS)
or pay the due amount on credit account each month within a fixed date. If the person fails to make payment before
the specified date, it is considered as default. It can mar the credit record of that person.

DOWNPAYMENT/MARGIN MONEY

When a bank asks the borrower to share a part of the credit risk and the payment that is received from him/her on
this account, is referred to as downpayment/ margin money.

DIRECT DEBIT
Also referred to as Electronic Clearing Facility (ECS), direct debit option proves beneficial in case of servicing of
various lines of credit. This is a facility whereby the person empowers his/her bank to take off a particular amount
from his/her account on a particular date every month. This facility enables a person to make his payments without
visiting the lending institution or bank personally on a frequent basis. However, the person has to be aware of the
fund availability in his account, as the bank is not responsible for intimating its customer when the amount is debited
from his/her account.

DOCUMENTATION CHARGES

The banks or lending institutions require certain documents from the person, who has applied for a loan, to look into
his/ her creditworthiness. The lending institution levies some charges for this purpose. These charges are known as
documentation charges. The documentation charges are separate from registration charge, stamp duty and lawyers
fee.

DORMANT/INOPERATIVE ACCOUNT

If an individual has not made any transactions from his/her account for more than 2 years, a savings/current account
is declared as inoperative or dormant.

Earnest Money: Good assurance amount of money allotted to seal an agreement is known as Earnest Money.
For instance, in case of a contract to buy realty or an assurance fee to guarantee an advance payment of money by
the lender, is referred as Earnest Money. In realty business, the amount is implied to the buying cost and is paid if the
buyer is unsuccessful in following the terms and conditions of the contract.

EFT (Electronic Fund Transfer): EFT or Electronic funds transfer indicates to electronically supported systems
employed to execute pecuniary operations by electronic means. EFT is used for a host of concepts such as
credit/debit card holder dealings, online payments by the cardholder, direct investment payroll compensations for
some kind of dealing by a company to its members of staff, online bill payment, electronic Indian and international
banking, etc.

Endorsement: Endorsement is a legal word that indicates to the signing of a credential which permits for the
authorized transfer of a transferable amount from one person to another. In Insurance term, Endorsement is referred
to as Rider, which acts as an inclusive prerequisite to an insurance strategy.

Equilibrium real interest rate: Equilibrium real interest rate is the rate at which the complete labor employment
and manufacturing capability is constant, supported by the performance of the actual Gross Domestic product in the
long run. Equilibrium real interest rate is required as a yardstick to review whether the considered actual interest rate
is profitable or not.

Equity: The discrepancy between the cost of an asset and the sum of money possessed on the asset is referred as
Equity. In other words it is the total sum of money the property owner attains when the assets are traded.

Expansionary fiscal policy: Guidelines implemented by the government to alleviate the financial system of the
country, particularly, by regulating the levels and allotments of tariffs and government spending. During the phrase of
slow-moving financial system, the government reduces tax impositions, giving extra privilege to taxpayers to elevate
their levels of expenditure.

Expansionary monetary policy: The strategy implemented by the central bank of the country to control the
cost and accessibility of funds and investments. They are implied to endorse economic objectives of a country either
by increasing or decreasing interim interest rates, etc. When a nation undergoes deflation, the government orders to
print more currency and circulate it in order to support inflation.

FREE CREDIT PERIOD

FIXED RATE

A fixed rate scheme means the interest rate has been specified for the full term of the loan. However, this scheme is
not carried out in reality. The banks or lending institutions feature a clause that enables them to revise the interest
rates after certain period of time. They can also modify rates, if the value of funds rises considerably.

FLOATING RATE

An interest rate that goes up and down periodically is referred to as the floating rate. Under the scheme of floating
rate, the interest rate is influenced by the Floating Reference Rate (FRR) or Benchmark prime Lending Rate (BPLR)
of the bank. It implies that interest rate of the loan can change following the variations in FRR and BPLR.

FINANCE CHARGES

Finance charges or overdue interest charges are related to credit cards. These charges are levied on an individual's
account, if he/she has failed to clear the payment of last billing cycle. These charges vary between 35 and 42% on an
annual basis. A person, who has to pay finance charges, has to miss out on free credit days. He/she has to pay
interest on cash advances from the time the transaction was made until its final settlement.

Late Charge: A payment evaluated by the lender for a borrower and obtains it after a premeditated date is termed
as Late Charge. Fine is implied for aberrant payments on a credit after a Grace Period of ten to fifteen days has
passed. Late charge is computed as a proportion of the unpaid balance and is generally eliminated from the
outstanding interest of the loan.

Leverage: The utilization of different fiscal tools or loaned capital to elevate the capability of potential profits from
an investment is termed as Leverage.

In other word, Leverage is an amount of debit utilized to fund a company's assets. A highly leveraged company
comprises more obligations than equity. Leverage triggers investments on part of both investor and company.

Leveraged Buy-Out (LBO): The acquirement of a business entity by utilizing considerable sum of borrowed
capital, through bonds or loans, to fulfill the expenses met during acquisition. Generally, the properties of the
company being obtained are utilized as loan securities incorporating the properties of the obtained firm. The intention
of leveraged buyouts is to permit firms to indulge in money-spinning acquisitions without entrusting a huge amount of
money.

Liability: The legal responsibility of the firm that occurs during commercial operations is termed as liability. These
liabilities are met through relocation of fiscal advantages which incorporates capital, products and services.

LIBOR: The LIBOR is an extensively used yardstick for interim interest rates. It is the rate at which privileged
borrowers from all over the world are competent enough for borrowing money. LIBOR are also referred to the interest
rates allotted for the less favored world's borrowers.

Life of Loan: A loan borrowed from a bank for a certain capital with a precise reimbursement agenda and a
balanced interest rate. Life of a loan is between 1 to 10 years.

LIFFE: London International Financial Futures and Options Exchange (LIFFE) was formed after the initiation of
Chicago Board of Trade and the Chicago Mercantile Exchange. It dealt with futures, alternatives and products
agreements. In the year 2002, it was obtained by Euronext in order to elevate its existence as a derivatives seller.
After the acquisition LIFFE was rechristened as Euronext.liffe.

Line of Credit: An understanding between a bank and a consumer ascertaining an utmost loan equilibrium that
the financial institution can allow the borrower to retain is known as Line of Credit. The benefit of Line of Credit in
case of ordinary loan is that the borrower is not entitled to forfeit on behalf of the portion of line of credit that he
generally doesn't utilize.

Liquidation: When the operation of a company come to an end or when the company is considered as bankrupt,
then its properties are sold, advance amount is paid to the creditors and surpluses are circulated to shareholders. In
other words Liquidation is referred to any kind of business deal that equalizes or terminates a short-term or long-term
arrangement.

Liquidity risk: The risks arising from the absence of profitability of an investment or deposit that can neither be
purchased nor traded promptly to avert or reduce any kind of loss is termed as Liquidity risk.

London Clearing House: London Clearing House is an association related with an exchange to deal with the
verification, payment and release of contracts along with satisfying the key responsibility of ascertaining that the
dealings are done in a speedy and well-organized way.

MICR CODE

MICR stands for Magnetic Ink Character Recognition. MICR Code comprises nine digits given on the white strip in
the lower part of the cheque on the right side of the cheque number. This is a unique code and no two bank branches
can have the same set of this code in the nation. It facilitates the process of cheque clearance. The MICR Code is
different from the IFCS code, that is mentioned on every cheque. This code number is needed in case of RTGS /
NEFT transaction.

MINIMUM QUARTERLY BALANCE/QUARTERLY AVERAGE BALANCE

A savings account holder needs to keep a minimum balance in his/her account on monthly or quarterly basis, as
specified by the banks. In case of private banks, the person may have to maintain higher balance than that of any
public sector bank. The public sector banks can ask a person to maintain a balance of Rs. 500 to Rs. 1000. However,
in private sector banks, the minimum limit for the quarterly balance begins from Rs 5,000. MORATORIUM
PERIOD

The moratorium period can be called a repayment holiday for loan. If an individual wants to secure disbursement of
loan, but he doesn't have EMI or Pre-EMI provision, he is provided with an option to dish out some amount, as stated
in the bank policy. The moratorium period is contained in the maximum repayment period. An individual has to pay
interest rates during this period.

NET INTEREST MARGIN

Net interest margin measures the success of the bank's decision taken in the area of investment as in case of debt
situation. If the decision of the bank has not been fruitful, it denotes negative value. Negative value reflects that the
interest expenses of the bank were higher than the returns coming from its investments.

NO-FRILLS ACCOUNT
The apex Indian bank i.e. Reserve Bank of India had issued an Annual Policy Statement 2005-2006 urging banks to
take a look at their present practices to enable disadvantaged sections of the people to have an easy access to the
banking services. These accounts witness limited number of transactions. A detailed record of the nature and number
of such transactions is provided to the customers beforehand in a precise manner. Nowadays, almost every bank
provides no-frills account to the customers. The central bank of India has made Know Your Customer (KYC) norms
easy to facilitate the opening of a no-frills account.

NEGOTIABLE INSTRUMENTS ACT

Negotiable Instruments Act has been implemented with an aim to infuse faith in the usefulness of banking operations
and trustworthiness in transacting business done through negotiable instruments. Under Section 138 of the
Negotiable Instruments ACT, 1881, a person is prevented from drawing a cheque, if he/she doesn't have adequate
cash amount in the bank account. It also encourages the concerned person such as holder/payee to take action
against it.

NPA

The loans that can lead to a case of default are declared as Non-performing assets (NPAs). If a person does not pay
interest or principal amount for a period of 90 days, the loan is termed as a non-performing asset.

Obligation: The legal liabilities on a firm or individual to satisfy the conditions of an agreement. If the liability is not
paid, the other party can resort to suitable measures as per the ones mentioned in the agreement.

Offer Price: Offer Price is referred to the price which a purchaser is eager to acknowledge for a security. Besides
the cost, the offer price usually specifies the sum of the security that the purchaser is willing to sell it for.

OFEX: OFEX or PLUS Markets Group PLC is a London-based stock exchange which emerged as a Recognized
Investment Exchange in the year 2007. OPEX firms have greater tentative investments than Alternative Investment
Market (AIM) firms.

Open-end credit: A loan which was agreed previously and can be utilized frequently up to a definite limit is called
an Open-end credit. Also known as line of credit, it offers investors and firms an available amount of cash whenever
required.

Open-End Fund: Open-End Fund is a kind of mutual fund which includes no constraints on the number of shares
the fund will allocate. In case of escalating demands, the fund will carry on allocating shares regardless of the number
of investors. They can also be procured back and can be sold as per the desire of the investor.

Open-end lease: A contract that compels the leaseholder, who make intermittent rent payments, to buy the
rented property at the closing contents of the contract. It is also known as a "finance lease".

Out of the Money: Out of the Money is a term which is used when the strike value of an option is greater than the
market cost of the principal asset.

Outstanding Check: Checks or demand drafts that have not been delivered to the forfeiting bank for
compensation or the checks which are still waiting to be collected are known as Outstanding Checks.

Outstanding Debt: Outstanding Debt refers to the due portion of a liability that may incorporate interest
accumulated on the amount held.

Over the counter (OTC): A security dealt in a different perspective other than the recognized stock exchange
like NYSE, AMEX, etc. The term is associated with the stocks that are sold through a trader, the channel which is
different from a federal exchange. It also indicates to the protection of the obligation and other fiscal tools such as
derivatives, which are sold by merchants.

Overbought: It is referred to certain kind of condition in which the requirement of a specific asset excessively
elevates the cost of the price of a principal asset to such an extent that does not assist the essentials.

Overdraft: Overdraft is regarded as an immediate expansion of credit from a loan providing organization. If the
borrower has an overdraft bank account, his checks would be covered by the banks in case if they bounce.

Overdue: Overdue refers to outstanding and more than outstanding amount which is postponed further ahead the
premeditated time of arrival or imbursement.
Oversold: It is a situation in which the cost of the principal property declines rapidly to an extent of its original
value. This situation is generally an outcome of panic selling of goods in the market.

PIN NUMBER

A person needs to have pin number in order to gain an access to the ATM. This number is required, if the person is
using credit card, ATM card or ATM-cum-debit card for the purpose of withdrawing money. Pin number is a set of
digits that is sent by the bank to its customer separately after he/she receives the card. The pin number needs to be
kept secret. According to the experts in banking sector, it is wise to change this number so that any other person
apart from the card holder cannot get access to the holder's account. Some customer service counters of the
institutions ask for pin number. In fact, some retailers also need this number to enable cash transactions.

PLR/BPLR

PLR stands for Prime Lending Rate and BPLR for Benchmark Prime Lending Rate. PLR/BPLR is given to the main
customers of the lending institution. Mostly, the rates of interest for all retail loans are connected with PLR/BPLR.
However, in some cases, interest rates are dependent on the floating reference Rate (FRR).

PRE-PAYMENT PENALTY

A person has to bear pre-payment penalty if he/she decides to close the loan amount ahead of time of its specified
expiry date. This penalty is levied on the principal that a person owes to a lending institution. This penalty saves the
lending institution from facing a loss of income generated through interest rates. Previously, many lending institutions
used to levy a pre-penalty, if the person closed his home loan before the loan tenure. Nowadays, in case of home
loans, if a person has a proof that the money he is using for foreclosure belongs to his own resources, he can get rid
of the pre-payment penalty. However, any other loan apart from home loan is subject to pre-payment penalty.

PROCESSING FEE

A lending institution levies this fee in order to process the loan application of a person. This fee can be waived off
during festive offers, if the lending institution so decides.

REPO RATE

If any bank faces fund shortage and seeks to borrow some amount from the central bank of India i.e. RBI, it is
charged the Repo rate. If repo rate is reduced, the banks get to avail funds at low rates.

REVERSE REPO RATE

When Reserve bank of India takes fund from banks, it is charged the Reverse Repo Rate. If reverse repo rate is
raised, it becomes attractive for the banks to lend more money to RBI, as it accounts for higher interest rates.

RTGS, NEFT AND IFSC CODE

The National Electronic Fund Transfer (NEFT) system was started to facilitate the process of fund transfer from one
bank to the other. RTGS or Real Time Gross Settlement, on the other hand, is a process which helps in money
transfer from one bank to the other on gross basis and on a real time. This system makes money transfer fast and
smooth. Settlement in real time implies that there is no waiting period for the fund transfer. Gross settlement, on the
other hand, stands for settlement done on one-to-one basis. This is considered to be the full and final payment and
cannot be revoked, as it is registered with RBI.

In order to ascertain the unique identity of the different branches of the banks, the Indian Financial System Code
(IFSC) was devised. This code is a combination of letters and numbers. The first 4 characters of this code represent
the banks code and next character includes the control character. Presently, 0 is used in the 5th position. The last 6
characters stand for the branch identity. In MICR code, one can refer to the nine numbers to locate a particular
branch of the bank.

SARFESI ACT

The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (Sarfesi) Act was
introduced to offer an organized platform to the banking industry so that it can manage its increasing NPA stocks and
also match the pace of foreign financial institutions.

This act enables financial institutions as well as banks to acquire securities and deal in them. With the help of this
act, the financial institutions as well as the banks can actualize the long-term assets and deal with the issues of
liquidity. They can look for the mismatch in asset-liability and also get hold of their securities to better recovery. This
act enables them to sell securities and bring down the number of Non Performing Assets (NPAs).

SAVINGS BANK ACCOUNT

A savings account holder of a particular bank can carry out his/her banking transactions on daily basis. Mostly, these
accounts are accessed for non-commercial purposes. Savings account helps is money withdrawal and cash or
cheque deposits. A savings account user gets an easy access to ATM, mobile banking as well as internet banking.

SECURED LOAN

A secured loan is that against which the lender receives some sort of security from the borrower. Home loan is
considered to be the simplest form of this type of loan. The interest rate on secured loans is less than the ones
charged in case of unsecured loans.

STATUTORY LIQUIDITY RATIO

The Statutory Liquidity Ratio (SLR) is a metric which enables the banks to know the minimum deposit percentage
such as of cash, gold or any other form of security they need to maintain. It helps in controlling the credit growth in
nation.

Time Decay: The changing ratio in an option's cost from the decline in duration to the time of its termination. In
short, it is the process in which the cost of an option premium is worn as termination advances. It is also known as
theta and time-value decay.

Time Deposit: Time Deposit is a saving account or certificate deposit which is possessed for an allocated
duration with the perceptive that the investor can extract it by providing written application only.

Time Value of Money: Also known as present discounted value, it refers to the concept that the capital available
at a specific duration values much more than the similar cost in the future because of its prospective income ability.
This basic theory of investment states similar concept provided capital can generate interest and any kind of capital
values much more the faster it is attained.

Total Expense Ratio: A computation of the total value related to controlling and functioning of an investment
organization such as mutual fund is Total Expense Ratio. These values mainly incorporate organization charges and
supplementary expenditures for instance transaction charges, official charges, assessor fees and other functional
expenditures.

Total Return: The profit or loss on an investment that is accrued on two elements: earnings accrued from interest
on dividends and capital expansion in the share value or bond value. Total Return is generally expressed as a yearly
proportion in context of the sum invested.

Townhouse: It refers to a residential unit that encompasses two or more stories and is linked to other associated
units through party hedges. They are generally used in designed unit improvement which offers grouped or combined
lodging.

Transaction: A pact signed between the purchaser and the vendor for the trading of commodities and services
for compensation. The parties taking part in a business deal has a compulsion to execute their part.

Treasury Bills: Treasury Bills are an interim debt responsibility supported by the government with a maturity
period of below a year. They are subscribed via an aggressive bidding method at a concession. It indicates that the
bond offers income to the holder rather than forfeiting of pre-set interest payments by the holder.

Treasury Bond: It is a profitable bond with a pre-set interest rate and a maturity period of more than ten years.
The holder is entitled to make interest imbursements after every six months and the earnings accrued by the holders
is only charged at the national level.

Treasury Note: Treasury notes are profitable investments with preset interest rate with a maturity period between
one to ten years. They are widely preferred investments because they offer great derivative markets that trigger their
liquidity. Interest fees on the notes are transacted after every six months till the investment matures.

Treasury Security: They are bonds which have a maturity level of more than ten years. Also known as 'the long
bond', they uphold capital on a long term basis and pays greater yields to the depositors.

Trendline: A line on the cost diagram of a security illustrating the general course of the development of a security
in its business operations. Trendlines are used to investigate the cost of individual securities, like goods, mutual fund,
etc.

Treynor Ratio: Treynor Ratio was formed by Jack Treynor which computes surplus income accrued in comparison
to the income which could have been accrued on safe investments for each unit of market instability.

Umbrella Fund: It is an investment phrase which is used to explain a combined investment policy presented in a
form of one legal entity but incorporates many discrete sub-subsidizes which are sold as personal investment funds.

Underwriter: A legal entity which governs the unrestricted issuance and allocation of securities from a
conglomerate or other issuing entity is known as an Underwriter. Such kind of entity works in association with the
issuing entity to verify the submission cost of the securities. It purchases securities from the issuing entity and trades
them to depositors through the underwriter's allocation channel.

Uninsured Deposit: Uninsured Deposits are not covered against losses. They generate greater interest rate due
to absence of cover and the buyer undertakes all risks.

Unit of Trading: It refers to the usual quantity of shares, debentures, goods, equities that incorporates the lowest
unit of buying and selling on an exchange.

Unit Trusts: A non-integrated mutual fund organization that permits accounts to possess assets and exceed gains
via the account holders, other than investing them again into the account.

Universal Stock Futures: An assortment of consistent futures agreements on the shares of respective firms is
known as Universal Stock Futures. The futures agreement is an accord between the purchaser and the vendor to
purchase or trade an allocated number of shares during any time in the future at a pre-decided cost. The agreement
is signed with a cash payment, which indicates that the stocks are not entitled to be distributed.