This
is a glossary of terms that are, for the most part, unique
to the world of financial investigations, or terms that have
a different meaning than that which is commonly understood
when they are used in this context.
Value Line Equity Rating
Criteria: Using a computerized model based on a corporation's
earnings growth potential, Value Line's Equity Rating Criteria
ranks corporations for both timeliness and safety as follows:
1. Highest rank
2. Above average rank
3. Average rank
4. Below average rank
5. Lowest rank.
Value Line Investment
Survey (VL): An investment advisory service that
ranks hundreds of securities for safety and timeliness. It
projects which securities should have the best or worst price
performance over the next year. Moreover, each corporation
is assigned a risk rating. The ratings identify the volatility
of a corporation's stock price behavior compared to the market
average. Subscribers to the service receive weekly write-ups
detailing corporations' financial information, and data such
as corporate insider buying and selling decisions and the
percentage of a corporation's shares held by institutions.
Variable Annuity: A
life insurance annuity contract whose value fluctuates with
that of its underlying securities portfolio. Through security
investments, the objective is to preserve the annuity's value
that is otherwise subject to inflationary erosion. The return
to investors, usually at retirement, may be periodic payments
that change with the market value of the portfolio or fixed
minimum payments based on portfolio appreciation.
Variable Life Insurance:
A variation of whole life insurance created to fight inflation
and to remain competitive with other investment vehicles that
provide higher rates of return. It affords policyholders a
chance to earn capital gains on their insurance by investing
the cash value of the policy in stock, bond, or money market
portfolios. The policyholder sustains the investment risk
and the insurance company guarantees a minimum death benefit
that is not affected by any portfolio losses. As in IRAs,
earnings from variable life policies grow tax deferred until
distributed. Income is taxed only for the amount that exceeds
the total premiums paid into the policy.
Variable Rate Demand
Note: Note representing borrowings that are payable
on demand. Its interest is tied to a money market rate (e.g.,
the bank prime rate). The note's rate is adjusted downward
or upward every time the base rate changes.
VD (Volume Deleted):
Note appearing on the consolidated tape indicating
that for transactions of less than 5000 shares only the stock
symbol and the trading price will be displayed. This usually
occurs when the tape is running behind because of heavy trading.
Velocity of Money:
The amount of times a dollar is spent in a specific time period.
Velocity affects economic activity produced by a given money
supply, which includes bank deposits and cash in circulation.
The Federal Reserve Board considers the velocity of money
as a factor in their management of monetary policy. This is
because a rise in velocity may preclude the need to stimulate
an increase in the money supply. Conversely, a decline in
velocity may slow down economic growth.
Venture Capital:
Source of financing for start-up companies and new or turnaround
ventures that involve investment risk but offer the prospect
for above average future profits--also called "risk capital".
Venture capital financing supplements other funds that an
entrepreneur is able to tap (or takes the place of loans that
conventional financial institutions are unwilling to risk).
Venture capital sources include wealthy individual investors,
subsidiaries of banks, small business investment companies
(SBICs), groups of investment banks and venture capital limited
partnerships. In return for taking an investment risk, venture
capitalists are commonly rewarded with either profits, royalties,
preferred stock, capital appreciation of shares or any combination
thereof.
Venture Capital Limited
Partnership: Investment vehicle set up by a brokerage
firm or entrepreneurial company to raise capital for start-up
businesses or those in the early stages of development. In
return for taking an investment risk, the partnership usually
takes shares of stock in the company. Venture capital limited
partners receive income from profits the company earns, regardless
of what services or products are sold.
Versus Purchase (VSP):
Method of identifying specific shares of securities to be
sold for tax purposes--also called vs. purchase. If versus
purchase is not specifically stated, the IRS deems the securities
sold are on a first-in first-out (FIFO) basis.
Vertical Line Charts:
A type of technical charting that displays on one vertical
line the low and high prices of a security or market and a
short horizontal mark that denotes the closing price. Each
vertical line represents one day. The chart shows the trend
of a security or a market over a period of days, weeks, months,
or years. Technical analysts determine from these charts whether
a security or a market is frequently closing at the low or
high end of its trading range during a day. This information
is useful in discerning whether the security or a market is
weak or strong, and thus, if prices will decline or advance
in the near future.
Vertical Spread:
Strategy where an investor concurrently buys and sells options
on the same underlying security--also called a price spread.
Both options have identical expiration dates but different
strike prices. For instance, a vertical spread is created
by buying an XYZ April 20 call and selling an XYZ April 25
call. This strategy is used in hopes of profiting as the difference
between the option premium on the two option positions widens
or narrows.
Vesting: The
process by which an employee becomes entitled to receive employer-contributed
benefits in a qualified retirement plan. The Tax Reform Act
of 1986 stipulates that employees must be vested 100% after
five years of employment or at 20% a year in the third year
and 100% vested after seven years.
Vetting: It
is the process used by the offshore consultant for qualifying
the prospective client to determine if he or she is a good
candidate for offshore asset protection; as in to "vet"
the prospective client.
V Formation:
A V formation is a technical chart pattern indicating that
the security being charted has bottomed out and is now in
a rising (bullish) trend. An inverse (upside-down) V is indicative
of a bearish trend.
Visible Supply:
The total par value of all bond issues scheduled to come to
market during the forthcoming thirty days exclusive of issues
with maturities of one year or less. It is published each
day in the Daily Bond Buyer.
VL (Value Line Investment
Survey): An investment advisory service that ranks
hundreds of securities for safety and timeliness. It projects
which securities should have the best or worst price performance
over the next year. Moreover, each corporation is assigned
a risk rating. The ratings identify the volatility of a corporation's
stock price behavior compared to the market average. Subscribers
to the service receive weekly write-ups detailing corporations'
financial information, and data such as corporate insider
buying and selling decisions and the percentage of a corporation's
shares held by institutions.
VOL (Volume): The
total number of shares traded in a security or an entire market
during a given period of time. Volume figures are reported
daily by exchanges and a daily average is computed for longer
periods. Technical analysts stress the importance on the amount
of volume that occurs in the trading of a security. A sharp
rise in volume is deemed to signal future sharp rises or falls
in price, because it reflects increased interest in a security.
Volatile: The
term describes the size and frequency of fluctuations in the
price of a particular security. A security may be volatile
because the company's outlook is uncertain, there are only
a few outstanding shares (see Thin Market), or many other
reasons. When the reasons for the variation have to do with
the particular security and not the market as a whole, return
is measured by alpha. Market-related volatility is measured
by beta--also called systematic risk.
Volatility:
A security, market, or commodity that rises or falls severely
in price within a short time period.
Volume: The
total number of shares traded in a security or an entire market
during a given period of time. Volume figures are reported
daily by exchanges and a daily average is computed for longer
periods. Technical analysts stress the importance on the amount
of volume that occurs in the trading of a security. A sharp
rise in volume is deemed to signal future sharp rises or falls
in price, because it reflects increased interest in a security.
Volume Deleted (VD):
Note appearing on the consolidated tape indicating that for
transactions of less than 5000 shares only the stock symbol
and the trading price will be displayed. This usually occurs
when the tape is running behind because of heavy trading.
Voting Right:
Right to vote in corporate business matters in which they
are common shareholder. This right may be delegated to another
person by the shareholder.
Voting Stock:
Shares in a company that give a shareholder voting and proxy
rights.
Voting Trust:
A limited-life trust established to center authority of a
corporation to a few individuals, called voting trustees.
Voting Trust Certificate
(VTC): Transferable certificate of beneficial interest
in a voting trust that is issued to stockholders in exchange
for their common stock. The certificates represent all the
rights of common stock (the shareholder retains rights to
earnings and dividends) but delegates voting rights to the
trustees. The common stock is then registered on the corporation's
books in the names of the trustees. The common purpose for
such an arrangement is to facilitate reorganization of a corporation
in financial difficulty by preventing resistance to management.
VSP (Versus Purchase):
Method of identifying specific shares of securities to be
sold for tax purposes--also called vs. purchase. If versus
purchase is not specifically stated, the IRS deems the securities
sold are on a first-in first-out (FIFO) basis.
VTC (Voting Trust Certificate):
Transferable certificate of beneficial interest in a voting
trust that is issued to stockholders in exchange for their
common stock. The certificates represent all the rights of
common stock (the shareholder retains rights to earnings and
dividends) but delegates voting rights to the trustees. The
common stock is then registered on the corporation's books
in the names of the trustees. The common purpose for such
an arrangement is to facilitate reorganization of a corporation
in financial difficulty by preventing resistance to management.
Vulture Funds:
A limited partnership that invests in undervalued property
and whose goal is to profit when prices rebound.
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