Agency basis: Agency basis is the means of compensating a broker on the commission established

through bids submitted by various brokerage firms.

Agency pass-troughs: Agency pass-through is a type of pass-through security guaranteed by a

governmental agency such as the Government National Mortgage Association. The
principal and interest payments of these mortgage securities differ from the conventional
pass-through securities that are not guaranteed by governmental agencies.

Agreement: A mutual arrangement between two or more parties, either verbally or through a
written agreement.

Agreement corporation: An agreement corporation is a federally or state-chartered corporation,

which has entered into an agreement or understanding with the Federal's Board of
Governors that it will limit its powers to those specified by the Edge Act.

Agreement of sale: Agreement of sale is a real estate terminology which refers to a written
agreement between the seller and purchaser. In the agreement, the purchaser agrees to buy
certain real estate and the seller agrees to sell upon terms of the agreement. It is also known
as contract of offer and acceptance, contract of sale and earnest money contract.

Allocation-of-income rules: The U.S. tax provisions define how the income and the deductions
are to be allocated between the domestic and the foreign source income.

Alpha equation: The equation to determine the measure of selection risk of a mutual fund in the
market is also known as the "alpha".

The alpha equation is:

[ (sum of y) - ((b)(sum of x)) ] / n

where,

n = number of observations (36 months)

b = beta of the fund
x = rate of return for the S&P 500
y = rate of return for the fund

American-style option: An American-style option is an option contract that can be exercised any
time before its expiration date. It contrasts with the European-style option, which is
executed on the date of the expiration itself.

Amortized loan: A loan for which the principal and interest is paid in a series of equal or nearly
equal regular installments.
Annual fund operating expenses: Annual fund operating expenses for investment companies refer
to the management fees and "other expenses". These also include the expenses for
providing custodial and accounting services, maintaining shareholder records and
providing shareholders with financial statements.

Annual report: The annual report of any publicly held business is the yearly record of its financial
condition, which includes a description of the firm's operations, its balance sheet and
income statement. Rules dictate that these reports have to be passed on to all shareholders.

Appraisal
Business: The business definition of appraisal refers to a performance review or
performance appraisals, whereby a face-to-face discussion is held in which an
employee's work is discussed, reviewed, and appraised by another, using an agreed
and understood framework.

Real Estate: When a licensed real estate appraiser makes an expert judgment or estimate
of the quality or value of real estate on a given date it is known as real estate
appraisal.

Approved attorney: A title insurance company usually authorizes an approved attorney the
authority to handle closings and to render title opinions.

Appurtenance: Anything attached to the land or used with it that passes on to the new owner of
the land is known as appurtenance.

Arbitrage pricing theory (APT): Developed by Stephen Ross, the arbitrage pricing theory (APT)
is an alternative valuation model which is based purely on arbitrage arguments.

Arbitrage-free option-pricing models: Arbitrage-free option-pricing models are the yield curve
option pricing models which essentially include different volatility assumptions along the
yield curve.

Arithmetic average (mean) rate of return: The Arithmetic average (mean) rate of return or the
arithmetic mean return is calculated by averaging the sub period returns and dividing it by
the number of sub periods.

Asset: Assets are any property owned by the business which includes tangible assets such as cash,
receivables, inventory and intangible assets like goodwill.

Asset allocation decision: The decision of how the funds of the business should be distributed
among the major classes of assets in which it may be invested is known as asset allocation
decision.

Asset classes: Asset classes are defined as the categories of assets, such as bonds, stocks and real
estate,