Business Terms and Definitions (C)
Call: An option of buying a security at a predetermined price that gives the buyer a certain time frame to exercise the option. There is usually a call date, call price, call spread, call loan rate, and call features.
Capital: Money or other assets from which income can be derived in the future such as an IRA, CD, checking account, savings account, and credit cards. Capital can be cash on hand, equity in real estate, such as a home or investment property, the cash value of an insurance policy, stocks, bonds, mutual funds, money in a 401k, SEP, and/or other retirement plans.
Capital Gains: The profit taken on capital asset that puts the value of the asset above the original purchase price.
Capital Loss: A decrease in value of an asset that puts the value below the original purchase price.
Capital Risk: As with all investment vehicles, there is always the possibility of losing money due to any one of many unforeseeable circumstances, such as an economic recession or the insolvency of a company.
Cash: The tangible form of money, such as bank notes (paper money) or coins.
Cash Dividends: The actual distribution of net profits by a company to it's shareholders.
Cash Flow: The amount of money that is made and spent by an individual or business. It is usually the money that can be documented as it moves into and out of an account.
Certificate of Deposit (CD): Negotiable or Non-negotiable deposits issued by banks with varying maturity dates and interest rates. Usually cannot be transferred from one investor to another and can only be redeemed by the issuing bank. Banks may charge a large penalty if the CD is redeemed before the maturity date.
Certified Financial Planner: An individual who has completed the necessary training and courses by the Certified Financial Board of Standards and has expertise in the field of financial planning.
Charge-Off: Debt written off as uncollectible and removed from a lender's balance sheet, then sent to it's collection department or to an outside independent agency for collection. Charge-off's are usually filed with credit reporting agencies, which in turn, puts them on a debtor's credit report as bad debt.
Charter: The articles of incorporation and other required certificates that a company files with the state in order to obtain a certificate of incorporation.
Chicago Mercantile Exchange: Started in 1919, it is the largest futures exchange in the United States, marketing stock indexes, interest rates, and other commodities.
Convertible Bonds: Bonds that allow a company to borrow money in exchange for a yield in payment thereby giving the bond holder a set amount of income along with the repayment of principal on a future date. Convertible bonds are similar to both stocks and bonds. They allow the investor the opportunity to profit on the gains made by the company's stocks.
Commission: A fee charged by a broker for selling or trading commodities, such as real estate, stock and bonds, or other securities on behalf of a customer.
Commodity: Raw materials such as oil, natural gas, precious metals, grains, meats, or other products that are used in processing or manufacturing.
Corporate Bonds: Debt issued by corporations in the form of bonds to get investors' money with a promise to pay interest payments biannually and to repay the investors' money in full at a specified date.
Coverdell Education Savings Account: A nondeductible, tax free contribution account (currently $2,000. per child, per year) made to cover college and other qualified education expenses.
Credit: An individual's or a company's reputation for repaying debts on time. The better the credit, the higher the rating and the more willingness for companies, banks, credit unions, and savings and loan organizations to lend money.
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