Financial Glossary
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W
- A Nasdaq symbol specifying that a particular security is a warrant.
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W-2 Form
- The form that an employer must send to an employee and the IRS at the end of the year. The W-2 form reports an employee's annual wages and the amount of taxes withheld from his or her paycheck.
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W-4 Form
- A form completed by an employee to indicate his or her tax situation (exemptions, status, etc.) to the employer. The W-4 form tells the employer the correct amount of tax to withhold from an employee's paycheck.
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W-8 Form
- An IRS form that grants a foreigner an exemption from certain U.S. information return reporting and backup withholding regulations.
There are many variations of the W-8 form, such as the W-8BEN and W-8ECI.
- An IRS form that grants a foreigner an exemption from certain U.S. information return reporting and backup withholding regulations.
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W-9 Form
- An IRS form, also known as "Request for Taxpayer Identification Number and Certification", which is used by an individual defined as a "U.S. person" or a resident alien to verify his or her taxpayer identification number (TIN).
An entity that is required to file an information return with the IRS must obtain your correct TIN to report, for example, income paid to you, real estate transactions, mortgage interest you paid, etc. For example, companies that issue dividends use the W-9 form to verify a shareholder's TIN.
- An IRS form, also known as "Request for Taxpayer Identification Number and Certification", which is used by an individual defined as a "U.S. person" or a resident alien to verify his or her taxpayer identification number (TIN).
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W-Shaped Recovery
- An economic cycle of recession and recovery that resembles a "W" in charting. A W-shaped recovery represents the shape of the chart of certain economic measures such as employment, GDP, industrial output, etc. A W-shaped recovery involves a sharp decline in these metrics followed by a sharp rise back to the previous peak, followed again by a sharp decline and ending with another sharp rise. The middle section of the W can represent a significant bear market rally or a recovery that was stifled by an additional economic crisis.
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Wage Assignment
- The procedure of taking money directly from an employee's compensation under the authority of a court order, in order to pay a debt obligation. Wage assignments are typically a last resort of a lender to receive repayment from a borrower who has previously failed to pay their debt obligation.
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Wage-Price Spiral
- A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. The wage-price sprial suggests that rising wages increase disposable income, thus raising the demand for goods and causing prices to rise. Rising prices cause demand for higher wages, which leads to higher production costs and further upward pressure on prices.
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Waiting Period
1. The period of time between filing a registration statement with the SEC and the registration statement being declared effective by the SEC. Also known as the "quiet period" and the "cooling-off period".
2. The time between the filing of an insurance claim and the payments made on the claim. Also known as the "elimination period".
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Waiver
- The voluntary action of a person or party that removes that person's or party's right or particular ability in an agreement. The waiver can either be in written form or some form of action. A waiver essentially removes a real or potential liability for the other party in the agreement.
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Waiver Of Premium Rider
- A clause in an insurance policy that waives the policyholder's obligation to pay any further premiums should he or she become seriously ill or disabled. A waiver of premium allows people to benefit from an insurance policy, even when they cannot work.
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Walk-Away Lease
- A common type of car lease in which the lessee returns the car at the end of the lease period, ending the lease agreement. The lessee bears very little risk under this type of lease agreement because the total costs of ownership (minus maintenance and repair costs) are known in advance. In other words, the lessee does not bear the risk of selling the vehicle at the current market price when the lease is over.
Also known as a "closed-end lease".
- A common type of car lease in which the lessee returns the car at the end of the lease period, ending the lease agreement. The lessee bears very little risk under this type of lease agreement because the total costs of ownership (minus maintenance and repair costs) are known in advance. In other words, the lessee does not bear the risk of selling the vehicle at the current market price when the lease is over.
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Wall of Worry
- A phrase used to describe a bullish market trend occurring in the face of negative uncertainties.
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Wall Street
- 1. A street in lower Manhattan that is the original home of the New York Stock Exchange. The street is the historic headquarters of the largest U.S. brokerages and investment banks. Many have since relocated to other areas of Manhattan and the United States. Wall Street was named after the wooden wall Dutch colonists built in this area in 1653 to defend themselves from the British and Native Americans.
2. The collective name for the financial and investment community, which includes stock exchanges and large banks, brokerages, securities and underwriting firms, and big businesses. Some people believe that the interests of these big firms contrast those of smaller businesses, or "Main Street".
- 1. A street in lower Manhattan that is the original home of the New York Stock Exchange. The street is the historic headquarters of the largest U.S. brokerages and investment banks. Many have since relocated to other areas of Manhattan and the United States. Wall Street was named after the wooden wall Dutch colonists built in this area in 1653 to defend themselves from the British and Native Americans.
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Wallflower
- A stock that has fallen out of favor with investors and, consequently, tends to trade at a low P/E. Also called orphan stock.
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Wallpaper
- The name given to stocks, bonds and other securities that have become worthless.
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Walrasian Market
- An economic model of a market process in which orders are collected into batches of buys and sells and then analyzed to determine a clearing price that will decide the market price. Also referred to as "call market".
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War Babies
- A name given to securities in companies that are defense contractors.
Also known as "defense stocks".
- A name given to securities in companies that are defense contractors.
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War Bond
- Debt securities issued by a government for the purpose of financing military operations during times of war. It is an emotional appeal to patriotic citizens to lend the government their money because these bonds offer a rate of return below the market rate.
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War Chest
- Slang for the reserve of cash a corporation sets aside to attempt a takeover or to defend against a hostile takeover.
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Warehouse Lending
- A line of credit extended by a financial institution to a loan originator to fund a mortgage that a borrower initially used to buy a property. The loan typically lasts from the time it is originated to when the loan is sold into the secondary market, whether directly or through a securitization.
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Warehouse Receipt
- A receipt used in futures markets to guarantee the quantity and quality of a particular commodity being stored within an approved facility.
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Warehousing
- 1. A procedure whereby a company gradually builds up a holding of shares in a company it wishes to takeover in the future.
2. The process of storing goods within a storage facility.
- 1. A procedure whereby a company gradually builds up a holding of shares in a company it wishes to takeover in the future.
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Warrant
- A derivative security that gives the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are often included in a new debt issue as a "sweetener" to entice investors.
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Warrant Coverage
- An agreement between a company and its shareholders whereby the company issues warrants equal to some percentage of the dollar amount of the shareholder's investment.
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Warrant Premium
- The premium paid for the rights associated with a warrant.
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Warranty
- A type of guarantee that a manufacturer or similar party makes regarding the condition of its product. It also refers to the terms and situations in which repairs or exchanges will be made in the event that the product does not function as originally described or intended.
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Warren Buffett
- Known as "the Oracle of Omaha", Buffett is Chairman of Berkshire Hathaway and arguably the greatest investor of all time. His wealth fluctuates with the performance of the market but as of 2008 his net worth was estimated at $62 billion, making him the richest man in the world.
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Warsaw Stock Exchange - WSE
- The largest stock exchange in eastern Europe, located in Warsaw Poland. Trading started on April 16, 1991, and the exchange ballooned to a market capitalization of approximately $200 billion (EUR) in six years. Instruments such as shares, bonds and various derivative products can all be traded electronically on this exchange. The WSE is a joint-stock company founded by the state treasury.
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Wash
- A situation in which two events or actions have the effect of nullifying each other. In terms of investment, this could be when the gains in a portfolio equal the losses.
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Wash Sale
- An illegal transaction an investor makes by simultaneously buying and selling a security through two different brokers, thereby creating the illusion of activity. Investors do this to try and recognize a tax loss without actually changing their position.
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Wash Trading
- An illegal stock trading practice where an investor simultaneously buys and sells shares in a company through two different brokers.
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Wash-Out Round
- A common round of financing to owners of small companies that are not yet financially stable. When such financing is done, the new issuance serves to dilute drastically the ownership of previous investors and owners. Often, the new investors are able to take control of the company because the previous owners are in desperate need of more financing to avoid bankruptcy.
Also know as "burn-out round" or "cram-down round".
- A common round of financing to owners of small companies that are not yet financially stable. When such financing is done, the new issuance serves to dilute drastically the ownership of previous investors and owners. Often, the new investors are able to take control of the company because the previous owners are in desperate need of more financing to avoid bankruptcy.
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Wash-Sale Rule
- An Internal Revenue Service (IRS) rule prohibiting a taxpayer from claiming a loss on the sale of an investment when the same investment was purchased within 30 days before or after the sale date. Also know as the "30-day wash-sale rule".
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Wasting Asset
- A derivative security that loses value due to time decay.
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Watch List
- A list of securities being monitored closely by a brokerage or exchange in order to spot irregularities.
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Water ETF
- An exchange-traded fund that invests in companies operating in industries such as water treatment and purification, water utilities, water monitoring, and broader distribution and retail companies. Water ETFs invest the majority of their assets into publicly traded equities based on an underlying index, which may be created in house or by a third-party market service.
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Watered Stock
- Stock that is issued with a value much greater than the value of the issuing company's assets. Watered stock can be caused by excessive stock dividends, overvalued assets and/or large operating losses.
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Waterfall Concept
- A life insurance plan that provides a tax benefit in regards to intergenerational transfers of wealth. The concept occurs when a tax-exempt insurance policy is rolled over to a child or a grandchild. The origin of this term is derived from the fact that this insurance plan is similar to waterfalls in that it only flows downwards.
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Waterfall Payment
- A type of payment scheme in which higher-tiered creditors receive interest and principal payments, while the lower-tiered creditors receive only interest payments. When the higher tiered creditors have received all interest and principal payments in full, the next tier of creditors begins to receive interest and principal payments.
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Wave
- A metaphor for daily market activity that goes against the weekly market tide.
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Weak Dollar
- A situation where the U.S. dollar's value is decreasing relative to one or a basket of foreign currencies. Essentially, a weak dollar means that a U.S. dollar can exchange for fewer amounts of foreign currency. The dollar may weaken due to changes in the interest rate and outlook on the U.S. economy's future.
- A situation where the U.S. dollar's value is decreasing relative to one or a basket of foreign currencies. Essentially, a weak dollar means that a U.S. dollar can exchange for fewer amounts of foreign currency. The dollar may weaken due to changes in the interest rate and outlook on the U.S. economy's future.
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Weak Form Efficiency
- One of the different degrees of efficient market hypothesis (EMH) that claims all past prices of a stock are reflected in today's stock price. Therefore, technical analysis cannot be used to predict and beat a market.
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Weak Hands
- 1. The intention of futures contract holders not to receive delivery of the underlying.
2. Retail traders in the forex market who abide by the conventional wisdom that when a pattern is broken, get out.
- 1. The intention of futures contract holders not to receive delivery of the underlying.
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Weak Longs
- Refers to the group of investors that holds a long position and is quick to exit that position at the first sign of weakness. This group of investors is generally looking to capture the potential upside in a given security, but is not willing to take much loss. These investors will quickly close their positions when a trade does not work in their favor.
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Weak Shorts
- Refers to the group of investors who hold a short position and are quick to exit their positions at the first sign of strength in the underlying asset. This group of investors looks to capture the gain on a move lower, but they are usually unwilling to take on as much risk as other investors.
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Wealth
- A measure of the value of all of the assets of worth owned by a person, community, company or country. Wealth is the found by taking the total market value of all the physical and intangible assets of the entity and then subtracting all debts.
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Wealth Added Index - WAI
- A metric designed by Stern Stewart & Co consulting firm that attempts to measure wealth created (or destroyed) for shareholders by a company. The WAI takes into account more variables than just the profits or share growth of a company. According to this theory, wealth is created only if the returns of a company exceed its cost of equity.
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Wealth Management
- A professional service which is the combination of financial/investment advice, accounting/tax services, and legal/estate planning for one fee.
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Weather Derivative
- An instrument used by companies to hedge against the risk of weather-related losses. The investor who sells a weather derivative agrees to bear this risk for a premium. If nothing happens, the investor makes a profit. However, if the weather turns bad, then the company who buys the derivative claims the agreed amount.
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Weather Future
- A type of weather derivative that obligates the buyer to purchase the value of the underlying weather index - measured in heating degree days (HDD) or cooling degree days (CDD) - at a future date. The settlement price of the underlying weather index is equal to the value of the relevant month's HDD/CDD multiplied by $20. Weather futures enable businesses to protect themselves against losses caused by unexpected shifts in weather conditions.
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Wedge
- A technical chart pattern composed of two converging lines connecting a series of peaks and troughs.
- A technical chart pattern composed of two converging lines connecting a series of peaks and troughs.
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Weekend Effect
- A phenomenon in financial markets in which stock returns on Mondays are often significantly lower than those of the immediately preceding Friday. Some theories that explain the effect attribute the tendency for companies to release bad news on Friday after the markets close to depressed stock prices on Monday. Others state that the weekend effect might be linked to short selling, which would affect stocks with high short interest positions. Alternatively, the effect could simply be a result of traders' fading optimism between Friday and Monday.
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Weekly Chart
- A chart where each data point is comprised of the price movement for a single week of trading. This type of chart typically shows high, low, open, and close for the whole week and does not show the day-to-day movements of the security. This type of chart is used by technical analysts to gauge the long-term trend of a given asset.
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Weekly Mortgage Applications Survey
- A survey established to provide current information regarding real estate market financing. The Weekly Mortgage Applications Survey contains statistical information on the previous week's mortgage activity. The website is used by real estate investors and anlaysts to assist them to keep up-to-date on market trends and help them make decisions on the purchase, or sale, of invesment property.
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Weighted
- Figures or components that are adjusted to reflect importance by value or proportion.
- Figures or components that are adjusted to reflect importance by value or proportion.
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Weighted Alpha
- A weighted measure of how much a stock has risen or fallen over a certain period, usually a year. Generally, more emphasis is placed on recent activity by assigning higher weights to it than those assigned to earlier movements. This helps to give a return figure that has a greater focus on the most current period and is a more relevant measure for short-term analysis. This technique is popular with technical analysts.
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Weighted Average
- An average in which each quantity to be averaged is assigned a weight. These weightings determine the relative importance of each quantity on the average. Weightings are the equivalent of having that many like items with the same value involved in the average.
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Weighted Average Cost Of Capital - WACC
- A calculation of a firm's cost of capital in which each category of capital is proportionately weighted. All capital sources - common stock, preferred stock, bonds and any other long-term debt - are included in a WACC calculation. All else help equal, the WACC of a firm increases as the beta and rate of return on equity increases, as an increase in WACC notes a decrease in valuation and a higher risk.
The WACC equation is the cost of each capital component multiplied by its proportional weight and then summing:
Where:
Re = cost of equity
Rd = cost of debt
E = market value of the firm's equity
D = market value of the firm's debt
V = E + D
E/V = percentage of financing that is equity
D/V = percentage of financing that is debt
Tc = corporate tax rate
Businesses often discount cash flows at WACC to determine the Net Present Value (NPV) of a project, using the formula:
NPV = Present Value (PV) of the Cash Flows discounted at WACC.
- A calculation of a firm's cost of capital in which each category of capital is proportionately weighted. All capital sources - common stock, preferred stock, bonds and any other long-term debt - are included in a WACC calculation. All else help equal, the WACC of a firm increases as the beta and rate of return on equity increases, as an increase in WACC notes a decrease in valuation and a higher risk.
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Weighted Average Cost of Equity - WACE
- A way to calculate the cost of a company's equity that gives different weight to different aspects of the equities. Instead of lumping retained earnings, common stock, and preferred stock together, WACE provides a more accurate idea of a companies total cost of equity. Determining an accurate cost of equity for a firm is integral for the firm to be able to calculate its cost of capital.
In turn, an accurate measure of the cost of capital is essential when a firm is trying to decide if a future project will be profitable or not.
- A way to calculate the cost of a company's equity that gives different weight to different aspects of the equities. Instead of lumping retained earnings, common stock, and preferred stock together, WACE provides a more accurate idea of a companies total cost of equity. Determining an accurate cost of equity for a firm is integral for the firm to be able to calculate its cost of capital.
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Weighted Average Coupon - WAC
- The weighted-average gross interest rates of the pool of mortgages that underlie a mortgage-backed security (MBS) at the time the securities were issued. A mortgage-backed security's current WAC can differ from its original WAC as the underlying mortgages pay down at different speeds. In the weighted-average calculation, the principal balance of each underlying mortgage is used as the weighting factor.
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Weighted Average Credit Rating
- The weighted average of all the bond credit ratings in a bond fund. The measure gives investors an idea of how risky a fund's bonds are overall. The lower the weighted average credit, rating the riskier the bond fund. The weighted average credit rating is expressed as a regular letter rating (AAA,BBB, CCC).
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Weighted Average Life - WAL
- The average number of years for which each dollar of unpaid principal on a loan or mortgage remains outstanding. Once calculated, WAL tells how many years it will take to pay half of the outstanding principal.
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Weighted Average Loan Age - WALA
- A dollar-weighted average measuring the age of the individual loans in a mortgage pass-through or pooled security, such as Ginnie Mae or a Freddie Mac security. The WALA is measured as the time in months since the origination of the loans, with the weighting based on each loan's size in proportion to the aggregate total of the pool.
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Weighted Average Market Capitalization
- A stock market index weighted by the market capitalization of each stock in the index. In such a weighting scheme, larger companies account for a greater portion of the index. Most indexes are constructed in this manner, with the best example being the S&P 500.
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Weighted Average Maturity - WAM
- The weighted average of the time until all maturities on mortgages in a mortgage-backed security (MBS). The higher the weighted average to maturity, the longer the mortgages in the security have until maturity. Also known as "average effective maturity".
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Weighted Average Rating Factor - WARF
- A measure that is used by credit rating companies to determine the credit quality of a portfolio. This measure allows rating companies to look at a portfolio as a single security, and assign it a single rating.WARFs are most often calculated by rating companies for collateralized debt obligations (CDOs).
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Welfare
- A government program which provides financial aid to individuals or groups who cannot support themselves. Welfare programs are funded by taxpayers and allow people to cope with financial stress during rough periods of their lives. In most cases, people who use welfare will receive a biweekly or monthly payment. The goals of welfare vary, as it looks to promote the pursuance of work, education or, in some instances, a better standard of living.
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Welfare Economics
- A branch of economics that focuses on the optimal allocation of resources and goods and how this affects social welfare. Welfare economics analyzes the total good or welfare that is achieve at a current state as well as how it is distributed. This relates to the study of income distribution and how it affects the common good.
Welfare economics is a subjective study that may assign units of welfare or utility in order to create models that measure the improvements to individuals based on their personal scales.
- A branch of economics that focuses on the optimal allocation of resources and goods and how this affects social welfare. Welfare economics analyzes the total good or welfare that is achieve at a current state as well as how it is distributed. This relates to the study of income distribution and how it affects the common good.
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Well's Notice
- Notifications issued by regulators to inform individuals and companies of completed investigations where infractions have been discovered.
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West Texas Intermediate - WTI
- Light, sweet crude oil commonly referred to as "oil" in the Western world. WTI is the underlying commodity of the New York Merchantile Exchange's oil futures contracts.
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Western Account
- An offering agreement in which each underwriter in a consortium of underwriters is responsible only for selling its alloted amount of the new issue. Once participants have met their previously agreed upon target allotment sale, their liability in the offering is completed.
- An offering agreement in which each underwriter in a consortium of underwriters is responsible only for selling its alloted amount of the new issue. Once participants have met their previously agreed upon target allotment sale, their liability in the offering is completed.
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Wet Loan
- A mortgage in which the funds are obtained before all required documentation is completed. Wet loans allow the borrower to purchase property in a more timely fashion and complete the required paperwork after the transaction. Conditions surrounding the use of wet loans differ based on state laws.
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Wharton School
- This is one of America's top business schools and is located at the University of Pennsylvania. The Wharton School was founded in 1881 through a donation by Joseph Wharton. Wharton is considered to be the world's first collegiate business school and is regarded by many as one of the most prestigious business schools in the world.
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When Issued - WI
- A transaction which is made conditionally because a security has been authorized, but not yet issued.
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Whipsaw
- A condition where a security's price heads in one direction, but then is followed quickly by a movement in the opposite direction. The origins of term is derived from the push and pull action used by lumberjacks to cut wood with a type of saw with the same name.
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Whisper Number
- 1. Traditionally, the unofficial and unpublished earnings per share (EPS) forecasts that circulate among professionals on Wall Street. In this context, whisper numbers were generally reserved for the favored (wealthy) clients of a brokerage.
2. A company's forecasted future earnings or revenues according to the collective expectations of individual investors. In this sense, a whisper number would be compiled by a website polling its visitors. Individuals come up with a whisper number using their own analyses of company financials, market trends, gut feel, etc.
- 1. Traditionally, the unofficial and unpublished earnings per share (EPS) forecasts that circulate among professionals on Wall Street. In this context, whisper numbers were generally reserved for the favored (wealthy) clients of a brokerage.
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Whisper Stock
- Shares in a company that is rumored to be the target of a takeover offer. The source of whisper stocks could be anybody from an investment banker involved in a deal, to the spouse of an executive privy to the information.
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Whistle Blower
- An employee who has inside knowledge of illegal activities occurring within his or her organization and reports these to the public.
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White Candlestick
- A point on a candle stick chart representing a day in which the underlying price has moved up. Candlesticks will have a body and usually two wicks on each end. The bottom of the white body represents the opening price and the top of the body represents the closing price. The top and bottom tips of each wick are the day's highest and lowest price respectively.
Also known as an "open candlestick."
- A point on a candle stick chart representing a day in which the underlying price has moved up. Candlesticks will have a body and usually two wicks on each end. The bottom of the white body represents the opening price and the top of the body represents the closing price. The top and bottom tips of each wick are the day's highest and lowest price respectively.
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White Collar
- A working class that is known for earning high average salaries and not performing manual labor at their jobs. White collar workers historically have been the "shirt and tie" set, defined by office jobs and not "getting their hands dirty" (or their white collar dress shirts).
This class of worker stands in contrast to blue collar workers, who traditionally wore blue shirts and worked in plants, mills and factories.
- A working class that is known for earning high average salaries and not performing manual labor at their jobs. White collar workers historically have been the "shirt and tie" set, defined by office jobs and not "getting their hands dirty" (or their white collar dress shirts).
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White Elephant
- Any investment that nobody wants because it is unprofitable.
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White Knight
- A company that makes a friendly takeover offer to a target company that is being faced with a hostile takeover from a separate party.
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White Label Product
- A product manufactured by one company that is packaged and sold by other companies under varying brand names. The end product appears as though it is being made by the marketer, when in reality it is being created by the manufacturing company.
In this case, the manufacturer can concentrate on making the product or service and focus on cost savings, rather than worrying about marketing, which will be handled by the companies that will sell the product.
- A product manufactured by one company that is packaged and sold by other companies under varying brand names. The end product appears as though it is being made by the marketer, when in reality it is being created by the manufacturing company.
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White Paper
- An informational document issued by companies trying to promote or highlight the significance of a planned product or service.
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White Squire
- Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in the target firm.
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White-Shoe Firm
- A slang term for a broker-dealer firm that is strongly against hostile takeover practices.
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Whitemail
- A strategy that a takeover target uses to try and thwart an undesired takeover attempt. The target firm issues a large amount of shares at below-market prices, which the acquiring company will then have to purchase if it wishes to complete the takeover.
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Whitewash Resolution
- A European term used in conjunction with the Companies Act Of 1985, which refers to a resolution that must be passed before a target company in a buyout situation can give financial assistance, forgive debts or provide other financial dealings to the buyer of the acquiring entity. A whitewash resolution occurs when directors of the target company must swear that the company will be able to pay its debts for a period of at least 12 months. Oftentimes, an auditor must then confirm the company's solvency. Only after this takes place may a target company give the purchasing company any type of financial assistance.
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Whole Life Insurance Policy
- A life insurance contract with level premiums that has both an insurance and an investment component. The insurance component pays a stated amount upon death of the insured. The investment component accumulates a cash value that the policyholder can withdraw or borrow against.
- A life insurance contract with level premiums that has both an insurance and an investment component. The insurance component pays a stated amount upon death of the insured. The investment component accumulates a cash value that the policyholder can withdraw or borrow against.
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Whole Loan
- A term used to distinguish between an original mortgage loan and a pass-through security.
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Wholesale Money
- Funds borrowed by corporations, in high amounts, through financial institutions. Wholesale money is a way for large institutions to obtain capital without having to issue shares or bonds. These loans will usually be issued by large financial institutions and banks to long-standing, financially secure companies and have a lower-than-average interest rate.
- Funds borrowed by corporations, in high amounts, through financial institutions. Wholesale money is a way for large institutions to obtain capital without having to issue shares or bonds. These loans will usually be issued by large financial institutions and banks to long-standing, financially secure companies and have a lower-than-average interest rate.
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Wholesale Price Index - WPI
- An index that measures and tracks the changes in price of goods in the stages before the retail level. Wholesale price indexes (WPIs) report monthly to show the average price changes of goods sold in bulk, and they are a group of the indicators that follow growth in the economy.
Although some countries still use the WPIs as a measure of inflation, many countries, including the United States, use the producer price index (PPI) instead.
- An index that measures and tracks the changes in price of goods in the stages before the retail level. Wholesale price indexes (WPIs) report monthly to show the average price changes of goods sold in bulk, and they are a group of the indicators that follow growth in the economy.
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Wholesale Trade
- An economic indicator that measures the value in U.S. dollars of all merchant wholesalers' sales and inventories. Wholesale trade is one component of business sales and inventories. Only those firms which sell to governments, institutions and other businesses are considered part of wholesale trade.
- An economic indicator that measures the value in U.S. dollars of all merchant wholesalers' sales and inventories. Wholesale trade is one component of business sales and inventories. Only those firms which sell to governments, institutions and other businesses are considered part of wholesale trade.
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Wholly Owned Subsidiary
- A subsidiary whose parent company owns 100% of its common stock.
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Whoops
- Slang for the Washington Public Power Supply System (WPPSS), which made the record books with the largest municipal bond default in history.
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Wide Basis
- A condition found in futures markets in which the spot price of underlying commodities is not close to the futures price of the same contract.
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Wide Economic Moat
- A type of sustainable competitive advantage that a business possesses that makes it difficult for rivals to wear down its market share and profit. The term is derived from the water filled moats that surrounded medieval castles. The wider the moat, the more difficult it would be for an invader to reach the castle.
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Wide Open
- The situation at the opening of a trading day when there is a wide spread between the bid and ask prices for a security.
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Widely Held Fixed Investment Trust - WHFIT
- A fixed investment trust that is held by at least one third party, or middleman, rather than the owner of the trust. A widely held fixed investment trust (WHFIT) is set up by an investor or group of investors who create a portfolio of investments that are generally low risk/return. The investors then sell shares of the trust to different individuals. Holders of the trust are paid dividends and interest at regular intervals.
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Widow-and-Orphan Stock
- Relatively low-risk stocks from well-known firms that pay high dividends.
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Wild Card Option
- An option associated with treasury bond or treasury note futures contracts that permits the short position to delay the delivery of the underlying.
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Wild Card Play
- Having the right to deliver on a futures contract at the last closing price, even though the contract is no longer trading.
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Wildcat Drilling
- The process of drilling for oil in an area that has been left unexplored.
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Wildcatting
- A policy instituted by the Securities and Exchange Commission (SEC) that calls for the review of an entire industry whenever critical problems (such as accounting fraud) are found within one or two companies in the industry.
The origins of this term are derived from the oil industry, where companies drill for oil in unexplored or wild areas.
- A policy instituted by the Securities and Exchange Commission (SEC) that calls for the review of an entire industry whenever critical problems (such as accounting fraud) are found within one or two companies in the industry.
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Will
- A legally enforceable declaration of how a person wishes his or her property to be distributed after death. In a will, a person can also recommend a guardian for his or her children.
Also known as a "will and testament".
- A legally enforceable declaration of how a person wishes his or her property to be distributed after death. In a will, a person can also recommend a guardian for his or her children.
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Will Variation
- A law that allows spouses and children to contest a will if they are not adequately provided for.
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Williams %R
- In technical analysis, this is a momentum indicator measuring overbought and oversold levels, similar to a stochastic oscillator. It was developed by Larry Williams and compares a stock's close to the high-low range over a certain period of time, usually 14 days.
- In technical analysis, this is a momentum indicator measuring overbought and oversold levels, similar to a stochastic oscillator. It was developed by Larry Williams and compares a stock's close to the high-low range over a certain period of time, usually 14 days.
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Williams Act
- A federal act, passed in 1968, that defines the rules in regards to acquisitions and tender offers.
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Wilshire 5000 Total Market Index - TMWX
- A market capitalization-weighted index composed of more than 6,700 publicly-traded companies that meet the following criteria:
1. The companies are headquartered in the United States.
2. The stocks are actively traded on an American stock exchange.
3. The stocks have pricing information that is widely available to the public.
- A market capitalization-weighted index composed of more than 6,700 publicly-traded companies that meet the following criteria:
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Win/Loss Ratio
- A ratio of the total number of winning trades to the number of losing trades. It does not take into account how much was won or lost simply if they were winners or losers.
Win/Loss Ratio = Winning Trades : Losing Trades
The win/loss ratio is also known as the "success ratio".
- A ratio of the total number of winning trades to the number of losing trades. It does not take into account how much was won or lost simply if they were winners or losers.
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Windfall Shares
- Shares given for free to insiders of a society, a firm or a company when that same society, firm or company is undergoing the process of demutualization. Windfall shares are often given to promote goodwill and to encourage the demutualization process.
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Windfall Tax
- A tax levied by governments against certain industries when economic conditions allow those industries to experience above-average profits. Windfall taxes are primarily levied on the companies in the targeted industry that have benefited the most from the economic windfall, most often commodity-based businesses.
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Winding Up
- A process that entails selling all the assets of a business entity, paying off creditors, distributing any remaining assets to the principals, and then dissolving the business.
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Window Dressing
- A strategy used by mutual fund and portfolio managers near the year or quarter end to improve the appearance of the portfolio/fund performance before presenting it to clients or shareholders.
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Window Settlement
- A form of settlement between dealers whereby trades are settled through the physical comparison of transactions and actual money and stocks are transferred.
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Winner's Curse
- A tendency for the winning bid in an auction to exceed the intrinsic value of the item purchased. Because of incomplete information, emotions or any other number of factors regarding the item being auctioned, bidders can have a difficult time determining the item's intrinsic value. As a result, the largest overestimation of an item's value ends up winning the auction.
Originally, the term was coined as a result of companies bidding for offshore oil drilling rights in the Gulf of Mexico. In the investing world, the term often applies to initial public offerings.
- A tendency for the winning bid in an auction to exceed the intrinsic value of the item purchased. Because of incomplete information, emotions or any other number of factors regarding the item being auctioned, bidders can have a difficult time determining the item's intrinsic value. As a result, the largest overestimation of an item's value ends up winning the auction.
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Winnipeg Commodities Exchange - WCE
- A commodities exchange in Winnipeg, Manitoba, that serves as Canada's only agricultural futures and options exchange. Canola is the Winnipeg Commodities Exchange's (WCE) primary commodity, but the WCE also trades contracts on many other commodities and provides the world's only flaxseed futures market.
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Winsorized Mean
- A method of averaging that initially replaces the smallest and largest values with the observations closest to them. After replacing the values, a simple arithmetic averaging formula is used to calculate the winsorized mean.
Winsorized means are expressed in two ways. A "kth" winsorized mean refers to the replacement of the 'k' smallest and largest observations, where 'k' is an integer. A "X%" winsorized mean involves replacing a given percentage of values from both ends of the data.
- A method of averaging that initially replaces the smallest and largest values with the observations closest to them. After replacing the values, a simple arithmetic averaging formula is used to calculate the winsorized mean.
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Wire Fraud
- A situation where a person concocts a scheme to defraud or obtain money based on false representation or promises. This criminal act is done using electronic communications or an interstate communications facility.
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Wire House
- A company whose different branches are linked by a communications system enabling the sharing of financial information, research, and prices.
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Wire House Broker
- A non-independent broker working for a wire house firm, or a firm with multiple branches such as a national brokerage house. A wire house broker is typically a full-service broker, offering research, investment advice and order execution. By being affiliated with the wire house, the broker gains access to the firm's proprietary investment products, research and technology.
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Wire Transfer
- An electronic transfer of funds across a network administered by hundreds of banks around the world.
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Witching Hour
- The last hour of stock trading between 3pm (when the bond market closes) and 4pm EST. It is typically controlled by large professional traders, program traders and large institutional traders, and can be characterized by higher than average volatility.
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With Approved Credit - WAC
- A condition requiring a purchaser using financing to have adequate credit - as approved by his or her financial lending institution - for the transaction to go through.
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With Discretion
- A type of limit order that can be modified by a floor broker according to his or her own judgment, allowing him or her to buy or sell to a set point beyond the bounds of the original order. This trading modifier used along with limit and stop orders allows greater customization and flexibility.
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Withdrawal
- Removing funds from an account, plan, pension or trust. In some cases, conditions must be met in order to withdraw funds without penalization. There are two ways to withdraw money: in cash or in kind.
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Withdrawal Plan
- 1) A payment structure arranged with a mutual fund in which the investor receives a set amount of funds from the fund on a periodic basis. This is also called a "systematic withdrawal plan".
2) Any strategy in which an investor liquidates a portion of their portfolio and extracts cash periodically, such as an investor selling equity shares every year to help supplement their retirement.
- 1) A payment structure arranged with a mutual fund in which the investor receives a set amount of funds from the fund on a periodic basis. This is also called a "systematic withdrawal plan".
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Withholding
- Any tax that is taken directly out of an individual's wages or other income before he or she receives the funds.
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Withholding Allowance
- An allowance an individual claims on a W-4 Form. A withholding allowance is mainly used to assist an employer in calculating the amount of income tax to withhold from an employee's paycheck.
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Withholding Tax
- 1. Income tax withheld from employees' wages and paid directly to the government by the employer.
2. A tax levied on income (interest and dividends) from securities owned by a non-resident.
- 1. Income tax withheld from employees' wages and paid directly to the government by the employer.
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Without Recourse
- This phrase has several meanings. In a general sense, when the buyer of a promissory note or other negotiable instrument assumes the risk of default. Without recourse can also refer to a financing arrangement where the dealer's maximum possible liability is limited to warranties pertaining to the quality of an installment contract.
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Wolfe Wave
- In technical analysis, it is a naturally occurring trading pattern present in all financial markets. The pattern is composed of five waves showing supply and demand and a fight towards an equilibrium price. These patterns can develop over short- and long-term time frames such as minutes or weeks and are used to predict where a price is heading and when it will get there.
Source: www.harmonictrader.com
- In technical analysis, it is a naturally occurring trading pattern present in all financial markets. The pattern is composed of five waves showing supply and demand and a fight towards an equilibrium price. These patterns can develop over short- and long-term time frames such as minutes or weeks and are used to predict where a price is heading and when it will get there.
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Woody
- Slang to describe when the market has a strong and quick upward movement.
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Work in Progress - WIP
- Work that has not been completed but has already incurred a capital investment from the company.
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Workable Indication
- A nominal quote in the municipal bond market at which price a dealer is willing to either buy or sell a particular issue. This differs from a firm quote as revisions to the offer are allowed within a specified time period, usually one hour. Municipal bond dealers can also give out 'firm-with-recall' quotes that can be good for roughly the next hour, and then recalled.
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Working Capital
- A measure of both a company's efficiency and its short-term financial health. The working capital ratio is calculated as:
Positive working capital means that the company is able to pay off its short-term liabilities. Negative working capital means that a company currently is unable to meet its short-term liabilities with its current assets (cash, accounts receivable and inventory).
Also known as "net working capital", or the "working capital ratio".
- A measure of both a company's efficiency and its short-term financial health. The working capital ratio is calculated as:
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Working Capital Loan
- A loan whose purpose is to finance everyday operations of a company.
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Working Capital Management
- A managerial accounting strategy focusing on maintaining efficient levels of both components of working capital, current assets and current liabilities, in respect to each other. Working capital management ensures a company has sufficient cash flow in order to meet its short-term debt obligations and operating expenses.
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Working Capital Turnover
- A measurement comparing the depletion of working capital to the generation of sales over a given period. This provides some useful information as to how effectively a company is using its working capital to generate sales.
- A measurement comparing the depletion of working capital to the generation of sales over a given period. This provides some useful information as to how effectively a company is using its working capital to generate sales.
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Working Interests
- Refers to a form of investment in oil and gas drilling operations in which the investor is directly liable for a portion of the ongoing costs associated with exploration, drilling and production. In a similar fashion, working interest owners also fully participate in the profits of any successful wells. This stands in contrast to royalty interests, in which an investor's cost is usually limited to their initial investment, also resulting in a lower potential for large profits.
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Working Ratio
- A ratio used to measure a company's ability to recover operating costs from annual revenue. This ratio is calculated by taking the company's total annual expenses (excluding depreciation and debt-related expenses) and dividing it by the annual gross income:
- A ratio used to measure a company's ability to recover operating costs from annual revenue. This ratio is calculated by taking the company's total annual expenses (excluding depreciation and debt-related expenses) and dividing it by the annual gross income:
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Working-Age Population
- The total population in a region, within a set range of ages, that is considered to be able and likely to work. The working-age population measure is used to give an estimate of the total number of potential workers within an economy. Each region may have a different range of ages, but typically the ages of 20 to 65 are used.
- The total population in a region, within a set range of ages, that is considered to be able and likely to work. The working-age population measure is used to give an estimate of the total number of potential workers within an economy. Each region may have a different range of ages, but typically the ages of 20 to 65 are used.
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Workout Assumption
- The assumption of an existing mortgage by a qualified, third-party borrower from a financially distressed borrower. By having someone else assume the mortgage, the financially distressed borrower is relieved of its obligation of repaying the mortgage. The assumption must be approved by the mortgagee.
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Workout Market
- A market maker prediction as to the trading price range that a security will occupy within a reasonable period of time. The characteristics of a workout market are seen prevalently in thin markets.
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Workout Period
- The period of time in which temporary yield discrepancies between fixed income securities are adjusted.
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World Bank Group
- Five international organizations dedicated to providing financial assistance and advice to countries struggling with poverty and economic development. The World Bank generally focuses on developing third-world countries, helping them in areas such as health, education and agriculture. This bank provides loans and grants at discounted rates to these countries.
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World Economic Forum
- A discussion forum for discussing the major issues concerning the world. Some of the areas covered are political, economical, social and environmental. Parties included at the events include, but are not limited to, some of the most prominent worldly CEOs, ambassadors, public figures, media personnel, government officials, religious leaders and union representatives.
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World Economic Outlook - WEO
- A report by the International Monetary Fund (IMF) that contains analysis and projections of the integral elements of the IMF's surveillance of economic developments and policies in its member countries, and of the developments in the global financial markets and economic system. The World Economic Outlook (WEO) is usually prepared twice a year and is used in meetings of the International Monetary and Financial Committee.
- A report by the International Monetary Fund (IMF) that contains analysis and projections of the integral elements of the IMF's surveillance of economic developments and policies in its member countries, and of the developments in the global financial markets and economic system. The World Economic Outlook (WEO) is usually prepared twice a year and is used in meetings of the International Monetary and Financial Committee.
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World Equity Benchmark Series - WEBS
- A type of international fund traded on the American Stock Exchange that follows the Morgan Stanley Capital International (MSCI) country indexes. It was introduced in 1996 by Morgan Stanley and is a type of hybrid security that possesses qualities from both open and closed-end funds. Investors can use WEBS to achieve international diversification effectively and efficiently.
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World Federation Of Stock Exchanges
- An international standards organization based in Paris that was developed to handle business policy issues that affect the various world stock exchanges. The committee handles the issues of cross border investing and is the platform used to settle the majority of the debates that arise from the issues that affect the investment industry.
Formerly known as the "Federation Internationale des Bourses de Valeurs", or "International Federation of Stock Exchanges" (FIBV).
- An international standards organization based in Paris that was developed to handle business policy issues that affect the various world stock exchanges. The committee handles the issues of cross border investing and is the platform used to settle the majority of the debates that arise from the issues that affect the investment industry.
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World Fund
- A mutual fund that invests in securities from several different countries, including the United States. World funds typically have a significant portion of their capital invested in U.S.-listed securities, but also spread their investment capital among securities from several other countries. This structure limits exposure to any specific country and limits exchange rate risks.
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World Gold Council - WGC
- A nonprofit association of the world's leading gold producers, established to promote the use of, and thus demand for, gold through marketing, research and lobbying. Headquartered in Geneva, Switzerland, the WGC covers the markets which comprise about three-quarters of the world's annual gold consumption.
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World Trade Organization - WTO
- An international organization dealing with the global rules of trade between nations. Its main function is to ensure that trade flows as smoothly, predictably, and freely as possible.
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WorldCom
- Formerly known as WorldCom, now known as MCI, this U.S.-based telecommunications company was at one time the second-largest long distance phone company in the U.S. Today, it is perhaps best known for a massive accounting scandal that led to the company filing for bankruptcy protection in 2002. WorldCom executives effectively fudged the company's accounting numbers, inflating the company's assets by around $12 billion dollars. The swift bankruptcy that followed led to massive losses for investors.
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Worthless Securities
- Securities that have a market value of zero. Worthless securities can include stocks or bonds that are either publicly traded or privately held. These securities result in a capital loss for the owner and can be claimed as such when filing taxes.
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Wrap Account
- An account in which a brokerage manages an investor's portfolio for a flat quarterly or annual fee. This fee covers all administrative, commission, and management expenses. Sometimes this also includes funds of funds.
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Wrap Fee
- A comprehensive charge levied by an investment manager or investment advisor to a client for providing a bundle of services, such as investment advice, investment research and brokerage services. Wrap fees allow an investment advisor to charge one straightforward fee to their clients, simplifying the process for both the advisor and the customer.
- A comprehensive charge levied by an investment manager or investment advisor to a client for providing a bundle of services, such as investment advice, investment research and brokerage services. Wrap fees allow an investment advisor to charge one straightforward fee to their clients, simplifying the process for both the advisor and the customer.
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Wrap-Around Loan
- A loan that is most commonly used with property with an outstanding loan. The seller lends the buyer the difference between the existing loan and the purchase price. The buyer's periodic loan payments are sufficient to repay the existing loan as well as the seller's loan to the buyer. When the loan involves mortgage loans, it is also referred to as a wrap-around mortgage.
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Writ
- A formal document written by a judge or official requiring specific action.
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Writ Of Seizure And Sale
- A court order that permits a creditor to instruct a sheriff to seize and sell assets/property of a debtor in order to pay off a debt.
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Write Out
- A dual trade transaction enacted by a specialist in an individual stock issue. The first trade in a write out will be between the specialist and a floor trader, using the specialist's own inventory of stock, which is sold to the trader. The trader then executes the second part of the trade by transacting the same number of shares with an end client or firm.
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Write-Down
- Reducing the book value of an asset because it is overvalued compared to the market value.
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Write-Off
- A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues.
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Write-Up
- An increase made to the book value of an asset because it is undervalued compared to market values.
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Writer
- The seller of an option who collects the premium payment from the buyer.
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Written-Down Value
- The book value of an asset after accounting for depreciation and amortization.
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WST (Samoan Tala)
- The currency abbreviation for the Samoan tala (WST), the currency for Samoa. The Samoan tala is made up of 100 sene and is often presented with the symbol WS$, but is also represented by SAT, ST or T. The words "tala" and "sene" are Samoan equivalents to the English words "dollars" and "cents".
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