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The person appointed by the court to administer the estate when there is no will, the will did not name an executor or all named executors have died or are unwilling to act. Also referred to as a "personal representative."

Agent for Executor
Where a person or trust company like Royal Trust is hired by the named executor to provide advice and administration services.

Everything a company or person owns or is owed, such as money, securities, equipment and buildings.

Asset Allocation
The process of dividing investments among different kinds of assets, such as stocks, bonds, real estate and cash, to optimize the risk/reward tradeoff based on an individual's or specific situation and goals. A key concept in financial planning and money management.

Averages and Indexes or Indices
Statistical tools that measure the state of the stock market or the economy, based on the performance of stocks, bonds or other components. The Down Jones Industrial Average and the TSE 300 Composite Index are well-known examples.





Balance Sheet
A financial statement showing a company's assets, liabilities and shareholder's equity on a given date. It shows what the company owns and what debts it owes.

Bank of Canada
The central bank of Canada, founded in the 1930s to facilitate the functioning of the financial system. The Bank of Canada issues and removes bank notes, acts as the federal government's financial advisor on debt management and foreign exchange, and conducts monetary policy to regulate the growth of the country's money supply and influence interest rates.

Bank Rate
The minimum rate at which the Bank of Canada will make short-term advances to the chartered banks and money market dealers. Since 1980 the bank rate has been set at 1/4 of 1% (25 basis points) above the weekly average tender rate of 91-day Government of Canada treasury bills. The upward and downward trend of the bank rate affects the prime lending rates that chartered banks give to their most creditworthy borrowers, as well as rates on all types of bank deposits, short term paper, bonds and mortgages.

The legal status of an individual or company which is unable to pay its creditors and whose assets are therefore administered for its creditors by a trustee in bankruptcy.

Bear Market
A market in which prices are declining. A "bear" is a person who expects that the market or the price of a particular security will decline.

Beneficial Owner
The real owner of a security. An investor may have securities registered in the name of a broker, trustee or bank to facilitate transfer or to preserve anonymity, but the investor is the beneficial owner and will receive any dividends, interest or profits from sales.

A person who receives a benefit or gift under a will, or a person for whose benefit a trust is created.

An investment that pays you interest in semi- annual installments until a future maturity date, when the issuing government or company repays the bond s face value. Strictly speaking, the issuer pledges assets as security, except in the case of government bonds, but the term is often loosely used to describe any debt investment. Corporations and the federal, provincial and municipal governments issue bonds. Bond holders are first in line before shareholders to claim any of a company's assets when it goes insolvent.

A securities firm or an investment advisor associated with a firm. When acting as a broker for the purchase or sale of listed stock, the investment advisor does not own the securities him or herself, but acts as an agent for the buyer and seller and charges a commission for these services.

Bull Market
A market in which prices are rising. A "bull" is a person who expects that the market or the price of a particular security will rise.





Canadian Investor Protection Fund (CIPF)
An industry sponsored fund that protects investors from losses resulting from the bankruptcy of a member firm. The maximum coverage is $500,000 per account, of which up to $60,000 can be cash. The CIPF is sponsored by the Investment Dealers Association of Canada, the Toronto Stock Exchange and Futures Exchange, and the Montreal, Vancouver and Alberta Stock Exchanges.

Canadian Payments Association
This association operates a highly automated national clearing system for interbank payments which reduces costs and increases the efficiency of the clearing system in Canada. Members include chartered banks, trust and loan companies and some credit unions.

To economists, capital means the machinery, factories and inventory required to produce other products. To investors, capital means their cash plus the financial assets they have invested in securities, their home and other fixed assets.

Capital Gain or Loss
Profit or loss resulting from the sale of certain assets classified under the federal income tax legislation as capital assets. This includes stocks and other investments such as investment property.

Certificate of Deposit (CD)
A fixed-income debt security issued by most chartered banks, usually in minimum denominations of $1000 with maturity terms of one to six years.

A mini-certificate actually attached to a bond certificate which represents an actual interest payment. The coupon becomes negotiable on the date the interest is due and usually represents the six month interest payment on the face value of the bond certificate. The term "coupon" is sometimes used as a slang reference to the interest rate paid on a debt instrument, i.e. the coupon of the new Government of Canada March 2015 is 8.75%. This means the interest rate is 8.75% per annum on the face value of the bond.





Money borrowed from lenders for a variety of corporate or personal purposes. The borrower pays interest for the use of the money and is obligated to repay the principal amount on a set date.

A financial situation for an individual, company or government where expenses exceed income.

Discount Brokers
Brokerage firms that offer lower commission rates than investment dealers, but do not offer the services that investment dealers do, such as advice, research and portfolio planning.

Spreading investment to reduce risk by buying different securities from various companies, businesses, locations and governments.





EPS ratios Earnings per Share = Portion of a company's profit allocated to each outstanding share of common stock.

The stock, or ownership of shareholders in a company.

Estate Planning
The process of planning the transfer of all personal assets at death to chosen beneficiaries.

The person(s) or institution named under a will to administer an estate in accordance with the terms of the will. If the will requires a trust to be established, rather than having the assets distributed outright to the beneficiaries, the executor will normally also be named as trustee.





Fee-Based Accounts
Client accounts in which the investment dealer does not charge commissions, but charges a fee based on the value of the investor's account instead.

Financial Planning
A process in which an individual sets long-term financial goals through investments, tax planning, asset allocation, risk management, retirement planning and estate planning.

Fixed Income Securities
Securities that generate a predictable stream of interest or dividend income, such as bonds, debentures and preferred shares.





Guaranteed Investment Certificates (GICs)
A deposit instrument most commonly available from trust companies or banks requiring a minimum investment at a predetermined rate of interest for a stated term, i.e. one year, five years, etc. Generally non-redeemable and non-transferable prior to maturity, but there can be exceptions.





Index or Average
A statistical tool that measures the state of the stock market or the economy, based on the performance of stocks or other meaningful components. Examples are the TSE 300 Composite Index, The Montreal Exchange Market Portfolio Index and the Dow Jones Industrial Average.

Inter Vivos Trust
Also known as a living trust, inter vivos trusts are created during the lifetime of the settlor.

Money charged by a lender to a borrower for the use of his or her money.

A person who dies without a will. A partial intestacy is where a valid will does not dispose of the whole of the estate.

The purchase or ownership of a security to make money by gaining income, increasing capital, or both. Investments may also include artwork, antiques and real estate.

Investment Advisor
This is a person employed by an investment dealer who provides investment advice to clients and executes trades on their behalf in securities and other investment products. Investment advisors must attain set educational qualifications, follow certain rules and regulations and be registered by the securities commission in the province in which he or she works.

Investment Counsellor
A specialist in the investment industry paid by fee to provide advice and research to investors with larger sized accounts.

Investment Objective
Investment Objective is determined by your financial goals, time horizon, level of investment risk, and tax considerations. Once identified, your investment objective becomes a long-term action plan that includes a target mix of equities, bonds, and other securities.

Investment Policy Statement
Investment Policy Statement is the core of your investment strategy. It embodies your current financial situation, what you hope to achieve in the future, and your attitude toward risk. It is your assurance that your assets will be prudently managed, in keeping with your expressed goals and objectives.

Investment Representatives
Registered with the IDA a Investment Representative is licensed to receive and act upon clients trading instructions but does not provide advice or investment recommendations





These are the debts and obligations of a company. Current liabilities are debts due and payable within one year. Long-term liabilities are those payable after one year. Liabilities are found on a company's balance sheet.

Life Annuity
A contract which guarantees the planholder a regular monthly income for life in exchange for an amount of money in a Registered Retirement Savings Plan (RRSP).





Managed Account
This is similar to a discretionary account where a client has given specific written authorization to a partner, director or qualified portfolio manager of an investment dealer to select securities and execute trades, but on a continuing basis and for a fee. Managed accounts can be solicited whereas discretionary accounts are opened as a matter of convenience to clients who are ill or out of the country.

Margin Account
A client account where he or she uses credit from the investment dealer to buy a security. The client needs to deposit a "margin" amount with the balance being advanced by the investment dealer against acceptable collateral such as investments. The investment dealer can make a "margin call" and demand that the client deposit more money or securities when the value of the account falls below a certain level. If the client does not meet the margin call, the dealer can sell the securities in the margin account at a possible loss to cover the balance owed. The client is also charged interest on the money borrowed from the investment dealer for the purchase of the securities.

Money Manager
The person who is responsible for a portfolio of securities. In return for a fee, the manager has the fiduciary responsibility to manage the assets prudently and choose which asset types are most appropriate over time.

Money Market
That part of the capital market in which short-term financial obligations are bought and sold. These include federal government treasury bills, short term Government of Canada bonds, commercial paper, bankers' acceptances and guaranteed investment certificates. Longer term securities, when their term shortens to three years, are also traded in the money market.

Mutual Funds
These are open-end funds that are not listed for trading on a stock exchange and are issued by companies which use their capital to invest in other companies. Mutual funds sell their own new shares to investors and buy back their old shares upon redemption. Capitalization is not fixed and normally shares are issued as people want them.





Net Worth
The difference between a company's total assets less its total liabilities. Also referred to as shareholders' equity.





An investor who purchases an option has the right, but not the obligation, to buy or sell certain securities at a specified price within a specified time. A put option gives the holder the right to sell the security, a call option gives the right to buy the security.





Price of a stock divided by earnings per share.

The entire combination of securities or investments an individual or institution holds. A portfolio can contain a variety of government and company bonds, preferred and common stocks from different businesses and other types of securities and assets.

Portfolio Management
The process of managing money, including investments, budgeting, banking and taxes.

Preferred Stocks or Shares
A class of stock that entitles the owners to a stated dollar value per share in liquidation (paid after bondholders) and a fixed dividend paid ahead of the company's common shares. Preferred shares usually only have voting rights when a stated number of dividends have been missed. Preferred shares are generally considered income investments.

Probate of Will
Formal proof before the proper officer or court that the will offered is the last will of the testor and confirming the executor(s) named.





Registered Pension Plan (RPP)
A RPP is a trust registered with Revenue Canada and established by a company to provide pension benefits for its employees when they retire. Both employee and employer contributions to the plan are tax deductible.

Registered Representative
Now more commonly referred to as an investment advisor. This is a person employed by an investment dealer who provides investment advice to clients and executes trades on their behalf in securities and other investment products. Investment advisors must attain set educational qualifications, follow certain rules and regulations and be registered by the securities commission of the province in which he or she works.

Registered Retirement Income Fund (RRIF)
A RRIF is a tax deferral vehicle available to Registered Retirement Savings Plan (RRSP) holders who de-register their plans. The plan holder invests the withdrawn RRSP funds in the RRIF and each year must withdraw and pay income tax on a set fraction of the total assets in the fund.

Registered Retirement Savings Plan (RRSP)
A vehicle available to individuals to defer tax on a specified amount of money to be used for retirement. The holder invests money in one or more of a variety of investment vehicles which are held in trust under the plan. Income tax is deferred until the money (the amount originally deposited plus any interest or dividends made on that money) is withdrawn at retirement. RRSPs can be converted into Registered Retirement Income Funds.





Transferable certificates of ownership of investment products such as notes, bonds, stocks, futures contracts and options.

Self Directed
Traditionally a client who manages a brokerage account with no outside assistance. Self Directed accounts have access to all of the traditional brokerage products and services but with less fees.

Shares or Stocks
These two terms are used interchangeably. Certificates representing ownership in a corporation and the appropriate claim on the corporation's earnings and assets.





Tax Bracket
Although income tax is paid by most wage or income earners, the rate of income tax paid increases as income exceeds certain amounts, called brackets.

Tax Credit
Tax credits reduce taxes payable to the same extent for all taxpayers, regardless of their income level and marginal tax rate. Deductions from taxable income, however, are more valuable as your income and tax rate increases.

Tax Shelter
This is an investment that offers tax savings in some form, such as immediate deductions, credits or income deferral.

Common term for a government treasury bill, which is a short-term government debt issue.

Testamentary Trust
A trust set up in a will that only takes effect after death.

Time Horizon
Time Horizon is the time span of your investment objectives. Your time horizon dictates the types of investments that are suitable for your portfolio. The shorter the time horizon, the less appropriate are equities, or any other asset class with high return variations. Conversely, the longer the time horizon, the more an investor can afford a higher return variation and thus a higher allocation to equities.

A legal arrangement in which one person (the settlor) transfers legal title to a trustee (a fiduciary) to manage the property for the benefit of a person or institution (the beneficiaries).

The person or corporate trustee who takes legal title to the trust property and who is required to follow the terms of the trust. The trustee may be a trust company or an individual. Often settlors will name joint or co-trustees, with a trust company managing the property and dealing with the various legal requirements, while an individual advises on discretionary matters on the distribution of funds. Co-trustees have equal authority.





A legal document, prepared by a person in compliance with formal requirements, which takes effect on his/her death and which states what he/she wants to happen to his/her property on death.

Wrap Account
A type of fully discretionary account (in which a client has given specific written authorization to a partner, director or qualified portfolio manager of an investment dealer to select securities and execute trades for him or her). A single annual fee, based on the account's total assets, is charged instead of commissions and service charges being levied separately for each transaction. The account is then managed separately from all other wrap accounts, but is kept consistent with a model portfolio suitable to clients with similar objectives. This is also known as a wrap fee program.





This is the measure of the return on an investment and is shown as a percentage. A stock yield is calculated by dividing the annual dividend by the current market price of the stock. For example, a stock selling at $50 and with an annual dividend of $5.00 per share yields 10%. A bond yield is a more complicated calculation, involving annual interest payments plus amortizing the difference between its current market price and par value over the life of the bond.


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