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| Dead Cat Bounce: Slaughtered stocks may
stage a little rally that offer hope. But after a
short rise, they head right back down. |
| Debenture: A note or bond that is
backed only by the credit-worthiness of the
issuing company, generally with a maturity of at
least 15 years. |
| Debtor: A person or business that owes
money. |
| Default: When a company fails to make
payments of interest or principle when due. |
| Default Judgment: A court's decision to
grant a plaintiff's motion or request without a
trial simply because the defendant failed to
appear in court to provide any debate on the
subject. |
| Deferred Compensation: Salary and
earnings to be received at some point in the
future, rather than when they are earned.
Deferring payment often hast ax advantages. |
| Deflation: A widespread decline in
prices. The opposite of inflation. |
| Demographics: Characteristics of
individuals, such as age, education level, and
marital status, that are used to better target
marketing efforts to appropriate groups of
consumers. |
| Defined Benefit Plan: A pension plan
that specifies when and how much the retired
worker will receive. |
| Defined Contribution Plan: A retirement
plan paid for by the employer. The employer is
only required to pay into the plan, without any
guarantee of the amount that will be there at the
employee's retirement. |
| Depreciation: The gradual tax write-off
of equipment, buildings, or vehicles as they
decrease in value. |
| Depth of Market: The number of shares
of a security that can be bought or sold at the
bid and ask prices near the market without causing
a dramatic change in price. |
| Derivative: A bet on the direction of
prices of a stock, a commodity, a stock index, an
interest rate, or a foreign currency exchange
rate. Options are derivatives. |
| Devaluation: Lowering a country's
currency relative to the price of gold or to
another country's currency. |
| Dilution: The decline in value of
earnings per share and stock price when new shares
are issued by a company. |
| Direct Marketing: A marketing method
that involves mailing brochures and promotional
materials to a group of consumers believed to have
a need for, or interest in, a company's product.
|
| Discretionary Account: An account where
the investor gives a broker, bank, or another
person authority to make investment decisions on
the investor's behalf. |
| Discount Rate: 1. The interest rate
that the Federal Reserve charges banks on loans.
2. The rate used to calculate the time value of
money; the value of future cash if it were to be
received today. |
| Disposable Income: Income available to
consumers after expenses for food, clothing,
shelter, and other debts have been covered. Also
known as discretionary income. |
| Divestiture: The act of selling off an
asset or business, typically because it is
under-performing financially or no longer fits
within a company's strategic plan. |
| Distribution: A payment of a dividend
or capital gain that is paid to a shareholder.
|
| Diversification: Spreading your money
over many investments. Don't bet everything on one
solution or put all your eggs in one basket. For
instance, if you were to allocate one-half of your
investment money to stocks and one-half to bonds,
you would diversify your stock investments by
buying stock in companies in at least 2 or more
industries, and diversify your bond investments by
purchasing 2 or more types of bonds. |
| Dividend: Profits that are distributed
to shareholders, which may be quarterly,
semi-annually, or once a year. |
| Dividend Yield: The current dividend
paid on one share of stock, divided by the current
price of that share. When an investor buys a
stock, his dividend yield is based on the price
that he paid for the stock, not the current stock
price. |
| Dog: A product or service with minimal
sales in a low-growth market. Generally, companies
attempt to rid themselves of dogs, which can be a
drain on cash flow. |
| Downtick: A transaction executed at a
price lower than the preceding transaction in that
security, or a new quote registered at a lower
price than the preceding quote in that security.
|
| Drawee: The individual or institution
who has been instructed to pay another individual
out of funds on deposit. Generally, when a check
is written by an individual, the bank on which the
check is drawn is the drawee. |
| Drawer: The individual or institution
that has writ- ten the check or has requested that
payment be made by the drawee. |
| Due Diligence: A thorough investigation
of a company that is preparing to go public,
undertaken by the company's underwriter and
accounting firm. |
| Dumping: Selling large numbers of
shares of a stock, despite the fact that such a
large-scale sale may cause the share price to drop
or the market to decline in response. Also used to
define the act of selling goods at below cost to
force competitors out of the market. |
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