Accounting & Investement Dictionary

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An alphabetical listing of General terms and items.

U.S. Treasury Bill   Dico Tools
U.S. government debt with a maturity of less than a year.

U.S. Treasury Bond   Dico Tools
U.S. government debt with a maturity of more than 10 years.

U.S. Treasury Note   Dico Tools
U.S. government debt with a maturity of one to 10 years.

Ultra Vires Activities   Dico Tools
Corporate actions and operations that are not sanctioned by corporate charter, sometimes leading to shareholder lawsuits.

Ultra-short-term Bond Fund   Dico Tools
A mutual fund that invests in bonds with very short maturity periods, usually one year or less.

Ultradot   Dico Tools
Applies to derivative products. Firm proprietary software that stores, and sends baskets of stock through SEAQ to either the NYSE or the curb for program trading.

Umbrella Personal Liability Policy   Dico Tools
A liability insurance policy that provides protection against damages not covered by standard liability policies, such as large jury awards in lawsuits.

Unamortized Bond Discount   Dico Tools
Par value of a bond less the proceeds received from the sale of the bond, less whatever portion has been amortized.

Unamortized Premiums On Investments   Dico Tools
The unexpensed portion of the difference between the price paid for a security and its par value.

Unbiased Predictor   Dico Tools
A theory that spot prices at some future date will be equal to today's forward rates.

Unbundling   Dico Tools
Separation of a multinational firm's transfers of funds into discrete flows for specific purposes. See: Bundling.

Uncollected Funds   Dico Tools
The amount of bank deposits in the form of checks that have not yet been paid by the banks on which the checks are drawn.

Uncollectible Account   Dico Tools
An account which cannot be collected by a company because the customer is not able to pay or is unwilling to pay.

Uncollectible Accounts Expense   Dico Tools
An account that represents the portion of the current period's receivables that are estimated to become uncollectible.

Uncovered Call   Dico Tools
A short call option position in which the writer does not own shares of underlying stock represented by the option contracts. Uncovered calls are much riskier for the writer than a covered call, where the writer of the uncovered call owns the underlying stock. If the buyer of a call exercises the option to call, the writer would be forced to buy the asset at the current market price. Also called a "naked" asset.

Uncovered Put   Dico Tools
A short put option position in which the writer does not have a corresponding short stock position or has not deposited, in a cash account, cash or cash equivalents equal to the exercise value of the put. The writer has pledged to buy the asset at a certain price if the buyer of the option chooses to exercise it. Uncovered put options limit the writer's risk to the value of the stock (adjusted for premium received.) Also called "naked" puts.

Under The Belt   Dico Tools
Long position in a stock.

Underbanked   Dico Tools
When an originating investment banker cannot find enough firms to underwrite a new issue.

Underbooked   Dico Tools
Describes limited interest by prospective buyers in a new issue of a security during the preoffering registration period.

Undercapitalized   Dico Tools
A business has insufficient capital to carry out its normal functions.

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Underfunded Pension Plan   Dico Tools
A pension plan that has a negative surplus (i.e., liabilities exceed assets).

Underinvestment Problem   Dico Tools
The mirror image of the asset substitution problem, in that stockholders refuse to invest in low-risk assets to avoid shifting wealth from themselves to debtholders.

Underlying   Dico Tools
What supports the security or instrument that parties agree to exchange in a derivative contract.

Underlying Asset   Dico Tools
The security or property or loan agreement that an option gives the option holder the right to buy or to sell.

Underlying Debt   Dico Tools
Municipal bonds issued by government entities but under the control of larger government entities and for which the larger entity shares the credit responsibility.

Underlying Futures Contract   Dico Tools
A futures contract that supports an option on that future, which is executed if the option is exercised .

Underlying Security   Dico Tools
For options, the security that is subject to purchase or sold upon exercise of an option contract. For example, IBM stock is the underlying security for IBM options. For Depository receipts, the class, series, and number of the foreign shares represented by the depository receipt.

Undermargined Account   Dico Tools
A margin account that no longer meets minimum maintenance requirements, requiring a margin call on the investor.

Underperform   Dico Tools
When a security is expected to, or does, appreciate at a slower rate than the overall market rate of performance.

Underpricing   Dico Tools
Issuing securities at less than their market value.

Undervalued   Dico Tools
A stock price perceived to be too low or cheap, as indicated by a particular valuation model. For instance, some might consider a particular company's stock price cheap if the company's price-earnings ratio is much lower than the industry average. To refer to undervaluation or overvaluation implicitly assumes some model of valuation. It is always possible that the security is valued correctly and that model applied is wrong.

Underwithholding   Dico Tools
When a taxpayer has withheld too little tax from salary and will therefore owe tax when filing a return.

Underwrite   Dico Tools
To guarantee, as to guarantee the issuer of securities a specified price by entering into a purchase and sale agreement. To bring securities to market.

Underwriter   Dico Tools
A firm, usually an investment bank, that buys an issue of securities from a company and resells it to investors. In general, A party that guarantees the proceeds to the firm from a security sale, thereby in effect taking ownership of the securities.

Underwriting   Dico Tools
Acting as the underwriter in the issue of new securities for a firm.

Underwriting Agreement   Dico Tools
The contract between a corporation issuing new publicly offered securities and the managing underwriter as agent for the underwriting group. Compare to agreement among underwriters.

Underwriting Fee   Dico Tools
The portion of the gross underwriting spread that compensates the securities firms that underwrite a public offering for their services.

Underwriting Income   Dico Tools
For an insurance company, the difference between the premiums earned and the costs of settling claims.

Underwriting Spread   Dico Tools
The income that is generated by the underwriting syndicate and the selling group, which is essentially the difference between the amount paid to the issuer of securities in a primary distribution and the public offering price.

Underwriting Syndicate   Dico Tools
A group of investment banks that work together to sell new security offerings to investors. The underwriting syndicate is led by the lead underwriter. See also: Lead underwriter.

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Underwritten Offering   Dico Tools
A purchase and sale.

Undigested Securities   Dico Tools
Newly issued securities that are not purchased because of lack of demand during the initial public offering.

Undiversifiable Risk   Dico Tools
Related: Systematic risk

Unearned Income   Dico Tools
Money received for which no exchange was made, such as a gift.

Unearned Interest   Dico Tools
Interest that has been received on a loan, but that cannot be treated as a part of earnings yet, because the principal of the loan has not been outstanding long enough.

Unearned Revenues   Dico Tools
Amounts received before they have been earned.

Unemployment Rate   Dico Tools
The percentage of the people classified as unemployed as compared to the total labor force.

Unencumbered   Dico Tools
Property that is not subject to any claims by creditors. For example, securities bought with cash instead of on margin and homes with mortgages paid off.

Unfunded Debt   Dico Tools
Debt maturing within one year (short-term debt). See: Funded debt.

Unfunded Pension Plan   Dico Tools
Provides for the employer to pay out amounts to retirees or beneficiaries as and when they are needed. There is no money put aside on a regular basis. Instead, it is taken out of current income.

Uniform Commercial Code   Dico Tools
Collection of laws dealing with commercial business.

Uniform Gifts To Minors Act   Dico Tools
Legislation that provides a tax-effective manner of transferring property to minors without the complications of trusts or guardianship restrictions.

Uniform Practice Code   Dico Tools
Standards of the NASD prescribing procedures for handling over-the-counter securities transactions, such as delivery, settlement date, and ex-dividend date.

Uniform Securities Agent State Law Examination   Dico Tools
A test required in some states for registered representatives who are employees of member firms of the NASD or over-the-counter brokers.

Uniform Transfers To Minors Act   Dico Tools
A law similar to the Uniform Gifts to Minors Act that extends the definition of gifts to include real estate, paintings, royalties, and patents.

Unilateral Transfers   Dico Tools
Items in the current account of the balance of payments of a country's accounting books that correspond to gifts from foreigners or pension payments to foreign residents who once worked in the particular country.

Uninsured Motorist Insurance   Dico Tools
Insurance that covers the policyholder and family if they are injured by a hit-and-run or uninsured motorist, assuming the other driver is at fault.

Unique Risk   Dico Tools
Also called unsystematic risk or idiosyncratic risk. Specific company risk that can be eliminated through diversification. See: Diversifiable risk and unsystematic risk.

Unissued Stock   Dico Tools
Shares authorized in a corporation's charter, but not issued.

Unit   Dico Tools
More than one class of securities traded together (e.g., one common share and three subscription warrants).

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Unit Benefit Formula   Dico Tools
Method used to determine a participant's benefits in a defined benefit plan. Involves multiplying years of service by the percentage of salary.

Unit Investment Trust   Dico Tools
Money invested in a portfolio whose composition is fixed for the life of the fund. Shares in a unit trust are called redeemable trust certificates, and they are sold at a premium to net asset value.

Unit Of Trading   Dico Tools
See: Trading unit.

Unit Share Investment Trust   Dico Tools
A unit investment trust comprising one unit of prime and one unit of score.

United States Government Securities   Dico Tools
Debt issues of the U.S. government, as distinguished from government-sponsored agency issues.

Universal Life   Dico Tools
A whole life insurance product whose investment component pays a competitive interest rate rather than the below-market crediting rate.

Universe Of Securities   Dico Tools
A group of stocks having a common feature, such as similar outstanding market capitalization or same product line.

Unleveraged Beta   Dico Tools
The beta of an unleveraged required return (i.e., no debt) on an investment when the investment is financed entirely by equity.

Unleveraged Program   Dico Tools
The use of borrowed funds to finance less than 50% of a purchase of assets. In a leveraged program borrowed funds are used to finance more than 50%.

Unleveraged Required Return   Dico Tools
The required return on an investment when the investment is financed entirely by equity (i.e., no debt).

Unlimited Liability   Dico Tools
The lack of a ceiling on the amount of liability a proprietor or partner must assume; meaning that if business assets are not sufficient to settle creditor claims, the personal assets of the proprietor or partners may be used to settle the claims.

Unlimited Tax Bond   Dico Tools
A municipal bond secured by the pledge to levy taxes until full repayment at an unlimited rate.

Unlisted Security   Dico Tools
A security traded in the over-the-counter market that is not listed on an organized exchange.

Unlisted Trading   Dico Tools
Trading in unlisted securities that occurs on an organized exchange to accommodate members. This practice is not permitted at the NYSE.

Unloading   Dico Tools
Selling securities or commodities whose prices are dropping to minimize loss.

Unmargined Account   Dico Tools
A cash account held at a brokerage firm.

Unmatched Book   Dico Tools
If the average maturity of a bank's liabilities is shorter than that of its assets, it is said to be running an unmatched book. The term is commonly used with the Euromarket. Also refers to entering into OTC derivatives contracts and not hedging by making trades in the opposite direction to another financial intermediary. In this case, the firm with an unmatched book usually hedges its net market risk with futures and options. Related expressions: Open book and short book.

Unpaid Dividend   Dico Tools
A dividend declared by the directors of a corporation that has not yet been paid.

Unqualified Opinion   Dico Tools
An independent auditor's opinion that a company's financial statements comply with accepted accounting procedures. Antithesis of qualified opinion.

Unrealized Gains And Losses   Dico Tools
Gains and losses resulting from changes in the value of securities that are still being held.

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Unrecorded Expenses   Dico Tools
Expenses incurred during a period that have not been recorded by the end of that period.

Unrecorded Revenues   Dico Tools
Revenues earned during a period that have not been recorded by the end of that period.

Unseasoned Issue   Dico Tools
Issue of a security for which there is no existing market. See: Seasoned issue.

Unsecured Debt   Dico Tools
Debt that does not identify specific assets that the debtholder is entitled to in case of default.

Unsterilized Intervention   Dico Tools
Foreign exchange market intervention in which the monetary authorities have not insulated their domestic money supplies from the foreign exchange transactions.

Unsystematic Risk   Dico Tools
Also called the diversifiable risk or residual risk. The risk that is unique to a company such as a strike, the outcome of unfavorable litigation, or a natural catastrophe that can be eliminated through diversification. Related: Systematic risk.

Unwind A Trade   Dico Tools
Reverse a securities transaction through an offsetting transaction in the market.

Up   Dico Tools
Market indication; willingness to go both ways (buy or sell) at the mentioned volume and market. Print; up on the ticker tape, confirming that the trade has been executed.

Up Tick   Dico Tools
Plus tick.

Upgrading   Dico Tools
Raising the quality rating of a security because of new optimism about the prospects of a firm due to tangible or intangible factors. This can increase investor confidence and push up the price of the security.

Upset Price   Dico Tools
The minimum price at which a seller of property will accept a bid at an auction.

Upside Potential   Dico Tools
The amount by which analysts or investors expect the price of a security may increase.

Upstairs Market   Dico Tools
A network of trading desks for the major brokerage firms and institutional investors, which communicate with each other by means of electronic display systems and telephones to facilitate block trades and program trades.

Upstairs Order   Dico Tools
Used for listed equity securities. Off-floor order.

Upswing   Dico Tools
An upward turn in a security's price after a period of falling prices.

Uptick Rule   Dico Tools
SEC rule that selling short is allowed only on an up tick.

Uptick Trade   Dico Tools
A transaction that takes place at a higher price than the preceding transaction involving the same security. Related: Tick test rules.

Useful Life   Dico Tools
The term used to describe the life over which an asset is expected to be useful to the company; cost is assigned to the periods benefited from using the asset.

Usury Laws   Dico Tools
Laws limiting the amount of interest that can be charged on loans.

Utility   Dico Tools
A power company that owns or operates facilities used for the generation, transmission, or distribution of electric energy, which is regulated at state and federal levels.

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Utility Function   Dico Tools
A mathematical expression that assigns a value to all possible choices. In portfolio theory, the utility function expresses the preferences of economic entities with respect to perceived risk and expected return.

Utility Revenue Bond   Dico Tools
A municipal bond issued to finance the construction of public utility services. These bonds are repaid from the operating revenues the project produces after the utility is finished.

Utility Value   Dico Tools
The welfare a given investor assigns to an investment with a particular expected return and risk.

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