N, O

Question 1

Naked Writer

Answer 1

A seller of an option contract who does not
own an offsetting position in the underlying
security or a suitable alternative.

Question 2

NASDAQ

Answer 2

An acronym for the National Association of
Securities Dealers Automated Quotation
System. NASDAQ is a computerized
system that provides brokers and dealers
with price quotations for securities traded
OTC

Question 3

National Debt

Answer 3

The accumulation of total government
borrowing over time .It is the sum of past
defi cits minus the sum of past surpluses.

Question 4

National Policies

Answer 4

The Canadian Securities Administrators
have developed a number of policies that
are applicable across Canada. These
coordinated efforts by the CSA are an
attempt to create a national securities
regulatory framework. Copies of policies
are available from each provincial regulator.

Question 5

National Do Not Call List (DNCL)

Answer 5

The Canadian Radio-television and
Telecommunications Commission (CRTC)
has established Rules that telemarketers and
organizations that hire telemarketers must
follow. The DNCL Rules prohibit
telemarketers and clients of telemarketers
from calling telephone numbers that have
been registered on the DNCL for more
than 31 days

Question 6

National Registration Database

NRD

Answer 6

A web-based system that permits mutual
fund salespersons and investment advisors
to fi le applications for registration
electronically

Question 7

Natural Unemployment Rate

Answer 7

Also called the full employment 
unemployment rate. At this level of 
unemployment, the economy is thought to 
be operating at close to its full potential or 
capacity

Question 8

Negative Pledge Provision

Answer 8

A protective provision written into the trust
indenture of a company’s debenture issue
providing that no subsequent mortgage
bond issue may be secured by all or part of
the company’s assets, unless at the same
time the company’s debentures are similarly
secured

Question 9

Negotiable

Answer 9

A certifi cate that is transferable by delivery
and which, in the case of a registered
certifi cate, has been duly endorsed and
guaranteed.

Question 10

Negotiated Offer

Answer 10

A term describing a particular type of
fi nancing in which the investment dealer
negotiates with the corporation on the
issuance of securities. The details would
include the type of security to be issued, the
price, coupon or dividend rate, special
features and protective provisions.

Question 11

Net Asset Value

Answer 11

For a mutual fund, net asset value
represents the market value of the fund’s
share and is calculated as total assets of a
corporation less its liabilities. Net asset
value is typically calculated at the close of
each trading day. Also referred to as the
book value of a company’s different classes
of securities.

Question 12

Net Change

Answer 12

The change in the price of a security from
the closing price on one day to the closing
price on the following trading day. In the
case of a stock which is entitled to a
dividend one day, but is traded ex-dividend
the next, the dividend is not considered in
computing the change. The same applies to
stock splits. A stock selling at $100 the day
before a two-for-one split and trading the
next day at $50 would be considered
unchanged. The net change is ordinarily the
last fi gure in a stock price list. The mark
+1.10 means up $1.10 a share from the last
sale on the previous day the stock traded.

Question 13

Net Profi t Margin

Answer 13

A profi tability ratio that indicates how
effi ciently the company is managed after
taking into account both expenses and
taxes.

Question 14

New Account Application Form

NAAF

Answer 14

A form that is fi lled out by the client and
the IA at the opening of an account. It gives
relevant information to make suitable
investment recommendations. The NAAF
must be completed and approved before
any trades are put through on an account.

Question 15

New Issue

Answer 15

An offering of stocks or bonds sold by a
company for the fi rst time. Proceeds may be
used to retire outstanding securities of the
company, to purchase fi xed assets or for
additional working capital. New debt issues
are also offered by government bodies.

Question 16

New York Stock Exchange (NYSE)

Answer 16

Oldest and largest stock exchange in North
America with more than 1,600 companies
listed on the exchange.

Question 17

NEX

Answer 17

A new and separate board of the TSX
Venture Exchange that provides a trading
forum for companies that have fallen below
the Venture Exchange’s listing standards.
Companies that have low levels of business
activity or who do not carry on active
business will trade on the NEX board,
while companies that are actively carrying
on business will remain with the main TSX
Venture Exchange stock list.

Question 18

No Par Value (n.p.v.

Answer 18

Indicates a common stock has no stated

face value

Question 19

Nominal GDP

Answer 19

Gross domestic product based on prices
prevailing in the same year not corrected for
infl ation. Also referred to as current dollar
or chained dollar GDP.

Question 20

Nominal Rate

Answer 20

The quoted or stated rate on an investment
or a loan. This rate allows for comparisons
but does not take into account the effects of
infl ation.

Question 21

Nominee

Answer 21

A person or fi rm (bank, investment dealer,
CDS) in whose name securities are
registered. The shareholder, however, retains
the true ownership of the securities.

Question 22

Non-Client and Professional

Orders

Answer 22

A type of order for the account of partners,
directors, offi cers, major shareholders, IAs
and employees of member fi rms that must
be marked “PRO” , “N-C” or “Emp”, in
order to ensure that client orders are given
priority for the same securities.

Question 23

Non-Competitive Tender

Answer 23

A method of distribution used in particular
by the Bank of Canada for Government of
Canada marketable bonds. Primary
distributors are allowed to request bonds at
the average price of the accepted
competitive tenders. There is no guarantee
as to the amount, if any, received in
response to this request

Question 24

Non-Controlling Interest

Answer 24

1. The equity of the shareholders who do
   not hold controlling interest in a controlled
   company; 2. In consolidated fi nancial
   statements (i) the item in the statement of
   fi nancial position of the parent company
   representing that portion of the assets of a
   consolidated subsidiary considered as
   accruing to the shares of the subsidiary not
   owned by the parent; and (ii) the item
   deducted in the statement of
   comprehensive income of the parent and
   representing that portion of the subsidiary’s
   earnings considered as accruing to the
   subsidiary’s shares not owned by the parent

Question 25

Non-Cumulative

Answer 25

A preferred dividend that does not accrue | or accumulate if unpaid.

Question 26

Odd Lot

Answer 26

A number of shares which is less than a standard trading unit. Usually refers to a securities trade for less than 100 shares, sometimes called a broken lot. Trading in less than 100 shares typically incurs a higher per share commission.

Question 27

Of Record

Answer 27

On the company’s books or records. If, for example, a company announces that it will pay a dividend on January 15 to shareholders of record, every shareholder whose name appears on the company’s books on that date will be sent a dividend cheque from the company.

Question 28

Offer

Answer 28

The lowest price at which a person is willing to sell; as opposed to bid which is the highest price at which one is willing to buy.

Question 29

Offering Memorandum

Answer 29

This document is prepared by the dealer involved in a new issue outlining some of the salient features of the new issue, but not the price or other issue-specifi c details. It is used as a pre-marketing tool in assessing the market for the issue as well as for obtaining expressions of interest.

Question 30

Offering Price

Answer 30

The price that an investor pays to purchase shares in a mutual fund. The offering price includes the charge or load that is levied when the purchase is made.

Question 31

Offsetting Transaction

Answer 31

A futures or option transaction that is the exact opposite of a previously established long or short position

Question 32

``` Offi ce of the Superintendent of Financial Institutions (OSFI) ```

Answer 32

The federal regulatory agency whose main responsibilities regarding insurance companies and segregated funds are to ensure that the companies issuing the funds are fi nancially solvent.

Question 33

Offi cers

Answer 33

Corporate employees responsible for the | day-to-day operation of the business.

Question 34

Old Age Security (OAS)

Answer 34

A government pension plan payable at age 65 to all Canadian citizens and legal residents

Question 35

``` Ombudsman for Banking Services and Investments (OBSI) ```

Answer 35

An independent organization that investigates customer complaints against fi nancial services providers

Question 36

Open Interest

Answer 36

The total number of outstanding option contracts for a particular option series. An opening transaction would increase open interest, while a closing transaction would decrease open interest. It is used as one measure of an option class’s liquidity.

Question 37

Open Market Operations

Answer 37

Method through which the Bank of Canada infl uences interest rates by trading securities with participants in the money market

Question 38

Opening Transaction

Answer 38

An option transaction that is considered the initial or primary transaction. An opening transaction creates new rights for the buyer of an option, or new obligations for a seller. See also Closing Transaction

Question 39

Operating Band

Answer 39

The Bank of Canada’s 50-basis-point range for the overnight lending rate. The top of the band, the Bank Rate, is the rate charged by the Bank on LVTS advances to fi nancial institutions. The bottom of the band is the rate paid by the Bank on any LVTS balances held overnight by those institutions. The middle of the operating band is the target for the overnight rate.

Question 40

Operating Income

Answer 40

The income that a company records from | its main ongoing operations.

Question 41

Operating Performance Ratios

Answer 41

A type of ratio that illustrates how well management is making use of company resources.

Question 42

Option

Answer 42

A right to buy or sell specifi c securities or properties at a specifi ed price within a specifi ed time. See Put Options and Call Options.

Question 43

Option Premium

Answer 43

The amount paid to enter into an option contract, paid by the buyer to the seller or writer of the contract.

Question 44

Option Writer

Answer 44

The seller of the option who may be obligated to buy (put writer) or sell (call writer) the underlying interest if assigned by the option buyer.

Question 45

Oscillator

Answer 45

A technical analysis indicator used when a stock’s chart is not showing a defi nite trend in either direction. When the oscillator reading reaches an extreme value in either the upper or lower band, this suggest that the current price move has gone too far. This may indicate that the price move is overextended and vulnerable.

Question 46

Out-of-the-Money

Answer 46

A call option is out-of-the-money if the market price of the underlying security is below its strike price. A put option is out-of-the-money if the market price of the underlying security is above the strike price.

Question 47

Output Gap

Answer 47

The difference between the actual level of output and the potential level of output when the economy is using all available resources of capital and labour.

Question 48

Outstanding Shares

Answer 48

That part of issued shares which remains | outstanding in the hands of investors.

Question 49

Over-Allotment Option

Answer 49

An activity used to stabilize the aftermarket price of a recently issued security. If the price increases above the offer price, dealers can cover their short position by exercising an overallotment option (also referred to as a green shoe option) by either increasing demand in the case of covering a short position or increasing supply in the case of over-allotment option exercise.

Question 50

Overcontribution

Answer 50

An amount made in excess to the annual limit made to an RRSP. An overcontribution in excess of$2,000 is penalized at a rate of 1% per month.

Question 51

Overlay Manager

Answer 51

The overlay manager works with advisors in servicing clients. This is not a referral but a partnership, in which the advisor retains the client’s assets. The service incorporates the existing trusted relationship of the advisor,whom the client has become comfortable dealing with

Question 52

Override

Answer 52

In an underwriting, the additional payment the Financing Group receives over and above their original entitlement for their services as fi nancial advisors and syndicate managers or leads.

Question 53

Over-the-Counter (OTC)

Answer 53

A market for securities made up of securities dealers who may or may not be members of a recognized stock exchange. Over-the-counter is mainly a market conducted over the telephone. Also called the unlisted, inter-dealer or street market. NASDAQ is an example of an over-the- counter market.