The CAC 40 (Continuous Assisted Quotation) is the major benchmark stock index for Euronext Paris (the French Stock Exchange). The index tracks the 40 most significant company stock values among the top tier of large cap public companies, making it an important figure that represents the value and performance of the stock exchange as a whole. Thus it is used and quoted by many financial news outlets and analysts alike, and is very important to investors on the French stock exchange.
Changes to the CAC 40 are instigated by an independent committee known as the Conseil Scientifique, which meet quarterly to update the index. It takes two weeks for changes to come in to affect. The selection process is a ranking of the market capitalization of freely and publicly traded stock and turnover, based on an annual basis. The top 100 companies are listed and then 40 are picked based on various economic factors, such as liquidity and the industry of the company, so that there is a wide enough selection to represent the whole of the stock exchange.
Like a lot of important indexes, the CAC 40 is used as a benchmark for other financial products and funds, to monitor performance and hopefully replicate. A lot of funds are displayed graphically, in relation to the CAC 40.
Large companies such as beauty product company L’Oreal, car manufacturer Renault and Michelin tires are commonly listed on the CAC 40 index.
The United States equivalent of the CAC 40 would be either the Dow Jones Industrial or the S&P 500 indexes.
Actions taken to pay the principal amount prior to the stated maturity date, in accordance with the provisions for “call” stated in the proceedings and the securities. Another term for call provisions is redemption provisions.
Bonds that is redeemable by the issuer prior to the maturity date, at a specified price at or above par.
The date some bonds are redeemable by the issuer prior to the maturity date. In the event of a refunded security, a prerefunded date will appear in place of any call date and will be indicated by an R = prerefunded; or an E = escrowed to maturity.
The dollar amount paid to the investor by the issuer for exercising a call provision that is usually stated as a percent of the principal amount called.
The specified price at which a bond will be redeemed (or called) prior to maturity, typically either at a premium (above par value) or at par.
There are many definitions and branches to the word capital, but it is essentially just another word for money or cash, but more specifically related to a business.
To go more in depth it means the monetary value of everything in a business, including pure cash itself. Business profits are considered capital, more commonly when retained in the business for future use. A piece of machinery is also a capital because it can be sold.
Another definition is the value of everything involved with the production process, from buildings to machinery. In other words the cost of maintaining everything that is required to make the business run. A capital intensive business is one that requires a lot of money to keep it running and producing and is at risk of failure if it runs out of money before inventory can be sold. These are called cash flow problems and the business may seek an overdraft.
Working Capital is the value of a business’ current assets (assets such as stock, inventory and machinery that can be sold in a short term to make money) minus its current liabilities (money owed to suppliers, outstanding loans etc). It shows the business’ ability to make cash and how efficient it is when relying on sales.
Capital is often used flippantly and can mean lots of different things, but generally it is used to determine if a business has enough money to run efficiently. “Do I have enough capital to invest, starting up and running my own business?” That basically means do you have enough money, but is referring more specifically to the money needed to start production. Selling X number of products may make you a profit, but if you don’t have enough capital to finish production then you’ll run into cash flow problems.
Capital markets are the electronic and physical markets in which bonds and other financial instruments such as stocks and commodities are sold to investors. Institutions such as governments and corporations use the capital markets to raise money through public offerings of bonds and stocks or through private placements of securities to institutional investors such as pension funds and insurance companies.
The cost of borrowing funds to finance an underwriting or trading position. A positive carry happens when the rate on the securities being financed is greater than the rate on the funds borrowed. A negative carry is when the rate on the funds borrowed is greater than the rate on the securities that are being financed.
Proof of ownership; a document issued to shareholders by a trustee of a unit investment trust.
A central bank is the major regulatory bank in a nation or group of nations’ monetary system. Its role normally includes control of the credit system, the issuing of notes and coins and supervision of commercial banks. It also manages its country’s foreign exchange reserves and acts as its government’s banker. Central banks in developed economies are also responsible for the conduct of monetary policy.
When a company or business can no longer pay off its debts, the business can voluntarily file for bankruptcy, or the creditors can enforce bankruptcy, both falling under either chapter 7 or chapter 13 of the Bankruptcy Code.
Whereas in chapter 7 of the code the business must cease operation and liquidate all of its assets to cover its debt, under chapter 11 of the code the debtor continues ownership, and is given the ability to reorganize or downsize the business and its operations. This allows the business to continue operations, albeit under a radical new structure.
Methods by which a debtor is allowed to restructure their business are granted by the courts, and may include the ability to obtain new loans and finance with more lenient terms, allowing them to cancel costly contracts and deals, and any further action against the debtor is put on hold until the current bankruptcy is processed.
If the company is in a state where a complete restructuring will leave the owners with nothing to operate with, the company is then given in its new clean state to the creditors, who assume ownership, either selling everything off, or running the business as a future investment.
The process of chapter 11 is worked on closely between the debtors and creditors through the courts. The creditors must agree on the proposed plan for restructuring before it goes ahead, to ensure that they get the best out of the situation, and hopefully get a good percentage of what they are owed in the end. Initially Debtors have the exclusive right to propose such a plan for restructuring for around 120 days before the debtors. Then after that time has passed, creditors may have their say.
If the reorganization process goes badly or cannot be agreed on, the courts may go in to the traditional complete liquidation process like in chapter 7 of the code.
Located in Chicago, Illinois, the Chicago Board of Trade is an options and futures specific exchange, and the oldest of its kind in the world, first opening in 1848. The CBOT (its abbreviated form) uses both traditional trading floor (where traders use the outcry technique on the famous raised octagonal pit) and electronic eTrading methods for all round satisfaction and efficiency. It makes an estimated 454 million contract trades in volume (as of 2003), with data suggesting it is on the rise each year.
The exchange trades primarily in both traditional financial contracts and agricultural contracts for commodities such as wheat. Other commodities such as silver and gold are also becoming common on the exchange.
Although it still exists under a subsidiary, the Chicago Board of Trade is owned by the CME Group after a merger with the Chicago Mercantile Exchange in 2007. CME now also owns the New York Mercantile Exchange, altogether making it the largest future and option contract exchange in the world.
The CBOT is often known by its famous raised octagonal pits that look more like theatre stages than that of financial transaction areas. Traders use a language of hand signals to express transactions and typical outcry techniques.
The unethical and excessive trading of a client account in order to generate commissions for a broker, but which may not in the best interests of the client. Not only does the client pay high commissions, they also get stuck with a high tax bills due to the short-term holding of assets.
A fund created with a fixed number of shares, which are traded as listed securities on a stock exchange.
The closing price of a bond is the last trading price before the exchange or market in which it is traded closes for the day. Given the existence of after-hours trading, the opening price at the start of the next trading day may be different from the closing price of the day before.
A collar is a way of limiting potential losses on an asset or security by buying a put option and selling a call option with the same expiry date. The strike price on the call option has to be above the strike price on the put option. Although potential losses are reduced so are potential profits.
Securities or property pledged by a borrower to secure payment of a loan. If the borrower fails to repay the loan, the lender may take ownership of the collateral. Collateral for CMOs consists primarily of mortgage pass-through securities or mortgage loans, but may also encompass letters of credit, insurance policies, or other credit enhancements.
The process by which a borrower pledges securities or property (or other types of financial assets) in order to provide security or collateral toward repayment of a loan or debt.
A type of asset-backed security (ABS), CDOs are backed by fixed income assets such as bonds, receivables on loans—usually non-mortgage—or other debt that have different levels of risk. Shares of the pool are sold to investors, divided into the different risk classes or “tranches” enabling the isolation of credit risk to reduce the risk of loss due to default. Each tranche usually has different maturities and risks.
A multiclass bond backed by a pool of mortgage pass-through securities or mortgage loans. See REMIC.
Commercial mortgage-backed securities (CMBS) have as underlying collateral loans on hotels, multifamily housing, retail properties, and office or industrial properties. Unlike residential mortgage loans, commercial loans tend to be “locked out” from prepayment for ten years and thus prepayment risk is reduced. However, default risk is greater on commercial loans.
Short term, unsecured bond notes issued by a corporation or a bank to meet immediate short term needs for cash. Maturities typically range from 2 to 270 days. Commercial paper is usually issued by corporations with high credit ratings and sold at a discount from face value.
The fee paid to a dealer when the dealer acts as agent in a transaction, as opposed to when the dealer acts as a principal in a transaction (see “net price”). Commissions differ in how they are calculated, such as a percentage of the value of a transaction or flat fee amount, and including whether the investor is using a bank, brokerage or online firm. Investors should be sure to ask and to understand what commission or other sales fees are charged by a broker or agent to make an investment transaction, including if such information is not provided in writing).
There are certain broad definitions of the term commodity, for example some people may consider a commodity as something you need in order to survive like water, but in business commodities have a very specific meaning.
A commodity is any product, item or resource that is in constant global demand, but doesn’t have quality characteristics or added value that can alter its perceived worth. For example salt is salt; it has never been changed and nobody wants it to be changed. We don’t have chocolate flavored salt or salt that gives us extra vitamins. The world over, salt is simply salt and is sold that way. This is a commodity. On the other hand desktop computers come in all different shapes and sizes, with all different functions, each with their own value based on its quality. The faster its processor the more it can be sold for. This is not a commodity.
So in the salt example, the price of salt is universal and fluctuates on a daily basis due to the amount of salt available and its global demand. If salt suddenly became scarce, its price would go up because the demand is still there.
One of the most sought after commodities on the earth, that has sparked war, political problems and is making some corporations very rich is oil. We’ve all seen price fluctuations at the gas pumps.
Other common commodities are iron ore, coal, ethanol, sugar, coffee beans, soybeans, aluminum, rice, wheat and everybody’s gold, silver and diamonds.
Despite this “salt is salt” theory, this of course doesn’t stop companies adding their own brand and marketing behind the commodity to help them sell it to their target audience.
Also referred to as voting shares, typically gives the owner voting rights that may be exercised in the company’s decisions in which they are held. Most of the time, a shareholder gets one vote per share of stock owned to elect the directors of the company. Common shares may or may not offer this voting feature depending on what the company has predetermined. This is different from preferred stock which usually doesn’t carry voting rights but the owner is legally entitled to receive a certain level of dividends.
If a company is liquidated, holders of common shares have rights to the company’s assets. However, this is only after holders of preferred stock and other debtors have been satisfied. Therefore, we would deduce that a ‘share’ of stock actually represents part ownership in a corporation.
Shareholders of common stock often have the right to purchase more stock. Of course, there is no obligation to do this, but they have what is known as preemptive rights. Preemptive rights give the common stock shareholder the opportunity to buy as many shares of stock as it takes to maintain the portion of his ownership in the corporation.
The history of the offering of stock dates back many, many centuries – the Dutch East India Company was the first company to issue stock in 1606. Today we have stock exchanges, which are organizations that provide a place to trade shares of stocks from a wide range of companies. Investors, or buyers of stock, are represented by stock brokers at stock exchanges.
If you’re interested in investing in common stock, you may do so by contacting a stock broker or by trading online yourself. Before becoming an investor, be sure to research the company to make sure it’s a good investment or talk to your stock broker for advice.
The ability of an asset to generate earnings that are then reinvested and generate their own earnings (earnings on earnings).
COMPOUND INTEREST
Fractional discount from the public offering of new securities at which the underwriter sells the bonds to dealers not in the syndicate.
A document used by securities dealers and banks to state in writing the terms and execution of a verbal arrangement to buy or sell a security.
From a macroeconomic point of view, consumer debt is a loan borrowed to fund mainly consumption, not investment. Taking a loan in order to buy household appliances or furniture is an example of consumer debt.
Recently, consumer debt is regarded as a way to improve domestic production due to the fact that the growing demand for consumer goods boosts the level of production.
Still, the cultural prejudice against borrowing is understandable. Historic developments demonstrate that the risk had often outweighed the involved costs. You did not just declared bankruptcy if your expectations were wrong – you also lost your private business, family home, and belongings. For example, credit card borrowing is largely unknown in the Far East because of cultural taboos and beliefs about debt. American culture, on the contrary, overemphasizes consumption and encourages excessive spending which leads to higher levels of consumer debt.
Used reasonably, consumer debt generates economic activity and may be fairly useful; however, it can also become a source of trouble if not managed properly. In this case, individuals can accumulate consumer debt to an extent that they are unable to repay their dues. Therefore, a number of debt solution options exist which can be very helpful in such situations.
A measure of the average change in the prices of consumer goods and services over time. It is a statistical measure based on the prices of representative items, collected periodically. Sub-categories and sub-indexes are also calculated in order to produce the general index. The annual change in percentage of this index is used to compute the inflation rate in North America and other continents. The CPI is among the most important and closely observed economic statistics in the world.
Weighing data and price data are used to construct this index. The first comes as prognoses of the shares of various types of expenses in the total expenses covered by the index. They are generally based on expense data gathered from surveys for a sample of households. Price data is collected for a representative sample of goods and services from a sample of outlets in given locations for set periods of time. Some of the item sampling for collecting prices is done by means of a frame and methods based on probabilities. In this way, confidence intervals cannot be estimated, meaning that one cannot determine what percent of the items is exempt from the statistical rule. Usually, the index is calculated on a monthly basis. As it consists of sub-indexes, these are compared month by month, combined into higher levels and into the total index.
The weights of the index relate to the components of expenses over the current month and the price-reference month. This can be used to estimate the cost-of-living index and show how consumer expenses would have to move and make up for price changes, permitting consumers to sustain a constant standard of living. Estimates can only be computed in retrospect, while the index appears monthly and, ideally, as soon as possible.
The index coverage is limited in scope. For one, consumer expenses abroad cannot always be included for obvious reasons. The rural population is not always covered as well. Groups at the two extreme ends – the very poor and the very rich – are sometimes excluded. The CPI is thus primarily based on the consumption of the middle class.
A mortgage loan that is based solely on real estate as security, is not insured or guaranteed by a government agency, and is eligible for purchase or insurance by Fannie Mae or Freddie Mac.
A corporate bond that can be exchanged, at the option of the holder, for a specific number of shares of the company’s stock. Because a convertible bond is a bond with a stock option built into it, it will usually offer a lower than prevailing rate of return.
A measure of the change in a security’s duration with respect to changes in interest rates. The more convex a security is, the more its duration will change with interest rate changes.
The cost of carrying or holding a position. In the capital markets it is the difference between the interest generated on a cash instrument such as a bond or a treasury bill and the cost of funds to finance the position. In commodity markets it is the cost of storage and insurance.
One of two entities in a traditional interest rate swap. In the municipal market a counterparty and a party can be a state or local government, a broker-dealer or a corporation.
Bonds issued by corporations. Corporations use the funds they raise from selling bonds for a variety of purposes, from building facilities to purchasing equipment to expanding their business. Corporate bonds (also called corporates) are debt obligations, or IOUs, issued by private and public corporations. They are typically issued in multiples of $1,000 and/or $5,000.
A feature of a bond that denotes the amount of interest due and the date payment is to be made. Where the coupon is blank, it can indicate that the bond can be a “ zero-coupon,” a new issue, or that it is a variable-rate bond. In the case of registered coupons (see “Registered Bond”), the interest payment is mailed directly to the registered holder. Bearer coupons are presented to the issuer’s designated paying agent or deposited in a commercial bank for collection. Coupons are generally payable semiannually.
The actual dollar amount of interest paid to an investor. The amount is calculated by multiplying the interest of the bond by its face value.
The interest rate on a bond, expressed as a percentage of the bond’s face value. Typically, it is expressed on a semi-annual basis.
Covered bonds, at their most basic, are debt securities backed by a guarantee from the issuing entity and secured by a dynamic pool of assets on that entity’s balance sheet. The issuer is typically a regulated financial institution. Germany introduced covered bonds, known as Pfandbriefe, in 1770—the bonds have continued to be a widely used funding tool for mortgage loans and public works projects across Europe for over 200 years.
Usually the Federal Reserve Commercial Paper Composite, calculated each day by the Federal Reserve Bank of New York by averaging the rate at which the five major commercial paper dealers offer “AA” industrial commercial paper for various maturities. Most CP-based floating-rate notes are reset according to the 30- and 90-day CP composites.
The index for measuring the inflation rate is the non-seasonally adjusted U.S. City Average All Items Consumer Price Index for All Urban Consumers (CPI-U), published monthly by the Bureau of Labor Statistics (BLS). The CPI-U was selected by the Treasury because it is the best known and most widely accepted measure of inflation.
A CDS or a credit default swap is a contract that aims to transfer the financial risk from one entity to another. In order for a company to pass on the risk to another entity, it buys a credit default swap from a seller. The latter gets premiums from the buyer for the whole duration of the contract, but runs the risk of paying the face value of the credit instrument in case the borrower defaults. This happens because the seller assumes the risk of default instead of the buyer.
A credit default swap is the simplest type of credit derivative. Basic CDS contracts are similar to insurance. They allow one party to buy protection against a company or country defaulting or restructuring their debt over a certain period of time. The buyer pays an annual fee in basis points based on a notional amount to the contract seller. If a default occurs the buyer can hand over the defaulted bonds to the contract seller and receive their par value. The contracts can also be cash settled with no transfer of bonds. CDS spreads are similar to regular corporate bond spreads in reflecting the market’s view of default risk. The most commonly traded contract is a five-year one, but maturities range from one year to 10 years.
The concept of CDS was developed by JP Morgan in the 1990’s as to allow financial institutions to transfer financial risks of credit instruments to other entities. Unlike insurance, CDS is largely unregulated and in the year 2008, many issues began to emerge. Because the contract is transferable, tracking it down to the person who is in possession can be a problem. If the borrower defaults, the contract has to be tracked down to the last person it has been transferred to. The seller of the CDS is not required to show a proof of ability to pay for the total amount of the insured debt, and there is a high chance that he may not be able to cover for it as well.
During the recent economic recession, many companies have faced the problem of selling CDS. Even corporate giants like AIG were unable to cover the amounts of their CDSs. Because of the hundreds and thousands of homeowners going into default, those who entered into CDS contracts were pressured by the catastrophic economic event.
Technically, the credit default swap is not a type of insurance. Although it has been compared to insurance for a variety of reasons, the underlying concepts behind the two are simply quite different. For one thing, insurances are regulated while the CDS is not. Buyers don’t need to own the underlying security and don’t incur losses in case of default. Credit default swaps are not traded on the exchanges, and the reporting of transactions to governmental agencies is not required. In the US, CDSs are most often subject to mark-to-market accounting, with balance sheet volatility and income statement that are not present in insurance contracts. In addition, insurance comes with the disclosure of all potential risks, while none of these requirements is valid for CDSs.
The use of the credit of a stronger entity to strengthen the credit of a weaker entity in bond or note financing. This term is used in the context of bond insurance, bank facilities and government programs.
A company that analyzes the credit worthiness of a company or security, and indicates that credit quality by means of a grade, or credit rating.
Designations used by ratings services to give relative indications of credit quality.
Credit ratings measure a borrower’s creditworthiness and provide an international framework for comparing the credit quality of issuers and rated bonds. Rating agencies allocate three kinds of ratings: for issuers, for long-term debt and for short-term debt. Of these, issuer credit ratings are the most widely watched. They measure the creditworthiness of the borrower including its capacity and willingness to meet its financial obligations. A top rating means there is thought to be almost no risk of the borrower failing to pay interest and principal. Ratings are derived from an examination of a company or a government’s past financial history, its current assets and liabilities and its future prospects. The higher the rating the less the borrower will need to pay for funds. The top credit rating issued by the main agencies, Standard & Poor’s, Moody’s and Fitch, is AAA or Aaa. This is reserved for a few sovereign and corporate issuers. The naming and designation of ratings varies according to each agency. They fall into two broad groups investment grade and speculative or junk
The risk for bond investors that the issuer will default on its obligation (default risk) or that the bond value will decline and/or that the bond price performance will compare unfavorably to other bonds against which the investment is compared due either to perceived increase in the risk that an issuer will default (credit spread risk) or that a company’s credit rating will be lowered (downgrade risk).
A yield difference, typically in relation to a comparable U.S. Treasury security, that reflects the issuer’s credit quality. Credit spread also refers to the difference between the value of two securities with similar interest rates and maturities when one is sold at a higher price than the other is purchased.
Currency is the broad term used to define the form of money used in circulation in any given country. In the United States the currency is the US Dollar and in the UK it’s British Pounds and Sterling. Almost every country has their own currency, although most members of the European Union now use the Euro, allowing free trade. A typical currency contains physical notes and coins, as well as electronic representations of the money in the form of checks, credit cards etc.
The general structure of a country’s currency starts at the central bank, which controls the production of money and the money supply itself. Upon trading goods and currency between two different regions the currency has an exchange rate, which can be described as the value of a currency measured in how much foreign currency it can buy. In other words currency A’s worth in relation to currency B.
The general structure of a country’s currency starts at the central bank, which controls the production of money and the money supply itself. Upon trading goods and currency between two different regions the currency has an exchange rate, which can be described as the value of a currency measured in how much foreign currency it can buy. In other words currency A’s worth in relation to currency B.
The purchase and sale of currencies on the foreign exchange (Forex or FX). With a volume of over two trillion USD, this market is considered the largest around the globe.
Small investment investors had limited access to currency trading until recently. Large multinational corporations and banking conglomerates were the major players on this market place. With the development of new technologies, different investors were allowed in.
Currency trading is also referred to as foreign exchange, with most people using FX or Forex as a shortcut. To understand currency exchange, it is important to note that every currency has a different value compared to others. Because of the constantly changing currency demands, these values shift from day to day. So, if a currency is bought low today and sold high tomorrow, the trader gains profit.
Currency trading always involves different currencies, for example, Euro and US dollars. Every currency has a fluctuating currency exchange rate. The latter determines the value of one currency when exchanged for another. The exchange rate changes due to several reasons including geopolitical events, inflation, industrial production, etc. These factors determine when to buy or sell certain currency in order to gain profit.
There are two major reasons for the fluctuation of relative currency values. First, outside investors and visitors of a country convert domestic currency to purchase goods and services in a foreign country. Second, there is speculation on the currency market. Investors buy or sell when they think that a foreign currency will become strong or weak. Such speculative trading can have drastic effects on national currencies and countries’ economies. During the 1997 crisis in East Asia, economic downturns followed after speculators realized huge profits through currency trading.
Due to the fluctuating nature of currency exchange rates, the Forex trader may have the opportunity to make huge profits. However, the risk of potential loss is high as well. Let’s say that a trader decides to buy Euros, believing that the currency value will go up against the US dollar. When the value of Euro increases, the trader sells the amount in that currency in exchange for dollars, making a profit. The exact opposite may happen if the value of Euro goes down instead.
Any trader can participate in the buying and selling of currency at a time of his convenience. Due to the unlimited access to the market, the trader may carry out transactions whenever there is a chance to make profit.
No commissions, exchange, brokerage and government fees are involved in the trading process. The traders only get the difference between the buying and selling prices (which can be positive or negative depending on the exchange rates) without other costs involved.
Investors in currency exchange can leverage the invested amounts to make higher profits. Because the traded amount of money is controlled, the investor has the option of adding more anytime.
Unlike other types of trading, currency exchange has lighting speed liquidity. When a currency has been traded, the transaction takes place over a couple of seconds.
Foreign exchange trading is not for everyone because this type of investment carries high risks of loss. Individuals with limited experience and persons who make hasty decisions are among the victims of high financial losses.
Investors who invest in a government bond that is not in his/her home currency face currency or exchange rate risk since the value of his/her investment could go down as well as up depending on what happens to the currency exchange recurrent yield
The ratio of the interest rate payable on a bond to the actual market price of the bond, stated as a percentage. For example, a bond with a current market price of par ($1,000) that pays eighty dollars ($80) per year in interest would have a current yield of eight percent.
In business current assets are cash itself or assets owned by the business that can be turned into cash quickly (through sale). Stock is considered a current asset and so is outstanding money owed to the business. The time period of turning assets in to cash “quickly” is usually considered to be by time the next balance sheet is issued, or within the current financial year.
On a business’s balance sheet, assets will normally be categorized into current assets and long term assets. Current assets go towards funding the day to day operations in the business, aka its working capital.
The figures of a business’s current assets are used in many ratios, calculations and for analysis. It is one of the factors that go towards valuing a business and its financial stability.
Ratios like the current ratio and the quick ratio used current assets to determine whether a business is able to meet their current day to day expenses.
During times of liquidation a business’s current assets are sold and used to pay off debt and money owed to shareholders, so creditors and investors are actively interested in the value of a company’s current assets.
Current assets, including cash, accounts receivable and inventory, divided by current liabilities, including all short-term debt. A rough measure of financial risk: the smaller current assets relative to current liabilities, the greater the risk of credit failure.
Annual income (interest or dividends) divided by the current price of the security. For stocks, this is the same as the dividend yield.
The bank or trust company that maintains a retirement plan’s assets, including its portfolio of securities or some record of them. Provides safekeeping of securities, but has no role in portfolio management.
An industry, such as automobiles, whose performance is closely, tied to the condition of the general economy. The company (and their stock) does well during good economic times, and not as well during poor economic times.
The Committee on Uniform Security Identification Procedures was established by the American Bankers Association to develop a uniform method of identifying securities. CUSIP numbers are unique nine-character alphanumeric identifiers assigned to each series of securities.