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Financial Glossary

N

N
Fifth letter in a Nasdaq stock symbol specifying that the issue is the company's third class of preferred shares.
NA
The two-character ISO 3166 country code for NAMIBIA.
NAD
The ISO 4217 currency code for the Namibian Dollar.
NASD
See: National Association of Securities Dealers
Nasdaq
See: National Association of Securities Dealers Automatic Quotation System
NAV
See: Net asset value
NC
The two-character ISO 3166 country code for NEW CALEDONIA.
NE
The two-character ISO 3166 country code for NIGER.
NF
The two-character ISO 3166 country code for NORFOLK ISLAND.
NFA
See: National Futures Association
NG
The two-character ISO 3166 country code for NIGERIA.
NGN
The ISO 4217 currency code for the Nigerian Naira.
NI
The two-character ISO 3166 country code for NICARAGUA.
NIF
See: Note issuance facility
NIO
The ISO 4217 currency code for the Nicaraguan Cordoba Oro.
NL
The two-character ISO 3166 country code for NETHERLANDS.
NLG
The ISO 4217 currency code for the Dutch Guilder.
NMS
See: National Market System
NO
The two-character ISO 3166 country code for NORWAY.
NOK
The ISO 4217 currency code for the Norwegian Krone.
NPR
The ISO 4217 currency code for the Nepalese Rupee.
NOW
See: Negotiable Order of Withdrawal
NP
The two-character ISO 3166 country code for NEPAL.
NPV
See: Net present value
NR
The two-character ISO 3166 country code for NAURU.
NTE
Short for Not To Exceed.
NU
The two-character ISO 3166 country code for NIUE0.
NYSE
See: New York Stock Exchange
Naive diversification
A strategy whereby an investor simply invests in a number of different assets in the hope that the variance of the expected return on the portfolio is lowered. In contrast, mathematical programming can be used to select the best possible investment weights. Related: Markowitz diversification.
NZ
The two-character ISO 3166 country code for NEW ZEALAND.
NZD
The ISO 4217 currency code for the New Zealand Dollar.
Naked option strategies
An unhedged strategy making exclusive use of one of the following: Short call strategy (selling or writing call options), and short put strategy (selling or writing put options). By themselves, these positions are called naked strategies because they do not involve an offsetting or risk-reducing position in another option or the underlying security. Related: Covered option strategies. Antithesis of covered option.
Naked strategies
Writing an option without owning the underlying asset. Holder is naked because holder may have agreed to sell something not owned.
Named perils insurance
An insurance policy that names specific risks covered by the policy.
NASD form FR-1
A form required by the NASD of foreign dealers to ensure that firms participating in a new distribution of securities make a bona fide public offering.
Narrow market
An inactive market, which displays large fluctuations in prices due to a low volume of trading.
Narrowing the spread
Reducing the difference between the bid and ask prices of a security.
Nasdaq small-capitalization companies
A group of 2000 companies with relatively small capitalization, which are listed separately and have at least two market makers.
Nasdaq stock market
The first electronic stock market listing over 5000 companies. The Nasdaq stock market comprises two separate markets, namely the Nasdaq National Market, which trades large, active securities and the Nasdaq Smallcap Market that trades emerging growth companies.
National Association of Investors Corporation
A Michigan-based association that helps groups establish investment clubs.
National Association of Securities Dealers (NASD)
Nonprofit organization formed under the joint sponsorship of the investment bankers' conference and the SEC to comply with the Maloney Act, which provides for the regulation of the OTC market.
National Association of Securities Dealers Automatic Quotation System (Nasdaq)
An electronic quotation system that provides price quotations to market participants about the more actively traded common stock issues in the OTC market. About 4000 common stock issues are included in the Nasdaq system.
National bank
A commercial bank approved by the U.S. Comptroller of the Currency, which is required to be a member of and purchase stocks in the Federal Reserve System.
National Credit Union Administration
Federal agency that oversees and insures the federal credit union system, and is funded by its members.
National debt
Treasury bills, notes, bonds, and other debt obligations that constitute the debt owed by the federal government.
National Foundation for Consumer Credit
A nonprofit organization that seeks to help consumers who have taken on too much debt by helping them work out payment plans and supplying credit counseling.
National Futures Association (NFA)
The futures industry self-regulatory organization established in 1982.
National market
Related: Internal market
National Market Advisory Board
Group that advises the SEC on establishing a national exchange market system, which is a highly automated, continuous national exchange, but that preserves the regional exchanges.
National Market System (NMS)
Refers to over-the-counter trading. System of trading OTC stocks under the sponsorship of the NASD. Must meet certain criteria for size, profitability and trading activity. More comprehensive information is available for NMS stocks than for non-NMS stocks traded OTC (high, low, and last-sale prices, cumulative volume figures, and bid and ask quotations throughout the day). This is due to the fact that market makers must report the actual price and number of shares in each transaction within 90 seconds verses nonreal-time reporting for non-NMS stocks (thus, last sale prices and minute-to-minute volume updates are not possible).
National Quotation Bureau
A service that publishes bid and offer quotes from market makers in OTC transactions.
National Securities Clearing Corporation (NSCC)
A clearing corporation that facilitates the settlement of accounts among brokerage firms, exchanges, and other clearing corporations.
National Stock Exchange (NSE)
Second-largest stock exchange based in India.
National tax policy
The way a country chooses to allocate tax burdens.
Nationalization
A government takeover of a private company.
Natural
Used in the context of general equities. Customer buyer or seller, versus a principal or profile interest. Legitimate, real.
Natural logarithm
Logarithm to the base e (approximately 2.7183).
Near money
Assets that are easily convertible into cash, such as money market accounts and bank deposits.
Nearby
The nearest active trading month of a financial or commodity futures market. Related: Deferred futures.
Nearby futures contract
When several futures contracts are considered, the contract with the closest settlement date is called the nearby futures contract. The next (or the "next out") futures contract is the one that settles just after the nearby futures contract. The contract farthest away in time from settlement is called the most distant futures contract.
Nearest month
The expiration date of an option or future that is closest to the present.
"Need the tick"
Used for listed equity securities. A stock must trade up/down at least one tick (1/8) in order to comply with regulations governing short sales/corporate repurchases.
Negative amortization
A loan repayment schedule in which the outstanding principal balance of the loan increases, rather than amortizing, because the scheduled monthly payments do not cover the full amount required to amortize the loan. The unpaid interest is added to the outstanding principal, to be repaid later.
Negative NPV tie-in project
A negative-NPV infrastructure development project that a local government requires of a company engaged in a positive NPV investment project elsewhere in the country.
Negotiable bill of lading
Contract that grants title of merchandise to the holder, which allows banks to use the merchandise as collateral.
Negotiable certificates of deposit
Large-denomination bank certificates of deposit that can be traded.
Negative carry
Related: Net financing cost
Negative cash flow
Occurs when spending in a business is greater than earnings.
Negative convexity
A bond characteristic such that the price appreciation will be less than the price depreciation for a large change in yield of a given number of basis points. For example, a fixed-rate mortgage may lose value as rates go down because of prepayments.
Negative covenant
A bond covenant that limits or prohibits certain actions unless the bondholders agree.
Negative duration
Occurs when the price of an MBS moves in the same direction as interest rates.
Negative income tax
A proposal to assist taxpayer with below-subsistence-level incomes. After filing a tax return, such persons would receive a subsidy to bring them up above the poverty level.
Negative pledge clause
A bond covenant that requires the borrower to grant lenders a lien equivalent to any liens that may be granted in the future to any other currently unsecured lenders.
Negative working capital
Occurs when current liabilities exceed current assets, which can lead to bankruptcy.
Negative yield curve
When the yield on a short-term security is higher than the yield on a long-term security, partially because high interest rates are creating a greater demand for short-term borrowing.
Neglected firm effect
The tendency of firms that are neglected by security analysts to outperform firms that are the subject of considerable attention.
Negotiable
A security whose title is transferable by delivery . See also: Negotiable instrument.
Negotiable instrument
An unconditional order or promise to pay some amount of money, easily transferable from one party to another.
Negotiable order of withdrawal (NOW)
Demand deposits that pay interest.
Negotiated certificate of deposit
A large-denomination CD, generally $1MM or more, that can be sold but cannot be cashed in before maturity.
Negotiated commission
An unfixed broker's commission that is determined through negotiation, depending on the specifics of the trades performed.
Negotiated markets
Markets in which each transaction is separately negotiated between buyer and seller (i.e., an investor and a dealer).
Negotiated offering
An offering of securities for which the terms, including underwriters' compensation, have been negotiated between the issuer and the underwriters.
Negotiated sale
Determining the terms of an offering by negotiation between the issuer and the underwriter rather than through competitive bidding by underwriting groups.
Negotiated underwriting
A securities offering process in which the purchase price paid to the issuer and the public offering price are determined by negotiation rather than through competitive bidding.
NEO
Abbreviation for nonequity options, which are options contracts on foreign currencies, debt issues, commodities, and stock indexes.
Net
The gain or loss on a security sale as measured by the selling price of a security less the adjusted cost of acquisition.
Net adjusted present value
The adjusted present value minus the initial cost of an investment.
Net advantage to leasing
The net present value of entering into a lease financing arrangement rather than borrowing the necessary funds and buying the asset.
Net advantage to merging
The difference in total post- and pre-merger market value minus the cost of the merger.
Net advantage of refunding
The net present value of the savings from a refunding.
Net after-tax gain
Capital gain after income taxes have been paid.
Net asset value (NAV)
The value of a fund's investments. For a mutual fund, the net asset value per share usually represents the fund's market price, subject to a possible sales or redemption charge. For a closed-end fund, the market price may vary significantly from the net asset value.
Net assets
The difference between total assets on the one hand and current liabilities and noncapitalized long-term liabilities on the other hand.
Net benefit to leverage factor
A linear approximation of a number, that enables one to operationalize the total impact of leverage on firm value in the capital market imperfections view of capital structure.
Net book value
The current book value of an asset or liability; that is, its original book value net of any accounting adjustments such as depreciation.
Net capital requirement
SEC requirement that member firms and nonmember securities broker-dealers maintain a maximum ratio of indebtedness to liquid capital of 15 to 1.
Net cash balance
Beginning cash balance plus cash receipts minus cash disbursements.
Net change
This is the difference between a day's last trade and the previous day's last trade.
Net currency exposure
Exposure to foreign exchange risk> after netting all intracompany cash flows.
Net current assets
The difference between current assets and current liabilities, also known as working capital.
Net errors and omissions
In balance of payments accounting, net errors and omissions record the statistical discrepancies that arise in gathering balance of payments data.
Net exposed assets
Exposed assets less exposed liabilities. This term is used with market values or, in translation accounting, with book values.
Net financing cost
Also called the cost of carry or, simply, carry, the difference between the cost of financing the purchase of an asset and the asset's cash yield. Positive carry means that the yield earned is greater than the financing cost; negative carry means that the financing cost exceeds the yield earned.
Net float
Sum of disbursement float and collection float.
Net income
The company's total earnings, reflecting revenues adjusted for costs of doing business, depreciation, interest, taxes and other expenses.
Net income per share of common stock
See: Earnings per share
Net interest cost (NIC)
The total amount of interest that will be paid on a debt obligation by a corporate or municipal bond issuer.
Net investment
Gross, or total, investment minus depreciation.
Net investment income per share
Income received by an investment company from dividends and interest on investments less administrative expenses, divided by the number of outstanding shares.
Net lease
A lease arrangement under which the lessee is responsible for all property taxes, maintenance expenses, insurance, and other costs associated with keeping the asset in good working condition.
Net monetary assets
See: Monetary assets less monetary liabilities.
Net operating loss carrybacks
The application of losses to offset earnings in previous years.
Net operating loss carryforwards
Application of losses to offset earnings in future years.
Net operating losses
Losses that a firm can take advantage of to reduce taxes.
Net operating margin
The ratio of net operating income to net sales.
Net parity
Antithesis of gross parity.
Convertibles: Price of a convertible security including accrued interest.
International: Price of international security including commissions, fees, stamp duty, and other transaction costs, translated into U.S. dollar amounts.
Net period
The period of time between the end of the discount period and the date payment is due.
Net position
The value of the position subtracting the initial cost of setting up the position. For example, if 100 options where purchased for $1 each and the option is currently trading for $9, the value of the net position is $900 - $100 = $800.
Net present value (NPV)
The present value of the expected future cash flows minus the cost.
Net proceeds
Amount received from the sale of an asset after deducting all transaction costs.
Net present value of future investments
The present value of the total sum of NPVs expected to result from all of the firm's future investments.
Net present value of growth opportunities
A model valuing a firm in which net present value of new investment opportunities is explicitly examined.
Net present value rule
An investment is worth making if it has a positive NPV Projects with negative NPVs should be rejected.
Net profit margin
Net income divided by sales; the amount of each sales dollar left over after all expenses have been paid.
Net quick assets
Cash, marketable securities, and accounts receivable less current liabilities.
Net realized capital gains per share
Capital gains realized by an investment company minus any capital losses divided by the total number of the company's outstanding shares.
Net sales
Gross sales less returns and allowances, freight out, and cash discounts allowed.
Net sales transaction
Refers to over-the-counter trading. Securities deal in which the quoted prices include commissions (i.e., OTC); looked at another way, the buyer and seller do not pay fees or commissions in addition to the print or quotation prices.
Net salvage value
The after-tax net cash flow for terminating the project.
Net tangible assets per share
All of a company's assets except patents, trademarks, and other intangible assets minus all liabilities and the par value of preferred stock, divided by the number of shares outstanding.
Net transaction
A securities transaction in which no commissions or extra fees are paid, such as in an initial public offering.
Net transaction exposure
Offsetting inflows against outflows in a given currency to determine extent of exposure to risk.
Net working capital
Current assets minus current liabilities. Often simply referred to as working capital.
Net worth
Common stockholders' equity which consists of common stock, surplus, and retained earnings.
Net yield
The rate of return on a security minus purchase costs, commissions, or markups.
Netting
Reducing transfers of funds between subsidiaries or separate companies to a net amount.
Netting out
To get or bring in as a net; to clear as profit.
Network A/Network B
See: Consolidated tape
Neutral hedge
Hedge that is expected to yield a dollar-neutral result of the combined position, regardless of price change in any part of the hedge securities. For any convertible trading at a premium, this ratio is less than 100%. The higher the convertible premium, the lower a ratio must be to be neutral. See: Delta.
Neural Nets
Models which mimic the massive parallel processing that occurs in the brain.
Neutral period
In the Euromarket, a period over which Eurodollars are sold is said to be neutral if it does not start or end on either a Friday or the day before a holiday.
Neutral stock
A stock with a beta of 1.0.
New account report
A broker's document including information about a new client. See: Know your customer.
New high/new low
A stock valued at its highest or lowest price in the last year.
New issue
Securities that are publicly offered for the first time, whether in an IPO or as an additional issue of stocks or bonds by a company that is already public.
New-issues market
The market in which a new issue of securities is first sold to investors. This is not a separate market but refers to a niche of the overall market.
New listing
A security that has just been entered on a stock or bond exchange for trading.
New money
In a Treasury auction, the amount by which the par value of the securities offered exceeds that of those maturing.
New York Cotton Exchange (NYCE)
Commodities exchange in New York trading futures and options on cotton, frozen concentrated orange juice, and potatoes, as well as interest rate, currency, and index futures and options.
New York Futures Exchange (NYFE)
A wholly owned subsidiary of the NYSE that trades futures and futures options on the NYSE composite index.
New York Mercantile Exchange (NYMEX)
The world's largest physical commodity futures exchange.
New York Stock Exchange (NYSE)
Also known as the Big Board or the Exchange.
NYSE composite index
Composite index covering price movements of all new world common stocks listed on the New York Stock Exchange. It is based on the close of the market on December 31, 1965, at a level of 50.00, and is weighted according to the number of shares listed for each issue. Print changes in the index are converted to dollars and cents so as to provide a meaningful measure of changes in the average price of listed stocks. The composite index is supplemented by separate indexes for four industry groups: industrial, transportation, utility, and finance.
New Zealand Stock Exchange
Automated, screen-based national trading system based in Wellington.
"News out"
Refers to over-the-counter trading. A news story concerning the stock being considered has recently been posted on one of the news services, such as the Dow Jones News Service or Reuters. A courtesy standard in trading is to mention that "news is out," in case the other party is unaware of the new development.
Next day settlement
Transaction in which the contract is settled the day after the trade is executed. See: Settlement date.
Next futures contract
The contract settling immediately after the nearby futures contract.
Nexus (of contracts)
A set or collection of something.
NICs
Newly Industrialized Countries, which are countries with high-growth industrial economies, such as Hong Kong and Malaysia.
Nifty Fifty
Institutional investor' 50 most popular stocks.
Nikkei stock average
Applies mainly to international equities. Price-weighted average of 225 stocks of the first section of the Tokyo Stock Exchange started on May 16, 1949. Japanese equivalent of the US Dow.
Nine-bond rule
An NYSE rule requiring that orders for nine bonds or fewer stay on the floor for one hour to seek a market.
19c3 stock
A stock listed on a national securities exchange after April 26, 1979, that is exempt from the Securities and Exchange Commission rule that prohibits exchange members from participating in off-board trading.
No-action letter
A letter from the Securities and Exchange Commission agreeing that the commission will take no civil or criminal action against a party, regarding a specific activity.
"No Autex"
Used in the context of general equities. "No buy or sell interest should be entered into the Autex (advertising) system." Inquirers do not want exposure of an inquiry to affect the price at which they hope to ultimately transact the trade, hence disturbing the customer's picture.
No book
Used for listed equity securities. Not much, if any, stock is being bid for or offered at the present time by customers or the specialist.
No-brainer
A market in which it does not take very complex analysis to figure out how securities are going to perform, such as a strong bull market.
No-load fund
A mutual fund that does not impose a sales commission. Related: Load fund, no-load mutual fund.
No-load mutual fund
An open-end investment company whose shares are sold without a sales charge. There can be other distribution charges, however, such as Article 12B-1 fees. A true no-load fund has neither a sales charge nor a distribution fee.
No-load stock
Shares that can be purchased from the issuing companies themselves, so that broker fees and commissions can be avoided.
NM
Abbreviation for "not meaningful".
Noah Effect
The tendency of persistent time series (0.50<H<1.00) to have abrupt, and discontinuous changes. The normal distribution assumes continuous changes in a system. However, a time series which exhibits Hurst statistics may abruptly change levels, skipping values either up or down. Mandelbrot coined the term "Noah effect" after the biblical story of the deluge. See: Joseph Effect, Hurst Exponent, Persistence, Anti-persistence.
NOB spread
Notes over bonds spread. This is the difference in yield between Treasury notes (maturing in 2 to 10 years) and Treasury bonds (maturing in 15 or more years), which is traded using Treasury note and bond futures.
Noise
Price and volume fluctuations that can confuse interpretation of market direction. Used in the context of general equities. Stock market activity caused by program trades, dividend rolls, and other phenomena not reflective of general sentiment. Antithesis of real.
Noisy Chaos
A chaotic dynamical system with either observational or system noise added. See: Chaos, Dynamical Systems, Observational Noise, System Noise.
No-par-value stock
A stock with no par value given in the charter or stock certificate.
Nominal
In name only. Differences in compounding cause the nominal rate to differ from the effective interest rate. Inflation causes the purchasing power of money to differ from one time to another.
Nominal annual rate
An effective rate per period multiplied by the number of periods in a year. Same as annual percentage rate.
Nominal cash flow
A cash flow expressed in nominal terms if the actual dollars to be received or paid out are given.
Nominal dollars
Dollars that are not adjusted for inflation.
Nominal exchange rate
The actual foreign exchange quotation in contrast to the real exchange rate, which has been adjusted for changes in purchasing power.
Nominal exercise price
The exercise price of a GNMA option contract, which equals the unpaid principal balance multiplied by the adjusted exercise price.
Nominal income
Income that has not been adjusted for inflation and decreasing purchasing power.
Nominal interest rate
The interest rate unadjusted for inflation.
Nominal price
Price quotations on futures for a period in which no actual trading took place.
Nominal quotation
Used in the context of general equities. Bid and offer prices given by a market maker for the purpose of valuation, not as an invitation to trade; must be specifically identified as such by prefixing the quotes FYI (for your information) or FVO (for valuation only).
Nominal yield
The income received from a fixed income security in one year divided by its par value. See also: Coupon rate.
Nominee
A person or firm to whom securities or other properties are transferred to facilitate transactions, while leaving the customer as the actual owner.
Nonaccredited investor
Wealthy, sophisticated investors who do not meet SEC net worth requirements. These investors require less protection because of large financial resources, but only 35 nonaccredited investor can be included per investment.
Noncallable
A preferred stock or bond that cannot be redeemed whenever desired by the issuer.
Noncash charge
A cost, such as depreciation, depletion, and amortization, that does not involve any cash outflow.
Nonclearing member
An exchange member firm that is not able to clear transactions, and must pay another member firm to carry out its clearing operations.
Noncompete
A provision in a number of employment contracts that prohibits an employee from working for a competing firm for a specified number of years after the employee leaves the firm.
Noncompetitive bid
In a Treasury auction, bidding for a specific amount of securities at the price, whatever it may turn out to be, equal to the average price of the accepted competitive bids.
Noncompetitive tender
Offer by an investor to purchase Treasury securities at a price equivalent to the weighted average discount rate or yield of accepted competitive bids in a Treasury auction. Noncompetitive tenders are always accepted in full.
Noncontributory pension plan
A pension plan that is fully paid for by the employer, requiring no employee contributions.
Noncumulative
Applies mainly to convertible securities. Type of preferred stock on which unpaid or omitted dividends do not accrue. Omitted dividends are, as a rule, gone forever.
Noncumulative preferred stock
Preferred stock whose holders must forgo dividend payments when the company misses a dividend payment. Related: Cumulative preferred stock.
Noncurrent asset
Any asset that is expected to be held for the whole year, not sold or exchanged, such as real estate, machinery, or a patent.
Noncurrent liability
A liability due in one year.
Nondiscretionary trust
A personal trust whose trustee has no discretion in deciding how income will be distributed to the beneficiary.
Nondeductible contribution
A contribution to either a traditional IRA or Roth IRA. Income tax is due on the contribution in the tax year for which the contribution is made.
Nondeliverable Forward Contracts (NDF)
Agreement regarding a position in a specified currency, a specified exchange rate, and a specified future settlement date, that does not result in delivery of currencies. Rather one party in the agreement makes a payment to the other party on the basis of the exchange rate at the future date.
Nondiversifiability of human capital
The difficulty of hedging one's human capital (the unique capabilities and expertise of individuals) and employment effort.
Nondiversifiable risk
Risk that cannot be eliminated by having a large portfolio of many assets.
Nonfinancial assets
Physical assets such as real estate and machinery.
Nonfinancial services
Such things as freight, insurance, passenger services, and travel.
Noninsured plans
Defined benefit pension plans that are not guaranteed by life insurance products. Related: Insured plans.
Noninterest-bearing note
A note without periodic interest payment, but selling at a discount and maturing at face value. See: Zero-coupon bond.
Nonmarketed claims
Claims that cannot be easily bought and sold in the financial markets, such as those of the government and litigants in lawsuits.
Nonintermediated debt market
A financial market in which borrowers (government and large corporations) appeal directly to savers for debt capital through the securities markets without using a financial institution as intermediary>.
Nonmarketable security
Securities that cannot be easily bought and sold.
Nonmember firm
Used for listed equity securities. Brokerage firm that is not a member of an organized exchange (NYSE). Such firms execute trades either through member firms, or on regional exchanges where they are members, or in the third market.
Nonmonetary assets and liabilities
Assets and liabilities with noncontractual payoffs.
Nonparallel shift in the yield curve
A shift in the yield curve in which yields do not change by the same number of basis points for every maturity. Related: Parallel shift in the yield curve.
Nonparticipating life insurance policy
Life insurance policy whose policyholders do not receive dividends, because they are not participants in the interest, dividends, and capital gains earned by the insurer on premiums paid.
Nonperforming asset
An asset that is not effectively producing income, such as an overdue loan.
Nonproductive loan
A loan that increases spending power, but is used in business that does not directly increase the economy's output, such as a leveraged buyout loan.
Nonpublic information
Information about a company that is not known by the general public, which will have a definite impact on the stock price when released. See: Insider trading.
Nonpurpose loan
A loan with securities pledged as collateral, but which is not to be used in securities trading or transactions.
Nonqualified plan
A retirement plan that does not meet the IRS requirements for favorable tax treatment.
Nonqualifying annuity
An annuity that does not fall under an IRS-approved pension plan. Contributions are made with after-tax dollars, but earnings can accumulate tax-deferred until withdrawal.
Nonqualifying stock option
An employee stock option that does not satisfy IRS qualifying rules and therefore is liable for taxation upon exercise .
Nonrated
A bond that has not been rated by a large rating agency, usually because the issue is too small.
Nonrecourse
In the case of default, the lender has ability to claim assets over and above what the limited partners contributed.
Nonrecourse loan
A loan taken by limited partners used to finance their portion of the partnership, which is secured by their ownership in the venture.
Nonrecurring charge
A one-time expense or credit shown in a company's financial statement.
Nonredeemable
Not permitted, under the terms of an indenture, to be redeemed.
Nonrefundable
Not permitted, under the terms of an indenture, to be refundable.
Nonreproducible assets
A tangible asset with unique physical properties, like a parcel of land, a mine, or a work of art.
Nonsterilized intervention
Taking an action in the foreign exchange market without adjusting for changes in money supply.
Nonsystematic risk
Nonmarket or firm-specific risk factors that can be eliminated by diversification. Also called unique risk or diversifiable risk. Systematic risk refers to risk factors common to the entire economy.
Nontradables
Goods and services produced and consumed domestically that are not close substitutes to import or export goods and services.
Nonvoting stock
A security that does not entitle the holder to vote on the corporation's resolutions or elections.
Normal annuity form
The manner in which retirement benefits are paid out.
Normal backwardation theory
Holds that the futures price will be bid down to a level below the expected spot price.
Normal deviate
Related: Standardized value
Normal Distribution
The well known bell shaped curve. According to the Central Limit Theorem, the probability density function of a large number of independent, identically distributed random numbers will approach the normal distribution. In the fractal family of distributions, the normal distribution only exists when alpha equals 2, or the Hurst exponent equals 0.50. Thus, the normal distribution is a special case which in time series analysis is quite rare. See: Alpha, Central Limit Theorem, Fractal Distribution.
Normal growth firms
Companies whose earnings grow at a constant rate.
Normal investment practice
The investment history of a customer, which is used as a benchmark to test the bona fide public offerings requirement of the allocation of a hot issue.
Normal Market Size (NMS)
A system that categorizes the size of transactions that are normal for a particular security and forces market makers to deal within these sizes.
Normal portfolio
A customized benchmark that includes all the securities from which a manager normally chooses, weighted as the manager would weight them in a portfolio.
Normal probability distribution
A probability distribution for a continuous random variable that forms a symmetrical bell-shaped curve around the mean. This distribution has no skewness or excess kurtosis.
Normal random variable
A random variable that has a normal probability distribution.
Normal retirement
The age or number of working years after which a pension plan beneficiary can retire and receive unreduced benefits immediately.
Normal trading unit
See: Round lot.
Normalized earnings
Earnings that have been adjusted in order to take into account the effect of cycles in the economy.
Normalizing method
Making a change in the income account equivalent to the tax savings realized through the use of different depreciation methods for shareholder and income tax purposes, thus washing out the benefits of the tax savings reported as final net income to shareholders.
North American Free Trade Agreement (NAFTA)
A regional trade pact among the United States, Canada, and Mexico.
Not a name with us
Refers to over-the-counter trading. Not a registered market maker in the security, especially in OTC and convertibles, or having nothing real to do.
Not-for-profit
An organization established for charitable, humanitarian, or educational purposes that is exempt from some taxes and in which no one in profits or losses.
Not rated
A rating service indicator, neither positive nor negative, showing that a security or company has not been rated.
Not-sufficient-funds check
A bank check having insufficient funds to back it.
Not held order (NH order)
Applies mainly to international equities. Market or limit order in which the customer does not desire to transact automatically at the inside market (market held) but instead has given the trader or floor broker (listed stock) time and price discretion in transacting on a best-efforts basis. This will not hold the broker responsible for missing the price within the limits (limit not held) or obtaining a worse price (market not held). The order is marked "not held, disregard tape/DRT, take time" or bears any such qualifying notation, excluding "or better." See: Held order.
Note
Debt instruments with initial maturities longer than one year and shorter than 10 years.
Note agreement
A contract for privately placed debt.
Note issuance facility (NIF)
An agreement by which a syndicate of banks indicates a willingness to accept short-term notes from borrowers and resell these notes in the Eurocurrency markets.
Notes to the financial statements
A detailed set of notes immediately following the financial statements in an annual report that explain and expand on the information in the financial statements.
Notice day
A day on which notices of intent to deliver pertaining to a specified delivery month may be issued. Related: Delivery notice.
Notice of sale
A notice advertising a new issue of municipal securities and inviting underwriters to submit competitive bids.
Notification date
The day the option is either exercised or expires.
Notional principal amount
In an interest rate swap, the predetermined dollar principal on which the exchanged interest payments are based.
Nouveau Marche
An equity market unit of the Paris Bourse that deals solely in innovative, high-growth companies.
Novation
Defeasance whereby the firm's debt is cancelled.
NPV profile
A graph of NPV as a function of the discount rate.
Numismatist
Collector of historical coins and currencies.

 
 

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