Debenture: A certificate of indebtedness of a government or company backed only by the general credit of the issuer and unsecured by mortgage or lien on any specific asset.

Debt: Money borrowed from lenders for a variety of corporate purposes. The borrower pays interest for use of the money and is obligated to repay it at a set date.

Deferred Annuity: An annuity under which payments do not begin as soon as the annuity is purchased.

Deferred Profit-Sharing Plan (DPSP): A plan that enables companies to share profits with their employees on a tax-assisted basis. Companies may deduct their contributions from their income, and those amounts, along with income they generate, are not subject to tax in the hands of the employee until funds are withdrawn from the plan.

Deposit Insurance: Coverage provided by the Canada Deposit Insurance Corporation (CDIC) against the loss of deposits with member institutions because of insolvency. The maximum deposit insurance is $60,000 for each person in each member institution.

Discount: The amount by which a preferred stock or bond sells below its par value.

Discount Broker: A brokerage house charging commissions lower than those charged by a full-service broker. Discount brokers provide execution of trades only and do not give investment advice. Related investment services are sometimes available for an additional fee.

Diversification: Spreading investment risk by buying different securities (and different types of securities) issued by different companies in different industries and/or different countries. This ensures that investment capital, and thus risk, is not concentrated in one area. An example would be a balanced fund.

Dividend: An amount determined by a company's board of directors and paid out to holders of the company's common and/or preferred shares. A dividend may be paid in cash or in additional shares. While dividends on common shares fluctuate with the profitability of the company, dividends on preferred shares are usually fixed.

Draft Prospectus: A prospectus prepared for internal use and discussion by the company issuing securities and the underwriters. It is not for outside distribution and shows only basic data on the company with little final detail about terms of the planned underwriting. It is not a legal document and does not have to be drawn to meet Securities Commission standards. It is an earlier version of a preliminary prospectus and cannot be used in offering the security.

Earnings Per Share: A company's net income (less preferred share dividends) divided by the number of common shares outstanding.

Effective Interest Rate: The actual rate of interest you receive on a deposit, or pay on a loan, once the frequency of compounding is taken into account.

Equipment Trust Certificate: A security, more common in the U.S.A. than in Canada, that is generally issued by a railroad or airline to pay for new moveable equipment. It is secured by a first lien on the equipment.

Extendible Bond or Debenture: A bond or debenture with terms granting the holder the option to extend the maturity date by a specified number of years.

Face Value: The value of a bond or debenture that appears on its face. Usually, this is the amount that is due on maturity. It is also called par value. The bond or debenture may trade in the market at either a premium or discount to its face value.

Federal Reserve: U.S. Central Bank.

Feed Freight Assistance Program: A program that subsidized the transportation of animal feed stock from the Prairie provinces.

Finance or Acceptance Company Paper: Short-term negotiable debt securities similar to Commercial Paper, but issued by finance companies.

Financial Institution: An institution that collects funds from the public for the purpose of placing those funds in financial assets. Depository institutions pay interest on deposits and invest those deposits mostly in loans of various types. Examples are banks, trust companies and credit unions. Non-depository institutions collect money by selling insurance policies or receiving employer contributions, and pay it out in the form of claims or retirement benefits, Examples are insurance companies and pension plans.

Financial Planner: A financial generalist who often works in conjunction with lawyers, accountants, and investment advisors to provide clients with personalized, long-term financial, investment and retirement plans. A small percentage of financial planners charge on a per-hour or per-project basis, and are compensated whether their plan is implemented or not. Some charge a fee for planning services but also receive commissions from the sale of investment products. The majority work exclusively on commission, being remunerated only when investments are made. Such planners are often insurance agents, stockbrokers or employees of mutual fund companies.

Firm Bid/Firm Offer: An undertaking to buy (firm bid) or sell (firm offer) a specified amount of securities at a specified price for a specified period of time, unless released from this obligation by the seller in the case of a "firm bid" or the buyer in the case of a "firm offer".

Fiscal Stabilization Fund (FSF): A fund that mitigates the need for tax increases.

Fixed Charges: A company's expenses, such as debt interest, that it has agreed to pay whether or not it has been earned, and which are deducted from income before income taxes are calculated.

Fixed-Income Securities: Securities that generate a predictable stream of interest or dividend income, such as bonds, debentures and preferred shares.

Front-End Load: An acquisition fee charged by many mutual funds, based on a percentage of total value of the units purchased. Generally, the percentage level of the fee decreases as the dollar amount of the transaction increases.

Full Service Broker: A broker who, in addition to executing trades on a commission basis, provides a wide range of services to clients at no additional cost. Unlike a discount broker, a full-service broker offers investment advice, research and other investment-related services.

Funded Debt: All outstanding bonds, debenture, notes and similar instruments of a company not due for at least one year.