Gas Utilities Act (The): Alberta's gas distribution utilities are regulated by the Alberta Energy and Utilities Board pursuant to the Gas Utilities Act.

General Mortgage Bond: A bond secured by a blanket mortgage on the company's property, but which is usually subordinated to one or more other mortgage bonds.

Gross National Product (GNP): The aggregate value of all goods and services produced in an economy over a fixed period of time (usually a year). GNP is a primary indicator of economic activity.

Group Registered Retirement Savings Plans: Plans sponsored by companies, unions, professional groups, etc., as a benefit to their employees or members. Essentially a collection of individual RRSP's where regular contributions are made for each participant through payroll deduction.

Guaranteed Investment Certificate (GIC): A deposit instrument most commonly available from trust companies, requiring a minimum investment at a predetermined rate of interest for a stated term. Generally non-redeemable prior to maturity, but there can be exceptions.

Hypothecate: To pledge securities as collateral for a loan.

IDA: Investment Dealers Association of Canada.

IFIC: The Investment Funds Institute of Canada.

IGFI: Inspector General of Financial Institutions.

Income Bond: Generally, an income bond promises to repay principal but to pay interest only when earned. In some cases, unpaid interest on an income bond may accumulate as a claim against the company when the bond matures.

Inflation: The deterioration in the purchasing power of the dollar, as evidenced by rising prices, rising wages and an increasing money supply. Central Bank often attempt to control inflation through monetary policy.

Insurance Premium: A sum paid to an insurance company in return for coverage against a specified risk.

Interest: Money charged by a lender to a borrower for the use of his or her money.

Inverted Yield Curve: The somewhat unusual phenomenon of short-term interest rates being higher than long-term rates. This results from high demand for short-term credit, which drives up rates on short-term instruments such as treasury bills. At the same time, borrowers are unwilling to make long-term commitments and this reduced demand results in long-term rates rising more slowly. The lack of longer term confidence that causes an inverted yield curve can be a sign of a faltering economy, and is often a warning of an impending recession.

Investment Advisor: A full-time employee of an investment firm who is licensed to give investment advice to the public and to execute orders to buy and sell securities.

Investment Company, or Investment Fund: A company that uses its capital to invest in other companies. There are two principal types: closed-end and open-end, or mutual fund. Shares in closed-end investment companies are readily transferable in the open market and are bought and sold like other shares. Capitalization is fixed. Open-end funds sell their own new shares to investors, buy back their old shares, and are not listed. Open-end funds earned their name because their capitalization is not fixed; they normally issue more shares as people want them.

Joint and Survivor Annuity: An annuity providing for payments for the lifetime of two or more beneficiaries, generally a husband and wife. When one of the annuitants dies, payments continue to the survivor.

Junior Bond Issue: A corporate bond issue, the collateral for which has been pledged as security for other, more senior debt issues and is therefore subject to these prior claims.

Lapse: Cease to exist without cash surrender value, paid up value, or death benefit.

Leverage: The use of borrowed money to increase the rate of return on an investment. Leverage is most commonly used in the purchase of a house, where a relatively small downpayment is made, and the remainder of the purchase price is paid with borrowed money secured by a mortgage. It should be noted that in the case of unsuccessful investments, leverage has the effect of magnifying losses.

Life Annuity: An annuity that provides regular payments over the course of the life of the annuitant, or his/her spouse in the case of a joint and survivor annuity.

Life Insurance: Insurance that provides a lump sum payment to a beneficiary named by the insured, in the event of the insured's death.

Liquidity: The ability to respond quickly to an immediate need for cash. This is usually accomplished by holding "liquid assets", which can be quickly sold without a substantial change in their value. Examples would be Canada Savings Bonds, treasury bills and savings accounts.

Load: The portion of the offering price of shares of most open-end investment companies (mutual funds) that covers sales commissions and all other costs of distribution.

Locked-In: Describes assets that cannot be withdrawn from an RRSP until retirement. The transfer of a pension to an RRSP may result in some or all of that RRSP being "locked-in".

Long-term Bond: A bond or debenture maturing in more than ten years.