Financial Glossary: C

C Shares

A class of share issued by investment trusts that carries an ongoing fee.

Cac 40 index

The main index of the French stock market made up of the 40 largest companies by market capitalisation.

Call option

An option that gives the holder the right to buy shares at a specified price on a specified date in the future. It is an option to buy that doesn't have to be exercised.

Capital

The money that is invested in company.

Capital expenditure

Expenditure on the company's long term asset.

Capital growth

The increase in value of assets and investments.

Capital gains tax (CGT)

Tax paid on the profits or gains made from the sale of fixed assets.

CAT mark

A benchmark against which products can be compared against. CAT is an acronym for 'Charges, Access, Terms' and the mark is a government seal of approval on an individual savings account (ISA) - the replacement for the personal equity plan. Requirements under each of the headings ensure that the product is flexible and of good value.

Charting

Chartists believe that investment opportunities can be spotted by analysing changes in share price trends.

Churning

Term used to describe the excessive trading of a client's account by a broker in order to increase their commissions.

Commission

The charge made by a stockbroker or the fee a financial adviser makes from a company whose products have been sold, generally based on the value of the sale.

Commodities

Term used to describe goods that have been mined, produced or harvested, like gold, coffee beans, etc. These are bought and sold in dedicated commodities markets.

Company share option scheme

A scheme offered by companies to employees to encourage better performance. Participants are given the right to buy shares in the company in the future, usually at a discount.

Compound interest

Interest is earned on the principal amount and the accumulated interest of prior periods.

Contract note

The confirmation of your share purchase transaction.

Convertible bonds or loan stock

Bonds/loan stock that give the holder the right to convert to shares at a future date. The terms of the conversion are set at the time of issue. The aim is to give investors a regular income whilst also giving them the chance to share in the capital growth of the company at a later date.

Corporate bond

Bonds issued by a public company.

Corporation tax

Tax chargeable on the profits of a UK company.

Correction

A reverse movement in the value of shares or securities, usually a sharp downturn in the value.

Coupon

The interest rate on a fixed-interest security.

Crest

The electronic system for settling share transactions, introduced in July 1997 by the London Stock Exchange, under which paper share certificates are no longer needed.

Critical illness cover

An insurance policy which will pay out a lump sum if you are diagnosed with or suffer from any of the listed life-threatening conditions such as, cancer, heart attack, or stroke.

Cum dividend

The latin word for 'with'. If a dividend is just about to be paid on a share then an investor buying a cum dividend share will be entitled to receive the dividend. If the share is ex-dividend, it means the dividend has already been paid out.

 

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