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Super Finance Glossary

Over 10,000 financial glossary terms...

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Browsing by the letter "S"

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Subsidiary
Definition: A wholly or partially owned company that is part of a large corporation. A foreign subsidiary is a separately incorporated entity under the host country's law. A subsidiary's financial results are carried on the parent company's books.
Subsidized Financing
Definition: Funding provided by a government or other entity that is available at a below-market interest rate.
Substantially Equal Periodic Payments (SEPP)
Definition: A method of distribution from IRA account assets that under certain conditions is not subject to the IRS's 10% premature withdrawal penalty for those under age 59-1/2.
Substitute Sale
Definition: A method for hedging price risk that uses debt market instruments, such as interest rate futures, or that involves selling borrowed securities as the primary assets.
Substitution Swap
Definition: A swap in which a money manager exchanges one bond for another bond that is similar in terms of coupon, maturity, and credit quality, but that offers a higher yield.
Success Tax
Definition: A 15% excise tax on "excess" distributions from tax-deferred retirement plans that was repealed by the Taxpayer Relief Act of 1997. In essence, the tax had penalized "successful" investors who accumulated large retirement accounts and took distributions that exceeded an annual limit deemed excessive by the tax code.
Suicide Pill
Definition: A hostile takeover prevention tactic that could destroy the target company. Taking on a large amount of debt to prevent the takeover might cause bankruptcy, for example.
Suitability
Definition: A requirement that any investing strategy fall within the financial means and investment objectives of an investor.
Suitability Rules
Definition: Policies and guidelines that brokers must use to ensure that investors have the financial means to assume risks that they wish to undertake. These are enforced by the NASD and other self-regulatory organizations.
Suitable
Definition: Describing a strategy or trading philosophy in which the investor is operating in accordance with his(her) financial means and investment objectives.
Sum-of-the-years'-digits Depreciation
Definition: Method of accelerated depreciation.
Summary Plan Description (SPD)
Definition: A document that explains the fundamental features of an employer's defined benefit or defined contribution plan, including eligibility requirements, contribution formulas, vesting schedules, benefit calculations, and distribution options. ERISA requires that the SPD be easy to understand and that each participant receive a copy within 90 days of joining the plan.
Sunk Costs
Definition: Costs that have been incurred and cannot be reversed.
Sunrise Industries
Definition: Growth industries in an economy that may become leaders in the market in the future.
Super Bowl Indicator
Definition: A theory that if a team from the old American Football League pre-1970 wins the Super Bowl, the stock market will decline during the coming year. If a team from the old pre-1990 National Football League wins the Super Bowl, stock prices will increase in the coming year.
Super DOT
Definition: Super DOT provides faster execution than regular DOT and focuses on large-size trades and baskets. See: Program trading.
Super Majority
Definition: A proposal requiring more than a simple majority of the votes eligible to be cast at an annual or special meeting. A super majority is often a 2/3 (66.66%) vote, but it can be as high as 3/4 (75%) or 4/5 (80%).
Super Sinker Bond
Definition: Usually a home financing bond, but also any other bond that has long-term coupons but short maturity; the mortgages may be prepaid, and the holders may receive the long-term yield after a short period of time.
Supermajority
Definition: Provision in a company's charter requiring a majority of, say, 80% of shareholders to approve certain changes, such as a merger.
Supermajority Amendment
Definition: Often used in risk arbitrage. Corporate amendment requiring that a substantial majority (usually 67% to 90%) of stockholders approve important transactions, such as mergers.
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