Glossary

A

• Abandonment Means, allowing an option to expire unexercised.
• Above par Above par means current price above face value.
• Abridged Prospectus Abridged Prospectus means the memorandum as prescribed in Form 2A under sub-section (3) of section 56 of the Companies Act, 1956. It contains all the salient features of a prospectus. It accompanies the application form of public issues.
• Absolute priority rule It is the rule, which gives priority to creditor to get their payment back before the payment is made to shareholders of the company in the case of liquidation or reorganization of the company.  
• Acid-test ratio   It is the ratio of current assets minus inventories divided by total current liabilities. It is also called Quick Ratio. It measures the ability to meet current debts with most - liquid current assets.  
• Active Portfolio Management It is a systematic and proactive approach to investment that involves the constant review of the portfolio of the fund. The basic objective behind such investing style is to beat the market. This investing style is based on the argument that markets are not efficient and at any point of time there is always a scope to earn abnormal profits through an active investment style.  
• ADR   ADR is an abbreviation of American Depositary Receipt. It is a negotiable instrument issued by U.S stock exchange, which paves the way to Americans to invest in foreign companies. There are various Indian companies that have issued ADRs in US market.  
• Aftermarket Performance The price appreciation (or depreciation) in IPOs is measured from the offering price going forward. However, to obtain a better benchmark of IPO aftermarket performance, some investors track performance from the first day close.
• Aftermarket   Trading in the IPO subsequent to its offering is called the aftermarket. Trading volume in IPOs is extremely high on the first day due to aftermarket purchases. Trading volume can decline subsequently in the following days.  
• AGDP Agricultural Gross Domestic Product.