Actuals - The physical commodity underlying a futures contract.

Agency basis - A means of compensating the broker of a program trade solely on the basis of commission established through bids submitted by various brokerage firms.

Agency incentive arrangement - A means of compensating the broker of a program trade using benchmark prices for issues to be traded in determining commissions or fees.

Alpha - In a Jensen Index, a factor to represent the portfolio's performance that diverges from its beta, representing a measure of the manager's performance.

American Depository Receipt (ADR) - The U.S. version of the International Depositary Receipt.

American option - An option that may be exercised at any time up to and including the expiration date. Related: European options

Annual fund operating expenses - For investment companies, the management fee and "other expenses," including the expenses for maintaining shareholder records, providing shareholders with financial statements, and providing custodial and accounting services. For 12b-1 funds, selling and marketing costs are included.

Arbitrage - The simultaneous buying and selling of a security at two different prices in two different markets, resulting in profits without risk. Perfectly efficient markets present no arbitrage opportunities.

Arbitrage-free option-pricing models - Yield curve option-pricing models.

Arbitrage pricing theory (APT) - An alternative model to the capital asset pricing model developed by Stephen Ross and based purely on arbitrage arguments.

Arithmetic average (mean) rate of return - Arithmetic mean return.

Arithmetic mean return - An average of the subperiod returns, calculated by summing the subperiod returns and dividing by the number of subperiods.

Ask price - Also called "offer". Indicates a willingness to sell a futures contract at a given price.

Asset - Any possession that has value in an exchange.

Asset/equity ratio - The ratio of total assets to stockholders' equity.

Asset/liability management - Also called surplus management, the task of managing funds of a financial institution to accomplish the two goals of a financial institution: (1) to earn an adequate return on funds invested and (2) to maintain a comfortable surplus of assets beyond liabilities.

Asset allocation decision - The decision regarding how the institution's funds should be distributed among the major classes of assets in which it may invest.

Asset-backed securities - Securities backed by assets that are not mortgage loans. Examples include assets backed by automobile loans and credit card receivables.

Asset classes - Categories of assets, such as stocks, bonds, real estate, and foreign securities.

Asset swap - An interest rate swap used to alter the cash flow characteristics of an institution's assets so as to provide a better match with its liabilities.

Asset turnover - The ratio of net sales to total assets.

At-the-Money - An option which has a strike price that is nearest to the underlying futures price.

Attribute bias - The tendency of stocks preferred by the dividend discount model to share certain equity attributes such as low price-earnings ratios, high dividends yield, high book-value ratio, or membership in a particular industry sector.

Average (across-day) measures - An estimation of price that uses the average or representative price or a large number of trades.