NAFTA:

North American Free Trade Agreement.

Naked Option Writer:

An option writer who does not have an offsetting position in the underling security is said to be "naked".

NASDAQ:

The National Association of Security Dealers Automated Quotation System, is a computerized that provides dealers with price quotations for securities.

National Housing Act (NHA) Loan:

A mortgage loan which is backed by (insured by) CMHC to certain maximums.

Negotiable Certificate of Deposit:

A large-denomination (generally $1 million) CD that can be sold but cannot be cashed in before maturity.

Negotiated Sale:

Situation in which the terms of an offering are determined by negotiation between the issuer and the underwriter rather than through competitive bidding by underwriting groups.

Net Asset Value:

The value of all the holdings of a mutual fund, less the fund's liabilities.

Net Asset Value per share:

The market value of a share or unit of a mutual fund. It is the total assets of a fund minus its liabilities, and divided by the number of units outstanding.

Net Income:

Generally net income refers to gross income less expenses incurred to earn income, but before taxes. Net income also assumes deductions for Canada Pension Plan, Unemployment Insurance, RRSPs .

Net Interest Margin:

Net interest income (the difference between interest income and interest expense) as a percentage of average total assets.

Net Present Value:

Is equal to the present value of a future returns, discounted at a marginal cost of capital, minus the present value of the cost of the investment.

Net Profit (net earnings):

The profit remaining after all expenses and taxes have been paid by a company.

Netting:

The offsetting with a counterparty of financial obligations payments one is owed with those one is entitled to receive, thus reducing the costs arising out of payments settlements. Netting is also used as a risk-management tool to help counterparties reduce their exposure to risk.

New Issues Market:

The market in which a new issue of securities is first sold to investors.

New Money:

In a Treasury refunding, the amount by which the par value of the securities offered exceeds that of those maturing.

NHA:

National Housing Act. This act of Parliament set up an insurance system which allows certain income groups to qualify for mortgages by guaranteeing lenders against loss in return for their earning lower rates of interest.

No Fault Insurance:

Government-mandated insurance designed to provide automatic compensation for automobile accident victims, regardless of who is to blame.

No-Load Fund:

A mutual fund that does not charge a fee for buying or selling its shares.

Nominal GDP:

The value of finished goods and services at current market prices.

Nominal Rate (Real Estate):

The quoted interest rate for a mortgage loan.

Nominal Rate of Return:

The rate of return on an investment, expressed in today's dollars; that is, without any provision for deducting the effects of inflation. See also real rate of return.

Non-Competitive Bid:

In a Treasury auction, bidding for a specific amount of securities at the price, whatever it may turn out to be, equal to the average price of the accepted competitive bids.

NOTE: Coupon issues with a relatively short original maturity are often called notes. Muni-notes, however, have maturities ranging from a month to a year and pay interest only at maturity. Treasury notes are coupon securities that have an original maturity of up to 10 years.

Non-Refundable Tax Credit:

A tax credit which will not be refunded if the total non-refundable tax credits exceeds the income tax otherwise payable.

Notional Amount:

The principal amount used as a reference point to calculate payments for derivatives.

Not-In-Advance:

Refers to interest that will be collected at the end of a calculation period.

NSF:

Not Sufficient Funds. Used in reference to a check drawn on a bank account where the balance is not sufficient to honor the check.

This Glossary of financial terms was created by Fiscal Agents Financial Information Services, Research Department. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, mechanical, electronic, photocopying, recording, or otherwise, without the prior written permission of Fiscal Agents. Copyright Fiscal Agents © 2000. All Worldwide Rights Reserved. Click to contact Glossary editor or see the permissions page.