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Glossary

G

Gains
Asset inflows not directly related to the ordinary activities of the business.
Gain-to-loss ratio
The ratio of positive returns to negative returns over a specified period of time.
Gamma
A numerical measure of how sensitive an option’s delta is to a change in the underlying.
Generalized least squares
A regression estimation technique that addresses heteroskedasticity of the error term.
Geometric mean
A measure of central tendency computed by taking the nth root of the product of n nonnegative values.
Giro system
An electronic payment system used widely in Europe and Japan.
Global custodian 
An entity that effects trade settlement, safekeeping of assets, and the allocation of trades to individual custody accounts.
Global investable market
A practical proxy for the world market portfolio consisting of traditional and alternative asset classes with sufficient capacity to absorb meaningful investment.
Global minimum-variance portfolio 
The portfolio on the minimum-variance frontier with the smallest variance of return.
Going-concern assumption
The assumption that the business will maintain its business activities into the foreseeable future.
General obligation bond (GO)
A municipal bond secured by the pledge of the issuer’s full faith, credit and taxing power.
General use of proceeds
Refers to the type of project proceeds or funds received from a municipal bond issuance are used for such as government use, education, water, sewer and gas, health care.
Ginnie Mae I
Pass-through mortgage securities on which registered holders receive separate principal and interest payments on each of their certificates. Ginnie Mae I securities are single-issuer pools.
Ginnie Mae II
Pass-through mortgage securities on which registered holders receive an aggregate principal and interest payment from a central paying agent on all of their Ginnie Mae II certificates. Ginnie Mae II securities are collateralized by multiple-issuer pools or custom pools, which contain loans from one issuer, but interest rates that may vary within one percentage point.
Global debt facility
The issuance platform used by most GSEs when issuing "global" debt into the international marketplace or a particular foreign market. Has same credit characteristics as nonglobal debt but is more easily "cleared" through international clearing facilities.
Going-concern value
A business’s value under a going-concern assumption.
Gold standard currency system 
A currency regime under which currency could be freely converted into gold at established rates.
Goodwill
An intangible asset that represents the excess of the purchase price of an acquired company over the value of the net assets acquired.
Gordon growth model 
A version of the dividend discount model for common share value that assumes a constant growth rate in dividends. Synonyms: constant growth model
Government structural policies
Government policies that affect the limits of economic growth and incentives within the private sector.
Grant date
The day that options are granted to employees; usually the date that compensation expense is measured if both the number of shares and option price are known.
Greenmail
The purchase of the accumulated shares of a hostile investor by a company that is targeted for takeover by that investor, usually at a substantial premium over market price.
Grinold–Kroner model
An expression for the expected return on a share as the sum of an expected income return, an expected nominal earnings growth return, and an expected repricing return.
Gross domestic product
A money measure of the goods and services produced within a country’s borders over a stated time period.
Gross profit
Sales minus the cost of sales (i.e., the cost of goods sold for a manufacturing company).
Gross profit margin
The ratio of gross profit to revenues.
Grouping by function
With reference to the presentation of expenses in an income statement, the grouping together of expenses serving the same function (e.g., all items that are costs of goods sold).
Grouping by nature
With reference to the presentation of expenses in an income statement, the grouping together of expenses by similar nature (e.g., all depreciation expenses).
Growth in total factor productivity
A component of trend growth in GDP that results from increased efficiency in using capital inputs; also known as technical progress.
Growth investment style
With reference to equity investing, an investment style focused on investing in high-earnings-growth companies.
Growth investors
With reference to equity investors, investors who seek to invest in high-earnings-growth companies.
Growth option
The ability to make additional investments in a project at some future time if the financial results are strong. Synonyms: expansion option
Growth phase
A stage of growth in which a company typically enjoys rapidly expanding markets, high profit margins, and an abnormally high growth rate in earnings per share.
Guaranteed investment contract 
A debt instrument issued by insurers—usually in large denominations—that pays a guaranteed, generally fixed interest rate for a specified time period.
Good-faith funds
Security deposit on new securities, ranging from 1% to 5% of the par amount, provided to the issuer at the time of a competitive bid by each underwriting syndicate. Also called good-faith check, if delivered as a check, or good-faith deposit.
Government-sponsored enterprise (GSE)
Financing entities created by US Congress to fund loans to certain groups of borrowers, such as homeowners, farmers and students.
Grantor trust
A special-purpose vehicle set up to issue fixed-rate capital securities and use the proceeds to purchase debt of the parent company. Investors who hold interests in the trust are taxed as if they owned pro rata undivided interests in the trust’s assets.
GSD
Government Securities Division (ASIFMA)
GSE debt security
Debt issued by government-sponsored enterprises (GSEs)—those financing entities created by Congress to fund loans to certain groups of borrowers such as homeowners, farmers and students. Through the creation of GSEs, the government has sought to address various public policy concerns regarding the ability of members of these groups to borrow sufficient funds at affordable rates. There are organizational differences among the GSEs although all are established with a public purpose. All GSE debt is not guaranteed by the federal government. GSE-issued debt securities can be structured to offer investors fixed or floating interest rates. While the basic structures share many characteristics of non-structured fixed- or floating-rate debt, many variations are possible.
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