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Meaning / Definition of

Accretion Of Discount

Categories: Accounting, Bonds and Treasuries,

An accounting procedure which adjusts the value of a bond purchased at a discount, such as a zero-coupon bond. The accretion of discount procedure adjusts the book value of the bond to the par value of the bond at maturity. It takes into account the interest paid out for the bond, which is accrued as non-cash payments during the life of the bond and only paid out at maturity.

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Definition / Meaning of

Broad-base Index

Categories: Stocks,

An index whose purpose is to reveal the performance of the entire market, such as the s&p 500, Wilshire 5000, AMEX Major market index or value line composite index. Different broad-base indices have different approaches to ensuring that the index captures the entire breadth of market activity. The Wilshire 5000 takes the most all-inclusive approach by including all the stocks listed on the new york stock exchange and almost all the stocks listed on the NASDAQ and american stock exchange. The s&p 500 includes 500 companies that are together considered a good indicator for the US stock market, based on the industries the companies operate in, their positions within the industry, and their market capitalizations. The s&p 500 is a market-weighted index, so only 10% if its components make up about 75% of its value. The value line composite index takes an in between approach by tracking 1700 issues. The Value Line Composite is thought to be a better indicator of speculative stocks than of more stable stocks.

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