Investment Glossary

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Naked Position

An investment position (usually in derivatives) that can result in unlimited losses. ie. losses greater than the amount invested.

National Association of Securities Dealers Automated Quotation System (NASDAQ)

originally computerised system for storing and displaying current price quotations on a large number of the more active securities traded in the over-the-counter (OTC) market. More recently an exchange which lists predominantly technology company shares.

Near money

assets that can be converted quickly and easily into cash with virtually no loss in value. Examples of near money are savings account balances and bank bills.

Net asset value per unit (NAV)

the market value of an investment fund's assets less any liabilities divided by the number of units outstanding. This factor illustrates the amount a shareholder would receive for each unit owned if the fund sold all its assets (shares, bonds, etc) at their current market value, paid off any outstanding debts with the proceeds, and then distributed the remainder to the investors. In general net asset value per unit is the price an investor would receive when selling a fund's units back to the fund.

Net present value (NPV)

the discounted value of an investment's cash inflows less the discounted value of its cash outflows. To be adequately profitable, an investment should have a net present value greater than zero. For investments, the initial cost is often the only outflow. - See also Present value; Discounted Cash Flow.

Net worth

total asset minus total liabilities. For an individual, total assets are recorded at current market value. For a company net worth uses assets as recorded on the balance sheet at historical cost less any depreciation.

New issue

a security that is being initially offered to the public.

New listing

a security that has recently been added to an organised exchange's trading list. The security may have been moved from the over-the-counter market or from a different exchange, or it may be the share of a firm that recently went public.

Nominal return

the rate of return on an investment without adjustment for inflation. While nominal return is useful in comparing the returns from different investments, it can be a very misleading indication of true investor earnings on an investment. - See also Real return.

Novation

the substitution of one debt with another debt.

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