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Glossary of Investment Terms

 

U

 

Underlying Security

 

For options, the security that is subject to purchase or sale upon exercise of an options contract. For example, ABC stock is the underlying security for ABC options.

 

 

 

Underwrite

 

To bring securities to market.

 

 

 

Underwriting Syndicate

 

A group of investment banks that work together to sell a new security offering to the investing public. The underwriting syndicate is led by the lead underwriter.

 

 

 

Unit Investment Trust (UIT)

 

Investment vehicle registered with the SEC under the Investment Company Act of 1940, that purchases a fixed portfolio of securities, such as corporate, municipal or government bonds, mortgage-backed securities, common stock or preferred stock. Units in the trust are sold to investors by brokers for a sales charge. The trust expires when bonds mature, or in the case of equity funds, at a specified future date. Unit holders receive an undivided interest in both the principal and the income portion of the portfolio in proportion to the amount of capital they invest.

 

 

 

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