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Conventional gilts

Conventional gilt

Gilts where the dividends and principal repayments are fixed in nominal terms. This is as opposed to an index-linked gilt where the dividends and principal repayments are related to movements in the Retail Prices Index (RPI).

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Spot Rate

The currency exchange rate a bank quotes, valid with immediate effect.
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Alpha

The percentage by which an investor outperforms a relevant benchmark.
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Accrued interest

The interest earned on a gilt since the last dividend date. When buying a gilt, the buyer pays the accrued interest at the time of a transaction to the seller in addition to the clean price of the gilt
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Retail Prices Index (RPI)

An index published each month by the Office for National Statistics, which measures the level of retail prices in the UK. Cash flows on all index-linked gilts are linked to the RPI.
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Custodian bank

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Balance sheet

A summary of a company's finances, including its assets, liabilities and shareholder equity.
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Running yield

The annual interest payment (dividend) divided by the current market price of a bond.
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American Depository Receipts (ADRs)

Tradeable assets that let Americans invest in overseas stocks using US laws and dollars.
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