Earnings Yield
The percentage found by dividing the earnings per share by the market price of a stock.

EBY
Equivalent Bond Yield

Effective
An offering is said to be effective once the SEC has released the issue for offering.

Effective Yield
The rate of return realized by an investor who buys a security and subsequently sells it. It reflects coupon, interest on interest, principal payments and capital gains or losses in comparison to the original purchase price.

Employees Retirement Income Security Act
A law enacted in 1974 covering private pension plans, setting standards for fiduciaryconduct and making fiduciaries personally liable for breaches of responsibility. (Erisa)

Equipment Trust Certificate
Form of borrowing secured by property, generally issued by railroads, to pay for new equipment. Title to the equipment is held in trust until the notes are paid off. It is usually secured by a first claim on the equipment.

Equity
Ownership or proprietary rights and interests in a company. Synonymous with common stock. Investments: ownership interest possessed by shareholders in a corporation - stock as opposed to bonds.

Equivalent Bond Yield (EBY)
A measurement of the rate of return on a security sold on a discount basis that assumes actual days to maturity and a 365-day year.

Equivalent Life
The arithmetic weighted average maturity of a bond where the weights are the present value of the redemption payments discounted by the internal rate of return.

ERISA
Employees Retirement Income Securities Act

ETC
Equipment Trust Certificate

Eurobond
A bond denominated in a currency of a European country.

Euroclear
An international clearing system for Euro-currency and foreign securities. Euroclear is based in Brussels and managed by Morgan Guaranty Trust Company.

Eurocurrency
Created when a banking office in one country accepts a deposit ( or other evidence of debt) denominated in the currency of another. When the deposit is denominated in U.S. dollars, it is a Eurodollar deposit. In addition to bank deposits, Eurocurrency instruments may take the form of bankers' acceptances, letters of credit, certificates of deposit and loans of various maturities. Hence the terms Eurodollar CD, Eurodollar Bond, etc.

Eurodollar Issues
Dollar denomination securities of U.S. issuers traded in foreign markets.

Even Par Swap
The sale of one block of bonds and the simultaneous purchase of the same principal amount of another block of bonds.

Events
Functions, Processes, Activities and Tasks.

Excess Reserves
Any excess of bank balances at the Fed above the amount required as reserves.

Exchange
1. Any place where business is carried on by brokers. Generally refers to one of the major stock exchanges, those being the New York Stock Exchange (NYSE) and the American Stock Exchange (ASE). Other exchanges include the Philadelphia-Baltimore-Washington (PBW), Boston, Cincinnati, Detroit, Midwest, Chicago Board of Options Exchange (CBOE) and the Pacific Exchange.

2. The money or currency of a country.

3. A physical facility for futures order execution, market making, trade reporting, trade clearing, and market surveillance.

4. A self-regulating body to assure fair and orderly trading designated by the CFTC.

Exchange Rate
The relative value of one currency in terms of another.

Exempt
Instruments exempt from registration requirements of the Securities Act of 1933 and the margin requirements of the Securities and Exchange Act of 1934. Exempt securities include debt of the U.S. Treasury, U.S. Government agencies and municipalities, private placements, commercial paper, Title XI, and equipment trust certificates.

Experience
In the pass-through market, refers to a rate of prepayments, usually measured in terms of some "norm". For example, "200% FHA-experience" means prepayments at twice the rate predicted by the FHA model.

Extendible Bond (or Retractable)
A bond with a call provision that gives the issuer the option to extend the maturity date ( if the call is not exercised) and reset the coupon at any rate. The investor then may choose to put the bond at the call price or accept the new coupon.