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Lagging Indicators
These are market indicators that often continue an upward trend after the peak of the economy has been signalled by other economic indicators leading indicators.

Last-In-First-Out (LIFO)
A method of valuing inventory which assumes that the last articles bought are the first used or sold.

Leading Indicators
These are market indicators that usually move before the general economy changes direction. Such indicators include employment, profits and certain commodity prices. For example, business profits start to rise during an economic expansion, but as the economy reaches the peak the rate at which profits increase slows down. Profits begin to flatten out and decrease as employment costs increase (caused by overtime needed to meet high demand) and cut into profit margins. At the peak of the economy, profits already are beginning to fall. Therefore profits lead the general economy and give some warning of economic conditions to come.

Legal Investment
In some provinces the law requires that a trustee may only invest funds in a list of securities designated by the province or the federal government.

Leverage
The effect of fixed charges such as debt interest or preferred dividends on per-share earnings of common stock. Increases or decreases in income before fixed charges result in magnified percentage increases or decreases in earnings per common share. Leverage also applies to seeking magnified percentage returns on an investment by using borrowed funds, margin accounts or buying securities which require payment of only a fraction of the underlying security's value, such as rights, warrants or options.

Leveraged Buy Out (LBO)
A takeover financed to a large degree by debt that is secured, serviced and repaid through the cash flow and assets of the acquired company. Typically, an LBO is financed predominantly by bank debt and low quality bonds, and to a minimum degree by equity. Its extreme leverage makes an LBO dependent upon a stable economy and stable interest rates, as well as a stable cash flow from the acquired company for its success.

Liabilities
These are the debts and obligations of a company. Current liabilities are debts due and payable within one year. Long-term liabilities are those payable after one year. Liabilities are found on a company's balance sheet.

Lien
This is the claim against property pledged or mortgaged to secure performance of an obligation.

Life Annuity
A contract which guarantees the planholder a regular monthly income for life in exchange for an amount of money in a Registered Retirement Savings Plan (RRSP).

Limit Order
This is a client's order to buy or sell a security at a specific price. The order can be executed only at that price or a better one. It sets the maximum price the client is willing to pay as a buyer, and the minimum price he or she is willing to accept as a seller.

Limited Liability
When "limited" is at the end of a Canadian company's name, the company's shareholders' responsibility for the debts of the company is limited to the amount of money they paid to buy the shares. In contrast, ownership of a company by a sole proprietor or partnership carries unlimited personal legal responsibility for debts incurred by the business.

Liquidation
The process of converting property and securities into cash. When a company is dissolved or closed down, cash remaining after sale of its assets and payment of all indebtedness is distributed to the shareholders, beginning with the preferred shareholders and ending with the common shareholders.

Liquidity
This refers to how easily securities can be bought or sold in the market. A security is liquid when there are enough units outstanding to allow large transactions without a substantial change in price. Liquidity is one of the most important characteristics of a good market. Liquidity also refers to how easily investors can convert their securities into cash and refers to a corporation's cash position, i.e. how much the value of current assets exceed current liabilities.

Listed Stock
The stock of a company which is traded on a stock exchange. Companies pay fees to the exchange to be listed and must abide by the rules and regulations set out by the exchange to maintain listing privileges.

Listing Statement
A stock exchange document published when a company's shares are accepted for listing. It provides basic information on the company, its business, management, assets, capitalization and financial status.

Load
A charge added to mutual funds which covers sales commissions and all other costs of distribution. The load, usually a percentage of the money invested in the fund, may be charged as a front-end, on the purchase of the fund, or as a back-end, when the fund is sold or redeemed.

Locked In
When an investor has a profit on a security owned, but does not sell because of either the absence of a market or some legal restriction on the sale of the security. Also refers to an investor holding a security which has declined below the purchase price who cannot sell without incurring a loss.

Long
Term used to signify ownership of securities. "I am long 100 BCE common" means that the investor owns 100 common shares of BCE Inc.

Long-Term Bond or Debenture
A bond or debenture maturing in more than 10 years.

Low
This is the lowest price paid for a stock during a certain period. For example, the low for the day was $15, but the low for the year was $7.50.