plus brokerage commissions, of a security, or the sales charge applied to load funds. See: Tax basis. Acquisition of assets A merger or consolidation in which an acquirerpurchases the selling firm's assets. Acquisition of stock A merger or consolidation in which an acquirerpurchases the acquiree'sstock. Across the board Movement or trend in the stock market that causes all stocks in all sectors to move in the same direction. Acting in concert Investors working together and performing identical actions to attain the same investment goal. Act of state doctrine This doctrine says that a nation is sovereign within its own borders, and its domestic actions may not be questioned in the courts of another nation. Active A market in which there is frequent trading. Active account Refers to a brokerage account in which many transactions occur. Brokerage firms may levy a fee if an account generates an inadequate level of activity. Active bond crowd Refers to members of the bond department of the NYSE who trade the most bonds. Antithesis of cabinet crowd. Active box Securities that are held in safekeeping and are available as collateral for securing brokers'loans or customers' marginpositions. Active fund management An investment approach that purposely shifts funds either between asset classes (asset allocation) or between individual securities (security selection). Active income Income from an active business as opposed to passiveinvestment income according to the U.S. tax code. Active Management The pursuit of investmentreturns in excess of a specified benchmark. Active portfolio strategy A strategy that uses available information and forecasting techniques to seek better performance than a buy and holdportfolio. Related: Passive portfolio strategy. Active Return Return relative to a benchmark. If a portfolio'sreturn is 5%, and the benchmark's return is 3%, then the portfolio's active return is 2%. Active Risk The risk (annualizedstandard deviation) of the activereturn. Also called the tracking error. Actual market Used in context of general equities. Firm market. Antithesis of Subject market. Actuals The physical commoditiesunderlying a futures contract. Cash commodity, physical asset. A-D Advance-Decline, or measurement of the number of issuestrading above their previous closing prices less the number trading below their previous closing prices over a particular period. As a technical measure of marketbreadth, the steepness of the AD line indicates whether a strong bull or bear market is under way. Ad valorem tax A type of tax calculated based on percentage of gross or stated value. For example, VAT. Additional bonds test A test for ensuring that bondissuers can meet the debt service requirements of issuing any new additional bonds. Additional hedge A protection against fallout risk in the mortgage pipeline. Adequacy of coverage A test that measures the extent to which the value of an asset is protected from potential loss either through insurance or hedging. Adjustable rate Applies mainly to convertible securities. Refers to interest rate or dividend that is adjusted periodically, usually according to a standard market rate outside the control of the bank or savings institution, such as that prevailing on Treasury bonds or notes. Typically, such issues have a set floor or ceiling, called caps