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Glossary · PSX term

Confirmation bias.

Confirmation bias is seeking out information that supports what you already believe.

Definition

Investors may read only bullish opinions on a stock they own while ignoring warning signs, leading to one-sided decisions. Actively seeking opposing views helps counter this bias.

Worked example

Only reading positive comments about a stock you hold, and dismissing the negatives, is confirmation bias.

Related on PSX Clarity

Behavioral bias

More glossary terms

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Capital gain tax

Capital gain tax is tax applied to gains from selling securities. Pakistani investors should verify current rules, rates, filer status, and holding-period treatment from official sources before calculating net returns.

Current ratio compares current assets with current liabilities. It gives a quick view of short-term liquidity, especially for working-capital-heavy businesses.

Cum-dividend means a share is trading with the right to the upcoming declared dividend still attached.

Circuit breaker

A circuit breaker is the maximum percentage a single stock's price can move up or down in one PSX session.

Central Depository Company (CDC)

The CDC is the institution that holds PSX shares electronically and records who owns them.

CDC Investor Account

A CDC Investor Account holds your shares directly with the CDC rather than inside a broker's pooled account.

Cash-settled futures

Cash-settled futures settle in cash for the price difference, with no shares changing hands.

The coupon rate is the annual interest a bond pays, stated as a percentage of its face value.

Consumer Price Index (CPI)

The CPI measures the average change in prices of a basket of goods and services households buy.