Mutual fundshares of a class that carries a front-end load.

American Association of Individual Investors. A non-profit organization whose mission is to help individuals become smarter investors.

To choose not to exercise or sell an option. Abandonment occurs when the option is out of the money on the expiration date.

To voluntarily relinquish the rights of property ownership, usually real estate.

The option to close out an investment prior to the fulfillment of the original conditions for termination.

A reduction in or reprieve from a tax, debt or any other payment obligation. An abatement is sometimes included in a contract; for example, abatement of rent in the event that a building is destroyed by fire, flood or other accident.

An agreement between a brokerage firm and an employee detailing the rights of the firm when it purchases an NYSE membership for the employee. It is believed to be known as an ABC agreement because the employee can: A) keep the seat if he/she leaves, but must buy another seat for an individual named by the firm; B) sell the seat but return the proceeds to the firm; or C) transfer the seat to another employee of the firm.

The suspension of a title to real estate while lawful ownership is being determined.

A borrower's capability of meeting his/her current and future debt obligations.

   The difference between the return on a stock (or an entire portfolio) and the performance of an index, such as the S&P 500. The abnormal return is equal to the market return - the normal return. For example, a stock that provided a return of 10% over the same period of time in which an index provided a 6% return would have an abnormal return of 10% - 6% = 4%. If the abnormal return is negative, it has underperformed the index.  

Having a current price above face value. This would generally be the case if the coupon paid on the bond exceeds the discount rate applicable, or if market interest rates fall after the bond is bought. If the bondholder had bought at a price above par, then he/she will suffer a capital loss upon maturity since the bond will only be redeemed at face value.

The name for the ability of one entity to engage in more efficient production than another entity. Assuming equal inputs, the entity with an absolute advantage will have a greater output.

The idea that creditors' claims take precedence over shareholders' claims in the event of a liquidation or reorganization. Shareholders are compensated only after debtors have been fully paid off.

Treated as an expense, rather than passing the cost on to customers.

A business that is merged into an another company due to acquisition.

In the equities market, the process of trading securities without affecting the market price.

The rate at which properties are able to be leased or sold in a given area.

A set of documents which record the ownership of a property through time.

A tax shelter which the IRS feels is being used to claim illegal deductions, such as inflating the value of acquired property above its market value.

In some life insurance policies, benefits available before death in such events as long-term, catastrophic or terminal illness. This benefit first became available when companies offering viatical settlements purchased the life insurance policies of terminally ill individuals from the insurance companies which issued the policies. After extracting a portion of the value of the policy for costs and profits, these companies offered the remainder of the death benefit to terminally ill policy holders. Insurance companies have different rules about how much money can be extracted and how close to death the holder must be to receive benefits early. The remainder of the value of the policy, minus interest charges, is awarded to the beneficiaries upon the death of the holder. Also called living benefits.

ACRS. Depreciation methods applied to limited partnership assets placed in service in 1986 or before. Replaced by the less-favorable Modified ACRS.

A depreciation method which allows faster write-offs than the straight line method. These methods provide a greater tax shield effect than straight line depreciation, so companies with large tax burdens may prefer to use accelerated depreciation methods, even if it reduces the income shown on a financial statement. Accelerated depreciation methods are popular for writing off equipment that might be replaced before the end of its useful life since the equipment might be obsolete (e.g. computers). One example of an accelerated depreciation method is the Modified Accelerated Cost Recovery System (MACRS).

A provision that allows a lender to demand payment of the total outstandingbalance or demand additional collateral under certain circumstances, such as failure to make payments, bankruptcy, nonpayment of taxes on mortgaged property, or the breaking of loan covenants.

Agree to specified terms, as in a contract.

The contractual agreement entered into when the drawee of a time draft writes "accepted" on the document and specifies a payment date. The drawee, thereby known as the acceptor, is responsible for making the payment at maturity.

A life insurancepolicyprovision that calls for an additional payment, usually equal to the face amount of the insurance, in the event of accidental death. also called double indemnity.

A negotiable instrument signed by a party without receiving something of value in return. Used to assist another party to secure financing.

A central bank policy designed to stimulate economic growth by lowering short term interest rates, making money less expensive to borrow. also called loose credit or easy monetary policy. opposite of tight monetary policy.

A record of financial transactions for an asset or individual, such as at a bank, brokerage, credit card company, or retail store.

More generally, an arrangement between a buyer and a seller in which payments are to be made in the future.

An online service provided to individuals, allowing them to consolidate a range of accounts, bills, credit cards, and other financial information into one interface, in order to simplify the managing of personal finances.

The amount of money in an account, equal to the net of credits and debits at that point in time for that account. also called balance.

An individual who is licensed to sell securities and has the legal power of an agent, having passed the Series 7 and Series 63 examinations. Usually works for a brokerage licensed by the SEC, NYSE, and NASD. also called registered representative.

The act of confirming that the balance in one's checkbook matches the corresponding bankstatement.

A record of transactions and their effect on account balances over a specified period of time, for a given account. A bank account statement lists the debits and credits that took place over the relevant time period, while a brokerage account statement lists the long positions and short positions, purchases and sales, and other transactions.

One who is skilled in the practice of accounting or who is in charge of public or private accounts. An accountant is responsible for reporting financial results, whether for a company or for an individual, in accordance with government and regulatory authority rules.

A letter preceding a financial report, written and signed by an independent accountant, which describes the scope of the statement and presents an opinion on the quality of the data presented. An accountant's letter in an annual statement will either certify that the financials are presented in an accurate manner and meet accounting standards adequately, or withhold opinion (which is a cause for concern).

A letter preceding a financial report, written and signed by an independent accountant, which describes the scope of the statement and presents an opinion on the quality of the data presented. also called accountant's letter.

The systematic recording, reporting, and analysis of financial transactions of a business.

The fundamental balance sheet equation: namely, assets = liabilities + net worth.

Money which a company owes to vendors for products and services purchased on credit. This item appears on the company's balance sheet as a current liability, since the expectation is that the liability will be fulfilled in less than a year. When accounts payable are paid off, it represents a negative cash flow for the company.

The average duration an item remains in accounts payable, equal to total purchases divided by average accounts payable. A change over time in the accounts payable turnover means that a company is paying off their suppliers either faster or slower than they were previously.

Money which is owed to a company by a customer for products and services provided on credit. This is treated as a current asset on a balance sheet. A specific sale is generally only treated as an account receivable after the customer is sent an invoice.

A periodic report showing all outstandingreceivablebalances, broken down by customer and month due.

The selling of a company's accounts receivable, at a discount, to a factor, who then assumes the risk of the account debtors and receives cash as the debtors settle their accounts. A firm that sells its accounts receivable may not be confident of its ability to collect those debts, or might think that the cost of collecting that debt is more than the discount which must be provided to the factor when of selling their receivables. also called accounts receivable financing.

The average duration of an account receivable, equal to total credit sales divided by accounts receivable.

The SEC designation for an individual or entity meeting any of the criteria listed below. Certain restricted offerings, limited partnerships, and angel investor networks are open only to accredited investors. opposite of nonaccredited investor.SEC criteria:Any director, executive officer, or general partner of the issuer of the securities being offered or sold, or any director, executive officer or general partner of a general partner of that issuer.Any natural person whose individual net worth, or joint net worth with that person's spouse, at the time of his purchase exceeds $1,000,000.Any natural person who had individual income in excess of $200,000 in each of the two most recent years or joint income with that person’s spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year.Any trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase of the securities is directed by a person who has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the prospective investment.Any organization that was not formed for the purpose of acquiring the securities being sold, with total assets in excess of $5,000,000.And, any entity in which all of the equity owners are Accredited Investors.

A Certified Public Accountant who has passed a rigorous financial planning examination.

The theoretical price a bond would sell at if market interest rates were to remain at current levels.

Asset growth, by internal expansion or acquisition.

Growing in size by external addition. Often used to refer to an acquisition which is expected to increase earnings per share.

The most commonly used accounting method, which reports income when earned and expenses when incurred, as opposed to cash basisaccounting, which reports income when received and expenses when paid. Under the accrual method, companies do have some discretion as to when income and expenses are recognized, but there are rules governing the recognition. In addition, companies are required to make prudent estimates against revenues that are recorded but may not be received, called a bad debt expense.

A bond that pays no coupons, is sold at a deep discount to its face value, and matures at its face value. An accrual bond has the important advantage of being free from reinvestment risk, though the downside is that there is no opportunity to enjoy the effects of a rise in market interest rates. Also, such bonds tend to be very sensitive to changes in interest rates, since there are no coupon payments to reduce the impact of interest rate changes. In addition, markets for zero-coupon bonds are relatively illiquid. Under U.S. tax law, the imputed interest on a zero-coupon bond is taxable as it accrues, even though there is no cash flow. also called zero-coupon bond.

The annual addition to book value contributed by bonds purchased below par.

see accrual basis accounting

Accumulate or increase.

Pension benefit that an employee has earned based on his or her years of service at a company. Accrued benefits are often calculated in relation to the employee's salary scale.

A regular dividend that is considered to be earned but not declared or payable.

An expense that is incurred, but not yet paid for, during a given accounting period.

Interest that is due on a bond or other fixed income security since the last interest payment was made. This often occurs for bonds purchased on the secondary market, since bonds usually pay interest every six months, but the interest is accrued by the bondholders on a day-to-day basis. When a bond is sold, the buyer pays the seller the market price plus the accrued interest, for which the buyer will be reimbursed when the issuer pays next pays interest. Accrued interest is calculated on a 30-day month/360-day year for corporate bonds and municipal bonds, and on actual-calendar-days for Government bonds. Income bonds and bonds in default trade without accrued interest. When calculating accrued interest on a bond that is being sold, it is conventional to consider the time period from the most recent payment up to, but not including, the date on which the bond sale is settled.

Interest that a company owes, a current liability on the balance sheet.

An increase in the market price of a discounted bond resulting from an approaching maturity date, rather than from declining interest rates. The increase occurs because the bond holder will also receive payout at par upon maturity, so the price of the bond will increase gradually as maturity approaches.

The depreciation that has taken place on a particular asset up to the present time.

A dividend due, but not yet paid, to a preferred stock holder.

Earnings not paid out as dividends but instead reinvested in the core business or used to pay off debt. also called earned surplus or unappropriated profit or retained earnings.

An additional tax on earnings that a business retains in an attempt to avoid the higher income taxes the owners would be subject to if the earnings were paid out to them as dividends. also called accumulated profits tax.

Buying over a period of time. For example, this might be done by an institutional investor to avoid making a single substantial purchase that might drive up the market price, or by a retail investor who wants to reduce risk by dollar cost averaging.

Retaining profits within a company, as opposed to paying them out as dividends.

More generally, any buying.

A bond which is sold at a price below its face value and returns its face value at maturity. also called discounted bond.

The years of an individual's working life when he/she is making regular contributions to a deferred annuity or retirement plan. The period ends when the income payments begin.

A share of participation in a variable annuity.

Automatic Clearing House. A nationwide electronic funds transfer network which enables participating financial institutions to distribute electronic credit and debit entries to bank accounts and to settle such entries.

The ratio of current assets less inventories to total current liabilities. This ratio is the most stringent measure of how well the company is covering its short-term obligations, since the ratio only considers that part of current assets which can be turned into cash immediately (thus the exclusion of inventories). The ratio tells creditors how much of the company's short term debt can be met by selling all the company's liquidassets at very short notice. also called acid-test ratio.

Certify the authenticity of a signature on a brokerage or bank document, such as for an accounttransfer.

Acquiring control of a corporation, called a target, by stock purchase or exchange, either hostile or friendly. also called takeover.

The cost of equipment or property after adjustments for incentives, discounts, or closing costs, but before any sales tax.

Applying to all items in a group in approximately the same way, such as when nearly all stocks move in the same direction on a given day.

Accelerated Cost Recovery System. Depreciation methods applied to limited partnership assets placed in service in 1986 or before. Replaced by the less-favorable Modified ACRS.

The price movement and volume of a stock or overall market.

A court action to establish ownership of property.

A brokerage account in which there are many transactions. Often, brokerages will charge a certain flat fee on accounts that are not very active. For a brokerage, this is a chance to generate revenues from accounts that would otherwise not be generating revenues.

An asset which is used in the daily operations of the business.

Salaries, wages, fees, and commissions.

A money-management approach based on informed, independent investment judgment, as opposed to passive management (indexing) which seeks to match the performance of the overall market (or some part of it) by mirroring its composition or by being broadly diversified.

The buying and selling of bonds, as opposed to holding them to maturity.

Market characterized by high volume, either for a specific security or an entire exchange. Usually, more active markets are more liquid and have smaller bid/ask spreads.

Currency in circulation.

An individual who participates in a retirement plan sponsored either by his/her employer or, if self-employed, by himself or herself. A person would be considered an active participant if his/her account balance in the retirement plan has received any contributions at all in a given year.

The volume of a stock or exchange over a given period of time.

A variant of cost-plus pricing that takes into account the specific resources required to make a product. Instead of charging an arbitrary fee to cover fixed expenses, a business would calculate the cost of labor, buildings, administration, and other inputs. This type of pricing is more difficult to calculate than simple cost-plus pricing.

A market in which commodities, such as grain, gold, crude oil, or RAM chips, are bought and sold for cash and delivered immediately. also called cash market or spot market.

An actual physical commodity which is delivered at the completion of a contract, as opposed to a futures contract on that commodity. A futures contract will specify the number of units of the cash commodity that must be delivered, and also the specific features of the cash commodity. also called cash commodity.

In the case of retirement plans, an estimate made for the purposes of calculating benefits. Possible variables include life expectancy, return on investments, interest rates, and compensation. By calculating the possible payout of benefits, the actuary can determine what premium to charge and what amount the insurance company should set aside as readily available cash or liquid securities.

The condition in which two or more payment streams have the same present value based on the appropriate actuarial assumptions.

A life-expectancy calculation by a professional actuary.

A specialist in the mathematics of risk, especially as it relates to insurance calculations such as premiums, reserves, dividends, and insurance and annuity rates. They work for insurance companies to evaluate applications based on risk.

A tax, duty, or fee which varies based on the value of the products, services, or property on which it is levied.

Capital contributed to a corporation by investors on top of the par value of capital stock. In other words, the money that a company gets from potential investors in addition to the stated value of the stock. also called contributed capital or paid-in capital.

A payment by a borrower of more than the scheduled principal amount due in order to reduce the principal. This also enables the borrower's future interest payments to be reduced.

The non-monetary services provided by a venture capitalist, such as helping to assemble a management team and helping to prepare the company for an IPO.

A measure of how well an asset's value is insulated from loss, such as through hedging or insurance.

A take-it-or-leave-it agreement.

The process of examining the facts in a disagreement and rendering a decision.

Life insurance for which the policyholder can change the details of the plan, including the face amount, premium, and coverage period.

Any interest rate that changes on a periodic basis. The change is usually tied to movement of an outside indicator, such as the prime interest rate. Movement above or below certain levels is often prevented by a predetermined floor and ceiling for a given rate. For example, you might see a rate set at "prime plus 2%". This means that the rate on the loan will always be 2% higher than the prime rate, which changes regularly to take into account changes in the inflation rate. For an individual taking out a loan when rates are low, a fixed rate loan would allow him or her to "lock in" the low rates and not be concerned with fluctuations. On the other hand, if interest rates were historically high at the time of the loan, he or she would benefit from a floating rate loan, because as the prime rate fell to historically normal levels, the rate on the loan would decrease.

ARM. A mortgage with an interest rate that may change, usually in response to changes in the Treasury Bill rate or the prime rate. The purpose of the interest rate adjustment is primarily to bring the interest rate on the mortgage in line with market rates. The mortgage holder is protected by a maximum interest rate (called a ceiling), which might be reset annually. ARMs usually start with better rates than fixed rate mortgages, in order to compensate the borrower for the additional risk that future interest rate fluctuations will create.

Preferred stock whose dividend changes, usually quarterly, according to changes in the Treasury Bill rate or a similar benchmark. The changes in the dividend are determined by a pre-set formula. Like floating ratedebt, adjustable ratepreferred stock tends to have stable prices, since the dividend amount can be can changed to offset price changes.

A technique for calculating finance charges (such as in a bank account, charge account, or credit card account) based on the account balance remaining after adjustments are made for payments and credits during the billing period. Interest charges are usually lower under this method than under other methods, such as average daily balance and previous balance methods.

The base price of an asset or security that reflects any deductions taken on or improvements to the asset or security, used to compute the gain or loss when sold.

The book value on a company's balance sheet after assets and liabilities are adjusted to market value. also called modified book value.

Value used to determine a margin account's position, as required by Regulation T. This is the amount a customer owes a broker, minus profits on short sales and balances in a special miscellaneous account. If the adjusted debit balance is very small, the customer can withdraw cash or securities from a margin account.

AFFO. A financial measure used by REITs that is usually more accurate than the Funds From Operations (FFO) measure, because it adjusts to take into account recurring capital expenditures.

The cash-price equivalent reflected in the price of a futures contract.

AGI. The amount used in the calculation of an individual's income taxliability; one's income after certain adjustments are made, but before standardized and itemized deductions and personal exemptions are made.

A bookkeeping entry made at the end of an accounting period to assign income and expenses to a different period. These entries are made under the accrual accounting systems in order to correctly reflect the timings of income and expenditure. Some adjusting entries include accounts receivable, accounts payable, depreciation and amortization.

A deduction made to charge off a loss, as with a bad debt.

A firm that manages the affairs of bankruptdebtors.

The date on which the interest rate changes on an adjustable rate mortgage.

Internal office and accounting functions.

An individual appointed by a probate court to handle the estate of a person who died intestate. They have the same duties as an executor.

More generally, an individual who carries out the policies of an organization.

An insurance company authorized to sellinsurance in a given state.

An available tax credit for expenses associated with the adoption of a child. A larger credit is available for the adoption of a child with special needs.

American Depositary Receipt. A negotiablecertificate issued by a U.S. bank representing a specific number of shares of a foreign stocktraded on a U.S. stock exchange. ADRs make it easier for Americans to invest in foreign companies, due to the widespread availability of dollar-denominated price information, lower transaction costs, and timely dividenddistributions.

American Depositary Share. The shareissued under an American Depositary Receipt agreement which is actually traded.

A form filed with the SEC that contains information about a Registered Investment Advisor.

An increase in price; opposite of decline.

A payment made before it is due.

The maximum amount of advances that will be made to a company, as a percentage of the value of some collateral.

Issuing a longer-maturitybond in order to pay off an earlier bond (usually prior to its maturity), in order to take advantage of a drop in interest rates. also called prerefunding.

A technical analysis tool considered a good measure of the overall market's direction. Equal to the number of stocks which rose divided by the number of stocks which fell during some specified period. Considered bullish if greater than 1, or bearish if less than 1.

An entrepreneur who helps other entrepreneurs financially, and often plays an active role in the company's operations (such as by occupying a seat on the board of directors).

An independent auditor's belief that a company's financial statements are not accurate.

Description or presentation of a product, idea, or organization, in order to induce individuals to buy, support, or approve of it.

Total advertising expenditure divided by total sale over some time period. Useful for evaluating how effective the company's advertising campaigns have been at generating sales; all other things being equal, the lower the ratio, the better.

An advertisement disguised as editorial.

A person or organization employed by an individual or mutual fund to manage assets or provide investment advice. also called financial advisor or investment advisor or investment counsel. sometimes spelled adviser.

A publication providing financial advice, such as market commentary or investment recommendations, to its subscribers. also called newsletter.

A statement written and sworn to in the presence of someone authorized to administer an oath, such as a notary public.

A company in which another company has a minority interest.

More generally, a company which is related to another company in some way.

Noncompeting retail stores that act as a single entity when purchasing products and services, to realize economies of scale.

A person who is able to exert influence on a corporation, often as a result of minority ownership.

Noncompeting wholesalers that act as a single entity when purchasing products and services, to realize economies of scale.

A name for a type of scam that targets members of a specific demographic. Perpetrators may attempt to relate to or exploit characteristics common to the demographic. Targeted groups can include the elderly, ethnic groups, and religions. Perpetrators attempt to portray themselves as members of this group or people who can relate to the members of the group in order to gain trust and eventually money. Ponzi schemes and pyramid schemes are sometimes combined with affinity fraud.

NASD requirements imposed on Nasdaqmarket makers, including: maintaining two-sided markets on a continuous basis, quoting firm bid and ask prices, participating in the Small Order Execution System, and reporting price and volume data for each Nasdaq securitytransaction within 90 seconds of execution.

A detailed examination of an individual's ability to afford a house, taking into consideration income, liabilities, available funds, mortgage type, home price and closing costs.

A measure of the financial ability of U.S. families to buy a house. 100 means that families earning the national medianincome have just the amount of money needed to qualify for a mortgage on a median-priced home; higher than 100 means they have more than enough and lower than 100 means they have less than enough.

A clause in a mortgagecontract specifying if the mortgagor acquires additional mortgageable property after the mortgage is signed, such property will be treated as additional collateral for the mortgage.

A provision in an agreement that automatically collateralizes certain assets acquired after the agreement.

The practice of buying and selling securities during a period of time when the major markets are officially closed. Once reserved for institutional investors, individual investors may now participate. Stocks are traded after hours on ECNs, which match buyers and seller with a computer system in order to execute trades.

A market in which an investor purchases a security from another investor rather than the issuer, subsequent to the original issuance in the primary market. also called secondary market.

An amount (usually income) after taxes have been subtracted.

The comparison of investment returns after factoring in the tax consequences, such as when comparing the return on a taxable corporate bond with the return on a tax-exempt municipal bond.

Contributions to a retirement plan which are subject to federal income tax. also called voluntary contributions.

see selling short against the box.

Name for the arrangement where an agent intermediates between buyers and sellers and charges a commission for his participation. The agent buys and sells for the account of the client, but the client assumes all risk.

More generally, the relationship between a principal and an agent.

A bond, issued by a U.S. government-sponsored agency. The offerings of these agencies are backed by the U.S. government, but not guaranteed by the government since the agencies are private entities. Such agencies have been set up in order to allow certain groups of people to access low costfinancing, especially students and first-time home buyers. Some prominent issuers of agency bonds are Student Loan Marketing Association (Sallie Mae), Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac). Agency bonds are usually exempt from state and local taxes, but not federal tax.

A security, usually a bond, issued by a U.S. government agency. Agency securities are exempt from state and local taxes. also called U.S. Government Agency Security.

A theory explaining the relationship between principals, such as a shareholders, and agents, such as a company's executives. In this relationship the principal delegates or hires an agent to perform work. The theory attempts to deal with two specific problems: first, that the goals of the principal and agent are not in conflict (agency problem), and second, that the principal and agent reconcile different tolerances for risk.

An individual or firm authorized to act on behalf of another (called the principal), such as by executing a transaction or selling and servicing an insurance policy. The agent does not assume any financial risk in the transaction, as a dealer would.

A bank that has been authorized by an individual to act as his/her agent. An agent bank would typically provide services such as back-office operations, processing of credit applications, and verification services.

A retirement plan characterized by the fact that both the age and compensation level of an employee are used to determine benefits. Usually the weighting is toward older employees, who therefore accumulate more benefits per year.

A consolidation or merging.

Total, sum.

A corporation with more than one shareholder.

A macroeconomic value equal to the sum of all personal consumptionexpenditures, business expenditures, and government expenditures in a particular time period.

Analogous to the demand curve, a theoretical graph showing the aggregate demand at different price levels.

The strike price of an option times the number of underlying securities in the contract. When calculating the aggregate exercise price, the premium paid or received on the option is not considered.

A macroeconomic value equal to the sum of all goods and services produced in a particular time period.

Analogous to the supply curve, a theoretical graph showing the aggregate supply at different price levels.

An investment strategy characterized by a willingness to accept above-average risk in pursuit of above-average returns. Usually favors stocks over bonds, especially stocks of rapidly growing companies, and sometimes employs buying on margin, options trading, and arbitrage.

A mutual fund which aims for the highest capital gains and is not risk-averse in its selection of investments. Aggressive growth funds are most suitable for investors willing to accept a high risk-return trade-off, since many of the companies which demonstrate high growth potential can also show a lot of share pricevolatility. Aggressive growth funds tend to have a very large positive correlation with the stock market, and so they often produce very good results during economic upswings and very bad results during economic downturns. An aggressive growth fund might, for example, buy initial public offerings (IPOs) of stock from small companies and then resell that stock very quickly in order to generate big profits. Some aggressive growth funds may even invest in derivatives, such as options, in order to increase their gains.

Adjusted gross income (AGI) is a number used to determine your federal income tax. AGI is your gross income minus deductions. Gross income includes wages, dividends, business profits, income from rental property and interest. Deductions include IRA contributions, SEP contributions, SIMPLE contributions, Keogh contributions, health insurance contributions (for self employed persons), trade or business expenses, depreciation on rental property, losses from sales of property, alimony payments, medical savings account contributions, moving expenses and charitable cash contributions. Note that AGI does not include standard or itemized deductions or personal exemptions. This figure appears on IRS Forms 1040, 1040A, and 1040EZ. Adjusted gross income level affects your eligibility for various types of retirement accounts, including Roth IRAs and Education IRAs.

A list of accounts receivable broken down by number of days until due or past due.

A contract between members of a syndicate, appointing the originating investment bank as the lead underwriter, defining the members' proportionate liability, and authorizing the manager to allocate units to a selling group.

A former Chairman of the Board of Governors of the Federal Reserve. Greenspan was the first to hold this position for 5 terms, totaling a record 18 years in office. He helped guide the economy through the stock market crash of 1987 and the burst of the dot-com bubble. He was succeeded by Ben Bernanke.

A notification, often by email or pager, of a market event such as a stock reaching a target price.

A form of automated trading in which computers execute trade orders based on a series of parameters, such as time, price and volume. One benefit of algorithmic trading is that it allows a company, such as a hedge fund or mutual fund, to break up an order so that the trade does not influence market price. Because computers automatically initiate the orders it is not necessary to have a person review the information.

A corporation which was incorporated under the laws of a foreign country; here also called foreign corporation.

To transfer a property title.

The transfer of property, whether voluntary or involuntary, from one entity to another.

A type of acceleration clause requiring full payment of the balance of a mortgage upon the transfer of title of the mortgaged property.

Payments made to a separated or divorced spouse as required by a divorce decree or separation agreement.

A stipulation of a buy or sell order for a discretionary account which instructs the broker to fill whatever part of the order he/she feels is appropriate, at the specified price.

A stipulation of a buy or sell order which instructs the broker to either fill the whole order or don't fill it at all; but in the latter case, don't cancel it, as the broker would if the order were fill or kill.

A term used in underwriting indicating that if the underwriter isn't able to sell all the shares offered, then the offering will be canceled.

   The oldest index in Australia. It is called "All Ordinaries" because it is comprised of only the common shares of stock listed on the Australian Stock Exchange.  

An assertion of fact, to be proven in court.

A general partner or voting stock holder of a NYSEmember firm; allowed to perform transactions on the exchangefloor.

A position consisting of a combination of put options and call options that collectively create commissions so high that it is almost impossible to turn a profit regardless of which direction the underlier moves. The term originates from the idea of the spread "eating the investor alive."

The systematic distribution of a limited quantity resources over various time periods, products, operations, or investments.

A paper attached to a negotiable instrument to enable writing endorsements when the back of the bill is full. An allonge is rare because bills of exchange are no longer very common.

The portion of a new securitiesissue which is assigned to each member of a syndicate, for underwriting and distribution.

Any entity which has subscribed to buy securities in an underwriting.

A sum set aside for an occurrence that may or may not come to pass. For example, funds earmarked for expenses associated with potential bad weather.

Funds allocated periodically for a stated purpose, such as a per diem.

A discount, especially one offered as a result of specific circumstances.

An accumulated expense that writes off the cost of a fixed asset over its expected useful life.

An estimated amount of bad debts, to be subtracted from a balance sheet'saccounts receivable.

Insurance policy that covers losses from all causes not specifically excluded in the policy. opposite of named peril coverage.

A coefficient which measures risk-adjusted performance, factoring in the risk due to the specific security, rather than the overall market. A high value for alpha implies that the stock or mutual fund has performed better than would have been expected given its beta (volatility).

A category of mortgages which have a risk potential that is greater than prime but less than subprime. The interest rate offered on these mortgages is usually between the prime and subprime levels. The reason for the increased risk is usually not the borrower's credit history, but rather something specific about the mortgage.

Account which multiple individuals can draw against without permission from each other.

An individual who is recognized as having a right to receive some or all of the benefits under a qualified retirement plan if the plan holder does not or cannot collect. Usually a spouse, former spouse, child, or other dependent.

Assets that have the potential to provide economic value to the owner but are not traditionally considered assets, such as collectibles.

Investments considered outside of the traditional asset classes of stocks, bonds and cash. Examples of alternative investments include real estate, commodities, options and financial derivatives. Alternative investments are often used by hedge funds.

AMT. An IRS system created to ensure that high-income individuals, corporations, trusts, and estates pay at least some minimum amount of tax, regardless of deductions, credits or exemptions. It functions by adding certain tax-preference items back into adjusted gross income. While it was once only important for a limited number of high-income individuals who made extensive use of tax shelters and deductions, more and more people are being affected by it. The AMT is often triggered when there are large numbers of personal exemptions on state and local taxes paid, large numbers of miscellaneous itemized deductions or medical expenses, or by Incentive Stock Option (ISO) plans.

Two orders given to a broker, for which the execution of either one automatically cancels the other. One example is combining a buy limit order with buy stop order.The buy limit order will only be executed if the market price is below a specified price, and the buy stop order will only be executed if the market price is above a certain price. If one order is executed, the other is cancelled. also called either-or order.

The merging of two or more businesses into single entity.

An IRSfiling done using Form 1040X to correct mistakes that were made on 1040 returns in the previous three years.

A change or addition to a legal document which, when properly signed, has the same legal power as the original document.

AAII. A non-profit organization whose mission is to help individuals become smarter investors.

ADR. A negotiablecertificate issued by a U.S. bank representing a specific number of shares of a foreign stocktraded on a U.S. stock exchange. ADRs make it easier for Americans to invest in foreign companies, due to the widespread availability of dollar-denominated price information, lower transaction costs, and timely dividenddistributions.

ADS. The shareissued under an American Depositary Receipt agreement which is actually traded.

AMBAC. A corporation which offers insurance policies on new municipal bond offerings. An offering with such insurance can command a higher price upon issue, depending on the extent to which the insurance policy guarantees interest and principal repayments

An option which can be exercised at any time between the purchase date and the expiration date. Most options in the U.S. are of this type. This is the opposite of a European-style option, which can only be exercised on the date of expiration. Since an American option provides an investor with a greater degree of flexibility than a European style option, the premium for an American style option is at least equal to or higher than the premium for a European-style option which otherwise has all the same features. also called American-style option.

AMEX. The second-largest stock exchange in the U.S., after the New York Stock Exchange (NYSE). In general, the listing rules are a little more lenient than those of the NYSE, and thus the AMEX has a larger representation of stocks and bonds issued by smaller companies than the NYSE. Some index options and interest rateoptions trading also occurs on the AMEX. The AMEX started as an alternative to the NYSE. It originated when brokers began meeting on the curb outside the NYSE in order to trade stocks that failed to meet the Big Board's stringent listing requirements, but the AMEX now has its own trading floor. In 1998 the parent company of the NASDAQ purchased the AMEX and combined their markets, although the two continue to operate separately. also called The Curb.

An option which can be exercised at any time between the purchase date and the expiration date. Most options in the U.S. are of this type. This is the opposite of a European-style option, which can only be exercised on the date of expiration. Since an American-style option provides an investor with a greater degree of flexibility than a European style option, the premium for an American style option is at least equal to or higher than the premium for a European-style option which otherwise has all the same features. also called American option.

American Stock Exchange. The second-largest stock exchange in the U.S., after the New York Stock Exchange (NYSE). In general, the listing rules are a little more lenient than those of the NYSE, and thus the AMEX has a larger representation of stocks and bonds issued by smaller companies than the NYSE. Some index options and interest rateoptions trading also occurs on the AMEX. The AMEX started as an alternative to the NYSE. It originated when brokers began meeting on the curb outside the NYSE in order to trade stocks that failed to meet the Big Board's stringent listing requirements, but the AMEX now has its own trading floor. In 1998 the parent company of the NASDAQ purchased the AMEX and combined their markets, although the two continue to operate separately. also called The Curb.

The gradual elimination of a liability, such as a mortgage, in regular payments over a specified period of time. Such payments must be sufficient to cover both principal and interest.

Writing off an intangible assetinvestment over the projected life of the assets.

A distribution calculation method for making penalty-free early withdrawals from retirement accounts. An assumed earningsrate is applied over the duration of the individual's life expectancy, while the life expectancy is determined using IRS tables. Generally, the rate must be within 120% of the applicable federal long-term rate. Once the rate is determined, the withdrawal remains fixed each year.

A distribution calculation method for making penalty-free early withdrawals from retirement accounts. An assumed earnings rate is applied over the duration of the individual's life expectancy. Generally, the rate must be within 120% of the applicable federal long-term rate. Once the rate is determined, the withdrawal remains fixed each year.

Charges made against the interest received on a debt in order to offset a premiumpaid for the debt. Thus, with each periodic payment, a debtor is not only paying back interest, but also part of his or her premium. This leads to higher periodic payments than in the case when only interest is paid out. However, a payment schedule which includes premium amortization makes debt management easier, especially if the principal is large. While paying just the interest each period will lead to a low outflow of cash each month, the debtor might not save enough to pay the principal. Thus, amortizing the premium each period also reduces the credit risk of the debt, since the creditor gets some part of the principal each time period, as opposed to allowing a debtor to forfeit on all of it at the maturity of the loan. Amortization of premium is a common feature in cases when a person or company takes on a large amount of debt at one time, such as a mortgage.

The schedule of payments for paying off a loan.

The period of time over which the loan will be amortized, usually expressed in months.

see amortization.

see amortization.

The value of a security as determined by the process of amortization.

Quantity or value, as in a transaction or account balance.

The amount of gain reportable and subject to tax.

Alternative Minimum Tax. An IRS mechanism created to ensure that high-income individuals, corporations, trusts, and estates pay at least some minimum amount of tax, regardless of deductions, credits or exemptions. It operates by adding certain tax-preference items back into adjusted gross income. While it was once only important for a small number of high-income individuals who made extensive use of tax shelters and deductions, more and more people are being affected by it. The AMT is triggered when there are large numbers of personal exemptions on state and local taxes paid, large numbers of miscellaneous itemized deductions or medical expenses, or by Incentive Stock Option (ISO) plans.

The examination and evaluation of the relevant information to select the best course of action from among various alternatives.

An employee of a bank, brokerage, advisor, or mutual fund who studies companies and makes buy and sell recommendations, often specializing in a single sector or industry. Analysts use a wide variety of techniques for researching and making recommendations. The reports and recommendations they publish are often used by traders, mutual fund managers, portfolio managers and investors in their decision making processes. also called financial analyst or securities analyst.

To study and interpret past, present and projected corporate, economic and market information in order to make predictions about the future.

An individual who provides capital to one or more startup companies. The individual is usually affluent or has a personal stake in the success of the venture. Such investments are characterized by high levels of risk and a potentially large return on investment. also called angel investor.

An individual who provides capital to one or more startup companies. The individual is usually affluent or has a personal stake in the success of the venture. Such investments are characterized by high levels of risk and a potentially large return on investment.

The date on which a company's directors meet to announce the date and amount of the next dividend payment. Once the payment has been authorized, it is called a declared dividend, which is a legal liability. also called announcement date.

Yearly.

The maximum amount that a person is allowed to give another person without incurring Federal gift tax. The current annual exclusion is $11,000 per year per recipient. There is no limit on the number of these gifts you can make to different people in a year. To qualify, a gift must be of a "present interest," meaning that the recipient can make use of the gift immediately, and the donor must not have any control over the asset after it is given.

The company gathering, usually held at the end of each fiscal year, at which the previous year and the outlook for the future are discussed and directors are elected by common shareholders. Shortly before each annual meeting, the corporation sends out a document called a proxy statement to each shareholder. The proxy statement contains a list of the business concerns to be addressed at the meeting and a ballot for voting on company initiatives and electing the new Board. This proxy ballot authorizes someone else at the meeting (usually the management team) to vote on investors' behalf.

A report sent to the mortgagor once a year, detailing the taxes and interest paid during the year as well as the remaining mortgage loan balance.

APR. The yearly cost of a mortgage, including interest, mortgage insurance, and the origination fee (points), expressed as a percentage.

APY. The rate of return on an investment for a one-year period. For an interest-bearing deposit account, such as a savings account, APY is equal to one plus the periodic rate (expressed as a decimal) raised to the number of periods in one year. This value is then subtracted by one. Due to compounding, the APY will be greater than the periodic interest rate multiplied by the number of periods in the year.

Audited document required by the SEC and sent to a public company's or mutual fund's shareholders at the end of each fiscal year, reporting the financial results for the year (including the balance sheet, income statement, cash flow statement and description of company operations) and commenting on the outlook for the future. The term sometimes refers to the glossy, colorful brochure and sometimes to Form 10-K, which is sent along with the brochure and contains more detailed financial information. All 10-Ks for public companies and mutual funds incorporated in the U.S. are available on the SEC's website for free.

The increase in value of an investment, expressed as a percentage per year. If the annual return is expressed as annual percentage yield, then the number takes into account the effects of compoundinginterest. If it is expressed as annual percentage rate, then the annual rate will usually not take into account the effect of compounding interest.

A measure of how quickly a fund turns over its holdings during the year. A highly active fund will have a high annual turnover. It is equal to the dollar transaction volume of the trades in one year divided by the total portfolio size, expressed as a percentage.

For a company, the amount of business it conducts during a year, usually measured through income or sales.

To extrapolate a value so that it reflects an expected or approximate total for a full year. This rate usually does not reflect the effects of compounding.

Making calculations for a period of less than a year as if the period were a whole year. For example, if data existed for only one quarter, it could be annualized by multiplying by four.

A person who is entitled to receive benefits from an annuity.

To begin to receive payments from an annuity.

A contract sold by an insurance company designed to provide payments to the holder at specified intervals, usually after retirement. The holder is taxed only when they start taking distributions or if they withdrawfunds from the account. All annuities are tax-deferred, meaning that the earnings from investments in these accounts grow tax-deferred until withdrawal. Annuity earnings are also tax-deferred so they cannot be withdrawn without penalty until a certain specified age. Fixed annuities guarantee a certain payment amount, while variable annuities do not, but do have the potential for greater returns. Both are relatively safe, low-yielding investments. An annuity has a death benefit equivalent to the higher of the current value of the annuity or the amount the buyer has paid into it. If the owner dies during the accumulation phase, his or her heirs will receive the accumulated amount in the annuity. This money is subject to ordinary income taxes in addition to estate taxes.

More generally, a series of payments of set size and frequency, often to a retired person.

A distribution calculation method for making penalty-free early withdrawals from retirementaccounts. The calculation is similar to, but relies upon different life expectancy data than, the amortization method.

An accounting measure upon which the size of periodic annuitypayouts is based.

To place a prior date on a legal document, statement or check. also called backdate.

The length of time a limited partnership expects to hold a given asset.

The paying of a bill or debt obligation before it is due.

Short term bond which will be paid off with the proceeds from a subsequent, larger bond issue. also called bond anticipation note.

The right of current shareholders to maintain their fractional ownership of a company by buying a proportional number of shares of any future issue of common stock. Most states consider antidilution provisions valid only if made explicit in a corporation'scharter. also called subscription privilege or subscription right or preemptive right.

Term used to describe a convertible security which could increase a corporation's earnings per share if exercised or converted into common stock. Such conversions are not considered when calculating earnings per share. opposite of dilutive.

A collectible or other item which is old (usually at least 100 years old) and is collected or desirable because of its rarity, condition, utility, or other unique features.

The Federal laws forbidding businesses from monopolizing a market or restraining free trade.

A takeover bid in which the acquiring company sets a price that it is willing to purchase shares at.

Interest rates set by the U.S. Treasury for determining imputed interest. These are published monthly, and the rate most commonly used is the lowest rate for the month of the transaction as well as the two months before.

Employing economic theories in real-world business.

Utilizing pure research to develop real-world products.

A professional opinion, usually written, of the market value of a property, such as a home, business, or other asset whose market price is not easily determined. Usually required when a property is sold, taxed, insured, or financed.

A person qualified by education, training, and experience to provide appraisals. also called evaluator.

The increase in value of an asset. opposite of depreciation.

Funds set aside for a specific purpose.

List of legal investments for savings banks and trust funds; determined by each state. also called legal list. opposite of nonlegal.

Annual Percentage Rate. The yearly cost of a loan, including interest, insurance, and the origination fee (points), expressed as a percentage. Often applied to mortgages, credit cards, and automobile financing.

Arbitrage Pricing Theory. An alternative asset pricing model to the Capital Asset Pricing Model. Unlike the Capital Asset Pricing Model, which specifies returns as a linear function of only systematic risk, Arbitrage Pricing Theory may specify returns as a linear function of more than a single factor.Thus, there is no clear risk-return trade-off in this model.

Annual Percentage Yield. The rate of return on an investment for a one-year period. For an interest-bearing deposit account, such as a savings account, APY is equal to one plus the periodic rate (expressed as a decimal) raised to the number of periods in one year. Due to compounding, the APY will be greater than the periodic interest rate multiplied by the number of periods in the year.

Attempting to profit by exploiting price differences of identical or similar financial instruments, on different markets or in different forms. The ideal version is riskless arbitrage.

A financial institution that engages in arbitrage. Such firms search for market inefficiencies and securities which they feel are mispriced, and then undertake trades which allow them to make riskless profits. Arbitrage opportunities are often quite difficult to detect, since mispricings can be very small. Also, arbitrage opportunities tend to disappear almost immediately since market forces act to reverse the opportunity. Because of these characteristics of arbitrage, many arbitrage houses are equipped with very sophisticated computer software and hardware to help them identify potential opportunities and act on them very quickly. Many arbitrage houses also develop complex software-driven mathematical models to find mispricings and market inefficiencies.

APT. An alternative asset pricing model to the Capital Asset Pricing Model. Unlike the Capital Asset Pricing Model, which specifies returns as a linear function of only systematic risk, Arbitrage Pricing Theory may specify returns as a linear function of more than a single factor.

A person or company which practices arbitrage.

A process in which a disagreement between two or more parties is resolved by impartial individuals, called arbitrators, in order to avoid costly and lengthy litigation.

A private, neutral person chosen to arbitrate a disagreement, as opposed to a court of law. An arbitrator could be used to settle any non-criminal dispute, and many business contracts make provisions for an arbitrator in the event of a disagreement. Generally, resolving a disagreement through an arbitrator is substantially less expensive than resolving it through a court of law.

Simple average, equal to the sum of all values divided by the number of values.

A market indicator used in technical analysis, calculated as follows: Arms Index = ((# of advancing issues / # of declining issues) / (Total up volume / Total down volume)). A value of less than 1 is considered bullish, greater than 1 bearish. also called Trading Index or TRIN.

A financial market in which parties engaging in transactions are separate and have no contact with each other outside of the buying and selling of securities. In the case of the stock market, most investors will never know from whom they are buying securities or to whom they are selling them.

The price at which two unrelated and non-desperate parties would agree to a transaction. This is most often an issue in the case of companies with international operations whose international subsidiaries trade with each other. For such companies, there is often an incentive to reduce overall tax burden by manipulation of inter-company prices. Tax authorities want to insure that the inter-company price is equivalent to an arm's length price, to prevent the loss of tax revenue.

A transaction between two related or affiliated parties that is conducted as if they were unrelated, so that there is no question of a conflict of interest. Or sometimes, a transaction between two otherwise unrelated or affiliated parties.

An amount of an obligation which is past.

For a bond or preferred share, overdue interest or dividends.

The unpaid portion of a serial bond at maturity.

A document describing the purpose, place of business, and details of a non-profit organization.

A document, filed with a U.S. state by a corporation's founders, describing the purpose, place of business, and other details of a corporation. also called charter.

Term in an agreement, such as for software licensing, indicating that no expressed or implied warranty is provided.

Technical analysis term for a chartpattern in which each successive low price is higher than the previous one; usually considered a bullishindicator.

Technical analysis term for a chartpattern in which each successive high price is higher than the previous one; considered a bullishindicator.

U.S. dollars in Asia.

An option whose payoff depends on the average value of an underlier over a specified period.

The lowest price that any investor or dealer has declared that he/she will sell a given security or commodity for. For over-the-counterstocks, the ask is the best quoted price at which a Market Maker is willing to sell a stock. For mutual funds, the ask is the net asset value plus any sales charges. also called asked price or asking price or offering price.

The number of shares that are being offered for sale at the ask price, often expressed in terms of hundreds of shares. Some traders try to use the bid size and ask size to measure impending short term upward or downward pressure on the stock's price. This can work for stocks on exchanges such as NYSE and AMEX, but is far less useful on Nasdaq, which has market makers ready to buy and sell shares, rather than specialists who balance books of buy and sell orders.

The lowest price that any investor or dealer has declared that he/she will sell a given security or commodity for. For over-the-counterstocks, the ask is the best quoted price at which a Market Maker is willing to sell a stock. For mutual funds, the ask is the net asset value plus any sales charges. also called or asking price or offering price or ask.

The lowest price for which any investor or dealer has declared that he/she will sell a given security or commodity. For over-the-counterstocks, the asking price is the best quoted price at which a Market Maker is willing to sell a stock. For mutual funds, the asking price is the net asset value plus any sales charges. also called asked price or offering price or ask.

The physical location of a company's production lines.

The dollar value of an asset assigned by a public taxassessor for the purposes of taxation.

The process of placing a value on an asset for the purpose of taxation. Also refers to the tax itself. also called property assessment.

Municipal bond which is repaid from taxes collected from those who benefit from the project the bond'sproceeds were used to fund. also called special-purpose bond.

A public official who performs assessments.

Any item of economic value owned by an individual or corporation, especially that which could be converted to cash. Examples are cash, securities, accounts receivable, inventory, office equipment, real estate, a car, and other property. On a balance sheet, assets are equal to the sum of liabilities, common stock, preferred stock, and retained earnings.From an accounting perspective, assets are divided into the following categories: current assets (cash and other liquid items), long-term assets (real estate, plant, equipment), prepaid and deferred assets (expenditures for future costs such as insurance, rent, interest), and intangible assets (trademarks, patents, copyrights, goodwill).

A buyout strategy in which key assets of the target company are purchased, rather than its shares. This is particularly popular in the case of bankrupt companies, who might otherwise have valuable assets which could be of use to other companies, but whose financing situation makes the company unattractive for buyers (an assetacquisitionstrategy may be pursued in almost any case where the potential target company has an unattractive financing structure). Further, the asset acquisition strategy might be pursued if the acquirer is interested in certain specific assets, and not all the possible target assets.

The process of dividing investments among different kinds of assets, such as stocks, bonds, real estate and cash, to optimize the risk/reward tradeoff based on an individual's or institution's specific situation and goals. A key concept in financial planning and money management.

A single mutual fund which tries to accomplish the goals of asset allocation all by itself. Such a fund invests in a variety of securities in different asset classes. The purpose is to provide investors with truly diversified holdings and consistent returns, while sparing the investor the trouble of having to accomplish asset allocation by purchasing a large number of different funds. Some asset allocation funds have a specific breakdown of asset classes that they try to maintain over time, while others vary the composition as opportunities and circumstances change.

A type of investment, such as stocks, bonds, real estate, or cash.

A short-term loan whose primary repayment source is the conversion of an asset, such as inventory or a receivable.

The extent to which a company's net assets cover its debtobligations and/or preferred stock. Expressed in dollar terms or as a percentage.

Financing for which assets are converted into working cash in exchange for a security interest in those assets. The most common kind of asset financing is to extend loans against accounts receivable, but other kinds of asset financing, such as lending against inventories, is becoming more common.

An unexpected or sudden decline in the service utility of a capital asset, such as a factory, property or vehicle. This could be the result of physical damage to the asset, obsolescence due to technological innovation, or changes to the legal code. Impairments can be written off.

see money management.

A single account at a brokerage or bank which includes both banking and brokerage services. Most asset management accounts allow checking, a debit or credit card, automatic transfer of excess funds into a money management account, and margin loans. also called central assets account.

A stock which is believed to be undervalued based on the value of assets the company holds. Specifically, the net value of the company's assets are higher than the company's market capitalization.

A corporate raider who acquires a target company with the intention of selling off some of the target's assets to repay outstandingdebt, under the belief that the assets which remain after the "stripping" will be worth significantly more than the purchase price.

An exchange of two assets. For example, one type of asset swap is the exchange of a fixed asset, such as a Treasury Bond with fixed and guaranteed payments, for a floating asset such as an index fund, which does not have a fixed or guaranteed return. Asset swaps are done most often in order to achieve a more favorable payment stream, and typically involve debt obligations.

Net sales divided by total assets. This is a measure of how well assets are being used to produce revenue. also called total asset turnover.

Total assets divided by shareholder equity. Asset/equity ratio is often used as a measure of leverage. For example, if a company's assets are $1 million and its shareholder equity is $1 million, then its asset/equity ratio would be 2.

Bonds or notes backed by loanpaper or accounts receivable originated by banks, credit card companies, or other providers of credit; not mortgages.

A secured business loan in which the borrower pledges as collateral any assets used in the conduct of his/her business. also called commercial finance or asset-based lending.

A secured business loan in which the borrower pledges as collateral any assets used in the conduct of his/her business. also called commercial finance or asset-based finance.

A risk management technique designed to earn an adequate return while maintaining a comfortable surplus of assets beyond liabilities. Takes into consideration interest rates, earning power, and degree of willingness to take on debt. also called surplus management.

The total value of assets that a mutual fund, hedge fund, or other portfolio manager manages and administers for itself and its customers.

To transfer ownership of a property or right to another party by signing a document.

The ability of an asset to be transferred from one party to another.

Individual to whom a title, claim, property, interest, or right has been transferred.

The receipt of an exercise notice by an option writer that requires him/her to sell the security in the case of a call option, or to buy the security in the case of a put option, at the specified strike price. Here, also called exercise assignment or exercise notice.

The transfer of ownership of an asset from one person to another.

A written document serving as evidence of a transfer of a loan obligation from the original borrower to a third party.

A written document which transfers to a mortgagee upon default the owner's right to collect rent.

The transfer of a property for the benefit of creditors or in trust.

Individual who transfers a title, claim, property, interest, or right to another person.

The completed distribution of a new securitiesissue to the public.

Designation for a member of a stock exchange who does not have a seat on the exchange.

A group of individuals who meet for a common purpose.

A mortgage that can be transfered with no change in terms. If an assumable mortgage is transferred, the buyer assumes all responsibility for repayment. The original lender must agree to the transfer of an assumable mortgage. The seller should receive a written release from the original lender stating that he/she has no responsibility for further payments. The buyer may have to meet certain standards to qualify and may be charged an assumption fee. Assumable mortgages can make a property more desirable if interest rates have risen, because the new buyer's payments are at the original rate. By definition, assumable mortgages cannot have a due-on-sale clause.

Bond which is issued by one corporation but whose liability is taken on by another corporation.

The taking over of an obligation or liability from another party.

An instruction to a broker or dealer to get the best price or rate that he/she is able to at that time.

Any transaction which occurs in the call money market.

A type of securities or commodityorder that specifies that the transaction occur only at the specified price or better.

A bond or preferred stock which is selling at a price equal its face (or par) value.

A type of spread in which the spot price and the forward price of an option are equal.

Exposed to the possibility of loss.

Payment due on demand.

Immediately after the opening or immediately before the closing of a trading session.

A market order or limit order to be executed just prior to the close of a trading session, or canceled if this is not possible. also called on close.

At the nearest whole number. Often meaning the integer closest to a decimal bid or ask.

At the nearest whole number. Often meaning the integer closest to a decimal bid or ask. also called at the figure.

A buy or sellorder in which the broker is to execute the order at the best price currently available. These are often the lowest-commission trades because they involve very little work by the broker. also called market order.

A condition in which the strike price of an option is equal to (or nearly equal to) the market price of the underlying security.

An order to buy or sell a given equity at the price when the market opens. If the transaction cannot occur at this price, the order is cancelled.

A type of stop-loss order for which the transaction must be executed at specific price. At the price stop-loss orders are executed regardless of the market conditions.

Acronym for automated teller machine, a machine at a bank branch or other location which enables a customer to perform basic banking activities (checking one's balance, withdrawing or transferring funds) even when the bank is closed.

The act of seizing a debtor's property and placing it under a court's control.

To affirm as true.

A person who holds power of attorney, and therefore is legally designated to transact business and execute documents on behalf of another person.

A method for selling an asset to the highest bidder.

A system in which buyers enter competitivebids and sellers enter competitive offers simultaneously, as opposed to the over-the-counter market, where trades are negotiated. Examples are the NYSE and the AMEX. also called double auction market.

The interest rate that a security, such as a Treasury Bill, will pay during a specific period as determined by an auction, usually a Dutch auction.

An examination and verification of a company's financial and accounting records and supporting documents by a professional, such as a Certified Public Accountant.

An audit is an IRS examination of an individual or corporation's tax return, to verify its accuracy. There are three types of audits: correspondence audits (the IRS mails a request for additional information), office audits (an interview is conducted at a local IRS office), and field audits (an interview is conducted at a taxpayer's place of business, for a corporate tax return). Since there is always the chance of an audit, experts recommend keeping good records to support all the information in a return. The reason detailed and accurate bookkeeping is so important is that the burden of proof is on the filer, not the IRS.

A step-by-step record by which financial data can be traced to its source.

A company's financial statements which have been prepared and certified by a Certified Public Accountant (the auditor). In the U.S., the auditor certifies that the financial statements meet the requirements of the U.S. GAAP. An auditor can have an unqualified opinion, in which he or she agrees with how the company prepared the statements, or a qualified opinion, in which he or she states which aspects of the company's statements he or she does not agree with. In extreme cases, the auditor may express no opinion on financial statements at all, in the case that the scope of the audit was insufficient.

An individual qualified (at the state level) to conduct audits.

A section of an annual report containing an accountant's opinion about the accuracy of its financial statements.

An electronic system which notifies institutions when another institution wants to buy or sell a large block of stock (which is then traded as usual, on an exchange or over-the-counter).

Verification that a legal document is genuine or valid, such as through a seal from an authorized public official.

A corporate or government bond issued in order to run a revenue-generating public enterprise and payable from the resulting revenue.

Grant the right to perform certain acts.

The maximum number of shares of stock that a company