Billing ErrorA charge that appears on a periodic statement associated with an extension of credit (e.g.
Billing periodThe billing period is the fixed period of time covered by the bill we send you.
BinderA temporary or preliminary agreement, in effect for less than 60 days, that provides coverage until a policy can be written or delivered.
Blind poolIf the general partner of a limited partnership does not say which investments the partnership will make, the investment is known as a blind pool.
Blind trustA blind trust is created when a third party, such as an investment adviser or other trustee, assumes complete control of the assets held in a trust.
Block tradeWhen at least 10,000 shares of stock or bonds valued at $200,000 or more are bought or sold in a single transaction, it is called a block trade.
Blue chip stockBlue chip stock is the common stock of a large, well-regarded US company. The companies in that informal category are collectively known as blue chips…
Blue sky lawsBlue sky laws require companies that sell stock, mutual funds, and other financial products to register new issues with the appropriate public agency.
Bodily Injury LiabilityIf you injure someone in a car accident, this coverage pays his/her medical and rehabilitation expenses and any damages for which you are found liable.
Bodily Injury Liability CoveragePays for another person's bodily injury or death in an accident that you may be found legally liable to pay.
Boiler roomA boiler room is a location used by con artists to contact potential victims out-of-the-blue - an approach known as cold calling - in an attempt to sell…
BondA long-term debt instrument with the promise to pay a specified amount of interest and to return the principal amount on a specified maturity date.
Bond fundA mutual fund whose portfolio consists primarily of bonds.
Bond ratingIndependent agencies, such as Standard & Poor's (S&P) and Moody's Investors Service, assess the likelihood that bond issuers are likely to default on…
Bond swapIn a bond swap, you buy one bond and sell another at the same time. For example, you might sell one bond at a loss at year's end to get a tax write-off…
Bond, U.S. SavingsSavings bonds are issued in face value denominations by the U.S. Government in denominations ranging from $50 to $10,000.
Bonds (Corporate)Corporate debt owed by an issuer to a bondholder usually a promise to pay a specified rate of interest over a fixed rate of time.
bonusCompensation received by an employee for services performed. A bonus is given in addition to an employee's usual compensation.
Book valueThe value of net assets that belong to a company's shareholders, as stated on the balance sheet.
Book Value (BV)(BV)The value of individual assets, calculated as actual cost less allowance for any depreciation. Book value may be more or less than current market value.
Book-entry securityBook-entry securities are stocks, bonds, and similar investments whose ownership is recorded electronically rather than in certificate form.
Bottom fishingInvestors using a bottom-fishing strategy look for stocks that they consider undervalued because the prices are low.
Bottom-up investingWhen you use a bottom-up investing strategy, you focus on the potential of individual stocks, bonds, and other investments.
BourseBourse is the French term for a stock exchange, meaning, literally, purse. The national stock market of France, a totally electronic market, is known as…
bp (Basis Point)The smallest measure used in quoting yields or returns. One basis point is 0.01% of yield, 100 basis points equals 1%. A yield that changed from 8.
Brady bondThese bonds of Latin American countries, named for former US Secretary of the Treasury Nicholas Brady, are issued in US dollars and backed by US Treasury…
Branch OfficeFor banks and thrifts, a branch office is an office approved as a branch by a supervisory agency.
Breakaway wallA wall that is not part of the structural support of the building and is intended through its design and construction to collapse under specific lateral…
BreakoutStock prices fluctuate constantly, but each stock typically moves within a fairly narrow range.
BreakpointA breakpoint is the level at which your account balance in a mutual fund company or the size of a new investment in the company's funds qualifies you to…
BrokerAn agent who handles the public's orders to buy and sell securities, commodities or other property. A commission is generally charged for this service.
Broker-dealerA person that buys and sells securities for others or for h the broker-dealer's own account (e.g. proprietary trading).
Brokerage accountTo buy and sell securities through a broker-dealer or other financial services firm, you establish an account, generally known as a brokerage account…
Brokerage firmBrokerage firms, also known as broker-dealers, are licensed by the Securities and Exchange Commission (SEC) to buy and sell securities for clients and for…
Brokerage windowA 401(k) account that permits its plan participants to buy and sell investments through a designated brokerage account is said to offer a brokerage window.
Bucket shopA bucket shop is an illegal brokerage firm, whose salespeople pose as legitimate brokers and attempt to sell you securities.
BudgetA budget is a plan on how much to save each week or month to make a purchase or to reach a savings goal.
Builders RiskCoverage for a home under construction. Claim payments are based on the percentage completed at time of loss.
Bull marketA market in which prices are generally rising.
Bull spreadA bull spread is an options strategy that you use when you anticipate an increase in the price of the underlying instrument, such as a stock or an index.
businessA continuous and regular activity that has income or profit as its primary purpose.
Business DayAny day on which offices of a bank are open to the public for carrying on substantially all of the bank's business.
Buy DownWhen you make an up-front cash payment to reduce your monthly payments on a mortgage loan, it's called a buy down.
Buy Here, Pay Here Financingis usually associated with used car dealers. Installment payments, often made weekly, are paid directly to the dealership, which provides private…
Buy sideInstitutional money managers, such as mutual funds, pension funds, and endowments, are the buy side of Wall Street.
Buy-and-holdBuy-and-hold investors take a long-term view of investing, generally keeping a bond from date of issue to date of maturity and holding onto shares of a…
BuybackWhen a company purchases shares of its own publicly traded stock or its own bonds in the open market, it's called a buyback.
Buyer's AgentA buyer's agent represents a buyer in a real estate transaction, negotiating with the seller's agent for a lower price or a contract with more favorable…
BV (Book Value)The value of individual assets, calculated as actual cost less allowance for any depreciation. Book value may be more or less than current market value.
BylawsBylaws are the self-imposed rules governing an incorporated company. The bylaws cover details such as the structure of the company, what the company's…
CAC Digital SignatureVerify that the identity on the CAC Card matches the identity of the expected signer.
Cafeteria planSome employers offer cafeteria plans, more formally known as flexible spending plans, which give you the option of participating in a range of tax-saving…
CallIn the bond markets, a call is an issuer's right to redeem bonds it has sold before the date they mature.
Call optionBuying a call option gives you, as owner, the right to buy a fixed quantity of the underlying product at a specified price, called the strike price…
Callable bondA callable bond can be redeemed by the issuer before it matures if that provision is included in the terms of the bond agreement, or deed of trust.
Canceled Check (Share Draft)A check that a financial institution paid, charged to the account holder's account, and then endorsed. Once canceled, a check is no longer negotiable.
CancellationTermination of a policy before its normal expiration date.
CapA cap is a ceiling, or the highest level to which something can go. For example, an interest rate cap limits the amount by which an interest rate can be…
CapitalCapital is money that is used to generate income or make an investment. For example, the money you use to buy shares of a mutual fund is capital that…
Capital AppreciationAny increase in a capital asset's fair market value is called capital appreciation.
Capital GainAlso known as capital appreciation, capital gain measures the increase in value of an asset over time.
capital gain (or loss)A income tax term referring to profit or loss resulting from the sale of an asset, such as a security.
Capital gains distributionWhen mutual fund companies sell investments that have increased in value, the profits, or capital gains, are passed on to their shareholders as capital…
Capital gains tax (CGT)A capital gains tax is due on profits you realize on the sale of a capital asset, such as stock, bonds, or real estate.
Capital lossWhen you sell an asset for less than you paid for it, the difference between the two prices is your capital loss.
Capital marketsCapital markets are the physical and electronic markets where equity and debt securities, commodities, and other investments are sold to investors.
Capital preservationCapital preservation is a strategy for protecting the money you have available to invest by choosing insured accounts or fixed-income investments that…
capital stockAll classes or types of shares representing ownership of the issues.
CapitalizationIn the context of bank supervision, capitalization refers to the funds a bank holds as a buffer against unexpected losses.
Car insuranceCar insurance covers theft of and damage to your car or damage that your car causes, plus liability protection in case you are sued as a result of an…
CARDYour card is the physical card, the account number, or any device (including a check) that can be used to access your credit card account.
Cash advanceYou receive a cash advance when you use your card or account to do any of the following: obtain cash from an automated teller machine (ATM); or obtain…
Cash balance planA cash balance retirement plan is a defined benefit plan that has many of the characteristics of a defined contribution plan.
Cash basis accountingCash basis accounting is one of two ways of recording revenues and expenses. Using this method, a company records income on its books when it receives a…
Cash equivalentAssets that can be quickly converted to cash. These include receivables, Treasury Bills, short-term commercial paper and short-term government and…
Cash EquivalentsInstruments or investments that are easily turned into cash and are so safe that they are virtually as good as cash.
Cash FlowCash flow is a measure of changes in a company's cash account during an accounting period, specifically its cash income minus the cash payments it makes.
Cash marketIn a cash market buyers pay the market price for securities, currency, or commodities "on the spot," just as you would pay cash for groceries or other…
Cash settlementTo settle a futures contract where the underlying asset is a financial instrument, such as a stock index or interest rate rather than a physical…
Cash surrender valueThe cash surrender value of a permanent life insurance policy is the amount you receive if you cancel or surrender your policy before you die.
Cash valueCash value is the amount that an account is worth at any given time. For example, the cash value of your 401(k) or IRA is what the account is worth at the…
Cash Value (Cash Surrender Value)The amount available in cash upon surrender of a policy before it becomes payable upon death or maturity.
Cash value accountIf you have a permanent life insurance policy, part of each premium you pay goes into a tax-deferred account called the cash value account.
Cash-advance feeA fee charged when you use a credit card for a cash advance, such as withdrawing cash from an ATM.
Cash-out refinancingWhen refinancing, taking a loan for more than you owe on your existing mortgage.
Cashier's CheckA check drawn on the funds of the bank, not against the funds in a depositor's account.
Catastrophic illness insuranceMany health insurance policies cap, or limit, the amount they will pay to cover medical expenses.
Catch-up contributionYou are entitled to make an annual catch-up contribution to your employer sponsored retirement savings plan and individual retirement account (IRA) if…
Category of AmountReportable financial interests are disclosed either by actual amount or by category of amount, depending on the interest, as specified by the SF 278 form.
CDs (Certificates of Deposit)A debt instrument issued by banks, usually paying interest, with maturities ranging from seven days to several years.
CeilingIf there is an upper limit, or cap, on the interest rate you can be charged on an adjustable-rate loan, it's known as a ceiling.
Census TractA census tract is a small geographic area. Census 2000 assigned census tract numbers to all areas of the U.S. and some U.S. territories and possessions.
Central bankMost countries have a central bank, which issues the country's currency and holds the reserve deposits of other banks in that country.
Certificate of DepositA negotiable instrument issued by a bank in exchange for funds, usually bearing interest, deposited with the bank.
Certificate of deposit (CD)CDs are time deposits. When you purchase a CD from a bank, up to $100,000 is insured by the Federal Deposit Insurance Corporation (FDIC).