ConsummationThe point in time when the contractual relationship between borrower and lender begins.
ContangoThe price of a futures contract tends to reflect the cost of storage, insurance, financing, and other expenses incurred by the producer as the commodity…
Contingency orderA contingency order to buy or sell a security or other investment product is one that has strings attached.
Contingent BeneficiaryA contingent beneficiary receives the proceeds of an insurance policy, term-certain annuity, individual retirement account (IRA), employer-sponsored…
Contingent deferred sales loadA contingent deferred sales load, also called a back-end load, is a sales charge some mutual funds impose when you sell shares in the fund within a…
Continuous net settlementIn continuous net settlement, most securities transactions are finalized, or cleared and settled, within a brokerage firm.
ContractIn most cases, the term "contract" refers to an insurance policy. A policy is considered to be a contract between the insurance company and the…
ContrarianAn investor who marches to a different drummer is sometimes described as a contrarian.
Conventional Conforming Mortgage LoansConventional mortgage loans are those mortgages that are not insured or guaranteed by the Federal Housing Administration, the U.S.
Conventional Fixed Rate MortgageA fixed-rate mortgage offers you a set interest rate and payments that do not change throughout the life, or "term," of the loan.
Conventional MortgageA mortgage loan which is not insured or guaranteed by a government agency such as FHA or VA.
Conversion priceA conversion price is the predetermined price, set at the time of issue, at which you can exchange a convertible bond or other convertible security for…
Convertible ARMis an Adjustable Rate Mortgage loan that can be converted into a fixed-rate mortgage during a certain time period.
Convertible bondConvertible bonds are corporate bonds that give you the alternative of converting their value into common stock of that company or redeeming them for cash…
Convertible hedgeWhen you use a convertible hedge, you buy a convertible bond, which you can exchange under certain circumstances for shares of the company's common stock.
Convertible termA convertible term life insurance policy can be converted into a permanent life policy at some point in the future without requiring you to pass a health…
Convertible Term InsuranceTerm insurance that offers the policyholder the option of exchanging it for a permanent plan of insurance without evidence of insurability.
Cook the booksWhen a company cooks the books, it is deliberately - and illegally - providing false information about its financial situation to bolster its stock price…
Cooling-off periodIn the financial industry, a cooling-off period applies when a new issue is being brought to market.
Cooperative (Co-op)A co-op is a corporation that owns a particular residential property. The shareholders are the tenants who, instead of owning an individual unit, own…
CopaymentIf you have a managed-care health insurance plan, your copayment is the fixed amount you pay - often $10 to $25 - for each in-network doctor's office…
Core earningsStandard & Poor's (S&P) developed the core earnings measure to give investors a more uniform way to compare earnings numbers.
Cornering the marketIf someone tries to buy up as much of a particular investment as possible in order to control its price, that investor is trying to corner the market.
Corporate BondA debt obligation issued by a corporation.
CorrectionA correction is a drop - usually a sudden and substantial one of 10% or more - in the price of an individual stock, bond, commodity, index, or the market…
Correlated SystemsSCRS and PORS are correlated systems. If a member has contributions in more than one of these retirement systems, the member’s service credit is…
CorrelationIn investment terms, correlation is the extent to which the values of different types of investments move in tandem with one another in response to…
CorrespondentA correspondent is a financial institution, such as a bank or brokerage firm, that handles transactions on behalf of another financial institution that it…
CosignerAnother person, not necessarily a relative, who also signs your loan contract and assumes equal responsibility for its repayment.
Cost basisThe cost basis is the original price of an asset - usually the purchase price plus commissions.
Cost IndexA way to compare the costs of similar plans of life insurance. A policy with a smaller index number is generally a better buy than a comparable policy…
Cost-of-Living AdjustmentAn adjustment of a salary or a retirement annuity intended to help offset the effects of inflation. Commonly referred to as COLA. COLAs are not guaranteed.
Cost-of-living adjustment (COLA)A COLA results in a wage or benefit increase that is designed to help you keep pace with increased living costs that result from inflation.
Cost-Of-Living RiderAn option that permits the policyholder to purchase increasing term insurance coverage.
Council of Economic Advisors (CEA)The Council of Economic Advisors' job is to assist and advise the president of the United States on economic policy.
Countercyclical stockStocks described as countercyclical tend to continue to maintain their value and provide regular income when the economy is slowing down or staying flat…
CounterpartyIn any financial contract, the persons or institutions entering the contract on the opposite sides of the transaction are called the counterparties.
Counterparty riskCounterparty risk is the risk that the person or institution with whom you have entered a financial contract - who is a counterparty to the contract -…
County CodeA three-digit FIPS (Federal Information Processing Standards) code that identifies the county where the property is located.
CouponA certificate that accompanies a bond that indicates the amount of interest it pays and the date it is due.
Coupon RateThe scheduled interest earned on a security, expressed as a percentage of the outstanding balance.
Coverdell Education Savings AccountFormerly called education IRA. An education account that accumulates interest tax-free. You can also withdraw money from this account without penalty.)
Covered ExpensesThe losses or conditions that the policy will pay for.
Covered optionWhen you sell call options on stock that you own, they are covered options. That means if the option holder exercises the option, you can deliver your…
CrashA crash is a sudden, steep drop in stock prices. The downward spiral is intensified as more and more investors, seeing the bottom falling out of the…
CreditCredit generally refers to the ability of a person or organization to borrow money, as well as the arrangements that are made for repaying the loan and…
Credit ApplicationA form to be completed by an applicant for a credit account, giving sufficient details (residence, employment, income, and existing debt) to allow the…
Credit BureauAn agency that collects individual credit information and sells it for a fee to creditors so they can make a decision on granting loans.
Credit Bureausor “consumer reporting agencies,” are companies that compile credit reports, and supply credit information to businesses upon request.
Credit CardA plastic card with a magnetic stripe that is used from time to time or over and over again to borrow money or buy goods or services on credit, and which…
Credit Card Account AgreementA written agreement that explains the terms and conditions of the account, credit usage and payment by the cardholder, and duties and responsibilities of…
Credit card agreementA document that outlines the terms and conditions for using your credit card. It is your contract with your credit card company.
Credit Card IssuerAny financial institution that issues bank cards to those who apply for them.
Credit counseling serviceA service that employs credit counselors who will look at your financial situation and help develop repayment options.
Credit Disability Insurance (CDI)(CDI)A type of insurance, also known as accident and health insurance, that makes payments on the loan if you become ill or injured and cannot work.
Credit HistoryA record of an individual’s or company’s past borrowing and repaying behavior maintained by an independent credit reporting agency.
Credit Life & Disability InsuranceInsurance offered to loan and credit card customers that will pay the monthly payments on their debt if they become disabled or the balance of their debt…
Credit Life Insurance (CLI)(CLI)A type of life insurance that helps repay a loan if you should die before the loan is fully repaid. CLI is optional coverage.
Credit limitThe maximum amount of credit that is available on a credit card or other line of credit account.
Credit LineA credit line, or line of credit, is a revolving credit agreement that allows you to write checks or make cash withdrawals of amounts up to your credit…
Credit Pre-ApprovalA process in which an individual can apply for a credit approval decision before he/she actually finds a home and enters into a Purchase and Sales…
Credit ratingYour credit rating is an independent statistical evaluation of your ability to repay debt based on your borrowing and repayment history.
Credit Repair OrganizationA person or organization that sells, provides, performs, or assists in improving a consumer's credit record, credit history or credit rating (or says that…
Credit ReportA detailed report of an individual's credit history prepared by a credit bureau and used by a lender in determining a loan applicant's creditworthiness.
Credit Reportsor “consumer reports,” contain information about your credit worthiness. Information is kept on file with a credit bureau and will display data about…
Credit ScoreA number, roughly between 300 and 800, that measures an individual's credit worthiness. The most well-known type of credit score is the FICOî score.
Credit Service Organizationalso known as a loan/mortgage broker. Starting in late September 2005 all Credit Service Organizations will be renamed loan brokers; see loan broker.
Credit UnionA cooperative, nonprofit association, licensed under for the purposes of encouraging thrift among its members, creating a source of credit at a fair and…
Credit Union StatementPeriodically the credit union provides a statement of a member's share account.
CreditorA person or company who provides credit to another person or company functions as a creditor.
Crossed marketA market in a particular stock or option is described as crossed when a bid to buy that stock or option is higher than the offer to sell it, or when an…
cum-dividendA term applied to stock at a time when the purchaser will be entitled to a forthcoming dividend.
Cumulative votingWith this method of voting for a corporation's board of directors, you may cast the total number of votes you're entitled to any way you choose.
CureTo bring your credit account current by paying all past due accounts.
CurrencyA form of money, something (such as coins or bills) generally accepted as a way of measuring value, as a way to trade value, and as a way to pay for goods…
Currency fluctuationA currency has value, or worth, in relation to other currencies and those values change constantly.
Currency swapIn a currency swap, the parties to the contract exchange the principal of two different currencies immediately, so that each party has the use of the…
Currency tradingThe global currency market, where roughly $1.9 trillion a day changes hands, is by far the largest financial market in the world.
Current Assumption Whole LifeA variation of universal life insurance, this product involves fixed premiums and fixed death benefits. Its cash value growth depends on market conditions.
Current returnCurrent return, also called current yield, is the amount of interest you earn on a bond in any given year, expressed as a percent of the current market…
Current yieldThe annual rate of return that an investor purchasing a security at its market price would realize.
Custodial accountIf you want to make investments on a minor's behalf, or transfer property you own to that person, you can open a custodial account with a bank, brokerage…
CustodianA financial institution, usually a bank or a trust company, that holds a mutual fund's securities and cash in safekeeping.
Custom/Non-factory Equipment CoverageCovers customized features such as those found on conversion vans, as well as non-factory items such as compact disc players, cellular phones or CB radios.
Cut-Off TimeA time of day established by a bank for receipt of deposits. After the cut-off time, deposits are considered received on the next banking day.
Cyber CrimeComputer crime, or cybercrime, refers to any crime that involves a computer and/or a network, where the computers may or may not have played an…
Cyclical stockCyclical stocks tend to rise in value during an upturn in the economy and fall during a downturn.
Daily balance method with compoundingAccording to this method, we calculate the interest charges for each balance by applying the “daily periodic rate” for that balance to the “daily…
Daily balance method without compoundingAccording to this method, we calculate the interest charges for each balance by applying the “daily periodic rate” for that balance to the “daily…
Daily periodic rate (DPR)(DPR)DPR stands for “Daily Periodic Rate.” This is a daily interest rate. The daily periodic rate or DPR for a given balance is equal to the APR on that…
Daily trading limitThe daily trading limit is the most that the price of a futures contract can rise or fall in a single session before trading in that contract is stopped…
Date of maturityThe date of maturity, or maturity date, is the day on which a bond's term ends, and its issuer repays the principal and makes the final interest payment.
Day orderAn order to buy or sell a security valid only for a limited period, normally less than a day.
Day traderWhen you continuously buy and sell investments within a very short time, perhaps a few minutes or hours, and rarely hold them overnight, you're considered…
day tradingRefers to establishing and liquidating the same position or positions within one day's trading.
DealerDealers, or principals, buy and sell securities for their own accounts, adding liquidity to the marketplace and seeking to profit from the spread between…
Dealer Sticker PriceDealer Sticker Price, usually on a supplemental sticker, is the Monroney sticker price plus the suggested retail price of dealer-installed options, such…