Personal Finance — page 2 of 19

Personal Finance terms

101. Asset Anything owned that has value; any interest in real property or personal property that can be used for payment of debts.
102. Asset Allocation An investment strategy that divides assets among major asset categories such as stocks, bonds, or cash, usually balancing risk and creating…
103. Asset class Different categories of investments are described as asset classes. Stock, bonds, and cash - including cash equivalents - are major asset classes.
104. Asset Classes A type of investment, such as stocks, bonds, or cash equivalents.
105. Asset Management Account An asset management account, offered by a brokerage house, bank, or savings and loan, combines a number of financial services, such as checking, money…
106. Asset management account (AMA) All-in-one asset management accounts provide the financial advantages of an investment account combined with the convenience of an interest-bearing…
107. Asset-backed bond Asset-backed bonds, also known as asset-backed securities, are secured by loans or by money owed to a company for merchandise or services purchased on…
108. Assign We assign your credit card contract if we sell or pass to a third party any or all of our rights or obligations under the contract, including any amount…
109. Assignment Assignment occurs when someone who has written, or sold, a listed option receives a notice that the option has been exercised and he or she must fulfill…
110. At-the-money At-the-money is another way of saying at the current price. Options whose exercise price is the same or almost the same as the current market price of the…
111. ATM Card Card used primarily for withdrawing funds, depositing funds or making a balance inquiry at an automated teller machine (ATM).
112. ATM surcharge The fee that the institution charges to non-account holders for use of its automated teller machines (ATMs).
113. Auction market Auction market trading, sometimes known as open outcry, is the way the major exchanges, such as the New York Stock Exchange (NYSE) and the Chicago…
114. Audit An audit is a professional, independent examination of a company's financial statements and accounting documents following generally accepted accounting…
115. Audit committee The corporate audit committee is the liaison between the company's management, the board of directors, internal and external auditors, and any other…
116. Authorization The issuance of approval, by a credit card issuer, merchant, or other affiliate, to complete a credit card transaction.
117. Authorized charge An authorized charge is any charge that you or any authorized user makes on the account, and any fees and interest charges owing on the account.
118. Authorized IRS e-file Provider A business authorized by the IRS to participate in the IRS e-file Program. The business may be a sole proprietorship, a partnership, a corporation, or an…
119. Authorized user If you ask us to issue a credit card on this account to another person, he or she is an authorized user.
120. Automated Clearing House (ACH) (ACH) A computerized facility used by member depository institutions to electronically combine, sort, and distribute inter-bank credits and debits.
121. Automated Teller Machine (ATM) (ATM) A machine, activated by a magnetically encoded card or other medium, that can process a variety of banking transactions.
122. Automatic Bill Payment A checkless system for paying recurring bills with one authorization statement to a financial institution.
123. Automatic enrollment Your employer has the right to sign you up for your company's 401(k) plan, in what's known as an automatic enrollment.
124. Automatic exercise If you hold a call option, automatic exercise may occur if the contract is in-the-money by a certain amount.
125. Availability Date The date on which checks payable at local or non-local banks are considered to be collected and available for customers' withdrawal.
126. Availability Policy Bank's policy as to when funds deposited into an account will be available for withdrawal.
127. Available Balance The balance of an account less any hold, uncollected funds, and restrictions against the account.
128. Available Credit The difference between the credit limit assigned to a cardholder account and the present balance of the account.
129. Average A stock market average is a mathematical way of reporting the composite change in prices of the stocks that the average includes.
130. Average annual yield Average annual yield is the average yearly income on an investment, expressed as a percentage.
131. Average daily balance The average daily balance method is one of the ways that the finance charge on your credit card may be calculated.
132. Average daily balance method with compounding According to this method, we calculate the interest charges for each balance by applying the “daily periodic rate” for that balance to the “average…
133. Average daily balance method without compounding According to this method, we calculate the interest charges for each balance by applying the “daily periodic rate” for that balance to the “average…
134. Average Final Compensation (AFC) Average final compensation (AFC) is the 12 highest consecutive quarters of a member’s earnable compensation divided by three.
135. Baby bond Bonds whose par values are less than $1,000 are often described as baby bonds, or, in the case of municipal bonds, as mini-munis.
136. Baccalaureate bond Baccalaureate bonds are tax-free zero coupon bonds issued by certain states specifically to help families accumulate assets to meet college tuition costs.
137. Back-end load A sales charge levied when mutual fund units are redeemed.
138. Back-up withholding Back-up withholding is triggered when a bank, brokerage firm, or other institution pays interest, dividends, or other income that must be reported on IRS…
139. Balance We put each charge on your account, including interest or fees, into a balance category.
140. Balance of trade The difference between the value of a country's imports and exports during a specific period of time is called the balance of trade.
141. Balance Sheet A financial statement showing the nature and amount of a company's assets, liabilities and shareholders' equity.
142. Balance transfer The process of moving an outstanding balance from one credit card to another. This is usually done to obtain a lower interest rate on the outstanding…
143. Balance-transfer fee A fee charged when you make a balance transfer. It may be a flat fee or a percentage of the transfer.
144. Balanced fund Balanced funds are mutual funds that invest in a portfolio of common stocks, preferred stocks, and bonds to meet their investment goal of seeking a strong…
145. Balloon Mortgage With a balloon mortgage, you make monthly payments over the mortgage term, which is typically five, seven, or ten years, and a final installment, or…
146. Balloon Payment A mortgage with periodic installments of principal and interest that do not fully amortize the loan.
147. Banking Day A business day during which an office of a bank is open to the public for substantially all of its banking functions.
148. Bankrupt A bankrupt person, firm, or corporation has insufficient assets to cover their debts.
149. Bankruptcy The legal proceedings by which the affairs of a bankrupt person are turned over to a trustee or receiver for administration under the bankruptcy laws.
150. Barbell strategy When you use a barbell strategy you invest equivalent amounts in short-term and long-term bonds, creating the shape that gives the strategy its name.
151. Base Price Base Price is the cost of a car without options, but includes standard equipment and factory warranty. It is also known as sticker price.
152. Basis Basis is the total cost of buying an investment or other asset, including the price, commissions, and other charges.
153. Basis point Yields on bonds, notes, and other fixed-income investments fluctuate regularly, typically changing only a few hundredths of a percentage point.
154. Basis price When you sell a security, such as a stock or bond, or real estate, the price you use to calculate your capital gains is known as your basis price.
155. Bear market A market in which prices are generally falling.
156. Bear spread A bear spread is an options strategy that you use when you anticipate a decline in the price of the underlying instrument, such as a stock or an index.
157. Bearer bond A bearer bond is a certificate that states the security's par value, the rate at which interest will be paid, and the name of the bond's owner.
158. Bearer form When securities are issued as paper certificates and the issuing corporation has no record of the owner, the securities are in bearer form.
159. Behavioral finance Behavioral finance combines psychology and economics to explain why and how investors act and to analyze how that behavior affects the market.
160. Beige Book Beige book is the colloquial name for the Federal report that is formally titled Summary of Commentary on Current Economic Conditions by Federal Reserve…
161. Bellwether A market bellwether is a security whose changing price is considered a signal that the market is changing direction.
162. Benchmark A standard unit used as the basis of comparison; a universal unit that is identified with sufficient detail so that other similar classifications can be…
163. Beneficial owner When your stocks are registered in street name, the brokerage firm has title to the stocks but you are the beneficial owner, or the person who actually…
164. Beneficiary A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract.
165. Beneficiary or Beneficiary Payee A person who is designated to receive, or is receiving, a retirement annuity or other benefit provided by the South Carolina Retirement Systems.
166. benefits received A concept of tax fairness that states that people should pay taxes in proportion to the benefits they receive from government goods and services.
167. Beta Beta is a measure of an investment's relative volatility. The higher the beta, the more sharply the value of the investment can be expected to fluctuate…
168. BID The bid is the price a market maker or broker is willing to pay for a security, such as a stock or bond, at a particular time.
169. Bid and ask The bid price is the highest price anyone is willing to pay to buy a stock; while the ask is the lowest anyone will accept to sell a stock.
170. Big Board The Big Board is the nickname of the New York Stock Exchange (NYSE), the oldest stock exchange in the United States and the one with the largest trading…
171. Bill Your bill is the statement of your account. Your bill will tell you the total amount that you owe us as of the end of the last billing period.
172. Billing Cycle The time interval between the dates on which regular periodic statements are issued.
173. Billing Date The month, date, and year when a periodic or monthly statement is generated. Calculations have been performed for appropriate finance charges, minimum…
174. Billing Error A charge that appears on a periodic statement associated with an extension of credit (e.g.
175. Billing period The billing period is the fixed period of time covered by the bill we send you.
176. Blind pool If the general partner of a limited partnership does not say which investments the partnership will make, the investment is known as a blind pool.
177. Blind trust A 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.
178. Block trade When 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.
179. Blue chip stock Blue 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…
180. Blue sky laws Blue sky laws require companies that sell stock, mutual funds, and other financial products to register new issues with the appropriate public agency.
181. Boiler room A 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…
182. Bond A 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.
183. Bond fund A mutual fund whose portfolio consists primarily of bonds.
184. Bond rating Independent agencies, such as Standard & Poor's (S&P) and Moody's Investors Service, assess the likelihood that bond issuers are likely to default on…
185. Bond swap In 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…
186. Bond, U.S. Savings Savings bonds are issued in face value denominations by the U.S. Government in denominations ranging from $50 to $10,000.
187. 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.
188. bonus Compensation received by an employee for services performed. A bonus is given in addition to an employee's usual compensation.
189. Book value The value of net assets that belong to a company's shareholders, as stated on the balance sheet.
190. Book-entry security Book-entry securities are stocks, bonds, and similar investments whose ownership is recorded electronically rather than in certificate form.
191. Bottom fishing Investors using a bottom-fishing strategy look for stocks that they consider undervalued because the prices are low.
192. Bottom-up investing When you use a bottom-up investing strategy, you focus on the potential of individual stocks, bonds, and other investments.
193. Bourse Bourse is the French term for a stock exchange, meaning, literally, purse. The national stock market of France, a totally electronic market, is known as…
194. Brady bond These 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…
195. Branch Office For banks and thrifts, a branch office is an office approved as a branch by a supervisory agency.
196. Breakout Stock prices fluctuate constantly, but each stock typically moves within a fairly narrow range.
197. Breakpoint A 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…
198. Broker An agent who handles the public's orders to buy and sell securities, commodities or other property. A commission is generally charged for this service.
199. Broker-dealer A person that buys and sells securities for others or for h the broker-dealer's own account (e.g. proprietary trading).
200. Brokerage account To buy and sell securities through a broker-dealer or other financial services firm, you establish an account, generally known as a brokerage account…