Financial definitions for business owners B

• Definition Below par Explain Less than the nominal or face value of a security
• Definition Book Explain A banker or trader's positions
• Definition Base rate Explain British equivalent of the U.S. prime rate
• Definition bonds Explain Corporate bonds arranged so that specified principal amounts become due on specified dates. Related: Term bonds
• Definition Book profit Explain The cumulative book income plus any gain or loss on disposition of assets
• Definition Blowout Explain The rapid sale of all shares in a new securities offering. See: hot issue
• Definition British clearers Explain The large clearing banks that dominate deposit taking and short-term lending in the domestic sterling market
• Definition Buydowns Explain consist of principal and interest. During the early part of the loan, portions of these payments are provided by a third party to reduce
• Definition Buyer's market Explain Market in which the supply exceeds the demand, creating lower prices. Antithesis of seller's_market
• Definition Busted convertible Explain Mainly applies to convertible securities. Convertible bond selling essentially as a straight bond. Assuming the issuer is money good, or
• Definition Bust-up takeover Explain A leveraged buyout in which the buyer sells off the assets of the target_company to repay the debt that financed the takeover
• Definition Butterfly Explain two divisions may split into two companies and issue original shareholders two shares (one in each of the new companies) for every old
• Definition Butterfly shift Explain A nonparallel shift in the yield curve involving the height of the curve
• Definition Butterfly spread Explain option strategy that involves selling two calls and buying two calls on the same or different markets, with several maturity dates. One of
• Definition Buy Explain To purchase an asset; taking a long position
• Definition Buy-and-hold strategy Explain active buying and selling of stocks from the time the portfolio is created until the end of the investment horizon
• Definition Buy-and-write strategy Explain An options strategy that calls for the purchase of stocks and the writing of covered call options on them
• Definition Buy the book Explain institutional investor to a broker to purchase all the shares available at the market from the specialist and other brokers and dealers at
• Definition Buy in Explain To cover, offset, or close out a short position. Related: Evening up, liquidation
• Definition Buy limit order Explain A conditional trading order that indicates a security may be purchased only at the designated price or lower. Related: Sell limit order
• Definition Buy minus order Explain rare market or limit order to buy a stated amount of a stock, provided that the price to be obtained is not higher than the last sale if
• Definition Buy on close Explain Buying at the end of the trading session at a price within the closing range
• Definition Buy on margin Explain Borrowing to buy additional shares, using the shares themselves as collateral
• Definition Buy on opening Explain Buying at the beginning of a trading session at a price within the opening range
• Definition Buy order Explain An order to a broker to purchase a specific quantity of a security
• Definition Buy-side analyst Explain nonbrokerage firm, typically one of the larger money management firms that purchases securities on its own account
• Definition Buy stop order Explain the market price rises to the stop price. Once the security has broken through that price, the order is then treated as a market order
• Definition "Buy them back" Explain Used for listed equity securities. Cover my short position
• Definition Buying climax Explain A rapid rise in the price of a stock resulting from heavy buying, which usually creates the market condition for a rapid fall in the price
• Definition Buying the index Explain Purchasing the stocks in the S;P 500 in the same proportion as the index to achieve the same return
• Definition Buying power Explain securities, determined by adding the total cash held in brokerage accounts and the amount that could be spent if securities were margined
• Definition Buyout Explain Purchase of a controlling interest (or percent of shares) of a company's stock. A leveraged buy out is effected with borrowed money
• Definition Broker loan rate Explain Related: Call money rate
• Definition Brokered CD Explain bank or thrift institution bought by a brokerage firm in bulk for the purpose of reselling to brokerage customers. A broker CD features a
• Definition Brokered market Explain A market in which an intermediary offers search services to buyers and sellers
• Definition Brought over the wall Explain investment bank to work in the underwriting department for a corporate client, therefore allowing for the transmission of insider
• Definition Brussels Stock Exchange (BSE) Explain Stock exchange that handles the majority of securities transactions in Belgium
• Definition Bubble theory Explain Security prices sometimes move wildly above their true values, or the price falls sharply until the bubble bursts
• Definition Budget deficit Explain The amount by which government spending exceeds government revenues
• Definition Buck Explain Slang for one million dollars
• Definition Bucket shop Explain customer orders but does not attain immediate executions. A bucket shop broker promises the customer a certain price, but waits until a
• Definition Budget surplus Explain The amount by which government revenues exceed government spending
• Definition Build a book Explain In the context of general equities, develop customer orders to gather demand/supply in order to make a bid or an offer
• Definition Builder buydown loan Explain property that the builder subsidizes during the early years of the development. The builder uses cash to buy down the mortgage rate to a
• Definition Bulge Explain A short-lived stock price increase. Synonymous with bubble
• Definition Bull Explain An investor who thinks the market will rise. Related: Bear
• Definition Bull-bear bond Explain linked to the price of another security. The bonds are issued in two tranches: In the first tranche repayment increases with the price of
• Definition Bull CD Explain percentage of the increase in return on a specified market index while guaranteeing a minimum rate of return
• Definition Bull market Explain Any market in which prices are in an upward trend
• Definition Bull spread Explain buys an out-of-the-money put option, financing it by selling an out-of-the money call option on the same underlying security
• Definition Bulldog bond Explain Foreign bond issue made in London
• Definition Bulldog market Explain The foreign market in the United Kingdom
• Definition Bullet contract Explain A guaranteed investment contract purchased with a single (one-shot) premium. Related: Window contract
• Definition Bullet loan Explain A bank term loan that calls for no amortization
• Definition Bullet strategy Explain portfolio is constructed so that the maturities of its securities are highly concentrated at one point on the yield curve
• Definition Bullion coins Explain platinum, or palladium that are actively traded. Some examples include the American eagle and the Canadian maple leaf. Their price is
• Definition Bullish Explain Words used to describe investor attitudes. Bullish refers to an optimistic outlook, while bearish means a pessimistic outlook
• Definition Bump-up CD Explain owner the right to increase its yield one time for the remaining term of the CD. The power is exercised by the owner in the event of an
• Definition Bunching Explain round-lot orders for execution at the same time. Bunching can also be used to combine odd-lot orders to save the odd-lot differential for
• Definition Bundling, unbundling Explain combining primitive and derivative securities into one composite hybrid or by separating returns on an asset into classes
• Definition Burn rate Explain refer to the rate at which a start-up company expends capital to finance overhead costs prior to the generation of positive cash flow
• Definition Burnout Explain benefits. In the context of mortgage backed securities it refers to the percentage of the pool that has prepaid their mortgage
• Definition Business cycle Explain and recession. The official peaks and troughs of the U.S. cycle are determined by the National Bureau of Economic Research in Cambridge
• Definition Business day Explain A day in which financial markets are open for trading
• Definition Business failure Explain A business that has terminated operations with a loss to creditors
• Definition Business risk Explain issuer will be impaired because of adverse economic conditions, making it difficult for the issuer to meet its operating expenses
• Definition Business segment reporting Explain Reporting the results of the separate divisions or subsidiaries of a business
• Definition Borrow Explain To obtain or receive money on loan with the promise or understanding that it will be repaid
• Definition Borrowed reserves Explain Funds borrowed from a Federal Reserve Bank by member banks to maintain the required reserve ratios
• Definition Borrower fallout Explain In the mortgage pipeline, the risk that prospective borrowers of loans committed to be closed will elect to withdraw from the contract
• Definition Bot Explain Shorthand for bought. Antithesis of SL, meaning sold
• Definition Bottom Explain market prices of any type. Also used in the context of securities to refer to the lowest market price of a security during a specific time
• Definition Bottom fisher Explain An investor seeking stocks that have fallen to prices at or near their bottom, which he or she believes will trend up in the future
• Definition Bottom-up equity management style Explain A management style that de-emphasizes the significance of economic and market cycles, focusing instead on the analysis of individual stocks
• Definition Bought deal Explain Security issue in which one or two underwriters buy the entire issue
• Definition Bounce Explain is not payable, usually because of insufficient funds. Also used in the context of securities to refer to the rejection and ensuing
• Definition Bourse Explain French for a stock market
• Definition Boutique Explain that offers limited services and products to a limited number of clients. Antithesis of financial supermarket
• Definition Box Explain brokerage house or bank where securities or other documents are stored for safekeeping. Alternatively, a quotation machine or battery march
• Definition Bracket Explain A term signifying the extent of an underwriter's commitment in a new issue, e.g., major bracket or minor bracket
• Definition Bracket creep Explain The gradual movement into higher tax brackets when incomes increase as a result of inflation
• Definition Brady bonds Explain Bonds issued by emerging countries under a debt reduction plan
• Definition Branch Explain An operation in a foreign country incorporated in the home country
• Definition Break Explain A rapid and sharp price decline. Related: Crash
• Definition Break price Explain Change one's offering or bid prices to move to a more realistic, tight level where execution is more feasible. Often done to trim
• Definition Break-even analysis Explain An analysis of the level of sales at which a project would make zero profit
• Definition Break-even lease payment Explain The lease payment at which a party to a prospective lease is indifferent between entering and not entering into a lease arrangement
• Definition Break-even payment rate Explain that will produce the same cash flow yield (CFY) as that of a predetermined benchmark MBS coupon. Used to identify for coupons higher than
• Definition Break-even point Explain transaction produces neither a gain nor a loss. In the context of options, the term has the additonal definitions:1. Long calls and short
• Definition Break-even tax rate Explain The tax rate at which a party to a prospective transaction is indifferent between entering into and not entering into the transaction
• Definition Break-even time Explain Related: Premium payback period
• Definition Breaking the syndicate Explain Terminating an agreement among underwriters, specifically the investment banking group assembled to underwrite the issue of a security
• Definition Book cash Explain A firm's cash balance as reported in its financial statements. Also calledledger cash
• Definition Breakout Explain a resistance level (commonly its previous high price) or a drop below a level of support (commonly the former lowest price.) A breakout is
• Definition Breeden, Douglas T Explain asset pricing models in finance, the consumption based capital asset pricing model. Chairman of Smith Breeden Associates
• Definition Bretton Woods Agreement Explain United Nations members in 1944 that established the International Monetary Fund (I.M.F.) and the post-World War II international monetary
• Definition Bridge financing Explain Interim financing of one sort or another used to solidify a position until more permanent financing is arranged
• Definition "Bring it out" Explain In the context of general equities, make stock available for sale to indicated buyers
• Definition Bellwether issues Explain Related: Benchmark issues
• Definition Broad tape Explain which is displayed on a screen in the board room of a brokerage firm and shows constantley updated financial information and news
• Definition Broken up Explain Prevented from executing a trade (committed to upstairs) due to exchange priority rules excluding one's order (e.g., higher bid/lower
• Definition Broker Explain for executing customer orders. Either a floor broker who executes orders on the floor of the exchange, or an upstairs broker who handles
• Definition Boiler room Explain Used to describe place or operation in which unscrupulous salespeople call and try to sell people speculative, even fraudulent, securities
• Definition Boilerplate Explain Standard terms and conditions
• Definition Bolsa Explain Spanish for stock exchange
• Definition Bolsa de Commercio de Santiago (SSE) Explain Chile's preeminent stock exchange
• Definition Bolsa de Valores de Rio de Janeiro (BVRJ) Explain Brazil's second-largest stock exchange
• Definition Bolsa de Valores de Sao Paulo (BOVESPA) Explain The largest stock exchange in Brazil
• Definition Bolt Explain Used for listed equity securities. Block trading version of COLT
• Definition Bond Explain period of more than one year. The U.S. government, local governments, water districts, companies and many other types of institutions sell
• Definition Bond agreement Explain A contract for privately placed debt
• Definition Bond broker Explain A broker on the floor of an exchange who trades bonds
• Definition Bond Buyer Explain A daily publication featuring many essential statistics and index figures relevant to the fixed income markets
• Definition Bond Buyer's municipal bond index Explain A municipal bond price tracking index published daily by the Bond Buyer
• Definition Bond counsel Explain An attorney who prepares the legal opinion concerning a municipal bond issue
• Definition Bond covenant Explain A contractual provision in a bond indenture. A positive covenant requires certain actions, and a negative covenant limits certain actions
• Definition Bond crowd Explain Members of the stock exchange who transact bond orders on the floor of the exchange
• Definition Bond-equivalent basis Explain The method used for computing the bond-equivalent yield
• Definition Bond equivalent yield Explain Bond yield calculated on an annual percentage rate method. Differs from annual effective yield
• Definition Bond indenture Explain Contract that sets forth the promises of a corporate bond issuer and the rights of investors
• Definition Bond indexing Explain Designing a bond portfolio so that its performance will match the performance of some bond index
• Definition Bond market association Explain broker/dealers and banks in U.S. government and federal agency securities, municipal securities, mortgage-backed securities, and money
• Definition Bond mutual fund Explain A mutual fund holding bonds
• Definition Bond points Explain prices set at $1 and equivalent to 1% of the $100 face value of the bond. A price of 80 means that the bond is selling at 80% of its face
• Definition Bond power Explain A form used in the transfer of registered bonds from one owner to a different owner
• Definition Bond discount Explain market price is lower than its face value. The antithesis of a bond premium, which prevails when the market price of a bond is higher than
• Definition Bond value Explain value the security would have if it were not convertible. That is the market value of the bond minus the value of the conversion option
• Definition Bondholder Explain The firm often has stockholders and bondholders. In a liquidation, the bondholders have first priority
• Definition BONDPAR Explain the performance of a fixed income portfolio, as well as the individual securities held in the portfolio. BONDPAR decomposes the return into
• Definition Boning Explain Charging a lot more for an asset than its worth
• Definition Book runner Explain The managing underwriter for a new issue. The book runner maintains the book of securities sold
• Definition Book to bill Explain high-technology industry's demand to supply ratio of orders on a firm's book to number of orders filled. Measures who the company
• Definition Book value Explain intangible assets and liabilities, such as debt. A company's book value might be higher or lower than its market value
• Definition Book value per share Explain average number of common shares. Book value per share should not be thought of as an indicator of economic worth, since it reflects
• Definition Book-entry securities Explain represented by paper certificates but are maintained in computerized records at the Fed in the names of member banks, which in turn keep
• Definition Bootstrap Explain Term used to describe the start-up of a company with very little capital
• Definition Bootstrapping Explain Creating a theoretical spot rate curve using one yield projection as the basis for the yield of the next maturity
• Definition Bill of exchange Explain General term for a document demanding payment
• Definition Bill of lading Explain transportation company in which the latter agrees to transport the goods under specified conditions that limit its liability. It is the
• Definition Billing cycle Explain The time elapsed between billing periods for goods sold or services rendered
• Definition Binder Explain An amount of money paid to indicate good faith in a transaction before the transaction is completed
• Definition Binomial option pricing model Explain underlying asset can assume one of only two possible, discrete values in the next time period for each value that it can take on in the
• Definition Bi-weekly mortgage loan Explain principal payments are made every half-month (total of 26 payments) as opposed to monthly payments. This results in earlier loan retirement
• Definition Black Friday Explain market . The original Black Friday occurred on September 24, 1869, when prospectors attempted to corner the gold market
• Definition Black market Explain An illegal market
• Definition Black Monday Explain Dow Jones Industrial Average fell 508 points on the heels of sharp drops the previous week. On Monday, October 27, 1997, the Dow dropped
• Definition Black-Scholes option-pricing model Explain on arbitrage arguments. Uses the stock price, the exercise price, the risk-free interest rate, the time to expiration, and the expected
• Definition Blank check Explain A check that is duly signed, but the amount of the check is left blank to be supplied by the drawee
• Definition Blank check offering Explain An initial public offering by a company whose business activities are undefined and therefore speculative
• Definition Blanket fidelity bond Explain SEC-required insurance coverage that brokerage firms are required to have in order to cover fraudulent trading by employees
• Definition Blanket inventory lien Explain A secured loan that gives the lender a lien against all the borrower's inventories
• Definition Blanket recommendation Explain sent to all its customers advising that they buy or sell a particular stock regardless of investment objectives or portfolio size
• Definition Blind pool Explain A limited partnership that does not announce its intentions as to what properties will be acquired
• Definition Blind trust Explain party has total discretion to make investments on behalf of a beneficiary while the beneficiary is uninformed about the holdings of the
• Definition Blitzkrieg tender offer Explain In the context of a takeover, refers to a tender offer that is priced so attractively that the tender is completed quickly
• Definition Block Explain amount of bonds held or traded. As a rule of thumb, 10,000 shares or more of stock and $200,000 or more worth of bonds would be described
• Definition Block call Explain conference meeting during which customer indications and orders, along with the traders' own buy/sell preferences, are conveyed to the
• Definition Block house Explain Brokerage firms that help to find potential buyers or sellers of large block trades
• Definition Block list Explain listing of stock the investment bank is looking for (wants to buy) or (wants to sell) at the beginning of the day, whether on an agency or
• Definition Block trade Explain New York Stock Exchange as an order that consists of 10,000 shares of a given stock or at a total market value of $200,000 or more
• Definition Block voting Explain Descirbes a group of shareholders banding together to vote their shares in a single block
• Definition Blocked currency Explain A currency that is not freely convertible to other currencies due to exchange controls
• Definition Blow-off top Explain followed by a steep and rapid drop. This is an indicator seen in charts and used in technical analysis of stock price and market trends
• Definition Blue list Explain bonds offered for sale by dealers and banks that represent billions of dollars in par value. Also available on-line at www.bluelist.com
• Definition Blue-chip company Explain Large and creditworthy company. Company renowned for the quality and wide acceptance of its products or services, and for its ability to
• Definition Blue-sky laws Explain State laws covering the issue and trading of securities
• Definition Bo Derek stock Explain High quality stock
• Definition Board broker Explain Employee of the Chicago Board Options Exchange who manages away from the market orders, which cannot be executed immediately
• Definition Board of Directors Explain Individuals elected by the shareholders of a corporation who carry out certain tasks established in the charter
• Definition Board of Governors of the Federal Reserve System Explain The managing body of the Federal Reserve System, set which policies on bank practices and the money supply
• Definition Board room Explain clients can watch an electronic board displaying stock prices and transactions. Also refers to the room where Board of Directors meetings
• Definition Bogey Explain The return an investment manager is compared to for performance evaluation
• Definition Before-tax profit margin Explain The ratio of net income before taxes to net sales
• Definition Beggar-thy-neighbor Explain competitive devaluations and increased protective barriers that one country institutes to gain at the expense of its trading partners
• Definition Beggar-thy-neighbor devaluation Explain cheapen a nation's currency and thereby increase its exports at the expense of other countries. Devaluation can also reduce a nation&#
• Definition Behind Explain the same price but entered after your order/interest, such as on the specialist's book. Antithesis of ahead of you
• Definition Bell Explain Signal on a stock exchange to indicate the open and close of trading
• Definition Benchmark Explain of securities, used for comparison purposes. Such sets may be based on published indexes or may be customized to suit an investment
• Definition Benchmark error Explain Use of an inappropriate proxy for the true market portfolio
• Definition Benchmark interest rate Explain is the minimum interest rate investors will demand for investing in a non-Treasury security. It is also tied to the yield to maturity
• Definition Benchmark issue Explain coupon issue or bellwether issues. In the secondary market, the benchmark issue is the most recently auctioned Treasury issues for each
• Definition Beneath Explain Used for listed equity securities. 1) Behind; 2) Lower in price
• Definition Beneficial ownership Explain who enjoys the benefits of ownership even though title is in another name. (Abused through the illegal use of a parking violation
• Definition Beneficiary Explain Term used to refer to the person who receives the benefits of a trust or the recipient of the proceeds of a life insurance policy
• Definition Best's rating Explain A rating A.M. Best Co. assigns to insurance companies based on the company's ability to meet its obligations to its policyholders
• Definition Best-efforts sale Explain distribution/underwriting in which the securities firm agrees to sell as much of the offering as possible and return any unsold shares to
• Definition Best-interests-of-creditors test Explain The requirement that a claim holder voting against a plan of reorganization must receive at least as much as if the debtor were liquidated
• Definition Beta Explain #039;s risk in relation to the market or to an alternative benchmark. A beta of 1.5 means that a stock's excess return is expected to
• Definition Beta equation (security) Explain determined as follows: Regress excess returns of stock y on excess returns of the market. The slope coefficient is beta. Define n as number
• Definition Biased expectations theories Explain Related: Pure expectations theory
• Definition Bid Explain to pay for a security. Sometimes also used in the context of takeovers where one corporation is bidding for (trying to buy) another
• Definition Bid away Explain Refers to over-the-counter trading. Bid from another dealer exists at the same (listed) or higher (O.T.C.) price
• Definition Bid-asked spread Explain The difference between the bid and the asked prices
• Definition Bid price Explain price an investor is willing to pay to buy a security. Practically speaking, this is the available price at which an investor can sell
• Definition Bid-to-cover ratio Explain The ratio of the number of bids received in a Treasury security auction compared to the number of accepted bids
• Definition Bid wanted Explain Used in the context of general equities. Announcement that a holder of securities wants to sell and will entertain bids
• Definition Bidder Explain A firm or person that wants to buy a firm or security
• Definition Bidding buyer Explain In the context of general equities, a nonaggressive buyer who prefers to await a natural seller in the hope of paying a lower price
• Definition Bidding through the market Explain aggressive willingness to purchase a security at a premium to the inside market. Contrast with bidding buyer
• Definition Bidding up Explain Moving the bid price higher
• Definition Big Bang Explain The term applied to the liberalization in 1986 of the London Stock Exchange (L.S.E.) when trading was automated
• Definition Big Board Explain Exchange (NYSE). Also known as The Exchange. More than 2,000 common and preferred stocks are traded. Founded in 1792, the N.Y.S.E. is the
• Definition Big picture Explain To highlight trading interest due to the size of the trade
• Definition Big producer Explain A successful broker who generates a large volume of commission. See Rainmaker
• Definition Big uglies Explain Unpopular stocks
• Definition Barrier options Explain Option contracts with trigger points that, when crossed, automatically generate buying or selling of other options. These are exotic options
• Definition Barron's confidence index Explain average yield on 10 top-grade bonds to the average yield on 10 intermediate-grade bonds. The discrepancy between high-rated top-grade bonds
• Definition Barter Explain The trading/exchange of goods or services without using currency
• Definition Base Explain pattern depicting the period when the supply and demand of a certain stock are in relative equilibrium, resulting in a narrow trading range
• Definition Base currency Explain Applies mainly to international equities. Currency in which gains or losses from operating an international portfolio are measured
• Definition Base interest rate Explain Related: Benchmark interest rate
• Definition Base market value Explain A group of securities, average market price at a specific time. Used for the purpose of indexing
• Definition Base period Explain A particular period of time used for comparative purposes when measuring economic data
• Definition Base probability of loss Explain The probability of not achieving a portfolio expected return. Related: Value at risk
• Definition Basic balance Explain In a balance of payments, the basic balance is the net balance of the combination of the current account and the capital account
• Definition Basic business strategies Explain Key strategies a firm intends to pursue in carrying out its business plan
• Definition Basic IRR rule Explain than the discount rate; reject the project if it is lower than the discount rate. It is wise to also consider net present value for project
• Definition Basis Explain security plus any out-of-pocket expenses. It is used to determine capital gains or losses for tax purposes when the stock is sold. Also
• Definition Basis point Explain measure used for quoting yields is a basis point. Each percentage point of yield in bonds equals 100 basis points. Basis points also are
• Definition Basis price Explain Price expressed in terms of yield to maturity or annual rate of return
• Definition Basis risk Explain Uncertainty about the basis at the time a hedge may be lifted. Hedging substitutes basis risk for price risk
• Definition Basket Explain of stocks that is formed with the intention of either being bought or sold all at once, usually to perform index arbitrage or a hedging
• Definition Basket options Explain more than two currencies against a base currency at expiration. The basket option buyer purchases the right, but not the obligation, to
• Definition Basket trades Explain Related: Program trades
• Definition BD form Explain An SEC required document of brokerage houses that outlines the firm's finances and officers
• Definition Bear Explain overall market will decline. A bear market is a prolonged period of falling stock prices, usually by 20% or more. Related: bull
• Definition Bear CD Explain A bear CD pays the holder a fraction of any fall in a given market index
• Definition Bear hug Explain takeover attempt in which the acquirer offers an exceptionally large premium over the market value of the acquiree's share so as to as
• Definition Bear market Explain Any market in which prices exhibit a declining trend. For a prolonged period, usually falling by 20% or more
• Definition Bankmail Explain An agreement between a company engaged in a takeover bid and a bank that the bank will not finance the bid of another acquirer
• Definition Bear raid Explain attempt by investors to move the price of a stock opportunistically by selling large numbers of shares short. The investors pocket the
• Definition Bear spread Explain Strategy in the options market designed to take advantage of a fall in the price of a security or commodity, usually executed by buying a
• Definition Bear trap Explain when a bear market reverses its trend and becomes bullish. The assets continue to sell in anticipation of further declines in price, and
• Definition Bearer bond Explain books of the issuer. Such bonds are held in physical form by the owner, who receives interest payments by physically detaching coupons from
• Definition Bearer form Explain registered on the issuing corporation's books, and therefore payable to its bearer. See also: Bearer bond; coupon bond
• Definition Bearer share Explain the issuing corporation and thus payable to possessor of the shares. Negotiable without endorsement and transferred by delivery, thus
• Definition Bearish Explain Words used to describe investor attitude
• Definition Beating the gun Explain In the context of general equities, gaining an advantageous price in a trade through a quick response to market developments
• Definition Backwardation Explain prices are lower in the distant delivery months than in the nearest delivery month. This may occur when the costs of storing the product
• Definition Bad delivery Explain Antithesis of good delivery
• Definition Bad title Explain Title to property that does not distinctly confer ownership, usually in the context of real estate
• Definition Bai-kai Explain Two-sided market picture, in Japanese terminology applies mainly to international equities
• Definition Bailing out Explain selling a security or commodity quickly, regardless of the price. May occur when an investor no longer wants to sustain further losses on
• Definition Bailout bond Explain Corporation (Refcorp) to save the failing savings and loan associations in the late 1980s and early 1990s
• Definition Baker Plan Explain Secretary James Baker under which 15 principal middle-income debtor countries (the Baker 15) would undertake growth-oriented structural
• Definition Balance of payments Explain a sovereign nation of all economic transactions between residents of that nation and residents of all other nations during a stipulated
• Definition Balance of trade Explain Net flow of goods (exports minus imports) between two countries
• Definition Balance sheet Explain Also called the statement of financial condition, it is a summary of a company's assets, liabilities, and owners' equity
• Definition Balance sheet identity Explain Total assets = Total liabilities + Total stockholders' equity
• Definition Budget Explain A detailed schedule of financial activity, such as an advertising budget, a sales budget, or a capital budget
• Definition Balanced fund Explain An investment company that invests in stocks and bonds. The same as a balanced mutual fund
• Definition Balanced mutual fund Explain This is a fund that buys common stock, preferred stock, and bonds. The same as a balanced fund
• Definition Balloon interest Explain In the context of serial bond issues, the elevated coupon rate on bonds with late maturities
• Definition Balloon maturity Explain Any large principal payment due at maturity for a bond or loan with or without a sinking fund requirement
• Definition Bond anticipation note (BAN) Explain A short-term debt instrument issued by a state or municipality to borrow against the proceeds of an upcoming bond issue
• Definition Bank collection float Explain check is deposited into a bank account and when the funds are available to the depositor, during which period the bank is collecting
• Definition Bank discount basis Explain A convention used for quoting bids and offers for Treasury bills in terms of annualized yield, based on a 360-day year
• Definition Bank draft Explain A draft addressed to a bank
• Definition Bank holding company Explain A company that owns or has controlling interest in two or more banks and/or other bank holding companies
• Definition Bank line Explain Line of credit that by a bank grants to a customer
• Definition Bank trust department Explain Bank department that deals with estates, administers trusts, and provides services such as estate planning advice to its clients
• Definition Bank wire Explain banks. It is used not for effecting payments, but as a mechanism to advise the receiving bank of some action that has occurred, e.g., the
• Definition Banker's acceptance Explain by a nonfinancial firm and guaranteed by a bank as to payment. Acceptances are traded at discounts to face value in the secondary market
• Definition Bankruptcy Explain of a publicly owned entity, the ownership of the firm's assets is transferred from the stockholders to the bondholders
• Definition Bankruptcy cost view Explain direct bankruptcy costs offset the other benefits from leverage so that the optimal amount of leverage is less than 100% debt financing
• Definition Bankruptcy risk Explain The risk that a firm will be unable to meet its debt obligations. Also referred to as default or insolvency risk
• Definition Bankruptcy view Explain The argument that expected bankruptcy costs preclude firms from financing entirely with debt
• Definition Bar Explain Slang for one million dollars
• Definition Barbell strategy Explain A fixed income strategy in which the maturities of the securities included in the portfolio are concentrated at two extremes
• Definition Barefoot pilgrim Explain A slang term for an unsophisticated investor who has lost everything on the stock market
• Definition Bargain hunter Explain In the context of general equities, purchaser who is extremely selective in the price sought on a transaction
• Definition Bargain-purchase-price option Explain Gives the lessee the option to purchase the asset at a price below fair market value when the lease expires
• Definition Barometer Explain Economic and market data that represent an overall trend. The Dow Jones Industrial Average is an example of a stock market barometer
• Definition BARRA's performance analysis (PERFAN) Explain consulting firm in Berkeley, Calif. It is commonly used by institutional investors applying performance attribution analysis to evaluate
• Definition B Explain Fifth letter of a Nasdaq stock descriptor specifying that issue is the Class B shares of the company
• Definition B2B Explain An Internet strategy of dealing directly with businesses, rather than consumers, i.e. business to (2) business
• Definition Bank anticipation notes (BAN) Explain municipalities to obtain interim financing for projects that will eventually be funded long term through the sale of a bond issue
• Definition Boston Exchange Automated Communication Order-Routing Network (BEACON) Explain execution of trades based on the current stock prices on the consolidated markets at any of the U.S. securities exchanges
• Definition Bonds Enabling Annual Retirement Savings (BEARS) Explain of bonds underlying call option, which are exercised by CUBS (an acronym for Calls Underwritten by Swanbrook). If the calls are exercised
• Definition Bank Investment Contract (BIC) Explain Interest guaranteed by the bank in a portfolio over a specific time frame with a specific yield
• Definition Bank Insurance Fund (BIF) Explain A unit of the Federal Deposit Insurance Corporation (FDIC) that provides deposit insurance for banks excluding thrifts
• Definition Bank for International Settlements (BIS) Explain Basel, Switzerland, which serves as a forum for monetary cooperation among several European central banks, the Bank of Japan, and the U.S
• Definition Baby bond Explain A bond with a par value of less than $1000
• Definition Back away Explain withdraw from a previously declared interest, indication, or transaction; broker-dealer's failure, as a market maker in a given
• Definition Back fee Explain The fee paid on the extension date if the buyer wishes to continue the option
• Definition Back months Explain In the context of futures and options trading, refers to the months of contracts with expiration dates farthest away. See farthest month
• Definition Back office Explain that support, but do not include, the trading of stocks and other securities. All written confirmation and settlement of trades, record
• Definition Bad debt Explain A debt that is written off and deemed uncollectible
• Definition Back taxes Explain Due taxes that have not been paid on time
• Definition Back up Explain fall, the market is said to backup. (2) An investor who swaps out of one security into another of shorter current maturity is said to back
• Definition "Back up the truck" Explain In the context of general equities, Prepare for a very large buyer
• Definition Backdating Explain feature allowing fundholders to use an earlier date on a letter of intent to invest in a mutual fund in exchange for a reduced sales charge
• Definition Backed in Explain describe result of unanticipated events that allow for a purchase at a discount or a sale at a premium
• Definition Back-end load fund Explain fee to sell (redeem) shares, often ranging from 4% to 6%. Some back-end load funds impose a full commission if the shares are redeemed
• Definition Back-testing Explain Creating a hypothetical portfolio performance history by applying current asset selection criteria to prior time periods
• Definition Back-to-back financing Explain An intercompany loan channeled through a bank
• Definition Back-to-back loan Explain separate countries borrow each other's currency for a specific time period and repay the other's currency at an agreed-upon
• Definition Backup line Explain line of credit covering maturing notes if, for some reason, selling new notes to cover the maturing notes is not possible

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Backup Line, Back-To-Back Loan, Back-To-Back Financing, Back-Testing, Back-End Load Fund, Backed In, Backdating, Back Up The Truck , Back Up, Back Taxes, Bad

Backup Line, Back-To-Back Loan, Back-To-Back Financing