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B
An abbreviation used in stock listings of newspapers to indicate a stock's
annual rate of return plus dividend.
See: Dividend;
Rate
Of Return
B/D
(Broker-Dealer)
See: Broker;
Dealer
Baby
Bond
Bonds with a denomination of less than a $1,000 par value. Baby bonds
are a source of funds to corporations that lack access to large institutional
markets and bring the bond market within reach of small investors.
See: Bond;
Institutional
Investor; Par;
Retail
Investor
Back
Office
Those departments of a broker-dealer that are not directly involved in
sales or trading. Some back office functions include cashiering, accounting,
and the record keeping of clients' cash or margin accounts.
See: Broker-Dealer;
Front
Office; Margin
Account
Back-End
Load
A fee that an investor pays when redeeming (withdrawing) funds from an
investment--also called "deferred sales charge." The fee is
usually dependent on how long the investment is held--the longer the time
period, the smaller the fee. Mutual funds and annuities are the most common
investments with back-end loads.
See: Annuity;
Deferred
Sales Charge; Exit
Fee; Mutual
Fund
Backing
Away
The failure of a market maker to fulfill its obligation to buy or sell
the minimum quantity of a particular security. Backing away is considered
an unethical practice under the National Association of Securities Dealers'
Rules of Fair Practice.
See: Market
Maker; National
Association Of Securities Dealers; Rules
Of Fair Practice
Backup
Lingo used to indicate a sudden reversal of a market trend.
See: Trendline
Bad
Debt
Open balance or loan receivable that is considered uncollectible and is
written off by a firm. (Reserves are usually maintained for uncollectible
accounts.) The relationship of recoveries and write-offs to accounts receivable
can indicate a firm's credit and charge-off policies.
See: Accounts
Receivable
Balance
Sheet
A financial report that entails the status of a corporation's assets,
liabilities, and owners' equity for a specific date, usually at month
end. It only captures this information as of that date; it does not cover
a period of time.
See: Balance
Sheet Equation; Fundamental
Analysis
Balance
Sheet Equation
Total liabilities plus stockholders' equity is equal to total company
assets.
See: Asset;
Balance Sheet; Equity;
Liability
BAN
(Bond Anticipation Note)
A short-term debt instrument that is issued by a municipality or a state.
At maturity, the debt is paid from the proceeds of a new bond issue.
BANs usually
provide an investor with a tax-free yield that may be higher than other
comparable tax-exempt debt instruments of the same maturity.
See: Debt
Instrument; Maturity
Date; New
Issue; Short
Term Debt; Tax
Exempt Security; Yield
Bank
Guarantee Letter
The document furnished by a bank certifying that a put writer has enough
funds on deposit at the bank to equal the aggregate exercise price of
the put.
See: Exercise
Price; Options;
Put
Option
Bankmail
An agreement between a bank and corporation involved in a takeover. The
bank agrees not to finance another acquirer's bid.
See: Acquisition;
Takeover
Base
Market Value
Group of securities average market price at a specified time. It is used
in plotting dollar or percentage changes for purposes of market indexing.
See: Indexing
Base
Period
A period of time that is used as a measurement yardstick for economic
data. A base period may be a month, year or average of years. For example,
the US inflation rate is determined by measuring the current Consumer
Price Index against those of its base year, 1967.
See: Consumer
Price Index; Inflation
Rate; Producer
Price Index
Basis
Point
One basis point is equal to 0.01% of the yield on a bond.
(ie. 50 basis point points (bp) is equal to .50%)
Form
BD
Document that broker-dealers must file and keep current with the SEC.
It provides details about the firm's principals and officers, net capital
compliance, and financial statements.
See: Broker-Dealer;
Financial
Statement; Principal
Bear
Investor who believes an individual security, an industry segment, or
the overall market will decline.
See: Bear
Market; Bull
Bearer
Bond
A security, usually a bond, that does not have the owner's name registered
on the books of the issuer or on the certificate. Interest and principal,
when due, are payable to the person in possession of the bond. The holder
sends in or presents a coupon for payment. Most securities issued today
are in registered form.
See: Bond;
Certificate;
Principal;
Registered
Security
Bear
Hug
Takeover bid so attractive that the target company's directors, who might
be adverse to it for other reasons, must approve it or risk shareholder
protest.
See: Takeover;
Target
Company
Bear
Market
A prolonged decline in stock prices that may occur for months or years.
A bear market in bonds is usually caused by rising interest rates while
a bear market in stocks is usually caused by investors who expect economic
activity to decline.
See: Bear;
Bear Market Strategies; Bull
Market; Economic
Growth Rate
Bear
Market Strategies
Some common strategies are: Buying Contramarket Stock, Buying Put Options,
Writing Call Options, Short Selling
See: Bear
Spread; Call
Option; Put
Option; Selling
Short
Bear
Spread
An option strategy wherein the investor profits when the underlying security's
price declines. (Vs. Bull Spread).
See: Bear;
Bear Market Strategies; Bull
Spread; Option
Spread; Spread
Position; Underlying
Security
Bell
Signal indicating that trading on major exchanges has either opened or
closed.
Bellwether
Security
A security that is perceived as an indicator of a market's direction.
IBM, for example, is considered a bellwether stock. The 20-year US Treasury
bond is considered a bellwether bond because it represents the direction
in which all other bonds are likely to move.
Below
Par
See: Par
Beneficial
Owner
The person(s) entitled to the benefits of ownership even though another
party such as a broker or bank--the nominal owner--actually has possession
and title to the security.
See: Nominee;
Street
Name
Beneficiary
A person or entity who is the recipient of or will receive some or all
proceeds of money or property held by the current owner upon a specified
event or condition. Such vehicles as life insurance policies, inheritances,
annuities or trusts may require that a beneficiary be named.
Beta
A measure of a fund's risk, or volatility, compared to the market, which
is represented as 1.00. A fund with a beta of 1.20 is 20% more volatile
than the market, while a fund with a beta of 0.80 would be 20% less volatile
than the market.
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