一些finance的词汇

A Actual cash value coverage -- In a homeowners insurance policy, this refers to the type of coverage that pays only the current, depreciated value of household furniture and other possessions that are destroyed or damaged. Certain assets, like furniture or office equipment, depreciate or decline in value as they age. Dollar for dollar, replacement coverage insurance is a better deal, because it replaces the actual items that have been damaged or destroyed no matter what the price.

Adjustable-rate mortgage (ARM) -- ARMs start off with a low, fixed interest rate and fixed monthly payments, but later adjust to reflect prevailing market interest rates. Borrowers get the advantage of starting with a low interest rate, but take the risk that interest rates may increase dramatically sometime during the life of the loan. Adjusted gross income

(AGI) -- This is your total income from all sources minus any allowable deductions, such as alimony, payments to a Keogh Plan, or payments to an Individual Retirement Account.

Alternative minimum tax -- A type of tax developed to make sure high-income taxpayers and businesses pay their fair share of income taxes.

Annual percentage rate -- Also known as an APR, this is the interest rate that borrowers agree to pay when they take out a loan.

Annual-renewable-term life -- Term life insurance in which the premium is renewed each year, usually, at a higher rate.

Annuity -- Originally, a payment made annually (each year). Today, it can mean any kind of payment made over a certain period of time or extended over the life of an individual.

It can also refers to a tax-deferred investment account that is sold by insurers, banks and brokerage firms.

Asset allocation -- The placement of money in various types of investments, including stocks, bonds and cash items.

Asset management account -- An all-in-one account at a bank, savings and loan, or brokerage house that allows customers to buy and sell financial instruments like stocks, options, and bonds, and store cash in money market mutual funds.

B Balance sheet -- This is a listing of your assets (everything you own that has value), your liabilities (mortgages, loans and credit card debt),and the remainder, which is your total net worth. (The term "balance" refers to an equation where your assets are equal to your net worth minus your liabilities.)

Balanced funds -- This is a fund managed by an investment company that usually contains 60% in stocks and 40% in bonds. This allocation is intended to minimize market risks while also trying to maximize returns on investments.

Bear market -- A Wall Street term used to describe a prolonged period when stock or bond prices fall fifteen percent or more. When the Bear is growling, he is nervous because of uncertain market conditions.

Beneficiary -- This is the person designated in your will, retirement plan, life insurance policy, etc., who will receive a financial benefit when you die.

Bodily Injury Liability Coverage -- A term used in automobile insurance policies that refers to the payment that is made if someone is killed or injured in an accident in which you are at fault.

Bond -- A bond is a certificate issued by a corporation when they need to raise capital. Bonds are essentially loans that you make to a corporation in return for being paid interest, usually at specified dates. When the bond matures, the corporation pays back the principal plus any interest due.

Bond Buyer Municipal Bond Index -- This index, compiled by the trade publication The Bond Buyer, is based on 40 long-term municipal bonds and is used to track the performance of tax-free municipal bonds.

Bond rating -- Bonds are rated by several independent agencies, including Standard & Poors and Moody's Investors Services. These ratings are an evaluation of the probability that the corporation issuing the bond will pay the promised interest and principal payments on time. There are many different kinds of rating systems, but most have at least ten categories, ranging from a high of AAA to a low of D.

Book Value -- The book value of a company, also known as stockholder's equity, is the difference between a company's assets and its liabilities. The book value of a company can normally be found in its annual report.

Brokerage firm -- This is a company that buys and sells securities for individual investors. There are two different types: Discount brokers, who charge lower commissions, and Full-service brokers, who charge higher commissions but also provide investment advice.

Bull Market -- A Wall Street term that refers to an extended period when prices are rising. Optimists on Wall Street are called "Bulls".

Business model -- As the name suggests, this is a comprehensive model of the business translated onto paper in the form of charts and maps that seek to show the relationships between employees, management, customers, suppliers, and manufacturers. The business model is used to make companies more efficient and streamlined, as well as to define how the company intends to make its profits.

C Cafeteria plan -- This refers to a flexible benefit plan offered by many employers. The plan gives workers the opportunity to design their own benefit plan by chosing from a "menu" of options, which may include life insurance, disability insurance, dental care and more.

Capital gain -- This refers to any profit made from the sale of stocks, bonds and certain other types of investments.

Capital loss -- This refers to losses incurred from the sale of stocks, bonds and certain other types of investments.

Capital Spending -- Spending by companies on physical items that have a useful life of more than one year. These may include real estate, machinery, office equipment, and furniture. Such capital expenditures may be depreciated over time, and the value of that depreciation each year may be tax-deductible for companies.

Cash-value life -- This is a life insurance policy that provides a death benefit as well as a tax-deferred build-up of savings. There are three main types of cash value insurance: whole life insurance, variable life insurance, and universal life insurance. Term life insurance, unlike cash value insurance, offers only a death benefit.

Certificate of Deposit (CD) -- A CD is a receipt for a deposit of funds in a financial institution. They generally earn compound interest at a fixed rate, determined by the current interest rate and the term of the deposit (which may range from a week to several years). When you purchase a CD, you agree not to withdraw the investment until the CD matures. Otherwise you pay a penalty.

Certified Financial Planner (CFP) -- These are financial planners certified by the CFP Board of Standards, in Denver, Colorado. A good CFP helps people develop a reliable financial plan of action.

Charitable lead trust -- This is a trust that pays a nonprofit organization income from a donated asset for a fixed number of years. After that period has passed, the principal goes to the donor's beneficiaries with reduced estate or gift taxes. This type of a trust helps families to keep assets in the family, while reducing the cost of passing it along.

Charitable reminder trust -- This type of trust lets you leave assets to your favorite charity, earn a tax break, and still have income for life. You donate an asset to a nonprofit agency which can sell it, and pay no tax. With the proceeds of the sale, they set up an annuity that pays the donor a regular income.

Chartered Financial Consultant (ChFC) -- This is an advanced financial planning designation given by the American College, in Bryn Mawr, Pennsylvania, to qualified planners.

Chartered Life Underwriter (CLU) -- This is a professional designation given to life insurance agents who pass a standardized test offered by the American College in Bryn Mawr, Pennsylvania.

Closed-end funds -- These are mutual funds that sell only a limited number of shares. These funds are then traded on an exchange, like stocks, and their prices fluctuate, based on supply and demand, and the value of their holdings. They are also known as publicly traded funds and exchange-traded funds.

Closing costs -- These are costs paid when you buy a new home or take on a new mortgage. They may include points, which are a form of additional interest, property taxes, attorney's fees, and title insurance.

COBRA -- The Consolidated Omnibus Budget Reconciliation Act of 1985 gives employees, who have quit or been laid off, the right to buy continuing health insurance through their former employers for a minimum of 18 months. People who lose coverage due to divorce, separation, or death of a spouse can continue coverage up to 36 months.

Collision coverage -- This is the part of your automobile insurance policy that pays for your car if it is damaged in an accident.

Compound interest -- Financial planners will tell you there is magic in compound interest. Compound interest is the interest you earn on your interest. For example, if you earned 10% interest on an investment of $10,000, you would make $1,000. If you reinvested all your money and again earned 10% the following year, this $1000 would earn an additional $100 -- which is considered compound interest.

Comprehensive coverage -- This refers to the part of your automobile insurance policy that pays if your car is vandalized, stolen, or damaged by something other than a collision.

D Dead Cat Bounce -- This expression graphically illustrates the odd fact that a dead cat dropped from a rooftop will bounce, and is used to refer to a surprising rise in stock prices after a heavy decline.

Deductible -- A term used in insurance policies (homeowners and automobile) that refers to the amount of money you must pay yourself before the insurance company begins paying on a claim.Disability insurance -- This type of insurance will replace your income if an injury or long-term illness keeps you from working. Rates for this type of insurance vary from company to company, so take your time and shop wisely for the coverage you need.Dividend yield -- This is a company's annual dividend expressed as a percentage of its current stock price.

A Dividend is a part of a company's earnings paid out to shareholders.

Dividends -- These are payments made in quarterly installments to shareholders who have invested in the company's stocks.

Diversification -- Diversification is the act of dividing investment money among a variety of different securities. The goal is to minimize the financial damage you may suffer if any particular security or investment goes sour.

Dow Jones Averages -- The Dow Jones Industrial, Transportation, Utilities and Composite Averages are widely used indicators of stock market performance. They track the stock performance of selected companies in major market sectors. It was first published in 1896 by Charles H. Dow, who also founded The Wall Street Journal.

Durable power of attorney -- This document designates a person to handle all of your personal and financial affairs if you become legally incompetent.

E Estate taxes -- These are the federal and state taxes levied on the transfer of assets after you die.Executor -- This is a person named in your will to take care of the settlement of your estate.

F Federal Reserve System -- The Federal Reserve was established as the nation's central banking system in 1913 to help provide the country with a safe and stable monetary and financial system. Known as the "Fed," its actions are closely watched by investors worldwide, because it has the power to set national monetary policy and change interest rates.

Fixed-rate mortgage -- This type of loan has a fixed interest rate and fixed monthly payments for the life of the loan, so the borrower always knows exactly how much to budget for housing costs.

Futures -- This term refers to an agreement to make or take delivery of a commodity at a designated time and price in the future. Futures contracts give investors who fear the fluctuation of prices of the open market some measure of security.401(k) plan --This is an employer sponsored retirement savings plan. Employees can contribute pre-tax dollars, and sometimes an employer will add a matching contribution, up to a set limit.403(b) plan -- This is an employer-sponsored retirement savings plan for employees of not-for-profit organizations such as hospitals, colleges, and religious and cultural institutions. Employees can contribute pre-tax dollars, and sometimes an employer will add a matching contribution, up to a set limit.

G Gift tax -- A federal tax is levied on gifts if they exceed the annual limit of $10,000 per person.Going public -- A privately owned company "goes public" when it first offers investment options to potential stockholders on the open market. The first time a company offers publically traded shares is known as an Initial Public Offering.Guaranteed-replacement-cost coverage -- This term refers to a homeowners insurance policy that will pay for some rebuilding or replacement expenses even if they exceed the policy's stated amount.

H High-Yield Bonds -- These are bonds that offer a high rate of interest, but may be a risky investment. High yield bonds are also known as "junk bonds"Home equity loan -- This is a loan secured by a second mortgage on a borrower's pricipal home. It is a popular way for home-owners to consolidate debts or finance new purchases because the interest on the new loan is tax-deductable.

I Index funds -- A mutual fund portfolio that contains the majority of the securities in a broad-based index, such as the Standard & Poor's 500 Index.Individual Retirement Account (IRA) -- This is a tax deferred investment account that can help people build their retirement savings. People who are not participating in an employer's retirement plan can deduct some or all of their annual IRA contributions.

Initial Public Offering (IPO) -- The first time a company offers publically traded shares is known as an Initial Public Offering. Corporations use IPO's to sell shares to the general public. There is no guarantee that an IPO will be a successful stock investment.

Itemized deductions -- These are deductions that the Internal Revenue Service allows you to subtract from your adjusted gross income if you choose not to take the standard deduction. Itemized deductions might include certain types of home mortgage interest, state and local tax payments, and gifts to charity.

J Junk bonds -- These are bonds issued by companies whose financial condition is considered risky. Because of the high risk, junk bonds typically offer higher yields than bonds issued by corporations with superior credit ratings. Junk bonds generally hold the lowest ratings assigned by rating services like Moody's Investors Services and Standard and Poor's.

K Keogh plan -- This is a tax-deferred retirement plan for small businesses and self-employed people. An individual may deposit up to $30,000 per year and defer taxes until they retire. Contributions to Keogh plans are tax deductible.

L Loan-to-value ratio -- This is the ratio of the principal balance of a home loan to the home's estimated market value. For example, a $100,000 home with a $75,000 mortgage has a loan-to-value ratio of 75%.

Very few lenders will make a loan for the full value of a home and most will have a maximum loan-to-value ratio of 75% to 95%.

Long-term-care insurance -- This insurance provides some coverage if you ever need to stay at a nursing home for an extended period of time. It also covers home health care for people with disabling conditions.

M Margin -- The amount of money or securities that an investor must deposit with a broker and against which the client can borrow when they want to purchase securities. Basic margin rates are set by the Federal Reserve System. The New York Stock Exchange sets the margin requirment at 25%, and some brokerage firms set margins at 30%.

Money market account -- This is a federally insured savings account available at most banks, savings and loan associations and credit unions. The interest rates are often comparable to those offered by money market mutual funds, and have the added benefit of being insured up to $100,000 by the FDIC.

Municipal bonds -- These are bonds issued by state or local government authorities which usually pay interest that is exempt from federal income taxes. They are also generally exempt from state and local income taxes, provided that you live in the state where the bond is issued.

Mutual funds -- A mutual fund is a professionally managed investment that draws together the capital of thousands of individual investors. All mutual funds charge management fees. Investment companies often create mutual funds so that small investors can pool their resources and afford to hire a professional money manager.

N Nasdaq Stock Market -- This is a computerized quotations network set up for the trading of so-called over-the-counter stocks (those not listed on major stock exchanges). The Nasdaq specializes in emerging companies, and is especially strong in technology and telecommunications.

Net worth -- This is a person's assets minus their liabilities. In other words, it is the amount of money you would have if you sold all of your possessions and paid off all of your debts.

No-Load
Mutual Funds -- These are mutual funds offered for sale directly to the public with no sales charge, or load. However, service and distribution fees, also known as "12b 1 fees" may be charged by these funds.

O Over-the-counter (OTC) -- This is a market for securities that are usually not listed on one of the major stock exchanges. The over-the-counter market is the principal market for U. S. government and municipal bonds.

P Prime rate -- This is the interest rate that banks use for their most creditworthy customers.

Private Mortgage Insurance (PMI) -- Most banks will not issue mortgages if the homebuyers has less than a 20% downpayment, because studies have shown that those with less cash invested in their homes are more likely to default on their payments. Fortunately, homebuyers without as much cash can purchase a private insurance policy that guarantees payment in case of foreclosure.

Q Quarter -- This is a three-month period. All companies in the financial world divide their year into four such quarters.

R Revenue bond -- These are tax exempt municipal bonds issued to finance public projects like airports, turnpikes, or dams. The bonds are backed by revenue to be generated from the project.

Reverse mortgage -- This is a payment against a home that can be given to the homeowner as a lump sum, a cash advance, or even a line of credit. It is popular with senior citizens who want a steady and reliable source of income for their retirement years. The longer the payments continue, the less equity the owner retains in their home.

S Sector funds -- These are mutual funds that invest in a single-industry sector, such as gold, biotechnology or regional banks. These funds tend to perform erratically, and may end up on either the top or the bottom of the annual mutual fund performance charts.

T Tax-deferred -- Investments you make, and the earnings on those investments, are called tax-deferred when you can postpone paying income tax until you start to withdraw funds from the investment account. Tax-deferred investments allow your money to grow faster because you will continue to earn interest on money you would otherwise have paid to Uncle Sam.

Treasury bills, bonds and notes -- These are U. S. government securities, back by the government's full faith and credit. Treasury bills are short term securities; treasury bonds mature in ten years or longer; and treasury notes mature in two to ten years.

Two-step mortgage -- This type of loan has a low interest rate for the first five or seven years, and then adjusts to a higher interest rate for the remaining life of the loan.

U Uniform Gift to Minors Act (UGMA) -- This act allows adults to create custodial accounts for minors, consisting of assets such as cash, securities, and mutual funds. The law does not limit the amount that can be put into the account each year, though currently, annual contributions over $10,000 may be subject to gift tax. Depending on state law, the minor may take possession of the account at age 18.

Uniform Transfer to Minors Act (UTMA) -- Similar to the UGMA. The UTMA also allows the gifting of real estate, fine art, antiques, patents, and royalties. The child must reach the age of 21 before taking control of the assets.

V Value investing -- Value investors are the bargain hunters of the stock market. They usually buy stocks with high dividend yields or that trade at a low price/earnings ratio.

Venture capital (VC) -- This is money invested in young companies by private investors, banks, and investment firms. In exchange for taking a risk, these individuals or firms usually receive shares in the company, a seat on the board of directors, and a split of the profits.

W Wrap Account -- This all-in-one account provides individual investors with a professional money manager and a brokerage firm. The fees and commissions on the account, rather than being charged individually, are deducted as a 2% to 3% annual charge based on the value of the assets in the account.

X Huh...? Can you think of a financial term that starts with 'x'?

Y Yield -- This is the rate of return on an investment. It can be paid as interest or dividends. Yield may be calculated by dividing the value of dividends or interest by the amount you invested. For example, if you invested $950, and were paid $60 in interest, the yield is 6.3 percent.

Z Zero-coupon bonds -- These are bonds issued at a deep discount from their face value. They pay no interest until they mature, but may be redeemed at face value on a specific maturity date. Coupon simply means interest in the bond world, therefore zero-coupon means no interest.