FBLA Banking and Financial Systems

Bull market

Any market in which prices are advancing in an upward trend. In general, someone is bullish if they believe the value of a security or market will rise. The opposite of a bear market.

Personal Financial Advisors

Personal financial advisors provide advice on investments, insurance, mortgages, college savings, estate planning, taxes, and retirement to help individuals manage their finances.

Tangible Personal Property

Physical articles (things) such as a animals, cars, furniture or equipment. Tangible property is distinguished from intangible property such as stock, rights, patents, copyrights and franchises.

Property damage (PD)

Physical damage to property.

Bodily injury (BI)

Physical injury to a person, including death.

integrated pension plan

Plan that is tied to a person's payments into Social Security. This amount will be used in calculating the total benefit that the individual will receive upon retirement.

false

T/F? If a credit applicant has opened many new accounts recently, that is a sign that the applicant is very creditworthy.

true

T/F? If there is a billing dispute, creditors may not take adverse action until the dispute is resolved.

false

T/F? In the US, the govn't plays the greatest role in determining how money is moving.

true

T/F? In the absence of a national banking system, state banks grew in number/influence in the early years of the US.

true

T/F? Interest on home-equity loans is tax-deductible for consumers.

false

T/F? Interest rates are usually lower for fixed rate mortgages than for other types.

false

T/F? It is illegal for banks to charge higher interest rates for loans than they pay depositors.

true

T/F? It is more difficult for lenders to evaluate business loan applications than it is consumer loan applications.

false

T/F? Lenders for residential mortgages tend to be more conservative than for residential ones.

false

T/F? MZM is sometimes referred to as the "base" money supply.

true

T/F? Money doesn't just mean currency, but also checks, ledger transfers, and even credit.

true

T/F? Money is a medium of exchange for people to use to trade things of value.

true

T/F? Most large money transactions involve ledger entries rather than the movement of physical currency.

true

T/F? One of the main functions of the Federal Reserve is to serve as a bank for other banks.

true

T/F? Paying off a loan early saves the consumer no money if the sum-of-digits method has been used to figure finance charges.

true

T/F? Personal loans do not require that specific purpose be stated.

false

T/F? Principal is the price paid for using money.

false

T/F? Private mortgage insurance protects the lender against loan default; it is not typically required for borrowers whose down payment is 10 percent or greater.

true

T/F? Probate is a court proceeding that settles an estate's final debts and formally passes legal title to property from the decedent to his or her heirs.

true

T/F? Qualifying veterans may get govn't-backed mortgage loans with low down payments through the Dept. of Veteran's Affairs.

true

T/F? Subprime rates are higher-than-normal interest rates offered to a less-than-perfect credit applicant.

true

T/F? The Gramm-Leach-Bliley Act requires that financial institutions protect the privacy of consumers.

false

T/F? The National Banking Act of 1864 founded an adaptable, flexible system of central banking for the US.

false

T/F? The National Banking Act of 1864 spelled the end of state banking systems in the US.

false

T/F? The Small Business Admin. is barred by law from assisting businesses that engage in international trade.

false

T/F? The Truth in Lending Act prohibits bill collectors from using deceptive or abusive tactics.

false

T/F? The agreed-upon value of money in the US today is based on the govn't supply of gold at Fort Knox, Kentucky.

false

T/F? The amount a borrower pays to use the principal of a loan is called a fee.

true

T/F? The fastest-growing segment of banking security issues involves safeguarding the technology that makes doing business possible.

false

T/F? The first Bank of the US was a govn't institution.

false

T/F? The govn't lends billions of dollars each year to American businesses through the Small Business Admin.

true

T/F? The most common type of trade financing involves a letter of credit.

false

T/F? The number of banks that are helping companies conduct business overseas is declining.

true

T/F? The overwhelming majority of businesses in the US can be classified as small businesses.

true

T/F? The prime rate is usually the same among major banks.

false

T/F? There was no form of paper currency in colonial America.

true

T/F? Unlike consumer lending, most commercial lending is regulated only by the terms of the loan agreement and some state laws.

false

T/F? You cannot get your money from a certificate of deposit before the maturity date.

false

T/F? You must pay off your credit card account in full at the end of every month.

false

T/F? nterest rates are usually lower for fixed rate mortgages than for other types.

deed

Tangible evidence of ownership in real property.

Value-style funds

Value-style funds typically hold company stocks that are undervalued in the market. Fundamentally strong companies whose stocks are inexpensive but trending upward may also be selected for value funds.

EPS

The portion of a company's profit allocated to each outstanding share of common stock. EPS serves as an indicator of a company's profitability.

YTD Return (w load)

Year-to-date return on an investment including appreciation and dividends or interest, minus any applicable expenses or charges.

YTD

Year-to-date return on an investment including appreciation and dividends or interest.

YTD total return

Year-to-date return on an investment including appreciation and dividends or interest.

passbook savings account

You are least likely to find this type of account at a modern bank.

fidelity bonds

Used to protect the firm against dishonesty of employees/agents. Covers various forms of losses, including fraudulent trading, theft and forgery.

point

Value equal to 1 percent of a mortgage loan.

no

Would a business probably finance increasing their inventory using a term loan?

Plaintiff

A person or business that files a formal complaint with the court. In bankruptcy cases, this is done in adversary proceedings.

Independent adjuster

A person who charges a fee to an insurance company to adjust the company´s claim.

NOW

Negotiable Order of Withdrawal. An interest-bearing checking account at a bank or savings and loan.

Annuity

A contract in which the buyer deposits money with a life insurance company for investment. The contract provides for specific payments to be made at regular intervals for a fixed period or for life.

false

T/F? HOEPA prohibits lenders from charging an APR that is 10 points higher than a rate on a Treasury Bill.

bond indenture

A legal contract between the borrower/creditor bondholders with details about the bond issue and any security involved.

false

T/F? High consumer debt is good for banks, b/c banks make most of their money from the interest paid on loans.

Check register

In accounting a check register is a document, usually part of the general ledger, used to record financial transactions in cash.

Building Societies

A Building Society is defined as a financial institution that gives banking and other financial services to its members. The Building Societies are owned by the members as a mutual organization. Services offered by Building societies include mortgages and demand-deposit accounts

equation of exchange

(M * V = P * Q) M = money supply V = velocity of money P = average price level of goods Q = index of expenditures Explains relationship between money and prices.

Bond

A bond acts like a loan or an IOU that is issued by a corporation, municipality or the U.S. government. The issuer promises to repay the full amount of the loan on a specific date and pay a specified rate of return for the use of the money to the investor at specific time intervals.

Trustee

1. An organization or individual who has responsibility for one or more accounts. 2. An individual who, as part of a fund's board of trustees, has ultimate responsibility for a fund's activities.

Constructive Trust

A Constructive Trust is an implied trust. An Implied Trust is established by a court and is determined from certain facts and circumstances. The court may decide that, even though there was never a formal declaration of a Trust, there was an intention on the part of the property owner that the property be used for a particular purpose or go to a particular person. While a person may take legal title to property, equitable considerations sometimes require that the equitable title of such property really belongs to someone else.

Weighted average maturity

A Fund's WAM calculates an average time to maturity of all the securities held in the portfolio, weighted by each security's percentage of net assets. The calculation takes into account the final maturity for a fixed income security and the interest rate reset date for floating rate securities held in the portfolio. This is a way to measure a fund's sensitivity to potential interest rate changes.

The Loan Estimate

A Loan Estimate is a three-page form that you receive after applying for a mortgage. The Loan Estimate tells you important details about the loan you have requested. We will deliver this to you with in 3 days of your fully completed loan application. The Loan Estimate provides you with important information, including the estimated interest rate, monthly payment, and total closing costs for the loan. The Loan Estimate also gives you information about the estimated costs of taxes and insurance, and how the interest rate and payments may change in the future. In addition, the Loan Estimate will also indicate if the loan has special features that you will want to be aware of, like penalties for paying off the loan early (a prepayment penalty) or increases to the mortgage loan balance even if payments are made on time (negative amortization). The form uses clear language and is designed to help you better understand the terms of the mortgage loan you've applied for. All lenders are required to use the same standard Loan Estimate form. This makes it easier for you to compare mortgage loans so that you can choose the one that is right for you. When you receive a Loan Estimate it does not mean that your loan has been approved or denied. The Loan Estimate shows you what loan terms we can offer you if you decide to move forward.

Special Needs Trust

A Special Needs Trust is one which is set up for a person who receives government benefits so as not to disqualify the beneficiary from such government benefits. This is completely legal and permitted under the Social Security rules provided that the disabled beneficiary cannot control the amount or the frequency of trust distributions and cannot revoke the trust. Ordinarily when a person is receiving government benefits, an inheritance or receipt of a gift could reduce or eliminate the person's eligibility for such benefits. By establishing a Trust, which provides for luxuries or other benefits which otherwise could not be obtained by the beneficiary, the beneficiary can obtain the benefits from the Trust without defeating his or her eligibility for government benefits. Usually, a Special Needs Trust has a provision which terminates the Trust in the event that it could be used to make the beneficiary ineligible for government benefits. Special needs has a specific legal definition and is defined as the requisites for maintaining the comfort and happiness of a disabled person, when such requisites are not being provided by any public or private agency. Special needs can include medical and dental expenses, equipment, education, treatment, rehabilitation, eye glasses, transportation (including vehicle purchase), maintenance, insurance (including payment of premiums of insurance on the life of the beneficiary), essential dietary needs, spending money, electronic and computer equipment, vacations, athletic contests, movies, trips, money with which to purchase gifts, payments for a companion, and other items to enhance self-esteem. The list is quite extensive. Parents of a disabled child can establish a Special Needs Trust as part of their general estate plan and not worry that their child will be prevented from receiving benefits when they are not there to care for the child. Disabled persons who expect an inheritance or other large sum of money may establish a Special Needs Trust themselves, provided that another person or entity is named as Trustee.

Tax By-Pass Trust

A Tax By-Pass Trust is a type of Trust that is created to allow one spouse to leave money to the other, while limiting the amount of Federal Estate tax that would be payable on the death of the second spouse. While assets can pass to a spouse tax-free, when the surviving spouse dies, the remaining assets over and above the exempt limit would be taxable to the children of the couple, potentially at a rate of 55%. A Tax By-Pass Trust avoids this situation and saves the children perhaps hundreds of thousands of dollars in Federal taxes, depending upon the value of the estate.

Totten Trust

A Totten Trust is one that is created during the lifetime of the grantor by depositing money into an account at a financial institution in his or her name as the Trustee for another. This is a type of revocable Trust in which the gift is not completed until the grantor's death or an unequivocal act reflecting the gift during the grantor's lifetime. An individual or an entity can be named as the beneficiary. Upon death, Totten Trust assets avoid probate. A Totten Trust is used primarily with accounts and securities in financial institutions such as savings accounts, bank accounts, and certificates of deposit. A Totten trust cannot be used with real property. A Totten Trust provides a safer method to pass assets on to family than using joint ownership. To create a Totten Trust, the title on the account should include identifying language, such as "In Trust For", "Payable on Death To", "As Trustee For", or the identifying initials for each, "IFF", "POD", "ATF". If this language is not included, the beneficiary may not be identifiable. A Totten Trust has been called a "poor man's" trust because a written trust document is typically not involved and it often costs the trustmaker nothing to establish

Spendthrift Trust

A Trust that is established for a beneficiary which does not allow the beneficiary to sell or pledge away interests in the Trust. A Spendthrift Trust is protected from the beneficiaries' creditors, until such time as the Trust property is distributed out of the Trust and given to the beneficiaries.

Contingent deferred sales charge (CDSC)

A back-end sales charge imposed when shares are redeemed from a fund. This fee usually declines over time.

Custodian

A bank that holds a mutual fund's assets, settles all portfolio trades and collects most of the valuation data required to calculate a fund's net asset value (NAV).

Emergency Filing

A bankruptcy case filed either without schedules or with incomplete schedules sometimes called a Skeletal Filing or a Face Sheet Filing. Since it usually takes a week or two to complete the schedules, an Emergency Filing may be necessary to stop a foreclosure, stop a garnishment or tax levy, or have a repossessed auto returned to the debtor.

Consumer Bankruptcy

A bankruptcy case filed to reduce or eliminate debts that are primarily consumer debts, such as credit card debt, medical debt, personal loans and auto loans.

Bear market

A bear market is a prolonged period of falling stock prices, usually marked by a decline of 20% or more. A market in which prices decline sharply against a background of widespread pessimism, growing unemployment or business recession. The opposite of a bull market.

Investment grade bonds

A bond generally considered suitable for purchase by prudent investors.

full-service broker

A broker that provides a large variety of services to its clients, including research and advice, retirement planning, tax tips, and much more. Commissions much higher than those at discount brokers.

Bankruptcy Mill

A business not authorized to practice law that provides bankruptcy counseling and prepares bankruptcy petitions.

credit card

A card issued by a financial company giving the holder an option to borrow funds, usually at point of sale. They have higher interest rates (around 19% per year) and are primarily used for short-term financing. Interest usually begins one month after a purchase is made and borrowing limits are pre-set according to the individual's credit rating. One of the most popular and widely accepted forms of payment for consumer goods and services in the U.S.

fractional reserve banking

A certain percentage of any deposit that is placed in the vault while the remainder is lent out/invested by the bank.

No-asset Case

A chapter 7 case where there are not enough non exempt assets available for the trustee to consider liquidating the assets and distribute funds to unsecured creditors. In Mississippi more than 95% of chapter 7 cases are no-asset cases.

cashier's check

A check drawn on the bank's own funds, often requested by seller to be assured of payment.

stale check

A check that is dated 6+ months before it is presented for payment/deposit is called _____.

share draft

A check written on an account at a credit union.

Third-party claim

A claim filed against another person's insurance policy.

First-party claim

A claim filed by an insured against his or her own insurance policy.

Unsecured Claim

A claim on a debt on which a creditor holds no collateral such as a mortgage or lien.

Unliquidated Claim

A claim upon which the debtor has liability, but the exact amount of that liability is unknown. Tort (such as auto accident injuries) claims are usually unliquidated until a trial fixes the amount of the liability of the tortfeasor.

preferred stock

A class of ownership in a corporation that has a higher claim on the company's assets and earnings than common stock. This type of stock has a dividend that must be paid out before dividends to common stockholders (in the event of a bankruptcy, paying these shareholders takes precedence before common stockholders). However, the shares usually do not have voting rights.

Preferred stock

A class of stock with a fixed dividend that has preference over a company's common stock in the payment of dividends and the liquidation of assets. There are several kinds of preferred stock, among them adjustable-rate and convertible.

prepayment clause

A clause in a mortgage contract that says if the mortgage is prepaid within a certain time period, a penalty will be assessed. The penalty is usually based on percentage of the remaining mortgage balance or a certain number of months worth of interest.

Portfolio

A collection of investments owned by one organization or individual, and managed as a collective whole with specific investment goals in mind.

portfolio

A collection of stocks held by an individual or group.

junk bonds

A colloquial term for a high-yield or non-investment grade bond. Junk bonds are fixed-income instruments so called because of their higher risk. However, they have speculative appeal because they offer much higher yields than safer bonds. Companies that issue junk bonds typically have less-than-stellar credit ratings, and investors demand these higher yields as compensation for the risk of investing in them. A junk bond issued from a company that manages to have its credit rating upgraded will generally have a substantial price appreciation.

front-end load

A commission or sales charge applied at the time of the initial purchase for an investment, usually mutual funds and insurance policies. It is deducted from the investment amount and, as a result, it lowers the size of the investment.

Carrier

A company or HMO that provides health care coverage.

stock company

A company or corporation whose capital is divided into shares.

defined benefit plan

A company retirement plan, such as a pension plan, in which a retired employee receives a specific amount based on salary history and years of service, and in which the employer bears the investment risk. Contributions may be made by the employee, the employer, or both.

Liabilities (Current and Long-Term)

A company's debts or financial obligations it incurred during business operations. Current liabilities are those debts that are payable within a year, such as a debt to suppliers. Long-term liabilities are typically payable over a period of time greater than one year. An example of a long-term liability would be a bank loan.

Net Income

A company's total earnings, also called net profit or the "bottom line." Net income is calculated by subtracting totally expenses from total revenues.

Justified complaint

A complaint that exposes an apparent violation of a policy provision, contract provision, rule, or statute; or which indicates a practice or service that a prudent layperson would regard as below customary business or medical standards.

General Ledger

A complete record of the financial transactions over the life of a company.

Form 10-K

A comprehensive summary report of a company's performance that must be submitted annually to the Securities and Exchange Commission. Typically contains much more detail than the annual report. It includes information such as company history, organizational structure, equity, holdings, earnings per share, subsidiaries, etc.

prospectus

A condensed version of a registration statement containing essential info about the amount offered, the price, and the plans for the funds raised made available to potential investors.

Investment company

A corporation, trust or partnership that invests pooled shareholder dollars in securities appropriate to the organization's objective. Mutual funds, closed-end funds and unit investment trusts are the three types of investment companies.

judgment

A court order that places a lien on a debtor's property as security for a debt owed to a creditor.

Joint Administration

A court-approved mechanism under which two or more cases can be administered together. (Assuming no conflicts of interest, these separate firms or individuals can pool their resources, hire the same professionals, etc.)

Relief from the Stay

A creditor can ask the judge to lift the automatic stay and permit some action against the debtor or the property of the estate. (See Motion to Lift the Automatic Stay.) If the motion is granted, the moving party (but no one else) is free to take whatever action the court permits

Claim

A creditor's assertion of a right to payment from a debtor or the debtor's property. The claim is asserted by filing a "proof of claim." In most cases, if a creditor does not file its proof of claim timely, then that creditor will not be paid.

Secured Debt

A debt backed by a mortgage, pledge of collateral, or other lien which gives the creditor the right to pursue specific pledged property upon default. The lien can be the result of a voluntary agreement or an involuntary lien such as a judgment or tax lien. Generally a secured claim must be perfected under applicable state law to be treated as a secured claim in the bankruptcy.

Unsecured Debt

A debt is unsecured if there is no collateral that is security for the debt. Common examples of unsecured debt are: most credit card debt, medical bills, and signature loans.

Nondischargeable Debt

A debt that cannot be eliminated in bankruptcy. Nondischargeable debts remain legally enforceable despite the bankruptcy discharge. The Code's list of nondischargeable debts is found at 11 U.S.C. 523(a). All of the debts listed in 523(a) are nondischargeable under chapters 7, 11 and 12, but some of those same debts can be discharged in a Chapter 13 case. More on differences in chapter 7 and 13.

Liquidated

A debt that is for a known number of dollars is liquidated. An unliquidated debt is one where the debtor has liability, but the exact amount of that liability is unknown. Tort (such as auto accident injuries) claims are usually unliquidated until a trial fixes the amount of the liability of the tortfeasor.

Oversecured Claim

A debt which is secured and the value of the collateral is greater than the amount of the debt.

Undersecured Claim

A debt which is secured and the value of the collateral is greater than the amount of the debt. The excess or unsecured portion may be treated differently than the secured portion in Chapter 11, 12 and 13 plans of reorganization.

Plan

A debtor's detailed description of how the debtor proposes to pay creditors' claims over a fixed period of time. Plans are filed in chapter 11, 12 and 13 cases.

Non-renewal

A decision by an insurance company not to renew a policy.

Statement of Intention

A declaration made by a chapter 7 debtor concerning plans for dealing with secured debts. The options in the Statement of Intent are for the debtor to 1) reaffirm a debt, 2) surrender the collateral, or 3) Redeem (which means pay the secured creditor the value of the collateral in one lump sum to retain the collateral and discharge the remainder of the debt.)

Exempt

A description of any property that a debtor may prevent creditors from recovering. In other words the property is protected from creditors or a bankruptcy trustee from taking the property.

Certified Public Accountant

A designation given to someone who has passed a standardized CPA exam and met government-mandated work experience and educational requirements to become a CPA.

insider

A director or senior officer of a company, as well as any person or entity that owns > 10% of a company's voting shares. Must comply with strict disclosure requirements with regard to the sale/purchase of their company's shares.

Insider (of corporate debtor)

A director, officer, or person in control of the debtor; a partnership in which the debtor is a general partner; a general partner of the debtor; or a relative of a general partner, director, officer, or person in control of the debtor.

Dividend

A dividend is a portion of a company's profit paid to common and preferred shareholders. Dividends provide an incentive to own stock in stable companies even if they are not experiencing much growth. Companies are not required to pay dividends.

stock dividend

A dividend paid as additional shares of stock rather than as cash. Stock dividends, unlike cash, are non-taxable.

Specified medical limitations

A dollar limit placed on treatment of certain medical conditions or types of treatment.

Recession

A downturn in economic activity, defined by many economists as at least two consecutive quarters of decline in a country's gross domestic product.

Deed of Trust

A legal document used to create a lien on real property (land) in Mississippi. In some states, the instrument is called a mortgage. Many of our clients mistakenly believe that a deed of trust is a deed that transfers the property to someone else.

back-end load

A fee that investors pay when selling mutual fund shares within a specified number (usually 5-10) of years. The fee amounts to a percentage of the value of the share being sold.

Finance Companies

A finance company is defined as an organization that provides loans for businesses as well as consumers. A finance company is similar to a bank as it acts as a lending entity by extending credit. However, unlike a bank, a finance company does not accept deposits from people. In fact, finance companies get their funding from banks and other resources. The role of a finance company is to extend credit to companies for commercial use and to individuals to make various purchases

Capital

A financial asset and its value, such as cash or goods. Working capital is calculated by taking your current assets subtracted from current liabilities.

derivatives

A financial instrument whose characteristics and value depend upon the characteristics and value of an underlier, typically a commodity, bond, equity or currency. Ex: corn futures contracts, put options, and forward agreements.

Balance Sheet

A financial report that summarizes a company's assets (what it owns), liabilities (what it owes) and owner's equity at a given time.

Profit and Loss Statement

A financial statement that is used to summarize a company's performance and financial position by reviewing revenues, costs and expenses during a specific period of time; such a quarterly or annually.

Variable annuity

A form of annuity policy under which the amount of each benefit payment is not guaranteed and specified in the policy, but which instead fluctuates according to the earnings of a separate account fund.

Renters insurance

A form of property insurance that covers a policyholder's belongings against perils. It also provides personal liability coverage and additional living expenses. Possessions can be covered for their replacement cost or the actual cash value, which includes depreciation.

Application

A form to be filled out with personal information that an insurance company will use to decide whether to issue a policy and how much to charge.

Bankruptcy Petition

A formal request for the protection of the federal bankruptcy laws. (There is an official form for bankruptcy petitions.) The Petition (approximately 3 pages) contains the person or company that is filings basic information, including name, address, etc.

Fixed income fund

A fund or portfolio where bonds are primarily purchased as investments. There is no fixed maturity date and no repayment guarantee.

Board of Trustees

A governing board elected or appointed to direct the policies of an institution.

bond rating

A grade given to bonds that indicates their credit quality. Private independent rating services such as Standard & Poor's, Moody's and Fitch provide these evaluations of a bond issuer's financial strength, or its the ability to pay a bond's principal and interest in a timely fashion.

Sector

A group of similar securities, such as equities in a specific industry.

Coordination of benefits

A group plan provision that stipulates the primary carrier when you have more than one health plan. This ensures that payments made by the carriers do no exceed the cost of the services provided.

Fee for service

A health plan that allows you to go to any physician or provider you choose, but requires that you pay for the services yourself and file claims for reimbursement. (Also known as an indemnity plan.)

Indemnity plan

A health plan that allows you to go to any physician or provider you choose, but requires that you pay for the services yourself and file claims for reimbursement. (Also known as fee-for-service.)

Blue chip

A high-quality, relatively low-risk investment; the term usually refers to stocks of large, well-established companies that have performed well over a long period. The term Blue Chip is borrowed from poker, where the blue chips are the most valuable.

Provider

A hospital, pharmacist, registered nurse, organization, institution, or person licensed to provide health care services in Texas. A physician also may be referred to as a provider. The term provider is often used collectively to refer to individual or facilities who provide health services.

Accelerated death benefits

A insurance policy with an accelerated death benefits provision will pay - under certain conditions - all or part of the policy death benefits while the policyholder is still alive. These conditions include proof that the policyholder is terminally ill with a life expectancy of less than 12 months, has a specified life-threatening disease or is in a long-term care facility such as a nursing home. For group term life policies or certificates, the amount of accelerated benefit is limited by law to the greatest of $25,000 or 50 percent of the death benefit. By accepting an accelerated benefit payment, a person could be ruled ineligible for Medicaid or other government benefits. The proceeds may also be taxable.

joint-stock company

A joint-stock company is a business entity which is owned by shareholders.

balloon payment

A large, final payment on the loan. These clauses usually call for the final payment to be made in 5, 10, 15 years, etc., from the original sale date.

Adversary proceeding

A lawsuit filed in the bankruptcy court which is related to the debtor's bankruptcy case. Examples are suits to determine the dischargeability of a debt, suits against creditors that violate the Automatic Stay.

Deed

A legal document used to transfer real property (land) from one person or entity to another. The two most common deeds are called a warranty deed or a quitclaim deed. Both transfer the seller's interest in the real property (land) but only the warranty deed gives a warranty to the purchaser that the seller has good title to the real property (land).

Letter of intent

A letter of intent may also be issued by a mutual fund shareholder to indicate that he/she would like to invest certain amounts of money at certain specified times. In exchange for signing a letter of intent, the shareholder would often qualify for reduced sales charges. A letter of intent is not a contract and cannot be enforced, it is just a document stating serious intent to carry out certain business activities.

Purchase Money Lien

A lien created on an item in which the funds used to purchase the item are the funds that are secured by the lien. Example: The contract used to purchase a car, truck, furniture or appliances generally includes a promise to pay the funds not paid at the time of purchase and also takes a purchase money lien on the items purchased. If the purchase money lien is on furniture, appliances, electronic entertainment equipment, then the creditor does not have to file a UCC1 or financing statement to perfect its lien. See Perfection of Liens.

Nonparticipating policy

A life insurance policy that does not grant the policy owner the right to policy dividends.

Corporate bond

A long-term bond issued by a corporation to raise outside capital.

Stock

A long-term, growth-oriented investment representing ownership in a company; also known as 'equity.'

Junk bond

A lower-rated, usually higher-yielding bond, with a credit rating of BB or lower.

secondary market

A market in which an investor purchases a security from another investor rather than the issuer, subsequent to the original issuance in the primary market. AKA aftermarket.

treasury bonds

A marketable, fixed-interest U.S. government debt security with a maturity of more than 10 years. Makes interest payments semi-annually and the income that holders receive is only taxed at the federal level. Issued with a minimum denomination of $1,000.

Return on Investment

A measure used to evaluate the financial performance relative to the amount of money that was invested. The ROI is calculated by dividing the net profit by the cost of the investment. The result is often expressed as a percentage.

Beta

A measurement of volatility where 1 is neutral; above 1 is more volatile; and less than 1 is less volatile.

Pre-existing condition

A medical problem or illness you had before applying for health care coverage.

341 Meeting

A meeting of creditors at which the debtor is questioned under oath by creditors, a trustee, examiner, or the United States trustee about his/her financial affairs.

Home service life

A method of selling and servicing insurance, mostly life and health insurance, and does not identify the type or relative cost of the product that is sold. Some companies that market on a home service basis sell what is known as "industrial life insurance." These are most often low death benefit policies with face amounts that may vary from $1,000 to $5,000 and which accumulate cash values at a very low rate. They are intended primarily to cover the expenses of a last illness and burial. The relative cost of industrial life insurance is extremely high compared to some other cash value policies and term life insurance policies.

12b-1 fee

A mutual fund fee, named for the SEC rule that permits it, used to pay for broker-dealer compensation and other distribution costs. If a fund has a 12b-1 fee, it will be disclosed in the fee table of the fund's prospectus.

Public offering price (POP)

A mutual fund share's purchase price, including sales charges.

load fund

A mutual fund that comes with a sales charge or commission.

Bond fund

A mutual fund that invests exclusively in bonds.

no load fund

A mutual fund which doesn't impose a sales or redemption charge, selling and redeeming its shares at net asset value.

Equity fund

A mutual fund/collective fund in which the money is invested primarily in common and/or preferred stock. Stock funds may vary, depending on the fund's investment objective.

Irrevocable beneficiary

A named beneficiary whose rights to life insurance policy proceeds are vested and whose rights cannot be canceled by the policy owner unless the beneficiary consents.

euro

A new currency used by members of the European union.

Contestable period

A period of up to two years during which a life insurance company may deny payment of a claim because of suicide or a material misrepresentation on an application.

Chapter 7 Trustee

A person appointed in a chapter 7 case to represent the interests of the bankruptcy estate and the unsecured creditors. (The trustee's responsibilities include reviewing the debtor's petition and schedules, liquidating the property of the estate, and making distributions to creditors. The trustee may also bring actions against creditors or the debtor to recover property of the bankruptcy estate.)

Chapter 12 Trustee

A person appointed to administer a chapter 12 case. (A chapter 12 trustee's responsibilities are similar to those of a chapter 7 trustee; however, a chapter 12 trustee has the additional responsibilities of overseeing the debtor's plan, receiving payments from debtors, and then paying payments creditors as required by the plan after the plan has been approved by the Court.)

Chapter 13 Trustee

A person appointed to administer a chapter 13 case. (A chapter 13 trustee's responsibilities are similar to those of a chapter 7 trustee; however, a chapter 13 trustee has the additional responsibilities of overseeing the debtor's plan, receiving payments from debtors, and then paying payments creditors as required by the plan after the plan has been approved by the Court.)

Debtor

A person who has filed a petition for relief under the Bankruptcy Code. A person includes an individual, a partnership, a limited liability company (LLC), or a corporation. Thus, any of these entities can be a Debtor.

Claimant

A person who makes an insurance claim.

Annuitant

A person who receives the payments from an annuity during his or her lifetime.

Agent

A person who sells insurance policies.

Confirmed

A plan of reorganization in Chapter 11, 12 or 13 approved by the court and binding on the parties is said to be confirmed. Unless there is an order directing payments to a creditor prior to confirmation, most creditors are not paid until the plan has been confirmed.

Rated policy

A policy issued at a higher premium to cover a person classified as a greater-than-average risk, usually due to impaired health or a dangerous occupation.

Extended term insurance option

A policy provision that provides the option of continuing the existing amount of insurance as term insurance for as long a period of time as the contract's cash value will purchase.

Claim

A policyholder's request for reimbursement from an insurance company under a home insurance policy for a loss to property.

Fund

A pool of money from a group of investors in order to buy securities. The two major ways funds may be offered are (1) by companies in the securities business (these funds are called mutual funds); and (2) by bank trust departments (these are called collective funds).

Return premium

A portion of the premium returned to a policy owner as a result of cancelation, rate adjustment, or a calculation that an advance premium was in excess of the actual premium.

callable preferred stock

A preferred stock that allows the issuer to repurchase the issued stock at a predetermined price. The right to repurchase is usually exercised when market rates fall below the preferred stock rate at time of issue. A firm issues this type of stock to protect itself from obligations to pay guaranteed dividends in the future.

participating preferred stock

A preferred stock which, in addition to a regular dividend, also pays an additional dividend (the participating dividend) when common stock dividends exceed a specified amount.

Conditional receipt

A premium receipt given to an applicant that makes a life and health insurance policy effective only if or when a specified condition is met.

Closed practice

A primary care physician who is not accepting new patients. Note: Even if your physician is on the HMO or PPO list, call to see if the practice is still open for accepting new HMO or PPO participants.

Bankruptcy Trustee

A private individual or corporation appointed in all chapter 7, chapter 12, and chapter 13 cases to represent the interests of the bankruptcy estate and the debtor's creditors. See chapter 7 trustee, chapter 12 trustee and chapter 13 trustee to see what the duties are for each of them.

Annualized

A procedure where figures covering a period of less than one year are extended to cover a 12-month period.

Loss of use

A provision in homeowners and renters insurance policies that reimburses policyholders for the additional costs (housing, food, and other essentials) of having to live elsewhere while the home is being restored following a disaster.

Incontestability

A provision that places a time limit - up to two years - on a life insurance company´s right to deny payment of a claim because of suicide or a material misrepresentation on your application.

401(K)

A qualified plan established by employers to which eligible employees may make tax-deferred contributions (often matched by the company) to a trust.

pension plan

A qualified retirement plan set up by a corporation, labor union, government, or other organization for its employees.

Motion to Lift the Automatic Stay

A request by a creditor to allow the creditor to take an action against a debtor or the debtor's property that would otherwise be prohibited by the automatic stay. A motion to lift the automatic stay is generally filed when a debtor is not making the payments on a secured loan, or by failing to make payments required by the Plan, or the debtor has allowed the insurance on a creditor's collateral such as a car or home. See Relief from Stay.

Precertification

A requirement that the health care plan must approve, in advance, certain medical procedures. Precertification means the procedure is approved as medically necessary, not approved for payment.

Retailers

A retailer sells goods directly to consumers with an aim of earning profit.

SEP-IRA

A retirement plan created to benefit self-employed persons and small business owners. Contributions to a SEP IRA are typically 100% tax deductible and earnings grow tax deferred.

defined contribution plan

A retirement plan in which a certain amount or percentage of money is set aside each year by a company for the benefit of the employee. There are restrictions as to when and how you can withdraw these funds without penalties.

Inflation

A rise in the prices of goods and services, often equated with loss of purchasing power.

Sharpe Ratio

A risk-adjusted measure that measures reward per unit of risk. The higher the sharpe ratio, the better. The numerator is the difference between the Fund's annualized return and the annualized return of the risk-free instrument (T-Bills).

Market timing

A risky investment strategy that calls for buying and selling securities in anticipation of market conditions.

Liquidation

A sale of a debtor's property by a Chapter 7 Trustee or a Chapter 11 Debtor with the proceeds to be used for the benefit of creditors.

Sales budgets

A sales budget is the direct outcome of sales forecast and is based on the consideration of demand and supply situation, competition, past sales trends, future prediction of sales, seasonal changes that affect sales and so on. The sales forecasting is based upon such factors as population trends, general economic environment, consumer's purchasing power, disposable income, price trends of the products, inflation rate and so an.

Fixed income security

A security that pays a set rate of interest on a regular basis.

common stock

A security that represents ownership in a corporation. Most of the shares of stock traded on the major stock exchanges are this type of stock:

52 Week High

A security's trading high point over the last 52-week period.

52 Week Low

A security's trading low point over the last 52-week period.

Statement of Financial Affairs

A series of questions the debtor must answer in writing concerning sources of income, transfers of property, lawsuits by creditors, etc. (There is an official form a debtor must use which must be filed in every bankruptcy proceeding.)

Systematic investment plan

A service option that allows investors to buy mutual fund shares on a regular schedule, usually through bank account deductions.

Generally Accepted Accounting Principles

A set of rules and guidelines developed by the accounting industry for companies to follow when reporting financial data. Following these rules is especially critical for all publicly traded companies.

Proxy

A shareholder vote on matters that require shareholders' approval.

Money market mutual fund

A short-term investment that seeks to protect principal and generate income by investing in Treasury bills, CDs with maturities less than one year and other conservative investments.

Cash equivalent

A short-term money-market instrument, such as a Treasury bill or repurchase agreement, of such high liquidity and safety that it is easily converted into cash.

Material misrepresentation

A significant misstatement on an application form. If a company had access to the correct information at the time of application, the company might not have agreed to accept the application.

Peril

A specific risk or cause of loss covered by a property insurance policy, such as a fire, windstorm, flood, or theft. A named-peril policy covers the policyholder only for the risks named in the policy. An all-risk policy covers all causes of loss except those specifically excluded.

Benchmark

A standard, usually an unmanaged index, used for comparative purposes in assessing performance of a portfolio or mutual fund.

Standard Deviation

A statistical measure of the degree to which an individual value in a probability distribution tends to vary from the mean of the distribution.

Price-to-earnings (P/E) Ratio

A stock's price divided by its earnings per share, which indicates how much investors are paying for a company's earning power.

Long-term investment strategy

A strategy that looks past the day-to-day fluctuations of the stock and bond markets and responds to fundamental changes in the financial markets or the economy.

Value investing

A strategy whereby investors purchase equity securities that they believe are selling below estimated true value. The investor can profit by buying these securities then selling them once they appreciate to their real value.

Company profile

A summary of information about an insurance company, including its license status, financial data, complaint history, and a history of regulatory action.

currency swap

A swap that involves the exchange of principal and interest in one currency for the same in another currency. It is considered to be a foreign exchange transaction and is not required by law to be shown on a company's balance sheet.

Managed health care

A system that organizes physicians, hospitals, and other health care providers into networks with the goal of lowering costs while still providing appropriate medical services. Many managed care systems focus on preventive care and case management to avoid treating more costly illnesses.

Capitation

A system where an HMO pays a doctor or hospital a flat monthly fee for the care of each health plan member whether or not any services are delivered.

Accounting

A systematic way of recording and reporting financial transactions.

Keogh Plan

A tax deferred pension plan available to self-employed individuals or unincorporated businesses for retirement purposes. Can be set up as either a defined-benefit or defined-contribution plan, although most plans are defined contribution.

Individual Retirement Account (IRA)

A tax-deferred account to which an eligible individual can make annual contributions up to $3,000 ($6,000 for a single-income married couple filing a joint income tax return).

Binder

A temporary insurance contract that provides proof of coverage until a permanent policy is issued.

Distribution schedule

A tentative distribution schedule of a mutual fund's dividends and capital gains.

higher interest rates

A tight money policy followed by the Federal Reserve would most likely result in:

Fraudulent Transfer

A transfer of a debtor's property 1) made with intent to defraud or 2) for which the debtor receives less than the transferred property's value. In then second instance, the transfer does not have to be made with an intent to defraud to constitute a fraudulent transfer under the Bankruptcy Code.

Post-petition Transfer

A transfer of a debtor's property made after the commencement of the case. If the transfer is done without approval of the court, then the trustee or the debtor may be able to set the transfer aside pursuant to 11 U.S.C. §549.

Voluntary Transfer

A transfer of a debtor's property with the debtor's consent. The granting of a lien on property by a mortgage (deed of trust) or a security agreement on an automobile or other property can also be considered a voluntary transfer.

Involuntary Transfer

A transfer of a debtor's property without the debtor's consent. The taking of a lien by court action (judgment lien) or as authorized by state or federal laws (statutory lien). Examples of statutory liens are Federal Tax Liens and state tax liens that can be placed upon all property of a person simply by filing the lien in the courthouse of the county where property owned by the person is located.

Preference

A transfer to a creditor in payment of an existing debt made within certain time periods before the commencement of the case. Preferences may be recovered by the trustee for the benefit of all creditors of the estate pursuant to 11 U.S.C. §647. In some instances, the debtor may recover transfer of exempt assets. The time limit is normally 90 days except for transfer to insiders, which is one year.

Trust

A trust can be created during a person's lifetime and survive the person's death. A trust can also be created by a will and formed after death. Once assets are put into the trust they belong to the trust itself, not the trustee, and remain subject to the rules and instructions of the trust contract. Most basically, a trust is a right in property, which is held in a fiduciary relationship by one party for the benefit of another. The trustee is the one who holds title to the trust property, and the beneficiary is the person who receives the benefits of the trust. While there are a number of different types of trusts, the basic types are revocable and irrevocable.

Objection to Discharge

A trustee's or creditor's objection requesting that the court deny the debtor or debtors from receiving a discharge.

Objection to Exemptions

A trustee's or creditor's objection to a debtor's attempt to claim certain property as exempt. If he trustee or creditor is successful, then the trustee will be able to liquidate the property and use the funds to pay creditors of the debtor.

term deposit

A type of account which cannot be accessed for a predetermined period (typically the loan's term).

tax-sheltered annuity

A type of annuity that allows an employee to make contributions from his or her income into a retirement plan. Contributions are deducted from the employee's income and are not taxed until withdrawal.

mutual company

A type of insurance company that returns part of the profits of the company to its policyholders.

Single-premium whole life policy

A type of limited-payment policy that requires only one premium payment.

Preferred provider organization (PPO)

A type of plan in which physicians, hospitals, and other providers agree to discount rates for an insurance company. These providers are part of the PPO´s network. Insurance contracts with PPO provisions reimburse at a higher percentage if you use providers in the network. If you go to providers outside the PPO´s network, you will have to pay more for your care.

Variable life insurance

A type of whole life policy in which the death benefit and the cash value fluctuate according to the investment performance of a separate account fund that the policyholder selects. Because the investment account is regulated by the Securities and Exchange Commission, the policyholder must be presented with a prospectus before they purchase a variable life policy.

Summation

A typical "A" mortgage transaction takes between 21-30 business days to complete. With new automated underwriting, this process speeds up greatly. Contact one of our experienced Loan Officers today to discuss your particular mortgage needs or Apply Online and a Loan Officer will promptly get back to you.

Share

A unit of ownership in an investment, such as a share of a stock or a mutual fund.

Indexed life insurance

A whole life plan of insurance that provides for the face amount of the policy and, correspondingly, the premium rate, to automatically increase every year based on an increase in the Consumer Price Index (CPI) or another index as defined in the policy.

Endorsement

A written agreement attached to a policy expanding or limiting the benefits otherwise payable under the policy. Also called a "rider."

Rider

A written agreement attached to the policy expanding or limiting the benefits otherwise payable under the policy. Also called an "endorsement."

Complaint

A written communication primarily expressing a grievance against an insurance company or agent.

income statement

AKA "profit and loss statement" or "statement of revenue and expense." A financial statement that measures a company's financial performance over a specific accounting period. Also shows the net profit or loss incurred over a specific accounting period, typically over a fiscal quarter or year.

Accountants and Auditors

Accountants and auditors prepare and examine financial records. They ensure that financial records are accurate and that taxes are paid properly and on time. Accountants and auditors assess financial operations and work to help ensure that organizations run efficiently.

call option

An agreement that gives an investor the right (but not the obligation) to buy a stock, bond, commodity, or other instrument at a specified price within a specific time period. Used by securities investors to gain control of a stock at a price below the market price.

Total return

Accounts for all of the dividends and interest earned before deductions for fees and expenses, in addition to any changes in the value of the principal, including share price, assuming the funds' dividends and capital gains are reinvested. Often, this percentage is presented in a specified period of time (one, five, ten years and/or life of fund). Also, a method of calculating an investment's return that takes share price changes and dividends into account.

Means Test

Added to the Code in 2005, the means test is intended to screen out those filing Chapter 7 who are supposedly able to repay some part of their debts. The test is found in Official Form B22a. Debtors who fail the means test may convert their case to another chapter of bankruptcy. More about how the means test works.

compound interest

Adding interest to the principal and paying interest on the new total is called _____.

Paid-up additions

Additional amounts of life insurance purchased using dividends; these insurance amounts require no further premium payments.

Chapter 9 Bankruptcy

Adjustment of Debts of Municipality - Only a municipality, such as cities, towns, villages, counties, taxing districts, municipal utilities, and school districts, may file for Chapter 9 Bankruptcy. Under Chapter 9 Bankruptcy, the municipality is expected to reorganize and propose a plan of repayment, similar to Chapter 11 Bankruptcy.

Chapter 12 Bankruptcy

Adjustment of Debts of a Family Farmer with Regular Income - Chapter 12 Bankruptcy provides debt relief to family farmers with regular annual income. Chapter 12 Bankruptcy is very similar to Chapter 13 Bankruptcy because both of these bankruptcy options allow the debtor to propose a plan of debt repayment over a period of three to five years, as well as a trustee is assigned to the case who is responsible to oversee the bankruptcy process and disbursement of payments to the creditors. Chapter 12 Bankruptcy allows a family farmer to continue to operate the farm while the plan is being carried out.

Chapter 13 Bankruptcy

Adjustment of Debts of an Individual With Regular Income - Chapter 13 Bankruptcy is designed for an individual who has a regular source of income, a desire to pay his or her debts, but currently is unable to do so. Chapter 13 Bankruptcy may be preferable to Chapter 7 Bankruptcy because Chapter 13 Bankruptcy usually allows the debtor to keep a valuable asset, such as his or her own house. Under Chapter 13 Bankruptcy the debtor may arrange and propose a plan to the Court. The plan illustrates how the debtor will repay creditors over time, between three and five years. The Court must then approve this plan. If the Court approves the plan, the debtor will make payments to the creditors through a trustee. The debtor is then protected from actions by creditors including lawsuits, wage garnishments, and actual contact with the debtor for the life of the plan. Upon completion of the plan, any remaining debts are discharged. You may consider filing a petition under Chapter 13 Bankruptcy if you owe debts that are not dischargeable under Chapter 7 Bankruptcy, such as taxes and child support, or if you have liens that are larger than the value of the assets securing the debt, you have years of unfiled taxes, you are behind or car or house payments, or your assets are worth more than the available exemptions.

Treasury bond

Negotiable long-term (10 years or longer) debt obligations issued by the U.S. government and backed by its full faith and credit.

The Intent to Proceed

After you receive your Loan Estimate, it is up to you to decide whether to move forward with us or not. If you decide not to proceed with an application for a particular loan, you don't need to do anything further. If you do intend to proceed with us, you must take the next step and tell us in writing or by phone that you want to move forward with the application for that loan. All lenders are required to honor the terms of the Loan Estimate for 10 business days. So if you decide to move forward more than 10 business days after you receive a Loan Estimate, please realize that market conditions may make it necessary to revise the terms and estimated costs and provide you with a revised Loan Estimate.

Real Property

All land together with builings, structures, fences, etc. which are attached to the land and along with equipment that has become a part of the land such as light fixtures to a house or a well pump on the land.

Network

All physicians, specialists, hospitals, and other providers who have agreed to provide medical care to HMO members under terms of the contract with the HMO. Insurance contracts with preferred provider benefits also use networks.

Personal property

All tangible property (other than land) that is either temporary or movable in some way, such as furniture, jewelry, electronics, etc.

Provider network

All the doctors, specialists, hospitals, and other providers who agree to provide medical care to HMO or PPO members under terms of a contract with the HMO or insurance company.

Free examination period

Also known as "10-day free look" or "free look," it is the time period after a life insurance policy or an annuity is delivered during which the policy owner may review it and return it to the company for a full refund of the initial premium. Variable life policies are required to include a "free-look" provision. For other coverage, it is at the company´s option.

Health care reimbursement accounts

Although not an insurance benefit, these accounts allow you to set aside pre-tax dollars to pay for medical care or medical costs not covered by your regular health benefit plan.

Portfolio allocation

Amount of assets in a portfolio specifically designated for a certain type of investment.

Death benefit

Amount paid to the beneficiary upon the death of the insured.

Dividend paid

Amount paid to the shareholder of record a security or mutual fund.

Expense ratio (date)

Amount, expressed as a percentage of total investment that shareholders pay annually for mutual fund operating expenses and management fees.

Asset Protection Trust

An Asset Protection Trust is a type of Trust that is designed to protect a person's assets from claims of future creditors. These types of Trusts are often set up in countries outside of the United States, although the assets do not always need to be transferred to the foreign jurisdiction. The purpose of an Asset Protection Trust is to insulate assets from creditor attack. These trusts are normally structured so that they are irrevocable for a term of years and so that the trustmaker is not a current beneficiary. An asset protection trust is normally structured so that the undistributed assets of the trust are returned to the trustmaker upon termination of the trust provided there is no current risk of creditor attack, thus permitting the trustmaker to regain complete control over the formerly protected assets.

Irrevocable Trust

An Irrevocable Trust is one which cannot be altered, changed, modified or revoked after its creation. Once a property is transferred to an Irrevocable Trust, no one, including the trustmaker, can take the property out of the Trust. It is possible to purchase Survivorship Life Insurance, the benefits of which can be held by an Irrevocable Trust. This type of survivorship life insurance can be used for estate tax planning purposes in large estates, however, survivorship life insurance held in an Irrevocable Trust can have serious negative consequences.

Credit

An accounting entry that may either decrease assets or increase liabilities and equity on the company's balance sheet, depending on the transaction. When using the double-entry accounting method there will be two recorded entries for every transaction: a credit and a debit.

Debit

An accounting entry where there is either an increase in assets or a decrease in liabilities on a company's balance sheet.

Policy loan

An advance made by a life insurance company to a policy owner. The advance is secured by the cash value of the policy.

Transfer agent

An agent, usually a commercial bank, appointed to monitor records of stocks, bonds and shareholders. A transfer agent keeps a record of the name of each registered shareholder, his or her address, the number of shares owned, and sees that certificates presented for the transfer are properly canceled and new certificates are issued in the name of the new owner.

Reaffirmation Agreement

An agreement by a chapter 7 debtor to continue paying a debt after the bankruptcy, usually for the purpose of keeping collateral or mortgaged property that would otherwise be subject to repossession or foreclosure.

Assumption of a lease or contract

An agreement to continue performing duties under a contract or lease. Example: If you assume your cell phone contract, you agree to continue paying the monthly charges in exchange for being able to use the service.

Sales charge

An amount charged for the sale of some fund shares, usually those sold by brokers or other sales professionals. By regulation, a mutual fund sales charge may not exceed 8.5 percent of an investment purchase. The charge may vary depending on the amount invested and the fund chosen. A sales charge or load is reflected in the asked or offering price. See loads.

Premium load

An amount deducted from each life insurance premium payment, which reduces the amount credited to the policy.

Administrative expense charge

An amount deducted, usually monthly, from the policy.

Refund

An amount of money returned to the policyholder for overpayment of premium or if the policyholder is due unearned premium.

Annuity certain

An annuity that provides a benefit amount payable for a specified period of time regardless of whether the annuitant lives or dies.

Deferred annuity

An annuity under which the annuity payment period is scheduled to begin at some future date.

Appraisal Basics

An appraisal of real estate is the valuation of the rights of ownership. The appraiser must define the rights to be appraised. The appraiser does not create value, the appraiser interprets the market to arrive at a value estimate. As the appraiser compiles data pertinent to a report, consideration must be given to the site and amenities as well as the physical condition of the property. Considerable research and collection of data must be completed prior to the appraiser arriving at a final opinion of value. Using three common approaches, which are all derived from the market, derives the opinion, or estimate of value. The first approach to value is the COST APPROACH. This method derives what it would cost to replace the existing improvements as of the date of the appraisal, less any physical deterioration, functional obsolescence, and economic obsolescence. The second method is the COMPARISON APPROACH, which uses other "bench mark" properties (comps) of similar size, quality and location that have recently sold to determine value. The INCOME APPROACH is used in the appraisal of rental properties and has little use in the valuation of single family dwellings. This approach provides an objective estimate of what a prudent investor would pay based on the net income the property produces.

Asset Management Firms

An asset management company is beneficial as they provide the investors with more investment options than they would have by their own as they have a much bigger pool of resources. The company will invest the pooled funds of its clients into securities that match declared financial objectives. Asset management companies manage hedge funds, mutual funds and pension plans.

Liability insurance

An auto insurance coverage that pays for injuries to the other party and damages to the other vehicle resulting from an accident the policyholder caused. It also pays if the accident was caused by someone covered by the policyholder's policy, including a driver operating the car with their permission.

Named driver policy

An auto insurance policy that doesn't provide coverage for an individual residing in a named insured 's household specifically unless the individual is named on the policy. The term includes an auto insurance policy that has been endorsed to provide coverage only for drivers specifically named on the policy.

Limited Liability Company

An company that is formed under state laws to operate as a business in that state and possibly others. You normally see this abbreviated as LLC. An LLC can be taxes as a corporation, partnership or if it is solely owned as a sole propritorship. Just as a corporation, an LLC can sue, be sued or file bankruptcy.

debit card

An electronic card issued by a bank which allows bank clients access to their account to withdraw cash or pay for goods and services. This form of payment also removes the need for checks as it immediately transfers money from the client's account to the business account. The major benefits to this type of card are convenience and security.

Eligible employee

An employee who meets the eligibility requirements for coverage in a group plan. To be eligible to join a group plan, you usually must work full-time for at least 30 hours a week. Some group plans may require employees to be a certain pay grade or job classification to be eligible for coverage.

Named driver exclusion

An endorsement to an auto insurance policy that provides that a policy does not cover accidents when a specifically named person is the driver.

teller

An entry-level position at a financial institution.

financial institution

An establishment that focuses on dealing with financial transactions, such as investments, loans and deposits.

Valuation

An estimate of the value or worth of a company; the price investors assign to an individual stock.

Appraisal

An evaluation of a home insurance property claim by an authorized person to determine property value or damaged property value. Many policies provide an "appraisal" process to resolve claim disputes. In this process, you and the insurance company hire separate damage appraisers. The two appraisers choose a third appraiser to act as an "umpire." The appraisers then review your claim, and the umpire rules on any disagreements. The umpire's decision is binding on you and the insurance company, but only for the loss amount. If there is a dispute over what is covered, you can still pursue a settlement of the coverage issue after the appraisal takes place. You are required to pay for your appraiser and half of the umpire's costs.

Surcharge

An extra charge added to a premium by an insurance company. For automobile insurance, a surcharge is usually added if a policyholder has at-fault accidents.

suitability

An important element in determining proper business practices. Financial professionals recommend financial products based on the client's financial, social, and emotional circumstances.

Treasury note

Negotiable medium-term (one year to 10 years) debt obligations issued by the U.S. government and backed by its full faith and credit.

S&P 500

An index of 500 stocks chosen for market size, liquidity and industry grouping, among other factors. Designed to be a leading indicator of U.S. equities. Investing success is usually measured by comparing an investor's percentage gain or loss to this.

Defendant

An individual (or business) against whom a lawsuit is filed.

Public insurance adjuster

An individual employed by a policyholder to negotiate a claim with the insurance company in exchange for a percentage of the claim settlement. Public insurance adjusters must be licensed by TDI.

Adjuster

An individual employed by an insurer to evaluate losses and settle policyholder claims. Also see "public insurance adjuster."

broker

An individual or firm that charges a fee or commission for executing buy and sell orders submitted by an investor.

Family Fisherman

An individual, individual and spouse, corporation, limited liability company (LLC) or partnership engaged in a commercial fishing operation who meet certain debt limits and other statutory criteria (such as more than 50% of the debtor's income must be derived from fishing) for filing a petition under chapter 12.

Family Farmer

An individual, individual and spouse, corporation, limited liability company (LLC) or partnership engaged in a farming operation who meet certain debt limits and other statutory criteria (such as more than 50% of the debtor's income must be derived from farming) for filing a petition under chapter 12.

discount broker

An individual/firm that carries out buy and sell orders at a reduced commission compared to a full-service broker, but provides no investment advice. Ex: E-Trade, Ameritrade, Charles-Schwab

commercial bank

An institution which accepts deposits, makes business loans, and offers related services. Also allow for a variety of deposit accounts, such as checking, savings, and time deposit. Primarily concerned with receiving deposits and lending to businesses.

letter of credit

An instrument given by a bank on behalf of a buyer to pay back the bank of the seller a given sum in a given time.

guaranteed insurability

An insurance policy in which the insurer is required to renew the policy for a specified amount of time regardless of changes to the health of the insured. Most important to individuals wishing to purchase health insurance.

Lien

An interest in real or personal property which secures a debt; the lien may be voluntary, such as a mortgage (deed of trust) on real property or the security interest retained by a bank or lender on an automobile. The lien may also be involuntary, such as a judgment lien or tax lien.

Index

An investment index tracks the performance of many investments as a way of measuring the overall performance of a particular investment type or category. The S&P 500 is widely considered the benchmark for large-stock investors. It tracks the performance of 500 large U.S. company stocks.

United States Trustee

An officer of the Justice Department responsible for supervising the administration of bankruptcy cases, estates, and trustees, monitoring plans and disclosure statements, monitoring creditors' committees, monitoring fee applications, and performing other statutory duties. Many times this is abbreviated in the following manner: UST.

renewability

An option sometimes found in term life insurance policies that allows insured to continue purchasing the same policy without having to demonstrate that they are still insurable.

Investment advisor

An organization employed by a mutual fund to give professional advice on the fund's investments and asset management practices.

Third-party administrator (TPA)

An organization that performs managerial and clerical functions related to an employee benefit insurance plan by an individual or committee that is not an original party to the benefit plan.

Owner's Equity

An owner's equity is typically explained in terms of the percentage amount of stock a person has ownership interest in the company. The owners of the stock are commonly referred to as the shareholders.

Accident

An unforeseen, unintended event.

debenture

An unsecured corporate bond.

Dividend yield

Annual percentage of return earned by a mutual fund. The yield is determined by dividing the amount of the annual dividends per share by the current net asset value or public offering price.

Yield

Annual percentage rate of return on capital. The dividend or interest paid by a company expressed as a percentage of the current price.

Securities

Another name for investments such as stocks or bonds. The name 'securities' comes from the documents that certify an investor's ownership of particular stocks or bonds.

Debt Relief Agency

Another new term created by the 2005 amendments to the Bankruptcy Code. The Code requires all law firms and other entities that provide bankruptcy assistance for pay are Debt Relief Agencies, and that the firm or company must state in any advertisement that the firm or company is a Debt Relief Agency. Apparently, this was done to stop misleading advertising by some that made it appear that the firm or company helped people with debt consolidations without mentioning that what was being done was the firm or company was filing chapter 13 debt reorganizations instead.

Contingent beneficiary

Another party or parties who will receive the life insurance proceeds if the primary beneficiary should predecease the person whose life is insured.

passbook accounts

Another way of saying "savings accounts."

finance charge

Any fee representing the cost of credit, or the cost of borrowing.

Insurable interest

Any financial interest a person has in the property or person insured. In life insurance, a person´s or party´s interest - financial or emotional - in the continuing life of the insured.

Insider (of individual debtor)

Any relative of the debtor or of a general partner of the debtor; partnership in which the debtor is a general partner; general partner of the debtor; or corporation of which the debtor is a director, officer, or person in control.

insider trading

Any trade of a company's shares based on material non-public knowledge.

Appraisers and Assessors of Real Estate

Appraisers and assessors of real estate provide an estimate of the value of land and the buildings on the land usually before it is sold, mortgaged, taxed, insured, or developed.

small wholesale business

As defined by the Small Business Admin., a _____ is one with 100 or less employees.

Property of the estate

As of the Petition Date, the property that is not exempt and belongs to the bankruptcy estate. Property of the estate is usually sold by the trustee and the claims of creditors paid from the proceeds. In chapter 12 and 13 and individual 11 cases, property of the estate also includes future income.

Short-term investment

Asset purchased with an investment life of less than a year.

Assets

Assets are every form of property that the debtor owns. They include tangible assets such as furniture and cars and intangible things such as debt owed to the debtor and the debtor's the right to sue someone. The debtor must list all of his assets in the bankruptcy schedules.

liquid assets

Assets that are easily convertible to cash, such as those in savings accounts, stocks, and US savings bonds.

Personal property

Assets, such as cars, stock, furniture, debt owed to the debtor etc., that is not real estate or affixed to real property. In other words, if buildings and items attached to buildings and land are real property. Everything else is personal property.

Subrogation

Assignment of rights of recovery from insured.

Non-owners policy

Auto insurance coverage that offers liability, uninsured motorist, and medical payments to a named insured who does not own a vehicle.

Rental reimbursement coverage

Auto insurance coverage that pays a set daily amount for a rental car if the policyholder's car is being repaired because of damage covered by the auto policy.

Uninsured/underinsured motorist (UM/UIM) coverage

Auto insurance coverage that pays for the policyholder's injuries and property damage caused by a hit-and-run driver or a motorist without liability insurance. It will also pay when medical and car repair bills are higher than the other driver´s liability coverage.

Towing and labor coverage

Auto insurance coverage that pays for towing charges when a car can´t be driven. Also pays labor charges, such as changing a flat tire, at the place where the car broke down.

Inflation protection

Automatically adjusts home insurance policy limits to account for increases in the costs to repair or rebuild a property.

secondary reserve

Bank assets invested in high grade short-term marketable securities (such as treasury bills) which serve as a source of liquidity supplemental to primary reserves. Ex: securities purchased from Federal govn't.

lockbox service

Bank collection service that allows accounts receivable payments to be sent directly to the bank.

depository intermediary

Bank, building society, credit union, or other financial institution that solicits and accepts savings of the general public as demand deposits or time deposits, and pays a fixed or variable rate of interest.

Important Bankruptcy Information

Bankruptcy filings are public records. A bankruptcy will stay on your credit report for ten years. However, the law prohibits an employer from discriminating against you because you filed for bankruptcy.

chartered

Banks may be ____ by either federal or state govn't.

national banks

Banks that receive their charters from the US Dept. of the Treasury.

Multiple employer plans

Benefit plans that serve employees of more than one employer and are set up under terms of a collective bargaining agreement.

renewable term life insurance

Best for short-term life insurance. Policies that start out with low premiums, but increases each time the term is renewed. Policyholders are guaranteed renewal for succeeding terms even if they have a serious illness.

D

Bonds in default for non-payment of principal and/or interest

municipal bonds

Bonds issued by a local government, or its agencies. Most likely would have the lowest interest rate.

Medical payments and personal injury protection (PIP)

Both auto insurance coverages pay limited medical and funeral expenses if the policyholder, a family member, or a passenger in the car is injured or killed in a motor vehicle accident. PIP also pays lost-income benefits.

Country breakdown

Breakdown of securities in a portfolio by country.

Sector breakdown

Breakdown of securities in a portfolio by industry categories.

Standard & Poor's Index

Broad-based measurement of changes in stock market conditions based on the average performance of 500 widely held common stocks commonly known as the Standard & Poor's 500 or S&P 500.

Budget Analysts

Budget analysts help public and private institutions organize their finances. They prepare budget reports and monitor institutional spending.

Buyers and Purchasing Agents

Buyers and purchasing agents buy products and services for organizations to use or resell. They evaluate suppliers, negotiate contracts, and review the quality of products.

Treasury bill

Negotiable short-term (one year or less) debt obligations issued by the U.S. government and backed by its full faith and credit.

Skilled nursing care

Care needed after a serious illness. It is available 24 hours a day from skilled medical personnel such as registered nurses or professional therapists. A doctor orders skilled nursing care as part of a treatment plan.

Conversion

Cases under the Code may be converted from one chapter to another chapter; for example, a Chapter 7 case may be converted to a case under Chapter 13 if the debtor is eligible for Chapter 13. Even though the chapter of the Code which governs it changes, it remains the same case as originally filed.

Catastrophic

Catastrophic policies pay less than 60% of the total average cost of care. Catastrophic plans must also cover the first three primary care visits and preventive care for free, even if you have not yet met your deductible.

M1

Category of the money supply to which transaction accounts belong.

Priority claims

Certain debts, such as unpaid wages, spousal or child support (domestic support obligations), and taxes are elevated in the payment hierarchy under the Code. In a chapter 7 liquidation, priority claims must be paid in full before general unsecured claims are paid. It is not uncommon for there not be enough funds to pay the priority claims in full in the few times that a chapter 7 liquidation occurs in Mississippi.

negotiability

Characteristic of a document that allows it to be legally/freely assignable, saleable, or transferable. Elements include a signature, it must be written, and must state the amount to be paid.

divisible

Characteristic of money that makes it possible for recipients to give money back.

Surrender charges

Charges that are deducted if a life insurance policy or annuity is cashed in (surrendered). These charges also are deducted if the policyholder borrows money on the policy or if the policy lapses for non-payment.

Charitable Trust

Charitable Trusts are trusts which benefit a particular charity or the public in general. Typically Charitable Trusts are established as part of an estate plan to lower or avoid imposition of estate and gift tax. A charitable remainder trust (CRT) funded during the grantor's lifetime can be a financial planning tool, providing the trustmaker with valuable lifetime benefits. In addition to the financial benefits, there is the intangible benefit of rewarding the trustmaker's altruism as charities usually immediately honor the donors who have named the charity as the beneficiary of a CRT.

Claims Adjusters, Appraisers, Examiners, and Investigators

Claims adjusters, appraisers, examiners, and investigators evaluate insurance claims. They decide whether an insurance company must pay a claim, and if so, how much.

Pre-petition

Claims: Debts owed by the debtor or other claims against the debtor which arose before the commencement of the bankruptcy case, that is, before the filing of the bankruptcy petition (Petition Date). Generally only pre-petition debts may be discharged in a bankruptcy proceeding. (One exception are debts that were incurred post-petition, but before a case was converted from one chapter to another.)

Share classes

Classes represent ownership in the same fund but charge different fees. This can enable shareholders to choose the type of fee structure that best suits their particular needs.

Commercial Banking

Commercial banks, from large entities to local institutions, offer a range of financial services, from checking and savings accounts to IRAs and loans. Career options available in this sector include bank tellers, loan officers, operations, marketing and branch managers. Talented professionals can advance from a local branch job to a position in corporate headquarters. Such a promotion would expose you to a number of other areas, such as international finance.

Commodity Futures

Commodity futures contracts are agreements to buy or sell a specific quantity of a commodity at a specified price on a particular date in the future. Commodities include metals, oil, grains and animal products, as well as financial instruments and currencies. With limited exceptions, trading in futures contracts must be executed on the floor of a commodity exchange.

check safekeeping

Common practice whereby the bank does not return canceled checks but allows customers to request photocopies if proof of payment is required.

common size analysis

Comparison of different-sized firms in the same industry when analyzing a firm's financial statements.

Compensation, Benefits, and Job Analysis Specialists

Compensation, benefits, and job analysis specialists conduct an organization's compensation and benefits programs. They also evaluate position descriptions to determine details such as a person's classification and salary.

Yield to maturity

Concept used to determine the rate of return an investor will receive if a long-term, interest-bearing investment, such as a bond, is held to its maturity date.

installment loan

Consumer or business loan in which the principal and interest are repaid in equal installments at fixed intervals. Ex: automobile loans, home equity loans, education loans.

HOEPA loan

Consumer protection legislation designed to shield homeowners from abusive loan practices. Stated that lenders must make disclosures 3 days before closing, may not require balloon payments in less that 5 years on most loans, and also may not make loans that do not adequately consider the borrower's ability to repay.

Renewal

Continuation of a policy after its expiration date.

Domestic Support Obligation

Debts for alimony, maintenance or support owed to child, spouse or governmental entity that paid for the support of the child or spouse. A new term introduced by the bankruptcy amendments of 2005.

Corporate Finance

Corporate finance jobs involve working for a company in the capacity of finding and managing the capital necessary to run the enterprise. This is done while maximizing corporate value and reducing financial risk. The functions you may implement while in such a position include the following: Setting up the company's overall financial strategy, Forecasting profits and losses, Negotiating lines of credit, Preparing financial statements, Coordinating with outside auditors, ​More sophisticated corporate finance jobs might involve mergers and acquisitions activity, such as calculating the value of an acquisition target or determining the value of a division for a spinoff. Corporate finance positions can be found in companies of all sizes, from large, international entities to small startups. Additional corporate finance positions include financial analysts, treasurers and internal auditors.

Cost Estimators

Cost estimators collect and analyze data in order to estimate the time, money, materials, and labor required to manufacture a product, construct a building, or provide a service. They generally specialize in a particular product or industry.

Surplus lines

Coverage from out-of-state companies not licensed in Texas but legally eligible to sell insurance on a "surplus lines" basis. Surplus lines companies generally charge more than licensed companies and often offer less coverage.

Long-term care benefits

Coverage that provides help for people when they are unable to care for themselves because of prolonged illness or disability. Benefits are triggered by specific findings of "cognitive impairment" or inability to perform certain actions known as "Activities of Daily Living." Benefits can range from help with daily activities while recuperating at home to skilled nursing care provided in a nursing home.

Liability coverage

Covers losses that an insured is legally liable. For homeowners insurance, for example, liability coverage protects the policyholder against financial loss if they are sued and found legally responsible for someone else's injury or property damage.

Features of whole life insurance

Covers you for life Provides death benefits as well as a cash value accumulation that builds during the life of the policy You typically must qualify with a health examination Can be purchased without a medical exam, but at a higher cost Takes 12 to 15 years to build up a decent cash value Can be a good choice for estate planning Cash value is based on how much the return on investment is worth A portion of the cash value can be withdrawn or borrowed during the life of the policy Initially has more expensive premiums than term life insurance, but can potentially save you money over the life of the policy if in force for a considerable number of years

independent agency

Created by Congress to address concerns that go beyond the scope of ordinary legislation.

High Interest Rates and Increased Debt

Credit card companies charge you an enormous amount of interest on each balance that you don't pay off at the end of each month. This is how they make their money and this is how most people in the United States get into debt (and even bankruptcy.) Consider this: If you have a $100 in savings, most banks will give you at the most 2.0 to 2.5% interest on your money over the course of the year. This means you earn $2.00 - $2.50 a year on your $100 savings. Most credit cards charge you up to 10 times that amount of interest on balances. This means that if you have $100 balance that you don't pay off, you will be charged 20-25% interest on that $100. This means that you owe almost $30 interest (plus the original $100) at the end of the year. A good way to look at this is in comparison to what you would earn in interest from a bank or owe in interest to a bank loan: Savings accounts may pay you around 2% interest; if you have a loan from a bank you may pay them around 10% interest (5 times as much as you earn off your savings); if you owe money to a credit card company, you may pay them around 20% interest (10 times as much as you earn off your savings.)

Emergencies

Credit cards can also be useful in times of emergency. While you should avoid spending outside your budget (or money you don't have!), sometimes emergencies (such as your car breaking down or flood or fire) may lead to a large purchase (like the need for a rental car or a motel room for several nights.)

Purchase Power and Ease of Purchase

Credit cards can make it easier to buy things. If you don't like to carry large amounts of cash with you or if a company doesn't accept cash purchases (for example most airlines, hotels, and car rental agencies), putting purchases on a credit card can make buying things easier.

Protection of Purchases

Credit cards may also offer you additional protection if something you have bought is lost, damaged, or stolen. Both your credit card statement (and the credit card company) can vouch for the fact that you have made a purchase if the original receipt is lost or stolen. In addition, some credit card companies offer insurance on large purchases.

General Unsecured Claim

Creditor's claim without a priority for payment for which the creditor holds no security (or collateral). If the available funds in the estate extend to payment of a portion of the general unsecured claims, the claims are paid pro-rata.

online/electronic account access

Creditors are encouraging this for the following reasons: Bad debt collection costs are decreased; postage expenses are reduced; and material costs associated w/ producing paper statements are reduced.

Assets (Fixed and Current)

Current assets are those that will be used within one year. Typically this could be cash, inventory or accounts receivable. Fixed assets (non current) are more long-term and will likely provide benefits to a company for more than one year, such as a building, land or machinery.

Daily dividend factor (date)

Daily dividend distributed by a money market mutual fund.

DSCR

Debt Service Coverage Ratio Measurement of a property's ability to generate enough revenue to cover the cost of its mortgage payments. It is calculated by dividing the net operating income by the total debt service.

debt ratio

Debt divided by Income.

Top five contributors

Five assets in a portfolio that generated largest negative returns (losses).

Consumer Debt

Debts incurred by an individual for personal, family or household purposes. Taxes are not consumer debts and neither are business loans. The means test only applies to those with primarily consumer debt.

Dischargeable Debts

Debts that can be eliminated in bankruptcy. Certain debts are not dischargeable in any bankruptcy proceeding and others cannot be discharged except by the filing of a Chapter 13 case. Child support, alimony, most taxes, most student loans and criminal restitution are examples of debts which cannot be discharged in any bankruptcy case.

Depreciation

Decrease in the value of property over time due to use or wear and tear.

trust department

Department of a bank whose purpose is to handle the administration of trust funds, provide estate planning support, and in some cases see to the disposition of the estate of a deceased customer.

credit unions

Depositors are the owners of ______.

debit card

Directly transfers money from a person's account to the account of a retailer.

Dividend reinvest NAV

Dividends paid to the shareholder of record that are automatically invested in more shares of the security or mutual fund that are purchased at the security's net asset value.

listing agreement

Document allowing a real estate broker's firm to market a property to be sold.

payment history

Element of the FICO credit-scoring system that carries the most weight.

Bad-mouthing rival products

Emphasizing the dark sides of your rival's products in a bid to turn potential customers towards your own products is another common but unethical marketing practice. Rather than resort to this bad strategy, you should emphasize on those aspects that make your offer stand out from the rest of the pack. That's professional and ethical.

Staff adjuster

Employee of the insurance company´s claims department.

qualified endorsement

Endorsement that adds certain words which limit, qualify, or restrain the endorser's liability. For example, adding the term 'without recourse.'

restrictive endorsement

Endorsement which limits further negotiability of a negotiable instrument. Ex: Words like "For Deposit Only" on the back of a check block its cashing over the counter.

Demeaning references to races, age, sex, or religion

Ethical marketing must be devoid of all forms of discrimination. If your marketing messages contain lines that place people of certain age range, sex, religion, nationality, or race at a higher level than others, then you are crossing the bounds of ethical marketing.

Ratings

Evaluations of the credit quality of bonds usually made by independent rating services. Ratings generally measure the probability of timely repayment of principal and interest on debt securities.

Medicare/Medicaid

Examples of social insurance programs overseen by the Dept. of Health/Human Services.

Exemptions

Exemptions are the lists of the kinds and values of property that is legally beyond the reach of creditors or the bankruptcy trustee. The debtor in bankruptcy keeps the exempt property. What property may be exempted is determined by state and federal statutes, and varies from state to state. More on Exemptions in Mississippi under Bankruptcy Information.

Default

Failure of a debtor to make timely payments of interest and principal as they come due or to meet some other provision of a bond indenture.

FDIC

Federal Deposit Insurance Corporation. Responsibilities include enforcing regulations ensuring that banks operate in a sound manner.

Security Futures

Federal regulations permit trading in futures contracts on single stocks, also known as single stock futures, and certain security indices. Learn more about security futures, how they differ from stock options and the risks they can pose.

Alternative Minimum Tax (AMT)

Federal tax, revamped by the Tax Reform Act of 1986, aimed at ensuring that wealthy individuals, trusts, estates and corporations pay at least some tax.

Insurance

Finance jobs in the insurance industry involve helping businesses and individuals anticipate potential risks and protect themselves from losses. Most insurance jobs are with large insurance companies. You could begin a career in this sector working as a sales rep selling insurance policies, as a customer service rep working with existing clients or as an actuary computing risks and premium rates according to probabilities based on historical, quantitative data sets.

investment banking

Financial activities that involve underwriting new security issues and providing advice on mergers and acquisitions.

Financial Analysts

Financial analysts provide guidance to businesses and individuals making investment decisions. They assess the performance of stocks, bonds, and other types of investments.

Financial Examiners

Financial examiners ensure compliance with laws governing financial institutions and transactions. They review balance sheets, evaluate the risk level of loans, and assess bank management.

investment institution

Financial firm, such as a mutual fund or a hedge fund, that raises funds to invest in loans and securities.

hedge fund

Financial firms organized as a partnership of wealthy investors that make relatively high-risk, speculative investments.

contractual saving institution

Financial intermediary such as a pension fund or an insurance company that receives payments from individuals as a result of a contract and uses the funds to make investments.

pension fund

Financial intermediary that invests contributions of workers and firms in stocks, bonds, and mortgages to provide for pension benefit payments during workers' retirements.

mutual fund

Financial intermediary that raises funds by selling shares to individual savers and invests the funds in a portfolio of stocks, bonds, mortgages, and money market securities.

Financial Planning

Financial planners help individuals develop plans that will ensure their present and future financial stability. Typically, they review a client's financial goals and generate an appropriate plan for saving and investing that fits the client's individual needs. The plan may focus on wealth preservation or investment growth and may even include estate and tax planning. Most financial planners work in either large, nationwide groups or smaller, locally based firms. Some planners charge flat fees, others a percentage of assets under management, receiving commissions on the products they sell (such as mutual funds). Generally, financial planners with the Certified Financial Planner® (CFP®) designation are the most in-demand, as they must obtain three years of financial-planning experience, pass several exams (including a two-day, 10-hour case-study exam) and meet continuing-education requirements.

Microsoft and Intel

First two NASDAQ stocks to be included in the Dow Jones Industrial Average in 1999.

Rule of 78

For a 12 month loan, 12/78s of the finance charge is assessed as the first month's portion of the finance charge, 11/78s of the finance charge is assessed as the second month's portion of the finance charge and so on until the 12th month at which time 1/78s of the finance charge is assessed as that month's portion of the finance charge.

Average maturity

For a bond fund, the average of the stated maturity dates of the debt securities in the portfolio. Also called average weighted maturity. In general, the longer the average maturity, the greater the fund's sensitivity to interest-rate changes, which means greater price fluctuation. A shorter average maturity usually means a less sensitive - and consequently, less volatile - portfolio.

Prospectus

Formal written offer to sell securities that sets forth the plan for proposed business enterprise or the facts concerning an existing one that an investor needs to make an informed decision. Prospectuses are also issued by mutual funds, containing information required by the SEC, such as history, background of managers, fund objectives and policies, financial statement, risks, services and fees.

Federal Reserve

Functions include: conducting bank examinations, handling the the govn't central banking function, determining whether banks can borrow money from the govn't.

Share class net assets (date)

Fund assets included in a specific share class.

Mutual fund

Fund operated by an investment company that raises money from shareholders and invests it in stocks, bonds, options, commodities or money market securities.

Fundraisers

Fundraisers organize events and campaigns to raise money and other donations for an organization. They may design promotional materials and increase awareness of an organization's work, goals, and financial needs.

demand deposit

Funds held in an account from which deposited funds can be withdrawn at any time without any advance notice to the depository institution. Can be "demanded" by an account holder at any time. Accessible by the account holder through a variety of banking options, including teller, ATM and online banking.

Executory Contract or Lease

Generally includes contracts or leases under which both parties to the agreement have duties remaining to be performed. Examples of these are: Cell phone contracts, leases, and a contract with an attorney handling a lawsuit for the debtor. (If a contract or lease is executory, a debtor may assume it or reject it.)

25-28%

Generally speaking, housing costs should not exceed _____ of gross monthly income.

deposit rate schedules

Governing document listing interest rates in effect at the time for various types of accounts.

non-depository intermediaries

Government or private organization that serves as an intermediary between savers and borrowers, but does not accept deposits.

syndicate

Group of investment banks that jointly underwrite a security issue.

Growth-style funds

Growth funds focus on future gains. A growth fund manager will typically invest in stocks with earnings that outperform the current market. The manager attempts to achieve success by focusing on rapidly growing sectors of the economy and investing in leading companies with consistent earnings growth. The fund grows primarily as individual share prices climb.

Making false, exaggerated, or unverified claims

In a desperate bid to compel potential and existing customers to buy their products or services, some marketers use false statements, exaggerated benefits, or make unverifiable claims about their offers.

prepayment clause

In a mortgage loan agreement, this would enable the borrower to pay off the principal balance of the loan without paying a penalty.

Health Maintenance Organization (HMO) plans

HMOs are one of the most popular types of health insurance you can purchase. With this plan, an entire network of health care providers agrees to offer you its services. You have to select a primary care provider (PCP) who coordinates all of your health services and care. HMOs usually offer coverage for most types of preventive care, including specialist visits, but specialist visits are only covered when your PCP makes a referral. Additionally, you will pay copayment fees for every non-preventive medical visit, and you may have an annual deductible. HMOs are usually best suited for individuals and families that plan to see their primary care doctor on a regular basis for check-ups and other health concerns. Since 2014, the popularity of HMO plans has increased significantly.

Building a Credit Line

Having a good credit history is often important, not only when applying for credit cards, but also when applying for things such as loans, rental applications, or even some jobs. Having a credit card and using it wisely (making payments on time and in full each month) will help you build a good credit history.

Mandated offerings

Health care benefits that must be offered to the employer or organization sponsoring a group policy. The sponsor is not required to include the benefits in its group plan.

Mandated benefits

Health care benefits that state or federal law says must be included in health care plans.

Consumer Choice plans

Health care plans offered by carriers that do not include all of the state-mandated benefits. Consumer choice plans must provide members with a disclosure statement and a list describing the mandated benefits that are not covered.

Major medical policies

Health care policies that usually cover both hospital stays and physicians´ services in and out of the hospital.

Non-network providers

Health care providers and treatment facilities not under contract with the HMO or those that do not have an insurance PPO contract.

Emergency care

Health care services provided in a hospital emergency facility or comparable facility to evaluate and stabilize sudden and severe medical conditions.

Preventive care

Health care services such as routine physical examinations and immunizations that are intended to prevent illnesses before they occur.

Medically necessary care

Health care that results from illness or injury or is otherwise authorized by the health care plan. This term can be defined differently from one health care plan to another.

ERISA plan

Health plans created under the Employee Retirement and Income Security Act (ERISA) of 1974. These plans are self-funded, which means that claims are paid strictly from employer contributions and employee premiums. ERISA plans are administered by the U.S. Department of Labor. (Also known as a self-funded plan.)

Hedge Funds

Hedge funds are largely unregulated private investment funds whose managers can buy or sell a wide array of assets and financial products. Because of the mystery that surrounds this type of entity, hedge-fund jobs are also considered by many to be somewhat glamorous. Typical hedge-fund jobs include the following: Financial analyst, Trader, Regulatory compliance officer, Quantitative analyst, Marketing manager, Portfolio manager

High Deductible Health Plan (HDHP) plans

High-deductible plans cross categories. Some are PPO plans while others may be EPO or HMO plans. This type of health insurance has a high deductible that you have to meet before your health insurance coverage takes effect. These plans can be right for people who want to save money with low monthly premiums and don't plan to use their medical coverage extensively. HDHPs are often coupled with a Health Savings Account (HSA). If you already contribute money to an HSA, you can buy an HSA-compatible health plan. Money contributed to an HSA can be saved on a pre-tax or tax-deductible basis to pay for qualifying medical expenses, including annual deductibles.

AAA and AA

Highest bond rating; high credit-quality investment grade.

7

How many years does documentation of most credit problems stay in a consumer's file?

Human Resources Specialists

Human resources specialists recruit, screen, interview, and place workers. They often handle other human resources work, such as those related to employee relations, compensation and benefits, and training.

Accidental death benefits

If a life insurance policy includes an accidental death benefit, the cause of death will be examined to determine whether the insured´s death meets the policy´s definition of accidental.

Independent Review Organization (IRO)

If your health insurer or HMO declines to pay for health care you believe is medically necessary or appropriate, you may request that it contact TDI and request that an independent group (IRO) review the decision. An IRO review is not required for self-funded ERISA plans. Unless your condition is life-threatening, you must complete the standard appeal process before requesting an IRO review. IROs are not affiliated with your health plan. The health plan must pay for treatment the IRO determines is necessary.

Debtor in Possession

In a Chapter 11 case, the debtor usually remains in possession of its assets and assumes the duties of a trustee. The debtor in possession is a fiduciary for the creditors of the bankruptcy estate, and owes them the highest duty of care and loyalty.

Credit Card Benefits

In addition to the benefits listed above, some credit cards offer additional benefits, such as discounts from particular stores or companies, bonuses such as free airline miles or travel discounts, and special insurances (like travel or life insurance.) While most of these benefits are meant to encourage you to charge more money on your credit card (remember, credit card companies start making their money when you can't afford to pay off your charges!) the benefits are real and can be helpful as long as you remember your spending limits.

Multiple Employer Welfare Arrangements (MEWAs)

In general, employee association plans (not set up under a collective bargaining agreement) that provide benefits to employees of more than one employer. If the MEWA assumes all or part of the plan´s insurance risk, it must be licensed by TDI.

Contract

In most cases, an insurance policy. A policy is considered to be a contract between the insurance company and the policyholder.

Health benefit plan

In most cases, health care services provided to employees by an employer. It can be an indemnity plan or an HMO plan.

government

In the US, banks and the _____ work together to form the banking system and to ensure the money supply is adequate, appropriate, and trustworthy.

DRIP

In the securities industry, a Dividend Reinvestment Plan is offered by a corporation to allow investors to reinvest their cash dividends by purchasing additional shares or fractional shares on the dividend payment date.

IRA

Individual Retirement Account. A tax-deferred retirement account for an individual that permits individuals to set aside money each year, with earnings tax-deferred until withdrawals begin at age 59 1/2 or later (or earlier, with a 10% penalty). Can be established at a bank, mutual fund, or brokerage.

Federal Reserve

Influences the federal funds rate by buying/selling govn't securities.

Complaint history

Information collected or maintained by the Texas Department of Insurance (TDI) relating to the number of complaints received against a particular insurer, agent, or premium finance company and the disposition of the complaints.

IPO

Initial Public Offering. First time a firm sells stock to the public.

Disability benefits

Insurance company coverage that pays for lost wages when you are unable to work because of an illness or injury.

Single interest insurance

Insurance coverage for only one of the parties having an insurable interest in that property. For instance, if a policyholder still owes money on their mortgage and they do not have homeowners insurance, the lender may take out a single interest insurance policy to protect its own interest in the property. Single interest insurance protects only the policy owner, not the homeowner.

personal injury protection

Insurance coverage that covers medical expenses, although it depends based on plan/provider, usually it covers most medical costs, hospital costs, Income continuation, lost wages and funeral costs.

comprehensive physical damage

Insurance coverage that covers the cost of damages to your car caused by natural disasters, fire, robbery, theft, vandalism, and more.

property damage liability

Insurance coverage that pays for the damages to the car and possessions (including stationery objects such as trees/mailboxes) of the other party in an accident that is your fault.

Replacement cost

Insurance coverage that pays the dollar amount needed to replace the structure or damaged personal property without deducting for depreciation but limited by the policy's maximum dollar amount.

Hospital-surgical policies

Insurance policies that cover hospital and surgical services.

coinsurance clause

Insurance policy stipulation that a building must be insured for at least a certain percentage (usually 80 percent) of its insurable value (appraised or market value of the property less value of land) in order to collect the full amount of a partial-loss claim on it.

Gap insurance

Insurance that pays the difference between the actual cash value of a vehicle and the amount still to be paid on the loan. Some gap policies may also cover the amount of the deductible.

Insurance Underwriters

Insurance underwriters decide whether to provide insurance and under what terms. They evaluate insurance applications and determine coverage amounts and premiums.

Residual market

Insurers, such as assigned risk plans and the Texas FAIR Plan, that exist to provide coverage for those who cannot get it in the standard market.

Securities Investor Protection Corporation

Insures investors accounts for up to $500,000 (including $100,00 in cash), in the event of fraud or the bankruptcy of a member securities brokerage.

prime rate

Interest rate charged by banks to their best corporate borrowers.

discount rate

Interest rate that the Federal Reserve charges for short-term loans to member banks.

federal funds rate

Interest rate that the Federal Reserve suggests that member banks charge each other on short-term borrowing.

Dollar cost averaging

Investing the same amount of money at regular intervals over an extended period of time, regardless of the share price. By investing a fixed amount, you purchase more shares when prices are low, and fewer shares when prices are high. This may reduce your overall average cost of investing.

IAR

Investment Advisory Representative. Responsibility is to provide investment related advice to clients for a fee.

Growth investing

Investment strategy that focuses on stocks of companies and stock funds where earnings are growing rapidly and are expected to continue growing.

Portfolio holdings

Investments included in a portfolio.

income

Investments, loan payments, and fees for services are all considered sources of _____ for banks.

Labor Relations Specialists

Labor relations specialists interpret and administer labor contracts regarding issues such as wages and salaries, healthcare, pensions, and union and management practices.

fraud

Largest cause of loss to banks.

blank endorsement

Least secure type of endorsement b/c it carries only the signature of the endorser and does not specify in whose favor it is made. Thus, it can be claimed by any party.

lien

Legal claim a lender has on property to secure a debt.

Truth in Lending Act

Lenders are required to disclose the true costs of credit to borrowers, including the total amount of interest charged over the life of a loan and the amounts of monthly payments by this federal law:

BB, B, CCC, CC, C

Low credit-quality (non-investment grade), or "junk bonds."

Interest

money paid regularly at a particular rate for the use of money lent, or for delaying the repayment of a debt.

whole life insurance

Life insurance policy that remains in force for the insured's whole life. Advantage = cash values can build up that policy holders can borrow against later.

Suicide clause

Life insurance policy wording which specifies that the proceeds of the policy will not be paid if the insured takes his or her own life within a specified period of time after the policy´s date of issue.

Credit Card Fraud

Like cash, sometimes credit cards can be stolen. They may be physically stolen (if you lose your wallet) or someone may steal your credit card number (from a receipt, over the phone, or from a Web site) and use your card to rack up debts. The good news is that, unlike cash, if you realize your credit card or number has been stolen and you report it to your credit card company immediately, you will not be charged for any purchases that someone else has made. Even if you don't realize your credit card number has been stolen (sometimes you might not know until you receive your monthly statement), most credit card companies don't charge you or only charge a small fee, like $25 or $50, even if the thief has charged thousands of dollars to your card. There are several things you can do to prevent credit card fraud: If you lose your card or wallet, report it to your credit card company immediately. Don't loan your credit card to anyone and only give out your credit card information to trusted companies or Web sites. Check your statement closely at the end of each month to make sure all charges are yours.

open-end loans

Line of credit that allows you to borrow money when you need it and leaves you with available funds when you don't. With these, the longer you use the money, the more you pay.

Chapter 7 Bankruptcy

Liquidation - Chapter 7 Bankruptcy is also known as "liquidation," "straight bankruptcy," or "complete bankruptcy," is the most commonly filed form of bankruptcy among individuals. Chapter 7 Bankruptcy essentially allows the debtor to make a fresh start. When a Chapter 7 Bankruptcy has been filed, a trustee collects the debtor's nonexempt assets, which are then reduced to cash, and distributions are made to the creditors in accordance with bankruptcy law. In most Chapter 7 Bankruptcy cases the debtor receives a discharge releasing him or her from personal liability for certain dischargeable debts. You should consider a Chapter 7 Bankruptcy if there is no hope in repaying any of your debts, there are no cosigners involved, or if court action by creditors is imminent. Businesses that wish to liquidate their assets and discontinue business may also file under Chapter 7 Bankruptcy.

Loan Officers

Loan officers evaluate, authorize, or recommend approval of loan applications for people and businesses.

Logisticians

Logisticians analyze and coordinate an organization's supply chain—the system that moves a product from supplier to consumer. They manage the entire life cycle of a product, which includes how a product is acquired, distributed, allocated, and delivered.

Health maintenance organization (HMO)

Managed care plans that provide health care services to their members through networks of doctors, hospitals, and other health care providers. HMOs are popular alternatives to traditional health care plans offered by insurance companies because they cover a wide variety of services, usually at a lower cost.

Management Analysts

Management analysts, often called management consultants, propose ways to improve an organization's efficiency. They advise managers on how to make organizations more profitable through reduced costs and increased revenues.

Market Research Analysts

Market research analysts study market conditions to examine potential sales of a product or service. They help companies understand what products people want, who will buy them, and at what price.

Inpatient medical care

Medical and surgical care usually received in a hospital or skilled nursing home environment.

AA and BBB

Medium credit-quality investment grade

Meeting, Convention, and Event Planners

Meeting, convention, and event planners coordinate all aspects of events and professional meetings. They arrange meeting locations, transportation, and other details.

MZM

Money Zero Maturity Measuring of an economy's liquid money supply. Shows the money that is available within a particular economy that may be used for consumption and spending. Includes all of the money in M2, minus time deposits, and plus money market funds.

reserve requirement

Money on deposit, minus the _____, can be loaned by banks to customers.

Escrow

Money placed in the hands of a third party until specified conditions are met.

fiat money

Money with no intrinsic value and cannot be redeemed for commodities, but is made legal tender through govn't decree. Ex: US currency

checking account

Most common form of a transaction account.

coins

Most common medium of exchange in colonial America.

Wtd. Avg. Market Cap

Most indexes are constructed by weighting the market capitalization of each stock on the index. In such an index, larger companies account for a greater portion of the index. An example is the S&P 500 Index.

acceleration clause

Most often found in mortgage/real estate loans, this outlines the reasons that the lender can demand loan repayment. If the borrower does not make payments on time, the entire unpaid principal balance can be declared immediately due and payable.

Credit Reports

Most people applying for a home mortgage need not worry about the effects of their credit history during the mortgage process. However, you can be better prepared if you get a copy of your Credit Report before you apply for your mortgage. That way, you can take steps to correct any negatives before making your application. A Credit Profile refers to a consumer credit file, which is made up of various consumer credit reporting agencies. It is a picture of how you paid back the companies you have borrowed money from, or how you have met other financial obligations. There are five categories of information on a credit profile: Identifying Information, Employment Information, Credit Information, Public Record Information, Inquiries. NOT included on your credit profile is race, religion, health, driving record, criminal record, political preference, or income. If you have had credit problems, be prepared to discuss them honestly with a mortgage professional who will assist you in writing your "Letter of Explanation." Knowledgeable mortgage professionals know there can be legitimate reasons for credit problems, such as unemployment, illness, or other financial difficulties. If you had problems that have been corrected (reestablishment of credit), and your payments have been on time for a year or more, your credit may be considered satisfactory. The mortgage industry tends to create its own language, and credit rating is no different. BC mortgage lending gets its name from the grading of one's credit based on such things as payment history, amount of debt payments, bankruptcies, equity position, credit scores, etc. Credit scoring is a statistical method of assessing the credit risk of a mortgage application. The score looks at the following items: past delinquencies, derogatory payment behavior, current debt levels, length of credit history, types of credit and number of inquires. By now, most people have heard of credit scoring. The most common score (now the most common terminology for credit scoring) is called the FICO score. This score was developed by Fair, Isaac & Company, Inc. for the three main credit Bureaus; Equifax (Beacon), Experian (formerly TRW), and Empirica (TransUnion). FICO scores are simply repository scores meaning they ONLY consider the information contained in a person's credit file. They DO NOT consider a person's income, savings or down payment amount. Credit scores are based on five factors: 35% of the score is based on payment history, 30% on the amount owed, 15% on how long you have had credit, 10% percent on new credit being sought, and 10% on the types of credit you have. The scores are useful in directing applications to specific loan programs and to set levels of underwriting such as Streamline, Traditional or Second Review. However, they are not the final word regarding the type of program you will qualify for or your interest rate. Many people in the mortgage business are skeptical about the accuracy of FICO scores. Scoring has only been an integral part of the mortgage process for the past few years (since 1999); however, the FICO scores have been used since the late 1950's by retail merchants, credit card companies, insurance companies and banks for consumer lending. The data from large scoring projects, such as large mortgage portfolios, demonstrate their predictive quality and that the scores do work. The following items are some of the ways that you can improve your credit score: Pay your bills on time. Keep Balances low on credit cards. Limit your credit accounts to what you really need. Accounts that are no longer needed should be formally cancelled since zero balance accounts can still count against you. Check that your credit report information is accurate. Be conservative in applying for credit and make sure that your credit is only checked when necessary. A borrower with a score of 680 and above is considered an A+ borrower. A loan with this score will be put through an "automated basic computerized underwriting" system and be completed within minutes. Borrowers in this category qualify for the lowest interest rates and their loan can close in a couple of days. A score below 680 but above 620 may indicate underwriters will take a closer look in determining potential risk. Supplemental documentation may be required before final approval. Borrowers with this credit score may still obtain "A" pricing, but the loan may take several days longer to close. Borrowers with credit scores below 620 are not normally locked into the best rate and terms offered. This loan type usually goes to "sub-prime" lenders. The loan terms and conditions are less attractive with these loan types and more time is needed to find the borrower the best rates. All things being equal, when you have derogatory credit, all of the other aspects of the loan need to be in order. Equity, stability, income, documentation, assets, etc. play a larger role in the approval decision. Various combinations are allowed when determining your grade, but the worst-case scenario will push your grade to a lower credit grade. Late mortgage payments and Bankruptcies/Foreclosures are the most important. Credit patterns, such as a high number of recent inquiries or more than a few outstanding loans, may signal a problem. Since an indication of a "willingness to pay" is important, several late payments in the same time period is better than random lates.

money market mutual fund

Mutual fund that invests exclusively in short-term assets, such as: treasury bills, negotiable certificates of deposit, and commercial paper.

Balanced fund

Mutual funds that seek both growth and income in a portfolio with a mix of common stock, preferred stock or bonds. The companies selected typically are in different industries and different geographic regions.

insurance company

NON DEPOSITORY intermediary that specializes in writing contracts to protect policy-holders from the risk of financial loss associated with particular events.

NASDAQ

National Association of Securities Dealers Automated Quotations system, which is owned and operated by the National Association of Securities Dealers. NASDAQ is a computerized system that provides brokers and dealers with price quotations for securities traded over-the-counter as well as for many New York Stock Exchange listed securities.

finance company

Non-bank financial intermediary that raises money through sales of commercial paper and other securities and uses the funds to make small loans to households and firms.

Cash surrender option

Nonforfeiture option that specifies the policy owner can cancel the coverage and receive the entire net cash value in a lump sum.

Processing

Once the application has been submitted, the processing of the mortgage begins. The Processor orders the Credit Report, Appraisal and Title Report. The information on the application, such as bank deposits and payment histories, are then verified. Any credit derogatories, such as late payments, collections and/or judgments require a written explanation. The processor examines the Appraisal and Title Report checking for property issues that may require further investigation. The entire mortgage package is then put together for submission to the lender.

Closing

Once the loan is approved, the file is transferred to the closing and funding department. The funding department notifies the broker and closing attorney of the approval and verifies broker and closing fees. The closing attorney then schedules a time for the borrower to sign the loan documentation. At the closing the borrower should:

Underwriting

Once the processor has put together a complete package with all verifications and documentation, the file is sent to the lender. The underwriter is responsible for determining whether the package is deemed an acceptable loan. If more information is needed, the loan is put into "suspense" and the borrower is contacted to supply more information and/or documentation. If the loan is acceptable as submitted, the loan is put into an "approved" status.

Denial of Discharge

Penalty for debtor misconduct with respect to the bankruptcy case or creditors as a whole. The grounds on which the debtor's discharge may be denied are found in 11 U.S.C. 727. When the debtor's discharge is denied, the debts that could have been discharged in that case cannot be discharged in any subsequent bankruptcy. The administration of the case, the liquidation of assets and the recovery of avoidable transfers, continues for the benefit of creditors.

sponsor

People wanting to sell stocks and bonds must have a _____ before they can take licensing exams.

Turnover Ratio

Percentage of holdings in a mutual fund that are sold in a specified period.

donor

Person who creates a trust.

mortgagee

Person who lends money to a real estate purchaser.

drawer

Person who signs a draft.

Required Documents

Once you have completed the loan application, accepted the loan estimate and indicated your intent to proceed we will request documents from you in order to obtain your loan approval. The following statements are not a complete list of what will be needed but are intended to give you some idea of what we will need from you. Once you get to this stage of the loan process, we will give you a specific set of documents that we will need for your particular loan. If you are purchasing or refinancing your home, and you are salaried, you will need to provide the past two-years W-2s and one month of pay-stubs: OR, if you are self-employed you will need to provide the past two-years tax returns. If you own rental property you will need to provide Rental Agreements and the past two-years' tax returns. If you wish to speed up the approval process, you should also provide the past three months' bank, stock and mutual fund account statements. Provide the most recent copies of any stock brokerage or IRA/401k accounts that you might have. If you are requesting cash-out, you will need a "Use of Proceeds" letter of explanation. Provide a copy of the divorce decree if applicable. If you are not a US citizen, provide a copy of your green card (front and back), or if you are NOT a permanent resident provide your H-1 or L-1 visa. If you are applying for a Home Equity Loan you will need, in addition to the above documents, to provide a copy of your first mortgage note and deed of trust. These items will normally be found in your mortgage closing documents.

Joint Petition

One bankruptcy petition filed by a husband and wife together.

M2

One measure of the money supply that includes M1, plus savings and small time deposits, overnight repos at commercial banks, and non-institutional money market accounts. Used to forecast inflation.

M3

One measure of the money supply that includes M2, plus large time deposits, repos of maturity greater than one day at commercial banks, and institutional money market accounts.

auction market

One of 2 main types of US stock markets. A market in which buyers enter competitive bids and sellers enter competitive offers at the same time. A stock's price = highest price that a buyer is willing to pay and lowest price that a seller is willing to sell at. (EX: NYSE)

dealer market

One of 2 main types of US stock markets. A market where dealers are assigned for specific securities. The dealers create liquid markets by purchasing and selling against personal inventory.

cash flow statement

One of the quarterly financial reports any publicly traded company is required to disclose to the SEC and the public. Provides aggregate data regarding all cash inflows a company receives from both its ongoing operations and external investment sources, as well as all cash outflows that pay for business activities and investments during a given quarter.

Gramm-Leach-Bliley Act

One provision of this states that financial service companies are required to have and provide to customers a written privacy policy.

Fiduciary

One who is entrusted with duties on behalf of another. The law requires the highest level of good faith, loyalty and diligence of a fiduciary, higher than the common duty of care that we all owe one another. The debtor in possession in a Chapter 11 is a fiduciary for the creditors, owing loyalty to the creditors and not the shareholders of the debtor. Other examples of someone that has fiduciary responsibilities to others are: executors of estates, guardians appointed by courts, and attorneys with respect to their clients.

underwriter

One who purchases new issues of securities and resells them to investors for a profit. Usually investment banks that guarantee/select the risks an insurance company agrees to accept.

Options

Options are contracts that give the purchaser the right, but not the obligation, to buy or sell a security, such as a stock or exchange-traded fund, at a fixed price within a specific period of time. It pays to learn about different types of options, trading strategies and the risks involved.

Point-of-service (POS) plans

POS plans allow an HMO to contract with an insurance company to give enrollees the option of receiving services outside the HMO´s network. In Texas, HMOs must contract with an insurance company to offer POS plans.

Point of Service (POS) plans

POS plans are a hybrid of HMOs and PPOs. With a POS plan you will typically have to designate a primary care physician for regular check-ups and referrals. But you can also use out-of-network providers if you're willing to pay more out of pocket; you'll usually have a copayment and deductible as well. This type of plan is versatile, and can be right for people who are willing to pay a bit more for extra flexibility.

gift tax

Paid by giver on a gift of money/property.

Par value

Par value is the amount originally paid for a bond and the amount that will be repaid at maturity. Bonds are typically sold in multiples of $1,000.

Adequate protection

Payment to a creditor with collateral to protect the value of the creditor's lien during the bankruptcy proceeding from loss because the collateral's value will depreciate or lower over time.

Collision coverage

Pays for damage to a car without regard to who caused an accident. The company must pay for the repair or up to the actual cash value of the vehicle, minus the deductible.

Comprehensive coverage (physical damage other than collision)

Pays for damage to or loss of your automobile from causes other than accidents. These include hail, vandalism, flood, fire, and theft.

false

T/F? Equipment loans are often tied to the redevelopment of the business's real estate.

Self-funded plans

Plans funded strictly from employer contributions and employee premiums. These plans are authorized by the federal Employee Retirement and Income Security Act (ERISA) of 1974 and are regulated by the U.S. Department of Labor. State regulation of these plans is limited. Although an insurance company may be hired to administer the plan, the insurance company assumes no risk. (Also known as ERISA plans.)

Guaranteed renewable

Policies that may not be non-renewed or canceled, except in certain cases. An insurer may cancel a guaranteed renewable policy for failure to pay premiums, fraud, or intentional material misrepresentation. It also may cancel your policy if the company formally leaves the individual or group health market.

Hospital confinement policies

Policies that pay a fixed amount each day you are in the hospital.

Specified disease policies

Policies that pay only if you contract the illness specified in the policy. (Also called dread disease policies.)

Dread disease policies

Policies that pay only if you contract the illness specified in the policy. (Also called specified disease policies.)

Accident-only policies

Policies that pay only in cases arising from an accident or injury.

factoring

Practice of buying debt at a discount. A form of asset-based lending that advances cash to a business in exchange for its receivables.

Pre-Qualification

Pre-qualification starts the loan process. Once a lender has gathered information about a borrower's income and debts, a determination can be made as to how much the borrower can pay for a house. Since different loan programs can cause different valuations a borrower should get pre-qualified for each loan type the borrower may qualify for. In attempting to approve homebuyers for the type and amount of mortgage they want, mortgage companies look at two key factors. First, the borrower's ability to repay the loan and, second, the borrower's willingness to repay the loan. Ability to repay the mortgage is verified by your current employment and total income. Generally speaking, mortgage companies prefer for you to have been employed at the same place for at least two years, or at least be in the same line of work for a few years. The borrower's willingness to repay is determined by examining how the property will be used. For instance, will you be living there or just renting it out? Willingness is also closely related to how you have fulfilled previous financial commitments, thus the emphasis on the Credit Report and/or your rental payment history. It is important to remember that there are no rules carved in stone. Each applicant is handled on a case-by-case basis. So even if you come up a little short in one area, your stronger point could make up for the weak one. Mortgage companies could not stay in business if they did not generate loan business, so it is in everyone's best interest to see that you qualify.

non-cumulative preferred stock

Preferred stock for which unpaid dividends do not accrue.

cumulative preferred stock

Preferred stock on which dividends accrue in the event that the issuer does not make timely dividend payments. Most preferred stock is this kind.

convertible preferred stock

Preferred stock that can be converted into a specified amount of common stock at the holder's option.

P/E Ratio (1 yr trailing) (long position)

Price of a stock divided by its earnings from the latest year.

P/E Ratio (1 yr forecast)

Price of a stock divided by its projected earnings for the coming year.

commercial bank

Primary lending function is to help business owners who want to expand.

Certificates of coverage

Printed material showing members of a group health benefit plan the benefits provided by the group master policy.

Private Equity and Venture Capital

Private-equity professionals help businesses find capital for both expansion and current operations. They also provide financing for a number of corporate business transactions, such as managed buyouts and restructurings. At times, a private-equity job may involve working as an interim executive at a struggling company where your success helps determine the fate of the company. Venture-capital professionals (VCs) spend most of their time with startups or small, fast-growth companies. Venture-capital firms evaluate pitches by founders and small-company leaders to determine if the firm will make an investment. Sometimes referred to as "vulture capitalists," VCs are known to structure deals that favor the investor, not the company receiving funding. The hope of the VC is that the funded company will some day go public - that is, make its stock available on the public stock market. Venture capital is a tough business where the failure rate is high and the rewards, when they are realized, are huge.

commercial bank

Privately owned financial institution that accepts demand/time deposits, makes loans, and provides various services. Accounts for about 60% of the US deposit/loan business.

Exempt Property

Property that is exempt (protected) is removed from the bankruptcy estate and is not available to pay the claims of creditors. The debtor selects the property to be exempted from the statutory lists of exemptions available under the law of his state. The debtor gets to keep exempt property for use in making a fresh start after bankruptcy. More on Exemptions in Mississippi under Bankruptcy Information.

true

T/F? Every business, no matter how large or small, needs to disburse and collect cash to complete business transactions.

false

T/F? First step in the mortgage approval process is documentation.

Features of term life insurance

Provides death benefits only Pays benefits only if you die while the term of the policy is in effect Easiest and most affordable life insurance to buy Purchased for a specific time period, such as 5, 10, 15, or 30 years, known as a "term" Becomes more expensive as you age, especially after age 50 The term must be renewed if you want coverage to be extended beyond the term length Can be used as temporary additional coverage with a permanent life insurance policy Can be converted to whole life insurance

add-on clause

Provision contained in an installment contract. An add-on clause creates a security interest in the earlier goods until full payment is made on the new goods. By this clause, the earlier purchases serve as the security for new purchases.

Exclusions or limitations

Provisions that exclude or limit coverage of certain named diseases, medical conditions, or services, as well as some sicknesses or accidents that occur under specified circumstances.

uninsured/underinsured motorist coverage

Purpose of this type of insurance is to compensate another driver when the insured did not purchase enough liability insurance to cover medical expense or losses to another's property.

price-to-earnings ratio

Ratios that relate a stock's price to the firm's profits, thus allowing investors to evaluate stock prices.

payee

Receiver of funds (on a check).

Reinvestment option

Refers to an arrangement under which a mutual fund will apply dividends or capital gains distributions for its shareholders toward the purchase of additional shares.

Loss history

Refers to the number of insurance claims previously filed by a policyholder. A company will consider loss history when underwriting a new policy or considering a renewal of an existing policy. Companies view loss history as an indication of the likelihood that an insured will file a claim in the future.

Additional living expenses (ALE)

Reimburses the policyholder for the cost of temporary housing, food, and other essential living expenses, if the home is damaged by a covered peril that makes the home temporarily uninhabitable. Policies cap the amount of ALE payable to 20 percent of the policy's dwelling coverage.

false

T/F? Foreign bank branches operating in the US can accept deposits from US citizens only less than $100,000.

true

T/F? Fraud prevention occupies more resources of the banking industry than any other activity except routine processing.

Chapter 11 Bankruptcy

Reorganization - Chapter 11 Bankruptcy primarily applies to commercial enterprises that wish to continue business operations while repaying creditors through a court-approved reorganization plan. Under Chapter 11 Bankruptcy, the debtor has the right to file a plan of reorganization within 120 days after the order for relief. The debtor must provide creditors with a disclosure statement that allows the creditors to evaluate the plan, although whether the plan is approved is ultimately the Court's decision. The debtor has a number of options under Chapter 11 for returning the business to profitability. These options include reducing debts by repaying a portion of them while discharging others, discharging burdensome contracts and leases, and rescaling operations of the business. Upon completion of the plan, the debtor usually has undergone a period of consolidation and emerges with a reduced debt load and a reorganized, and more profitable, business.

30-day SEC yield (date)

Represents net investment income earned by a fund over a 30-day period, expressed as an annual percentage rate based on the fund's share price at the end of the 30-day period. The 30-day yield should be regarded as an estimate of investment income and may not equal the fund's actual income distribution rate.

Fair Credit Billing Act

Requires that creditors must investigate a debtor's written complaints about the accuracy of a bill or statement and respond within 30 days.

File and Use

Residential property rates utilize a system called "file and use." Under this system, insurance companies file their rates with the TDI, but they do not need prior approval to implement new rates. If TDI determines that a company's rates are excessive, the company can be ordered to pay refunds to the policyholders it overcharged. Companies can appeal adverse rate decisions.

Liability

Responsibility to another for one´s negligence that results in injury or damage.

Revocable Trusts

Revocable Trusts are created during the lifetime of the trustmaker and can be altered, changed, modified or revoked entirely. Often called a living trust, these are Trusts in which the trustmaker transfers the title of a property to a Trust, serves as the initial Trustee, and has the ability to remove the property from the Trust during his or her lifetime. Revocable Trust are extremely helpful in avoiding probate. If ownership of assets is transferred to a revocable trust during the lifetime of the trustmaker so that it is owned by the trust at the time of the trustmaker's death, the assets will not be subject to probate. Although useful to avoid probate, a revocable trust is not an asset protection technique as assets transferred to the trust during the trustmaker's lifetime will remain available to the trustmaker's creditors. It does make it more somewhat more difficult for creditors to access these assets since the creditor must petition a court for an order to enable the creditor to get to the assets held in the trust. Typically, a revocable trust evolves into an irrevocable trust upon the death of the trustmaker.

Avoidance powers

Rights given to the bankruptcy trustee (or the debtor in possession in a Chapter 11 and in certain instances to Debtors in other chapters) to recover certain transfers of property such as preferences or fraudulent transfers or to set aside liens created before the bankruptcy case was filed. More on preferences.

currency risk

Risk posed by variations in exchange rates between countries.

systemic risk

Risk to the entire financial system rather than to individual firms or investors.

Redemption

Sale of mutual fund shares by a shareholder.

Loads (back-end, front-end and no-load)

Sales charges on mutual funds. A back-end load is assessed at redemption (see contingent deferred sales charge), while a front-end load is paid at the time of purchase. No-load funds are free of sales charges.

Series EE Bond

Savings Bond issued at a discount from par par with a fixed rate of interest, set at the time of purchase. All interest on the bonds is calculated semi-annually, but paid at maturity and exempt from state and local taxes. Accrues interest monthly, compound interest semiannually.

SIMPLE IRA

Savings Incentive Match Plan for Employees A retirement plan sponsored by companies with fewer than 100 employees; though it may be structured as a 401(K), it avoids some of the administrative fees and paperwork of those plans.

time deposit

Savings account or CD held in a financial institution, usually a bank, for a fixed term or with the understanding that the customer can withdraw only by giving advanced notice. Ex: savings account, money market account, certificate of deposit.

Series E Bond

Savings bonds issued by the United States government between 1941 and 1979. Any interest that is accrued on these bonds is exempt from state and federal taxes. Accrues interest monthly, compound interest semiannually.

Treasury security

Securities issued by the U.S. Treasury Department and backed by the U.S. government.

Common stock

Securities that represent ownership in a corporation; must be issued by a corporation.

Asset class

Securities with similar features. The most common asset classes are stocks, bonds and cash equivalents.

Series HH Bond

Series HH bonds are sold in amounts from $500 to $10,000. They may be redeemed after only six months, and their interest is exempt from state and local taxes.

Outpatient services

Services usually provided in clinics, physician or provider offices, hospital-based outpatient departments, home health services, ambulatory surgical centers, hospices, and kidney dialysis centers.

Group of companies

Several insurance companies under common ownership and often common management.

Equities

Shares issued by a company which represent ownership in it. Ownership of property, usually in the form of common stocks, as distinguished from fixed-income securities such as bonds or mortgages. Stock funds may vary depending on the fund's investment objective.

false

T/F? Generally speaking, banks offer customers fewer services today than they did 20 years ago.

Investment Banking

Some of the most glamorous - and intense - financial careers are jobs in investment banking. Investment-banking jobs deal with facilitating the issuance of corporate securities and making these securities available for investors to purchase, all while trading securities and providing financial advice to both corporations and wealthy individual investors. Typically, investment-banking firms have a number of different divisions and groups with many different objectives and responsibilities. Working in a traditional investment-banking firm would allow you to interact with issuers of securities, mergers and acquisitions professionals or the trading desk, which trades stocks, bonds and other securities in the secondary market.

collateral

Something of value given by a borrower to a lender to back up the borrower's promise to repay the loan.

Spamming

Spamming is when you send unsolicited emails to potential customers, encouraging them to buy your products or services. This is the commonest unethical marketing practice done online. The number of time you send such emails doesn't matter. Whether you send them once, or on occasions, or frequently, you remain a spammer.

Morningstar ratings

System for rating open- and closed-end mutual funds and annuities by Morningstar Inc. of Chicago. The system rates funds from one to five stars, using a risk-adjusted performance rating in which performance equals total return of the fund.

true

T/F? A balloon payment is a single large payment due at the end of a loan.

false

T/F? A bank may not use excess reserves to give depositors their money back if they demand it.

false

T/F? A borrower cannot use mortgaged property until the debt is paid in full.

false

T/F? A capital investment is more liquid than stocks or bonds.

false

T/F? A check is an example bank currency.

false

T/F? A check is an example of bank currency.

false

T/F? A check must be written on paper in order to be legal.

true

T/F? A creditor may not use receipt of public assistance as a factor in determining creditworthiness.

false

T/F? A dollar bill represents an obligation of the govn't to provide a commodity of value to you.

true

T/F? A larger down payment on a home lowers the cost of the monthly payment.

false

T/F? A loan company is not a financial intermediary b/c it does not receive deposits.

true

T/F? A mortgage is the longest/largest debt most people will ever incur.

false

T/F? A shared application mortgage is another form of consumer loan tied to the appreciated value of a property.

true

T/F? A transaction account allows transactions to occur at any time and in any number.

true

T/F? A trust is an arrangement by which one party holds property on behalf of another property for certain defined purposes.

F

T/F? All banks are organized as corporations.

true

T/F? Almost no business can exist without financing debt.

true

T/F? An increase in money supply and incomes often causes prices to go up as well.

true

T/F? Banks are free to change governing doc., but they must give customers written notice of changes.

false

T/F? Banks are nonprofit organizations.

true

T/F? Banks can loan customers the money it has on deposit, minus the reserve requirement.

true

T/F? Banks may require up to a seven-day notice from a depositor who wants to withdraw money from a time deposit.

false

T/F? Basic checking accounts pay interest on the balance deposited in the account.

true

T/F? Bill collectors may not call debtors at odd hours.

false

T/F? By law, every bank in the US must be part of the Federal Reserve System.

true

T/F? Charitable organizations are not eligible for SBA loan guarantees.

true

T/F? Check use in the US is beginning to decline.

true

T/F? Commercial lending can apply to individuals as well as businesses.

false

T/F? Compound interest uses the same principal amount every time it is calculated.

true

T/F? Consumers are advised not to leave spaces on checks.

false

T/F? Consumers should always have their SSN printed on checks to aid identification.

true

T/F? Consumers should endorse all checks in the presence of a bank teller.

true

T/F? Consumers should shred account statements and canceled checks rather than simply throwing them in the trash.

true

T/F? Contract financing is secured by the value of a specific contract.

false

T/F? Credit bureaus may not report info more than 1 year old.

true

T/F? Credit card processing primarily occurs electronically.

true

T/F? Credit cards issued by banks are a form of lending.

true

T/F? Credit unions are nonprofit organizations.

true

T/F? Equipment loans are often tied to the equipment itself, the financial position of the borrower, and the business's overall cash flow.

Tax Examiners and Collectors, and Revenue Agents

Tax examiners and collectors, and revenue agents ensure that federal, state, and local governments get their tax money from businesses and citizens. They review tax returns, conduct audits, identify taxes owed, and collect overdue tax payments.

Tax-exempt income

Tax-exempt income is income that is exempt from income taxes. A purchaser of state municipal bonds is exempt from federal taxation on the income earned from the bonds.

Taxable Income

Taxable income is the amount of income used to calculate an individual's or a company's income tax due. Taxable income is generally described as gross income or adjusted gross income minus any deductions or exemptions allowed in that tax year. Taxable income includes wages, salaries, bonuses and tips, as well as investment income and unearned income.

tax credits

Taxes owed are reduced dollar-for-dollar on a personal/corporate income tax return by _____.

Top 10 holdings

Ten largest holdings in a portfolio based on asset value.

Cancellation

Termination of an insurance policy by the company or insured before the renewal date.

Priority

The Bankruptcy Code establishes the order in which claims are paid from the bankruptcy estate. All claims in a higher priority must be paid in full before claims with a lower priority receive anything. All claims with the same priority share pro rata. Claims are paid in this order: 1) costs of administration 2) priority claims and 3) general unsecured claims. Secured claims are paid from the proceeds of liquidating the collateral which secured the claim.

Avoidance

The Bankruptcy Code permits the debtor to eliminate (avoid) some kinds of liens that interfere with (or impair) an exemption claimed in the bankruptcy. In some cases a lien can be avoided, the debt discharged, and the debtor can keep the asset. In Mississippi, most judgment liens that have attached to the debtor's home can be avoided if the debtor's equity in his home is less than $75,000.00. Also, many liens on household goods and business equipment can be avoided. For more, see Lien Avoidance and Lien Stripping.

FTSE 100

The British (London Stock Exchange) equivalent of the Dow Jones 30 Industrial Average.

Cost of living adjustment (COLA)

The COLA increases your disability benefits over time based on the increased cost of living measured by the Consumer Price Index. You will pay a higher premium if you select the COLA.

Closing Disclosure

The Closing Disclosure is a five-page form that provides final details about the mortgage loan you have selected. It includes the loan terms, your projected monthly payments, and how much you will pay in fees and other costs to get your mortgage (closing costs). We are required by law to give you the Closing Disclosure at least three business days before you close on your mortgage loan. This three-day window allows you time to compare your final terms and costs to those estimated in the Loan Estimate that you previously received from us. The three days also gives you time to ask us any questions before you go to the closing table.

$100,000

The FDIC guarantees bank deposits against bank failures for amounts up to _____.

reduce the risk of inflation

The Federal Reserve might sell Treasury bonds and raise the discount rate in order to:

factors in money creation

The Federal Reserve's supply/control of money, banks' use of money, the demand for money.

Texas Health Insurance Pool

The Health Pool provides health insurance to Texans unable to obtain coverage because of their medical history or for certain other reasons.

Lipper ratings

The Lipper Mutual Fund Industry Average is the performance level of all mutual funds, as reported by Lipper Analytical Services of New York. The performance of all mutual funds is ranked quarterly and annually, by type of fund such as aggressive growth fund or income fund. Mutual fund managers try to beat the industry average as well as the other funds in their category.

Liquidity

The ability to have ready access to invested money. Mutual funds are liquid because their shares can be redeemed for current value (which may be more or less than the original cost) on any business day.

Exchange privilege

The ability to transfer money from one mutual fund to another within the same fund family.

Tracking Error

The active risk of the portfolio. It determines the annualized standard deviation of the excess returns between the portfolio and the benchmark.

Loss

The amount an insurance company pays on a claim.

Volatility

The amount and frequency with which an investment fluctuates in value.

Premium

The amount by which a bond or stock sells above its par value.

premium

The amount by which a bond or stock sells above its par value.

Capital loss

The amount by which the proceeds from a sale of a security are less than its purchase price.

Unearned premium

The amount of a pre-paid premium that has not yet been used to buy coverage. For instance, if a policyholder paid in advance for a six-month premium, but then cancel the policy after two months, the company must refund the remaining four months of "unearned" premium.

Coordination of benefits

The amount of benefits you receive from your insurance company is dependent on other benefits you receive because of your disability. Your policy specifies a target amount you will receive from all the policies combined, so this policy will make up the difference not paid by other policies.

Accounts Receivable

The amount of money owed by your customers after goods or services have been delivered and/or used. See how it works here.

Cash value

The amount of money the life insurance policy owner will receive as a refund if the policy owner cancels the coverage and returns the policy to the company. Also called "cash surrender value."

Accounts Payable

The amount of money you owe creditors (suppliers, etc.) in return for good and/or services they have delivered. See how it works here.

Relative risk and potential return

The amount of potential return from an investment as related to the amount of risk you are willing to accept.

Alpha

The amount of return expected from an investment from its inherent value.

Time horizon

The amount of time that you expect to stay invested in an asset or security.

Management fee

The amount paid by a mutual fund to the investment advisor for its services.

Premium

The amount paid by an insured to an insurance company to obtain or maintain an insurance policy.

maturity value

The amount that will be received at the time a security is redeemed at its maturity. For most securities, maturity value equals par value.

Deductible

The amount the insured must pay in a loss before any payment is due from the company.

Copayment

The amount you must pay out of your own pocket when you receive medical care or a prescription drug. Copayments usually refer to set fees that HMOs charge to access health care services, but they also may apply to a PPO insurance contract.

The Application

The application is the next step of the loan process. With the aid of a mortgage professional, the borrower completes the application and provides all Requested Documentation. A loan application is not considered complete until you have given us at least the following information: (1) Your name, (2) Your income, (3) Your Social Security number (and authorization to check your credit), (4) The address of the home you plan to purchase or refinance, (5) An estimate of the home's value and (6) The loan amount you want to borrow.

Out-of-area

The area outside the counties or ZIP codes in which an HMO provides regular and preventive coverage.

Annualized rate of return

The average annual return over a period of years, taking into account the effect of compounding. Annualized rate of return also can be called compound growth rate.

Yield to maturity distribution

The average rate of return that will be earned on a bond if held to maturity.

Blowing Your Budget

The biggest disadvantage of credit cards is that they encourage people to spend money that they don't have. Most credit cards do not require you to pay off your balance each month, so even if you only have $100, you may be able to spend up to $500 or $1,000 on your credit card. While this may seem like 'free money' at the time, you will have to pay it off - and the longer you wait, the more money you will owe since credit card companies charge you interest each month on the money you have borrowed.

Quality distribution

The breakdown of a portfolio's assets based on quality rating of the investments.

Maturity distribution

The breakdown of a portfolio's assets based on the time frame when the investments will mature.

long position

The buying of a security such as a stock, commodity or currency, with the expectation that the asset will rise in value. Stock market investors are in this position when they hold stocks purchased with case or on margin.

Fresh Start

The characterization of a debtor's status after bankruptcy, i.e., free of most debts. (Giving debtors a fresh start is one purpose of the Bankruptcy Code.)

Usual and customary

The charge for medical services that refers to the amount approved by the carrier for payment. These charges may be based on rates usually charged by physicians and providers in your area; rate averages compiled by independent rating services; or rate averages compiled by the insurance company.

Policy

The contract issued by the insurance company to the insured.

Mortality expenses

The cost of the insurance protection based upon actuarial tables which are based upon the incidence of death, by age, among given groups of people. This cost is based on the amount at risk under the policy, the insured´s risk classification at the time of policy purchase, and the insured´s current age.

Mortality charge

The cost of the insurance protection element of a universal life policy. This cost is based on the net amount at risk under the policy, the insured´s risk classification at the time of policy purchase, and the insured´s current age.

Service area

The counties, or portions of counties, where an HMO or PPO provides coverage.

Trustee

The court appoints a trustee in every Chapter 7, Chapter 12 and Chapter 13 case to review the debtor's schedules and represent the interests of the creditors in the bankruptcy case. The role of the trustee is different under the different chapters which are described in this glossary.

Confirmation

The court order which makes the terms of the plan for repayment of debts in a Chapter 11, 12 or 13 binding. The terms of the confirmed plan replace the prepetition rights of the debtor and creditor.

Net Asset Value per share (NAV)

The current dollar value of a single mutual fund share; also known as share price. The fund's NAV is calculated daily by taking the fund's total assets, subtracting the fund's liabilities, and dividing by the number of shares outstanding. The NAV does not include the sales charge. The process of calculating the NAV is called pricing.

Market price

The current price of an asset.

Market value

The current value of your home, including the price of land.

Ex-Dividend date

The date on which a stock goes ex-dividend. Typically about three weeks before the dividend is paid to shareholders of record.

Effective date

The date on which an insurance policy becomes effective.

Expiration date

The date on which an insurance policy expires.

Petition Date

The date on which the bankruptcy petition was filed. Most issues in the bankruptcy case are determined by the Petition Date.

Maturity

The date specified in a note or bond on which the debt is due and payable.

Capital gains ex-date

The date that a shareholder is no longer eligible for a capital gain distribution that has been declared by a security or mutual fund.

Meeting of creditors

The debtor must appear at a meeting with the trustee to be examined under oath about income, expenses, assets and debts. Creditors are invited but seldom attend. The meeting is sometimes called the 341 meeting, after the section of the Bankruptcy Code that requires it. See 341 Meeting.

Schedules

The debtor must file the required lists of assets, liabilities, income and expenses to commence a bankruptcy case, collectively called the schedules.

Risk tolerance

The degree to which you can tolerate volatility in your investment values.

Capital gain

The difference between a security's purchase price and its selling price, when the difference is positive.

Capital gains reinvest NAV

The difference between an asset's purchase price and selling price (when the difference is positive) that was automatically in vested in more shares of the security or mutual fund invested at the security's net asset value.

Capital gains long term

The difference between an asset's purchase price and selling price (when the difference is positive) that was earned in more than one year.

Capital gains short term

The difference between an asset's purchase price and selling price (when the difference is positive) that was earned in under one year.

Cost of Goods Sold

The direct expense related to producing the goods sold by a company. This may include the cost of the raw materials (parts) and amount of employee labor used in production.

Petition

The document that initiates a bankruptcy case. The filing of the petition constitutes an order for relief and institutes the automatic stay. Events are frequently described as "prepetition", happening before the bankruptcy petition was filed, and "post petition", after the bankruptcy was filed.

Bankruptcy Estate

The estate is all of the legal and equitable interests of the debtor as of the commencement of the case (the date the case is filed with the bankruptcy court). From the estate, an individual debtor can claim certain property as exempt (protected). If the debtor owns assets that are not exempt (not protected), then non-exempt (unprotected) assets can be liquidated or sold in a Chapter 7 to pay the administrative costs and pay a portion of the debts of the debtor. What creditors are paid and in what order is determined by each debts status. For example, priority debts are paid before regular or general unsecured debts such as credit card debt. In a chapter 13 case, the bankruptcy estate also includes future disposable income.

Securities and Exchange Commission (SEC)

The federal agency created by the Securities and Exchange Act of 1934 that administers the laws governing the securities industry, including the registration and distribution of mutual fund shares.

Public Accounting

The field of public accounting is broad, with many opportunities. Public accountants help businesses and individuals keep track of their finances according to generally accepted accounting principles (GAAP). Public accountants record business transactions, help prepare financial statements, audit financial records, prepare income tax returns and provide related consulting services. Accountants generally work in partnerships. The largest partnerships are known as the Big Four (previously the Big Eight and the Big Six) and include Deloitte Touche Tohmatsu, PricewaterhouseCoopers, Ernst & Young and KPMG. But many jobs also exist at many smaller firms. Typically, new hires start as a staff accountant, then advance to audit manager, then tax manager and eventually, if they can maintain the tough working schedule for many years, a partner in the firm.

Complaint

The first or initial document in a lawsuit that notifies the court and the defendant of the grounds claimed by the plaintiff for an award of money or other relief against the defendant. Although complaints are filed in all courts, a complaint is filed in Adversary Proceedings to start the lawsuit filed in a bankruptcy case.

Interest rate

The fixed amount of money that an issuer agrees to pay the bondholders. It is most often a percentage of the face value of the bond. Interest rates constitute one of the self-regulating mechanisms of the market, falling in response to economic weakness and rising on strength.

Expenses (Fixed, Variable, Accrued, Operation)

The fixed, variable, accrued or day-to-day costs that a business may incur through its operations. Examples of expenses include payments to banks, suppliers, employees or equipment.

Proof of claim

The form filed with the court which sets out the reason the debtor owes money to the creditor. The creditor should attach to the official form documents which establish or prove the validity of the claim.

Capital

The funds invested in a company on a long-term basis and obtained by issuing preferred or common stock, by retaining a portion of the company's earnings from date of incorporation and by long-term borrowing.

Investment objective

The goal of a mutual fund and its shareholders, e.g. growth, growth and income, income and tax-free income.

Federal Reserve Board (The Fed)

The governing board of the Federal Reserve System, it regulates the nation's money supply by setting the discount rate, tightening or easing the availability of credit in the economy.

Appreciation

The increase in value of a financial asset.

Face value

The initial amount of death benefit provided by the policy as shown on the face page of the contract. The actual death benefit may be higher or lower depending on the options selected, outstanding policy loans, or premium owed.

Automatic stay

The injunction issued automatically upon the filing of a bankruptcy case which stops almost all collection activity, including phone calls, lawsuits, garnishments, IRS levies, foreclosures and repossessions. See Relief from Stay on terminating the injunction. For example: If a lawsuit, has not been filed, then the creditor cannot file it. If the lawsuit was filed, then it stops and a judgment cannot be take. If a judgment was taken, the creditor start a garnishment. If the garnishment was started before the filing of the bankruptcy, then the garnishment stops.

Insurance Companies

The insurance company is one which signs a contract, which is represented by a policy, and provides an entity or individual with financial protection or reimbursement against any losses that may occur.

Insurer

The insurance company.

Federal Funds Rate (Fed Funds Rate)

The interest rate charged by banks with excess reserves at a Federal Reserve district bank to banks needing overnight loans to meet reserve requirements. The most sensitive indicator of the direction of interest rates, since it is set daily by the market, unlike the prime rate and the discount rate, which are periodically changed by banks and by the Federal Reserve Board.

Till Rate

The interest rate that will be used to pay on secured claims in Chapter 13 Plans. The U.S. Supreme Court held that in chapter 13 cases, the method to determine what interest rate will be paid on secured claims should be set at the Wall Street Journal Prime Rate plus a risk factor and that most courts use a risk factor between 1.0% and 3.0%. Till v. SCS Credit Corp., 541 U.S. 465 (2004) As of the date this entry was made in this Glossary, a Till Rate of 5.0% is used as the presumptive rate in chapter 13 cases in Mississippi.

Ex-Dividend

The interval between the announcement and the payment of the next dividend for a stock.

banking

The issuing, exchanging, loaning, and custody of money and the extension of credit.

tax liability

The item on a personal/business income tax return that taxpayers should pay the greatest amount of attention to and work hardest to reduce.

Universal life insurance

The key characteristic of universal life insurance is flexibility. Within limits, a policyholder can choose the amount of insurance and the premium they want to pay. The policy will stay in force as long as the policy value is sufficient to pay the costs and expenses of the policy. The policy value is "interest-sensitive," which means that it varies in accordance with the general financial climate. Lowering the death benefit and raising the premium will increase the growth rate of your policy. The opposite also is true. Raising the death benefit and lowering the premium will slow the growth of your policy. If insufficient premiums are paid, the policy could lapse without value before the maturity date is reached. (The maturity date is the time your policy ceases and cash surrender value would be payable if the policyholder is still living.) Therefore, it is the policyholder's responsibility to consistently pay a premium that is high enough to ensure that the policy´s value will be adequate to pay the monthly cost of the policy. The company is required to send an annual report and also to notify the policyholder if they are in danger of losing their policy due to insufficient value.

Primary care physician

The physician selected by HMO members to serve as their personal doctor and provide all basic medical treatments and any referrals to medical specialists. Primary care physicians are prohibited in PPOs and other indemnity health plans. (Also known as a gatekeeper.)

Discharge

The legal elimination of debt through a bankruptcy case. When a debt is discharged, it is no longer legally enforceable against the debtor, though most liens which secure the debt will survive the bankruptcy case. Example: An auto loan which is not reaffirmed is discharged. If the Creditor has not take actions to allow the repossession of the auto before discharge, then that creditor can repossess the auto after discharge but it cannot seek to collect the debt.

Breakpoint

The level of dollar investment in a mutual fund at which an investor becomes eligible for a discounted sales fee. This level may be achieved through a single purchase or a series of smaller purchases.

Mid-cap

The market capitalization of the stocks of companies with market values between $3 to $10 billion.

Large-cap

The market capitalization of the stocks of companies with market values greater than $10 billion.

Small-cap

The market capitalization of the stocks of companies with market values less than $3 billion.

Capitalization

The market value of a company, calculated by multiplying the number of shares outstanding by the price per share.

Maximum out-of-pocket expense

The maximum amount someone covered under a health care plan must pay during a certain period for expenses covered by the plan. Until the maximum is reached, the person covered is required to pay a copayment or a percentage on each claim.

Liability limits

The maximum amount your liability policy will pay. Your policy must pay at least $30,000 for each injured person, up to a total of $60,000 per accident, and $25,000 for property damage per accident. This basic coverage is called "30/60/25" coverage.

Median Market Cap

The midpoint of market capitalization (market price multiplied by the number of shares outstanding) of the stocks in a portfolio, where half the stocks have higher market capitalization and half have lower.

Dow Jones Industrial Average (Dow)

The most commonly used indicator of stock market performance, based on prices of 30 actively traded blue chip stocks, primarily major industrial companies. The Average is the sum of the current market price of 30 major industrial companies' stocks divided by a number that has been adjusted to take into account stocks splits and changes in stock composition.

Out-of-pocket maximum

The most you will have to pay during a policy period (usually a year) before you no longer have to pay your share of coinsurance for covered health services. Once you've reached your out-of-pocket maximum, your health plan generally pays 100 percent of your health care costs, up to your policy's coverage limit. You are still responsible for paying your premium. Depending on your plan, you also may have to continue paying copayments and some other expenses.

Coinsurance maximum

The most you will have to pay in coinsurance during a policy period (usually a year) before your health plan begins paying 100 percent of the cost of your covered health services. The coinsurance maximum generally does not apply to copayments or other expenses you might be required to pay.

M1

The narrowest definition of the money supply. Includes currency, travelers' checks, and balances in checking accounts.

par value

The nominal dollar amount assigned to a security by the issuer. Same thing as face value.

Stockholder

The owner of common or preferred stock of a corporation. Also called 'shareholder.'

Declarations page

The page in a policy that shows the name and address of the insurer, the period of time a policy is in force, the amount of the premium, and the amount of coverage.

R2

The percentage of a fund's movements that result from movements in the index ranging from 0 to 100. A fund with an R2 of 100 means that 100 percent of the fund's movement can completely be explained by movements in the fund's external index benchmark.

Coinsurance

The percentage of each health care bill a person must pay out of their own pocket. Non-covered charges and deductibles are in addition to this amount.

Policy period

The period a policy is in force, from the beginning or effective date to the expiration date.

Portfolio manager

The person or entity responsible for making investment decisions of the portfolio to meet the specific investment objective or goal of the portfolio.

Insured

The person or organization covered by an insurance policy.

Creditor

The person or organization to whom the debtor owes money or has some other form of legal obligation.

Policy owner

The person or party who owns an individual insurance policy. This person may be the insured, the beneficiary, or another person. The policy owner usually is the one who pays the premium and is the only person who may make changes to a policy.

payor

The person who makes payment to another; the person who pays. AKA drawer.

Underwriter

The person who reviews an application for insurance and decides if the applicant is acceptable and at what premium rate.

payer

The person who writes a check.

Beneficiary

The person, people, or entity designated to receive the death benefits from a life insurance policy or annuity contract.

Gatekeeper

The physician selected by HMO members to serve as their personal doctor and provide all basic medical treatments and any referrals to medical specialists. Gatekeepers are prohibited in PPOs and other indemnity health plans. (Also known as a primary care physician.)

Earned premium

The portion of a policy premium that has been used to actually buy coverage, or that the insurance company has "earned." For instance, if a policyholder has a six-month policy that was paid for in advance, two months into the policy, there would be two months of earned premium. The remaining four months of premium is "unearned premium."

Interest-rate risk

The possibility of a reduction in the value of a security, especially a bond, resulting from a rise in interest rates.

Market risk

The possibility that an investment will not achieve its target.

buying on margin

The practice of using borrowed money to purchase securities.

P/B Ratio

The price per share of a stock divided by its book value (net worth) per share. For a stock portfolio, the ratio is the weighted average price-to-book ratio of the stocks it holds.

Price-to-book

The price per share of a stock divided by its book value (net worth) per share. For a stock portfolio, the ratio is the weighted average price-to-book ratio of the stocks it holds.

Underwriting

The process an insurance company uses to decide whether to accept or reject an application for a policy.

Reinstatement

The process by which a life insurance company puts a policy back in force after it lapsed because of nonpayment of renewal premiums.

Asset allocation

The process of dividing investments among cash, income and growth buckets to optimize the balance between risk and reward based on investment needs.

credit check

The process of evaluating an applicant's loan request or a corporation's debt issue in order to determine the likelihood that the borrower will live up to his/her obligations. AKA credit analysis.

Diversification

The process of owning different investments that tend to perform well at different times in order to reduce the effects of volatility in a portfolio, and also increase the potential for increasing returns.

Production budget

The production budget contains the plan for future manufacturing operations and is based upon the sales forecasts and sales budgets. It aims at obtaining utilization of manufacturing methods and facilities. The budget may be prepared in two parts, one being the production volume budget and the other being the budget for cost of manufacturing. The production volume budget relates to the production of physical units and involves production planning. The cost of production budget deals with all costs attributable to the manufacture of the product.

Collateral

The property which is subject to a lien. A creditor with rights in collateral is a secured creditor and has additional protections in the Bankruptcy Code for the claim secured by collateral. The measure of the secured claim is the value of the collateral available to secure the claim: it is possible to have a lien on property that is subject to a senior lien or liens such that the security available to pay the claim is really without value to the junior creditor. The general rule with respect to liens is "First in time, first in right."

Using women as sex symbols for advertising

The rate at which even reputable brands are resorting to this unethical marketing practice is quite alarming. If you observe TV, billboard, and magazine adverts, there's something common to most of them; a half-naked lady is used to attract attention to the product or service being advertised. While it might be intuitive to use models in adverts for beauty products and cosmetics, having half-naked models in adverts for generators, heavy machinery, smartphones, and other products not strongly related to women is both nonsensical and unethical.

index

The rate to which a lender's interest rate is tied.

Benchmark rate(s)

The rates set annually by the Commissioner of Insurance that rate-regulated insurance companies use to reference their rates. Rate-regulated insurance companies filing rates within a range of 30 percent above or below the benchmarks may use them immediately upon filing without prior approval. A company that wants to set its rates outside this range must receive the Commissioner´s prior approval.

Expense ratio

The ratio between a mutual fund's operating expenses for the year and the average value of its net assets.

Grievance procedure

The required appeal process an HMO provides for you to protest a decision regarding medical necessity or claim payment. Insurance companies also may have grievance procedures.

Revenue and expense budgets

The revenue budgets should show anticipated sales by product or by geographical territory or by department and so on. In anticipating sales, managers must take into account their competitors, planned advertising expenditures, sales force effectiveness and other relevant factors. The expense budgets list the primary activities undertaken by a unit to achieve its goals and the costs associated with these activities. These budgets cover all necessary and relevant areas including rent, utilities, supplies, security and so on.

Cash Flow

The revenue or expense expected to be generated through business activities (sales, manufacturing, etc.) over a period of time. Having a positive cash flow is essential in order for businesses to survive in the long run.

Utilization review

The review process aimed at helping HMOs and insurance companies reduce health care costs by avoiding unnecessary care. The review includes evaluating requests for medical treatment and determining, on a case-by-case basis, whether that treatment is necessary.

Rights of accumulation

The right to buy over a period of time. For example, this might be done by an institutional investor to avoid making a single substantial purchase that might drive up the market price, or by a retail investor who wants to reduce risk by dollar cost averaging.

Conversion privilege

The right to change (convert) insurance coverage from one type of policy to another. For example, the right to change from an individual term insurance policy to an individual whole life insurance policy.

short position

The sale of a borrowed security, commodity or currency with the expectation that the asset will fall in value.

Stock Brokerage Firms

The stock brokerage firm is responsible for facilitating buying and selling of financial securities between a buyer and a seller.

Statement of additional information (SAI)

The supplementary document to a prospectus that contains more detailed information about a mutual fund; also known as 'Part B' of the prospectus.

Rescission

The termination of an insurance contract by the insurer when material misrepresentation has occurred.

Lapse

The termination of an insurance policy because a renewal premium is not paid by the end of the grace period.

Dismissal

The termination of the case without either the entry of a discharge or a denial of discharge; after a case is dismissed, the debtor and the creditors have the same rights as they had before the bankruptcy case was commenced. Dismissal is the penalty for many minor infractions of bankruptcy procedures under the 2005 amendments. Examples: Failure to file the all tax returns for the prior 4 years will result in dismissal of a Chapter 13 case and failure to supply copies of pay stubs for wages received in the 60 days prior to filing will result in dismissal of any case filed by individuals or a husband and wife filing jointly.

Grace period(s)

The time - usually 31 days - during which a policy remains in force after the premium is due but not paid. The policy lapses as of the day the premium was originally due unless the premium is paid before the end of the 31 days or the insured dies.

Cut-off time

The time of day when a transaction can no longer be accepted for that trading day.

Annuity period

The time span between the benefit payments made under an annuity contract.

Pre-bankruptcy Planning

The timing of the filing of a bankruptcy case and/or the arrangement (or rearrangement) of a debtor's property to allow the debtor to take maximum advantage of exemptions. (Pre-bankruptcy planning typically includes converting nonexempt assets into exempt assets.) A person has to be careful to insure that his/her pre-bankruptcy planning does not cross over the line to bankruptcy fraud.

Top 10 long and short positions

The top 10 holdings ranked by market value in each position category (long and short). A long position is one in which an investor buys shares of stock and as an equity holder will profit if the price of the stock rises. With a short position an investor will sell shares of stock that they do not own but have borrowed. The investor in a short position will profit if the price of the stock falls.

market capitalization

The total dollar market value of all of a company's outstanding shares. Calculated by multiplying a company's outstanding shares by the current price of one share.

Assignment

The transfer of all or part of a policy owner´s legal title and rights to a policy to another person. It is possible to change this type of transfer at a later date.

workers' compensation

The type of business insurance that pays for medical care/physical rehab of workers injured on the job.

Equity

The value of a debtor's interest in property that remains after liens and other creditors' interests are considered. (Example: If a house valued at $100,000 is subject to a $45,000 mortgage, there is $55,000 of equity.)

Present Value

The value of how much a future sum of money is worth today. Present value helps us understand how receiving $100 now is worth more than receiving $100 a year from now. See an example of the time value of money here.

Actual cash value (ACV)

The value of your property, based on the current cost to replace it minus depreciation. Also see "replacement cost."

Annual report

The yearly audited record of a corporation or a mutual fund's condition and performance that is distributed to shareholders.

deposits

These are considered liabilities for a bank.

Contingent

Used to describe debts that are not fixed in right at the time, but are dependent on some other event happening to fix the liability.

Capital expenditure budgets

These budgets plan for long term investments and include expenditures for new plants and equipment, major installations, replacement of existing equipment, renovation of buildings and so on. These are typically substantial expenditures both in terms of magnitude and duration. Capital budgeting is a part of long range planning and must be broken into well defined phases of the program - known as milestones - each phase being budgeted for cost, time and effort in self contained way.

finance companies

These companies often charge higher interest rates on loans because people who borrow from them usually have had past credit trouble or don't otherwise qualify for loans from lower interest sources.

smart cards

These have embedded microchips, and can be reused as value can be stored, used, and restored by banks/merchants.

banks

These institutions are essential to maintaining the economy and distribute the medium of exchange.

Electronic Funds Transfer Act

This act describes the rights/liabilities/responsibilities of customers who use automated funds transfer services.

National Currency Act of 1863

This act established standards for currency, taxed state bank notes, and made the printing of state bank notes unprofitable.

Health Insurance Portability and Accountability Act

This act permits employees to take their health insurance eligibility with them when they change jobs.

Emergency Banking Act of 1933

This act separated commercial banking from investment banking to protect assets.

Securities and Exchange Commission

This board is composed of 9 commissioners, selected by the Federal Reserve Bank chairman, and approved by the US House of Representatives.

Control of liquidity

This budget involves cash flow and is very important in controlling cash and meeting current financial obligations. The budget forecasts cash receipts and outlays for a given period of time and are necessary to control the income and expenses so that there is no shortage of cash to pay for bills and also there is no excessive unused cash which may be unproductive.

Materials and utilities budget

This budget provides for acquiring raw materials required for production, spare parts for maintenance, labour time, machine time, and energy consumption and so on. The labour time and machine time is usually related to what a unit of time is budgeted to yield. In other words it relates to the output per unit of time.

Churning

This can occur when an agent persuades a consumer to borrow against an existing life insurance policy to pay the premium on a new one.

Waiver of premium provision

This clause means that you do not have to pay premiums on the policy after you're disabled for 90 days.

Paid-up

This event occurs when a life insurance policy will not require any further premiums to keep the coverage in force.

sum-of-digits method

This finance charge method takes the total finance charge, divides it by the # of months in the loan term, and assigns a higher ratio of interest to the early payments.

Civil War

This in America brought monetary issues to a crisis point b/c rampant inflation threatened the entire economic system.

Major medical

This insurance is intended to cover the costs of surgery, hospitalization, and other large expenses arising from injuries and lengthy illnesses.

major medical

This insurance is intended to cover the costs of surgery, hospitalization, and other large expenses arising from injuries and lengthy illnesses.

Rule of 78

This is a method for calculating the amount of unused premium that takes into account the fact that more insurance coverage is required in the early months of the loan, since the payoff of the loan is greater. As the loan is paid off, less coverage is being paid for, so the refund percentage decreases.

Interpleader

This is a procedure when conflicting claims are made on a life insurance policy by two or more people. Using this procedure the insurance company pays the policy proceeds to a court, stating the company cannot determine the correct party to whom the proceeds should be paid.

Rule of anticipation

This is a similar method to "Rule of 78" where the amount of unused premium takes into account the fact that more insurance coverage is required in the early months of the loan, since the payoff of the loan is greater. As the loan is paid off, less coverage is being paid for, so the refund percentage decreases.

Credit life insurance

This is a special type of coverage usually designed to pay off a loan or charge account balance if the policyholder dies. Some lenders or sellers may require credit life insurance before they will approve a loan. If credit life is required, the lender or seller cannot require the policyholder to purchase it from them or a particular insurance company. If the policyholder has an existing life policy, the creditor has to accept an assignment of benefits under their existing policy instead of requiring them to purchase a credit life policy. Credit life insurance premium rates for loans of 10 years or less are regulated by TDI, but premium rates for loans that are more than 10 years old are unregulated.

Charged Off

This is an accounting term that means the creditor does not expect to collect on the debt. Just because a debt has been charged off does not mean that the creditor can no longer collect the charged off debt.

Using fear tactics

This is another common unethical marketing practice among snake oil salespersons. You will hear them saying something like: "This price is a limited-time offer. If you don't buy now, you might have to pay much more to buy it later because the offer will end up in two days time, and the price will go up." The only motive behind those statements is to prompt the potential buyer to make a decision on the spot. And that's wrong. Why subject someone to undue pressure because you want to make money off him or her?

Distortion of facts to mislead or confuse potential buyers

This is another common unethical marketing practice. A typical example is when a food processing company claims that its products are sugar-free or calorie-free when indeed they contain sugar or calories. Such a company is only trying to mislead potential buyers, since they are unlikely to buy the products if it is made known that they contain sugar or calories.

Exploitation

This is charging for much more than the actual value of a product or service. For marketing efforts to remain with ethical limits; the prices of your offers must be equal to or less than the value they give the buyer. If the value is less than the cost, it's unethical.

Truth in Savings Act

This law requires banks to disclose, in writing, such consumer bank account terms as interest rate info, balance requirements, and the circumstances under which fees are charged.

trust department

This part of a bank would be most likely to manage money for a 12-year-old who received an inheritance.

without recourse

This phrase is a type of qualified endorsement, which limits the liability of the person endorsing the check.

Residual or partial disability rider

This provision allows you to return to work part-time, collect part of your salary and receive a partial disability payment if you are still partially disabled.

Return of premium

This provision requires the insurance company to refund part of your premium if no claims are made for a specific period of time declared in the policy.

Home Mortgage Disclosure Act

This requires banks to record/report data on home lending in order to ID possible discriminatory patterns.

negotiation

This term, as it applies to a negotiable instrument, means the ability of the holder to obtain its value.

personal injury

This type of automobile insurance coverage is designed to protect both the insured and any passengers in the insured's car.

title insurance

This type of insurance protects the insured from losses arising from an event that occurred before the policy was purchased.

Decreasing term

This type of life insurance policy is unique b/c the death benefits decrease on a scheduled basis. Most commonly used to cover a mortgage or other type of loan.

decreasing term

This type of life insurance policy is unique b/c the death benefits decrease on a scheduled basis. Most commonly used to cover a mortgage or other type of loan.

Group life insurance

This type of life insurance provides coverage to a group of people under one contract. Most group contracts are sold to businesses that want to provide life insurance for their employees. Group life insurance can also be sold to associations to cover their members and to lending institutions to cover the amounts of their debtor loans. Most group policies are for term insurance. Generally, the business will be issued a master policy and each person in the group will receive a certificate of insurance.

reverse mortgage

This type of mortgage is repaid when the borrower dies.

Concealing dark sides or side effects of products or services

This unethical marketing practice is rife in the natural remedies industry, where most manufacturers deceive potential buyers that their products have no side effects because they are "made from natural products". But in reality, most of these products have been found to have side effects, especially when used over a long period. In fact, there's no product without side effects—it's just that the side effects might be unknown. It's better to say, "There are no known side effects" than to say "there are no side effects".

payable

This word, when written on a balance sheet, indicates an amount owed.

defensive stocks

Those likely to have share prices that are more volatile that those of growth stocks. Most popular when economic outlook is not very positive.

independent contractor agents

Used by some insurance companies to sell their products. These agents are usually compensated through commissions rather than salary.

Plagiarism of marketing messages

Though uncommon, some business owners and salespersons engage in using the exact marketing messages of their competitors to market their own products or services. Creativity is a huge part of marketing, and using other businesses' marketing messages just passes you off as being creatively bankrupt and fraudulent.

Bankruptcy Code

Title 11 of the United States Code governs bankruptcy proceedings. Bankruptcy is a matter of federal law and is, with the exception of exemptions, which are determined by state law on most assets. When federal bankruptcy law conflicts with state law, federal law controls.

Indemnify

To guarantee against any loss which another might suffer. In bankruptcy, it is used to describe the undertaking of one spouse in a divorce to assume certain debts of the marriage and to see that the other spouse is not forced to pay. This is sometimes called a "hold harmless" clause.

Mortgage Programs and Rates

To properly analyze a mortgage program, the borrower needs to think about how long he plans to keep the loan. If you plan to sell the house in a few years, an adjustable or balloon loan may make more sense. If you plan to keep the house for a longer period, a fixed loan may be more suitable. With so many programs from which to choose, each with different rates, points and fees, shopping for a loan can be time consuming and frustrating. An experienced mortgage professional can evaluate a borrower's situation and recommend the most suitable mortgage program, thus allowing the borrower to make an informed decision.

Evidence of insurability

To qualify for a particular policy at a particular price, companies have the right to ask for information about health and lifestyle. An insurance company will use this information - the evidence of insurability - in deciding if your application for insurance is acceptable and at what premium rate.

Top five detractors

Top five industries in a portfolio based on amount of invested assets.

Top five industries

Top five industries in a portfolio based on amount of invested assets.

Top five holdings

Top five securities in a portfolio based on amount of invested assets.

Number of Holdings

Total number of individual securities in a fund or portfolio.

Training and Development Specialists

Training and development specialists plan, conduct, and administer programs that train employees and improve their skills and knowledge.

false

True or false? Purchasers of automobile liability insurance can reduce their premium costs by agreeing to a deductible.

Traditional IRA

Type of IRA where contributions are tax-deductible at the time they are deposited and both the principal and the income earned in the account are taxed as regular income when they are withdrawn as distributions.

Roth IRA

Type of IRA where taxes are paid on contributions, but withdrawals are not taxed at all. Does not require you to start making withdrawals at a certain age, and allows an individual to make a qualified withdrawal up to $10,000 for a first time home purchase.

savings and loan association

Type of financial institution created for the purpose of promoting home ownership and which must make a majority of its loans for housing-related purposes.

construction loan

Type of short-term business loan meant to cover the cost of land development and building construction. Often packaged w/ a real estate loan.

Growth stock

Typically a well-known, successful company that is experiencing rapid growth in earnings and revenue, and usually pays little or no dividend.

Value stock

Typically an overlooked or underpriced company that is growing at slower rates.

Fair Credit Reporting Act

US Federal law that protects and regulates the collection, dissemination, and use of consumer information, including consumer credit information that credit bureaus may collect.

Preferred Provider Organization (PPO) plans

Under a PPO plan, both you and your family can see any health care provider in the insurance company's network, including specialists, without a referral. In most cases, you are not required to choose a primary care physician or to get referrals to see specialists. You will typically have copayments for any non-preventive medical care you receive, and you may have an annual deductible. Individuals who visit a specialist regularly generally prefer this type of health insurance. Since 2014, the popularity of PPO plans has declined.

Viatical settlement agreements

Viatical settlements involve the sale of an existing life insurance policy by a viator (person with a life threatening or terminal illness) to a viatical settlement company in return for a cash payment that is a percentage of the policy´s death benefit.

too much money

What is a possible cause for rising prices/inflation? _____ moving in the economy.

68%

What is the current home ownership rate in the US?

25%

What percentage of US commercial bank assets is held by foreign banking organizations?

high DSCR

What would indicate that a company has a good bit of operating income available for debt service?

street name

When a brokerage holds its clients' stock certificates, the stock is said to be held in _____.

Reaffirm

When a debtor chooses to waive the discharge as to a debt, then the debtor reaffirms that debt. Generally, the parties to the reaffirmed debt have the same rights and liabilities that each had prior to the bankruptcy filing. For example, the debtor is obligated to pay and the creditor can sue or repossess the collateral if the debtor doesn't pay. In a some cases, a debtor may reaffirm only part of the debt provided the creditor and debtor agree on the terms of the agreement.

Perfection of Lien

When a secured creditor has taken the required steps to perfect his lien, the lien is senior to any liens that arise after perfection. A mortgage (deed of trust) is perfected by recording it in the land records in the office of the Chancery Clerk of the county where the land is located; a lien in personal property is perfected by filing a financing statement (UCC1) with the secretary of state; a lien on a car, truck, or mobile home is protected by placing the lien on the title to the vehicle or mobile home. An unperfected lien is valid between the debtor and the secured creditor, but may be behind liens created later in time, but perfected earlier than the lien in question. An unperfected lien can be avoided by the trustee. See Purchase Money Lien for an exception to the requirement to file anything to perfect liens on furniture and appliances.

2-for-1 stock split

When each stockholder receives an additional share for each share held, but the value of each share is reduced by half: two shares now equal the original value of one share before the split.

3-for-2 stock split

When each stockholder receives an additional share for every two shares held, but the value of each share is reduced by 2/3: three shares now equal the original value of two shares before the split.

escrow

When real estate agents have the bank collect money from buyers and put it into the seller's account, they are using the bank's _____ services.

reserve requirement

When the Federal Reserve increases this, banks must retain more of each dollar deposited, reducing the amount they can lend. This does not change very often.

Private Mortgage Insurance

When the loan to value (LTV) is higher than 80% lenders will generally not be able to do the transaction. In these cases, the borrowers can get private mortgage insurance (PMI) which is a guarantee to the lender that until the borrower reaches a 80% LTV, they are covered from default. To get this protection, borrowers pay a monthly PMI premium. One popular option to get around paying PMI is to take a second mortgage and use it as a down payment on the first.

credit unions

Where do you find share draft accounts?

Fair Debt Collection Practices Act

Which prohibits debt collectors from using abusive, unfair, or deceptive practices to collect from you. It covers personal, family, and household debts, including money you owe on a personal credit card account, an auto loan, a medical bill, and your mortgage. Does not cover debts you incurred to run a business.

Whole life insurance

Whole life insurance policies are one type of cash value insurance. Whole life policies offer protection through a lifetime - that is, for a person´s "whole life." From the day a person buys the policy, they pay a scheduled premium. The scheduled premium may be level or may increase after a fixed time period, but it will not change from the amount(s) shown in the policy schedule. It is important to look at the policy schedule to understand what the premium payments will be and that they are affordable over time. This premium is based on age at the time of purchase. Initially, it will be higher than the premium paid for a term policy, but they are likely to decrease over time if the policy is kept for a long time. Part of each premium payment will go to cash value growth, part for the death benefit and part for expenses (such as commissions and administrative costs). There is no need to renew whole life policies. As long as the premium is paid when due, coverage will continue in force.

Exclusive Provider Organization (EPO) plans

With an EPO plan, you have access to all of the health care providers within the EPO network, including specialists. Whereas PPO plans may offer you some coverage outside of your network, EPO plans typically will not (except for emergencies). EPO plans can be suited well to individuals who don't mind limiting themselves to providers within a network and who don't want to coordinate their care through a primary care doctor. Since 2014, the popularity of EPO plans has increased.

discount loan

With this type of loan, borrowers receive less than the full amount of the loan and repay the full amount at maturity.

fixed rate mortgage

With this type of mortgage, payments on the loan, the interest rate, and terms all remain constant for the entirety of the loan.

Additional purchase options

Your insurance company gives you the right to buy additional insurance at a later time.

yield

_____ on a stock is similar to the interest rate on a savings account. Otherwise known as the income return on an investment.

Savings account

a bank account that earns interest.

Credit report

a detailed report of an individual's credit history.

Auditing

a means of evaluating the effectiveness of a company's internal controls. Maintaining an effective system of internal controls is vital for achieving a company's business objectives, obtaining reliable financial reporting on its operations, preventing fraud and misappropriation of its assets, and minimizing its cost of capital. Both internal and independent auditors contribute to a company's audit system in different but important ways.

Bank reconciliation

a statement accounting for the difference between the cash balance in company's cash account and the cash balance according to its bank statement.

Deposit

a sum of money placed or kept in a bank account, usually to gain interest

Withdrawals

a sum of money withdrawn from an account

Long-Term Disability policies (LTD)

a waiting period of several weeks to several months with a maximum benefit period ranging from a few years to the rest of your life.

Nontaxable Income

certain income is exempt from being taxable. The IRS defines the following as sources of nontaxable income. Inheritances, gifts and bequests, Cash rebates on items you purchase from a retailer, manufacturer or dealer, Child support payments, Most healthcare benefits, Money that is reimbursed from qualifying adoptions, Welfare payments

Adjustable Rate Mortgage

an adjustable rate mortgage, known as an ARM, is a mortgage that has a fixed rate of interest for only a set period of time, typically one, three or five years. During the initial period the interest rate is lower, and after that period it will adjust based on an index. The rate thereafter will adjust at set intervals.

ATM

an electronic telecommunications device that enables the customers of a financial institution to perform financial transactions, particularly cash withdrawal

Good Faith Estimate

an estimate by the lender of the closing costs that are from the mortgage. It is not an exact amount, however, it is a way for lenders to inform buyers of what is needed from them at the time of closing of the loan.

Credit rating

an estimate of the ability of a person or organization to fulfill their financial commitments, based on previous dealings.

Points

are percentage points of the loan amount. Often in order to get a lower interest rate, lenders will allow borrowers to "buy down" the rate by paying points. Paying a percentage point up front in order to get a lower rate will eventually be a saving to borrowers in the long run if they stay in the house for the duration of the loan. If they move shortly after buying the property then they will likely lose money buying points.

Escrow

at the closing of the mortgage, the borrowers are generally required to set aside a percentage of the yearly taxes to be held by the lender. On a monthly basis, the lender will also collect additional money to be used to pay the taxes on the home. This escrow account is maintained by the lender who is responsible for sending the tax bills on a regular basis.

Secured credit

backed by a cash deposit that you must supply beforehand

Bronze

covers 60% on average of your medical costs; you pay 40%

Silver

covers 70% on average of your medical costs; you pay 30%

Gold

covers 80% on average of your medical costs; you pay 20%

Platinum

covers 90% on average of your medical costs; you pay 10%

Dependents

family members who you support that qualify you for tax exemptions. Must be younger than 19, 24 if full-time student.

Truth in Lending

is a federal mandate that all lenders must follow. There are several important parts to the Truth In Lending regulations including proper disclosure of rates, how to advertise mortgage loans and many other aspects of the lending process. These regulations were put into place to protect consumers from potential fraud.

Fixed Rate Mortgage

is a mortgage where the interest rate and the term of the loan is negotiated and set for the life of the loan. The terms of fixed rate mortgages can range from 10 years to up to 40 years.

Down Payment

is the amount of the purchase price that the buyer is paying. Generally, lenders require a specific down payment in order to qualify for the mortgage.

Mortgage

is the loan and supporting documentation for the purchase of a home. Mortgage lenders generally follow strict underwriting guidelines to limit the possibility of borrowers defaulting on their payments.

Annual Percentage Rate

is the rate of interest that will be paid back to the mortgage lender. The rate can either be a fixed rate or adjustable rate.

Principal

is the term used to describe the amount of money that is borrowed for the mortgage. The principal amount that is owed will go down when borrowers make regular monthly or bi-weekly payments.

Bankruptcy

legal status of a person or other entity that cannot repay the debts it owes to creditors

Debt-to-income Ratio

lenders look at a number of ratios and financial data to determine if the borrowers are able to repay the loan. One such ratio is the debt-to-income ratio. In this calculation, the lender compares the monthly payments, including the new mortgage, and compares it to monthly income. The income figure is divided into the expense figure, and the result is displayed as a percentage. The higher the percentage, the more riskier loan it is for the lender.

Unsecured credit

no collateral associated with it. The credit limit is based on the lender's assessment of your credit risk using traditional factors — credit score, credit reports, payment records, and other indicators of your ability to pay.

Identity theft

occurs when someone uses another's personally identifying information, like their name, identifying number, or credit card number, without their permission, to commit fraud or other crimes.

Settlement Costs

prior to closing, the attorneys involved in the mortgage closing will meet to determine the final costs that are associated with the loan. These settlement costs are given to all parties so that they will be prepared to pay the closing costs that have been agreed upon.

Homeowner's Insurance

prior to the mortgage closing date, the homeowners must secure property insurance on the new home. The policy must list the lender as loss payee in the event of a fire or other event. This must be in place prior to the loan going into effect.

Bait and Switch

the action (generally illegal) of advertising goods that are an apparent bargain, with the intention of substituting inferior or more expensive goods.

Amortization

the amortization of the loan is a schedule on how the loan is intended to be repaid. For example, a typical amortization schedule for a 15 year loan will include the amount borrowed, interest rate paid and term. The result will be a month breakdown of how much interest you pay and how much is paid on the amount borrowed.

Equity

the difference between the value of the home and the mortgage loan is called equity. Over time, as the value of the home increases and the amount of the loan decreases, the equity of the home generally increases.

Title Insurance

the lender is using the home as collateral for the mortgage transaction. Because of this, they need to be certain that the title of the property is clear of any liens which could jeopardize the Mortgage. So, lenders will require borrowers to get title insurance on the property, which will ensure that the homes are free and clear.

Noncancelable

the policy cannot be canceled by the insurance company, except for nonpayment of premiums. This gives you the right to renew the policy every year without an increase in the premium or a reduction in benefits.

Check clearing

the process of moving a cheque from the bank in which it was deposited to the bank on which it was drawn, and the movement of the money in the opposite direction.

Guaranteed renewable

the right to renew the policy with the same benefits and not have the policy canceled by the company. However, your insurer has the right to increase your premiums as long as it does so for all other policyholders in the same rating class as you.

Closing Costs

these are the costs that the buyer must pay during the mortgage process. There are many closing costs involved ranging from attorney fees, recording fees and other costs associated with the mortgage closing.

Exemptions

they either reduce or entirely eliminate your obligation to pay tax

Loan-to-value Ratio

this is another typical financial calculation that is done is called the Loan-to-Value (LTV) ratio. This calculation is done by dividing the amount of the mortgage by the value of the home. Lenders will generally require the LTV ratio to be at least 80% in order to qualify for a mortgage.

Bi-Weekly Mortgage

this type of mortgage has an impact on when a loan is paid and how frequently. In a typical mortgage, you make one monthly payment or twelve payments over the course of a year. With a Bi-Weekly payment you are paying half of your normal payment every two weeks. This is the equivalent of thirteen regular payments, which in turn will reduce the amount of interest you pay and pay off the loan earlier.

Short-Term Disability policies (STD)

waiting period of 0 to 14 days with a maximum benefit period of no longer than two years.

Construction Mortgage

when a person is having a home-built, they will typically have a construction mortgage. With a construction mortgage, the lender will advance money based on the construction schedule of the builder. When the home is finished, the mortgage will convert into a permanent mortgage.

Origination Fee

when applying for a mortgage loan, borrowers are often required to pay an origination fee to the lender. This fee may include an application fee, appraisal fee, fees for all the follow-up work and other costs associated with the loan.