Balance Sheet: A financial statement that shows assets, liabilities, and net worth as of a specific date.
Balanced Mutual Fund: This is a mutual fund that buys common stock, preferred stock and bonds.
Balloon Mortgage: A mortgage that has level monthly payments that will amortize it over a stated term but that provides for a lump sum payment to be due at the end of an earlier specified term.
Balloon Payment: The final lump sum payment that is made at the maturity date of a balloon mortgage.
Bankers' Acceptance: A draft drawn on a specific bank by a seller of goods to obtain payment of goods that have been sold to a customer. The customer maintains an account with that specific bank.
Bankrupt: A person, firm, or corporation that, through a court proceeding, is relieved from the payment of all debts after the surrender of all assets to a court-appointed trustee.
Bankruptcy: A proceeding in a federal court in which a debtor who owes more than his or her assets can relieve the debts by transferring his or her assets to a trustee.
Basis Point: Used to measure changes in yields of bonds.
Bear Market: General decline in security prices.
Before-Tax Income: Income before taxes are deducted.
Beginning Net Asset Value: The market value of a fund share on a predetermined start date.
Beneficiary: The person designated to receive the income from a trust, estate, or a deed of trust.
Bequeath: To transfer personal property through a will.
Best Ask: The lowest quoted offer of all competing Market Makers to sell a particular stock at any given time.
Best Bid: The highest quoted bid of all competing Market Makers to buy a particular stock at any given time.
Best Effort Purchase: A method of selling newly issued securities whereby the underwriters are expected to sell as many securities as possible. They are not obligated to sell the entire subscription. (See firm commitment)
Beta: A relative (to a benchmark) measure of risk. Measures of an asset's non-diversifiable -- market-- risk. See also systematic risk.
Betterment: An improvement that increases property value as distinguished from repairs or replacements that simply maintain value.
Bid: The lowest price anyone wants to sell the security for at a given time. (See: Ask, and Bid-Ask Spread)
Bid-Ask Spread: The difference between the bid and the ask for a security at a given time.
Big Board: refers to the New York Stock Exchange (NYSE).
Bill: Debt that has less than 1-year maturity at time of issue.
Bill Of Sale: A written document that transfers title to personal property.
Binder: A preliminary agreement, secured by the payment of an earnest money deposit, under which a buyer offers to purchase real estate.
Biweekly Payment Mortgage: A mortgage that requires payments to reduce the debt every two weeks. The 26-27 biweekly payments over the year are each equal to one-half of the monthly payment that would be required if the loan were a standard 30-year fixed-rate mortgage resulting in a substantial savings in interest.
Blanket Insurance Policy: A single policy that covers more than one piece of property (or more than one person).
Blanket Mortgage: The mortgage that is secured by a cooperative project, as opposed to the share loans on individual units within the project.
Blue Chips: The stocks in the Dow Jones Industrial Average.
Bona Fide: In good faith, without fraud.
Bond: An interest-bearing certificate of debt with a maturity date. An obligation of a government or business corporation. A real estate bond is a written obligation usually secured by a mortgage or a deed of trust.
Bond Par Value: The face value that is to be returned to a bondholder at maturity.
Bond Covenants: A contractual provision in a bond indenture. Positive covenant requires certain actions while a negative covenant limits certain actions.
Book to Bill: This is the semiconductor book to bill ratio. It reports on the amount of semiconductor chips that are booked for delivery as compared with those that companies already have billed for.
Book Value: The depreciated value of a company's assets (original cost less accumulated depreciation) less the outstanding liabilities.
Breach: A violation of any legal obligation.
Bridge Loan: A form of second trust that is collateralized by the borrower's present home (which is usually for sale) in a manner that allows the proceeds to be used for closing on a new house before the present home is sold. Also known as swing loan
Broker: A person who, for a commission or a fee, brings parties together and assists in negotiating contracts between them. See mortgage broker.
Brokerage Commission: The amount of money your brokerage house would charge for a given transaction (buy/sell). This is how these firms make their living.
Brokers Calls: Individuals who buy stocks on margin borrow part of the funds to pay for the stocks they buy from their broker. The broker in turn may borrow the funds from a bank, agreeing to repay the bank immediately (on call) if the bank requests it. The rate paid on such loans is usually about 1% higher than the rate on short-term Treasury bills.
Bubbles: (See Efficient Market Hypothesis - EMH)
Budget: A detailed plan of income and expenses expected over a certain period of time. A budget can provide guidelines for managing future investments and expenses.
Budget Category: A category of income or expense data that you can use in a budget. You can also define your own budget categories and add them to some or all of the budgets you create. Rent is an example of an expense category. Salary is a typical income category.
Building Code: Local regulations that control design, construction, and materials used in construction. Building codes are based on safety and health standards.
Bull Market: A market with the general prices advancing.
Bullish: One who believes the general market will rise. (See Bear)
Buyback: When a firm repurchases its own stock from the public.
Buydown Account: An account in which funds are held so that they can be applied as part of the monthly mortgage payment as each payment comes due during the period that an interest rate buydown plan is in effect.
Buydown Mortgage: A temporary buydown is a mortgage on which an initial lump sum payment is made by any party to reduce a borrower’s monthly payments during the first few years of a mortgage. A permanent buydown reduces the interest rate over the entire life of a mortgage.
