Glossary

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Balanced Mutual Fund

A mutual fund whose objective is a balance of stocks and bonds. Such funds tend to be less volatile than stock-only funds.

Bear Market

When the stock market appears to be declining overall, it is said to be a bear market.

Beneficiary

A person named in a life insurance policy, annuity, will, trust, or other agreement to receive a financial benefit upon the death of the owner. A beneficiary can be an individual, company, organization, and so on.

Blue Chip Stock

The common stock of a company with a long history of profitability and consistent dividend payments.

Bond

A bond is evidence of a debt in which the issuer promises to pay the bondholders a specified amount of interest and to repay the principal at maturity. Bonds are usually issued in multiples of $1,000.

Book Value

The net value of a company's assets, less its liabilities and the liquidation price of its preferred issues. The net asset value divided by the number of shares of common stock outstanding equals the book value per share, which may be higher or lower than the stock's market value.

Bull Market

When the stock market appears to be advancing overall, it is said to be a bull market.

Buy-Sell Agreement

A buy-sell agreement is an arrangement between two or more parties that obligates one party to buy the business and another party to sell the business upon the death, disability, or retirement of one of the owners.