GLOSSARY
OF TERMS - page B
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T U
V W X Y Z
Balance Transfer
The process of transferring a balance from one account to
another account.
Basis Point
One basis point is 0.01 percent of a bond's yield. Basis points
also are used for interest rates. An interest rate of 4 percent
is 50 basis points greater than an interest rate of 3.5 percent.
Beneficiary
Person to whom the proceeds of a life policy are payable when
the insured dies. The various types of beneficiaries include:
- Primary beneficiaries - Those first entitled
to proceeds
- Secondary beneficiaries - Those entitled
to proceeds if no primary beneficiary is living when the
insured dies
- Tertiary beneficiaries - Those entitled
to proceeds if no primary or secondary beneficiaries are
alive when the insured dies.
Bond
Bonds are debt and are issued for a period of more than one
year. The U.S. government, local governments, water districts,
companies, and many other types of institutions sell bonds.
When an investor buys bonds, he or she is lending money. The
seller of the bond agrees to repay the principal amount of
the loan at a specified time. Interest-bearing bonds pay interest
periodically.
Bond Funds
Mutual funds that invest in bonds issued by municipalities,
corporations, and the U.S. government and its agencies. Bond
mutual funds do not mature and are not guaranteed, although
some of the individual bonds they invest in may be.
Book Value
A company's book value is total assets minus intangible assets
and liabilities such as debt. A company's book value might
be more or less than the market value of the company.
Business Continuation Plan
An arrangement between business owners that provides that
the shares owned by any one of them who dies shall be sold
to and purchased by the other co-owners or by the business.
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