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A deferred compensation plan that may be established by a company for profit sharing. Employees may place a portion (up to 25 percent) of their salaries into this plan, and those earnings will compound tax-free until withdrawal. The employee's annual contributions are excluded from federal income tax, although state laws may vary. These earnings are subject to Social Security tax. Withdrawals are permitted only after age 59-1/2 upon leaving the company or for hardship, disability, or death. The salary reduction portion is now limited to $7,627 annually. See also: Cash or deferred arrangement

The value of a bond, appearing on the face. Ordinarily, the amount the issuer promises to pay at maturity.

Mutual funds, each with a different investment objective, that are managed by the same investment company. Generally, funds in the same family are exchangeable on a dollar-for-dollar basis, although usually there is a fee for administrative expenses, and there may be an additional sales charge if a client switches from a fund with a lower sales charge to a fund with a higher sales charge. IRS considers the exchange a sale followed by a purchase, thus there may be a tax consequence on the shares swapped.

Used in reference to mortgages sold by the Federal National Mortgage Association.

A federally chartered organization which insures deposits in banks, currently limited to $100,000 per account.

There are 12 Federal Reserve Banks in the Federal Reserve System as authorized by the federal government. Their chief function is to act as a "banker's banker" in supplying money to the economy.

Insurance policy that protects broker-dealers from loss caused by misplacement of funds or securities, check forgery, fraudulent trading practices, or securities forgery. Policy covers such activities by employees, officers, or partners. Exchange and FINRA rules set the amount of insurance that is required. Also called fidelity bond insurance or blanket fidelity bond.

Person entrusted with the control of assets for the benefit of others. Most states have laws governing the conduct of fiduciaries. Fiduciaries are generally court appointed; executors of wills, administrators of estates, receivers-in-bankruptcy, and committees for incompetents. Trustees also are considered fiduciaries. The document of appointment usually limits the power of fiduciaries and sets guidelines for their activities. Custodians under Uniform Gifts to Minors Acts are fiduciaries in the sense that they may not alienate assets for their own benefit. They are not, however, directly governed by a written court-approved document governing the conduct of such accounts.

Designation for people associated with FINRA member firms, including assistant officers other than principals, who are engaged in the investment banking or securities business for the member. Must pass a qualifying examination and meet the other qualifications of the association.

Similar to the FDIC, except this organization insures deposits in savings and loan associations.

Directory of the 500 largest publicly owned corporations, compiled by Forbes magazine. Directory compares and ranks each of these companies by sales, assets, profits, and market value of shares.

Directory of the 500 largest U.S industrial corporations, compiled by Fortune magazine. The directory compares sales, net income, and stockholders' equity. Frequently the second 500 are given in a subsequent issue of Fortune. The same criteria are used. Financial and utility corporations are not included in the directory.

A process used by mutual funds to determine the net asset value of shares purchased and redeemed. The value is computed each day at the close of business of the New York Stock Exchange. This value applies to all purchases and redemptions made on that day.

Contract to be executed at some future date. Also referred to as "futures". Traditionally involved commodities, but may now also involve financial assets, government and money market securities, foreign currencies and market indices.