Page 117 - The Informed Fed--Hearn Wealth Management
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Benchmark: Benchmark is a standard against which some variable is
measured. A market index or average whose gains and losses reflect the
changing direction of the market segment it tracks--such as large
company stocks or corporate bonds--may serve as a benchmark for
individual securities included in the index and mutual funds investing in
those securities.
Beneficiary: The person who is designated to receive the benefits of a
contract.
Beta: A statistically generated number that is used to measure the
volatility of a security or mutual fund in comparison to the market as a
whole.
Bid Price: The price that a buyer is willing to pay for a security or
commodity.
Blue-chip Stocks: The equity issues of financially stable, well-
established companies that usually have a history of being able to pay
dividends in bear and bull markets.
Bond: A certificate of indebtedness issued by a government entity or a
corporation, which pays a fixed cash coupon at regular intervals. The
coupon payment is normally a fixed percentage of the initial in-vestment.
The face value of the bond is repaid to the investor upon maturity.
Bonding requirement: The individual(s) that are appointed to run the
day-to-day operations of a qualified plan, as well as the trustee(s) and
investment manager(s), must be bonded. The bond is required to provide
protection to the plan against loss due to fraud, theft, forgery or
dishonesty.
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