Page 117 - The Informed Fed--Hearn Wealth Management
P. 117

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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