Debt Free Article

Debt Terms Glossary

Letter B

Back office

In the debt free world and the financial world this term is used to describe the support operations of a brokerage firm that does not deal directly with customers. This is the part of the firm that deals with behind the scenes issues. Many of our debt free advocates at this site know this term has a lot to do with the slow aspect of financial dealings like bottlenecks and paperwork processing.

Bear

If you watch any money market show on the popular news channels you may know that this is a commonly used term in the world of investing and even debt. A bear believes the market is going to go down. It is also known as the opposite of the term bull in the investment world.

Bearer bond

Bearer bonds are most often referred to as coupon bonds. They are not registered in anyone’s name. Instead they are owned by whomever posses them (the bearer). This person collects the interest payments merely by cutting off an attached coupon and mailing it at the proper time (according to the coupon’s date of maturity). Unfortunately, these are bonds that are no longer being produced – but they are still around.

Beta

You may remember the term alpha on the first glossary page. A beta is the calculate of price instability that has to do with the stock or mutual fund to the market as a whole. A stock or fund with a beta rating higher than 1 is projected to jump up or down more than the market itself. A beta below 1 specifies a stock or fund that typically moves up and down less than the market.

Bid/asked

This is the price a bidder is willing to pay for the purchase of a security – asked is the price the seller will take for it. The difference of the two is known as the spread – your broker’s share of the deal.

Blue chip

A blue chip is a stock that is issued by a very well known; reputable companies that have a history of fantastic stability in their earnings and dividend payments. These are safe stocks that are income earners and are widely held by investors.

Boiler room

In the world of finances and even debt association, this is the widely used term for the place of origin of high pressure telephone sales campaigns. These types of campaigns are the ones that require cold calling to unsuspecting consumers and investors who would be better off without whatever is being offered to them.

Bond

A bond is an interest bearing security that necessitates the issuer to pay a certain amount of interest for a certain amount of time, most often many years, and then repay the bondholder the face value amount of the bond. Worth noting: Bonds that are issued by corporations or ones that are backed by corporate assets; in case of default, the bondholders have a legal claim on those assets Bonds issued by gov’t agencies may or may not be backed by a certain public project (think stadiums and toll roads). Interest from corporate bonds is taxable; interest from municipal bonds, which are issued by state and local gov’t is free of federal income taxes and, most often, income taxes of the issuing jurisdiction. Interest from Treasury bonds, issued by the federal gov’t, is free of state and local income taxes but subject to taxes on the federal level.

Bull

In the world of finance, investing and even debt, this the term you may remember that we mentioned above regarding bear. A bull is someone who thinks the market is going to go up. It is the opposite of a bear (in financial terms that is).

(624)

Back to Debt Free Articles