Glossary attachment

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Initial Public Offering (IPO)

The first public issues of shares by a corporation that has not previously traded publicly in the financial markets.

Institutional Investor

An organization, often a collection of professional investors, whose primary objective is to invest its own capital (assets) or that of those whose interest it represents. It generally buys and sells in large volumes. Examples include pension funds, investment companies, banks and life insurance companies.

Interest

Payments made by a borrower to lenders for the use of their money for a period of time.

Interest Income

Income earned on fixed-income investments treated as ordinary earned income and taxed fully at an individual's marginal tax rate.

Interest Rate Risk

See Risk.

Investment Objective

The investment goal of an investor. The three primary investment objectives of an investor are safety, income and growth. Two secondary investment objectives are tax minimization and liquidity.

Investors

An individual whose principal concern is to invest in an asset or security or set of securities with minimal risk.

Isntrument

A term used to describe securities or investments.

Joint Account

An account owned by two or more persons.

Known Pricing

The use of previous valuation date for purpose of pricing, purchases and redemptions of mutual funds.

Leveraging

Refers to borrowing funds to purchase a security in order to magnify returns.

Liabilities

Claims made by creditors against a corporation. Liabilities include those due and payable within the year, known as current liabilities (including accounts payable, taxes payable) and those payable after one year, referred to as long-term liabilities (including bonds, bank loans and mortgages).

Limited Liability

The owners of a corporation are responsible only for the amount they paid for their shares in a corporation. They are not personally responsible for any unpaid debts accumulated by the corporation.

Liquidating Value

The sale value of an asset.

Liquidity

(1) The ease with which an investment can be sold or pledged for cash.

(2) The ability of a given market to absorb a reasonable amount of buying and selling of securities at reasonable price changes. (3) A company's cash position: the amount of current assets in relation to its current liabilities.

Load

The commission or cost of acquiring a mutual fund. See Sales Charge.

Long-Term Bond

A bond maturing in ten years or more.

Long-Term Debt

Liabilities that are due in more than one year.

Loss

The sale of an asset at a price lower than the original price or the deficit recorded when expenditures exceed the revenue of a company.

Management Fee

The amount paid by the fund directly to the management company for providing portfolio management, day-to-day and administrative services to a fund. The fee is calculated as a percentage of the average assets being managed annually.