Accrued Interest - Accrued Interest is the interest due on a bond or other fixed-income security since the last interest payment was made. The buyer of a bond pays the market price plus accrued interest. Buyers of preferred stocks and exchange-traded debt securities do not pay accrued dividends or interest and these securities are said to trade flat.

Acronym - An acronym is a word formed from the first (or first few) letters of a series of words that is used as an abbreviation to refer to that series of words. A few examples of acronyms are NYSE is the acronym for the New York Stock Exchange, DRIP is the acronym for Dividend ReInvestment Program, and QUIPS is the acronym for QUarterly Interest Preferred Securities.

Basis Point - One basis point equals 0.01%, with each full percentage point equaling 100 basis points.

Bond - Bonds are promissory notes issued by a corporation or government to its lenders. They are usually issued in multiples of $1,000 or $5,000, although $100 and $500 denominations are available. A bond is evidence of a debt on which the issuing company usually promises to pay the bondholder a specified amount of interest at intervals over a specified length of time, and to repay the original loan on the expiration date. A bond represents debt, therefore its holder is a creditor of the corporation and not a part owner, as the stockholder is.

Chartered Financial Analyst (CFA) - A professional designation given by the CFA Institute (formerly AIMR) that measures the competence and integrity of financial analysts. Candidates are required to pass three levels of exams covering areas such as accounting, economics, ethics, money management and security analysis.

Common Stock - Common stock are securities that represent an ownership interest in a corporation. If the company has also issued preferred stock, both common and preferred have ownership rights. Common stockholders assume the greater risk, but generally exercise the greater control and may gain the greater award in the form of dividends and capital appreciation.

Cumulative - The term cumulative refers to preferred stock dividends. When a dividend is cumulative, if the payment of any dividend is omitted, the omitted or unpaid dividend(s) is accrued and must be paid to the preferred holders before any dividends may be paid on the company's common stock.

Dividend - Dividends represent the distribution of the company's profits to shareholders and may be paid in cash or shares of stock. The specific amount of common stock dividends is decided by the Board of Directors on a periodic basis and are generally paid quarterly. Preferred stock dividends are paid in the amount and on the schedule specified in the security's IPO prospectus.

Exchange-Traded - This term simply means that a security is traded on a stock exchange such as the NYSE, NYSE Arca, NYSE Amex, Nasdaq, OTCBB, Pink Sheets or Other OTC markets.

Fee-only Financial Advisor - A fee-only financial advisor cannot receive compensation from a brokerage firm, a mutual fund company, an insurance company, or from any other source than the client. This means they represent the client and the client's interests when giving investment advice.

Initial Public Offering (IPO) - A security's initial public offering (IPO) is the first offering of that security on the stock markets. The sale must be accomplished in conjunction with a prospectus that defines the provisions of the security and the background and financial condition of the issuer. The new shares are sold via one or more underwriters which then sell the shares to the public.

Interest - Interest is the cost of borrowing money. Because bonds, debentures, notes, etc. represent a loan to a company, they receive interest based on the provisions of the prospectus.

Investment - The action or process of investing money for profit or material result.

Investment Grade Securities -  Investment grade securities are considered to be securities that are rated in one of the four highest rating categories of a nationally recognized rating agency (e.g., between AAA and BBB by Standard & Poor's Corporation and Fitch IBCA, Inc. or between Aaa and Baa by Moody's Investors Service, Inc.), or issued or guaranteed by the U.S. Government or one of its agencies or instrumentalities.

Market Capitalization - Market capitalization is the market value of a company, determined by multiplying the price of its stock by the number of shares outstanding.

Maturity or Maturity Date - The maturity date of a security is the date on which the debt will cease and the principal amount or face value of the security will be returned to the holder. Recently issued preferred and debt securities have maturity dates ranging from 30 to 100 years from the date of issue.

Municipal Bond - Municipal bonds are bonds generally issued by state governments, local governments, and special-purpose agencies of state and local governments. These securities offer interest income that is usually exempt from federal taxes and, in some cases, state and local taxes.

Mutual Fund - A mutual fund is a pool of stocks and/or bonds managed with a specific investment objective and strategy. Investors buy shares in the fund, not the individual securities, and the value of the fund shares goes up and down with the value of the underlying securities. Funds vary enormously in the assets they hold, the strategies they pursue and the management and transaction fees they charge.

NASDAQ - The Nasdaq Stock Market (NASDAQ) is a major national and international stock market that uses computers and telecommunications for the trading and surveillance of thousands of securities. The Nasdaq Stock Market is built on a system of competing Market Makers that list specific prices for the sale or purchase of securities.

NYSE - NYSE is the abbreviation or acronym for the New York Stock Exchange.

Preferred - The term preferred is used widely with fixed income securities and generally means that the security has precedence over the company's common stock in both the payment of dividends and upon liquidation. In other words, the company can not pay a common dividend unless all preferred dividends have been paid and are current. In terms of a liquidation or bankruptcy, the preferred shareholders must be completely paid the liquidation preference amount of their securities before any payments can be made to common stock shareholders.

Price/Earnings Ratio - A popular measure for comparing stocks selling at different prices in order to single out over- or under-valued issues.

Real Estate Investment Trust (REIT) - A real estate investment trust (REIT) is a company dedicated to owning and, in most cases, operating income-producing real estate, such as apartments, shopping centers, offices and warehouses. Some REITs also are engaged in financing real estate.

S&P - S&P is the abbreviation for Standard & Poor's, the credit rating and financial information company.

SEC - SEC is the acronym or abbreviation for the U.S. Securities and Exchange Commission.

Securities - A security is a fungible, negotiable instrument representing financial value. Securities are broadly categorized into debt securities (such as banknotes, bonds and debentures) and equity securities, e.g., common stocks; and derivative contracts, such as forwards, futures, options and swaps.

Ticker Symbol - A ticker symbol is a series if one to five letters used to identify a security whether on the trading floor, a web page, or a newspaper page.

Warrants - A warrant is an option issued by a company to buy a specified number of company shares at a specified exercise price.

Yield - Yield is the amount of money returned to investors on their investments and is also known as Rate of Return.