| Term |  | Definition |
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| Market Risk | | The potential for loss of asset value faced by short-term investors (such as investors in the stock market). Also called short-term risk. |
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| Market Value | | The price an asset will bring on the open market. The market value of a stock listed on an exchange (such as the New York Stock Exchange) is the most recently reported sale price of that equity. With over-the-counter stocks, it refers to the current bid and ask prices. |
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| Maturity | | With bonds and other debts, maturity is the point at which payment in full must be made to the lender. With certificates of deposit and other similar vehicles, maturity refers to the end of the account's designated term. For instance, a six-month CD reaches maturity at the end of six months, at which time the funds may be withdrawn without penalty. |
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| Medigap Insurance | | A type of health insurance policy for Medicare recipients that is designed to cover some portion of the medical costs not covered by Medicare. |
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| Minimum Payment | | With respect to credit cards and other revolving charge accounts, the minimum payment is the lowest amount you can pay on your monthly bill without being subjected to a penalty. This amount usually reflects the month's interest charge plus some portion of the principal, typically detailed in the account holder agreement. |
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| Money Market Fund | | A type of mutual fund based on money markets. |
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| Money Markets | | Investment vehicle based on the short-term debt market. |
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| Mortgage-Backed Securities | | Investment certificates based on mortgages, like those issued by the Government National Mortgage Association ("Ginnie Mae") or the Federal Home Loan Mortgage Corporation ("Freddie Mac"). |
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| Mutual Fund | | A common type of investment. Mutual fund managers bring together capital from a large group of individuals and invest it in a broad range of stocks, bonds, and other securities, with earnings goals typically based on some broadly accepted standard, such as the Dow Jones Industrial Average. There are many different types of Mutual Funds, mostly defined in terms of the securities upon which they are based. These include Stock Funds, Bond Funds, Money Market Funds, and many others. |
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| Net Income | | An individual's (or a company's) gross income minus expenses. Income tax is calculated on the basis of net income. |
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| Notarize | | A notary public, a person licensed by the state to perform this service, serves as a witness to the signing of a document. |
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| Note | | A type of bond that reaches maturity in 1 to 10 years. |
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| Options | | One of the most common types of derivatives. Contracts that give the investor the right to buy ("call") or sell ("put") at any point between when the contract is established and when it expires. The European version of option establishes a fixed date on which the "call" or "put" must be made. |
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| Over-The-Counter Stocks | | Stocks not sold on a stock exchange, but rather through broker-to-broker transactions. |
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| Passbook Savings Account | | A savings vehicle traditionally employed by community banks. The account owner is given a passbook - a small, portable ledger - in which all account transactions are recorded, including deposits, withdrawals, and accrued interest. |
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| Pension Plan | | "Qualified" retirement plans, plans that are in compliance with Federal law and, therefore, are granted certain tax advantages. Pension plans may be established by employers (both private and public), labor unions, and other organizations. |
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| Preferred Stock | | A type of stock that pays a fixed amount in dividends, though that amount is guaranteed. Holders of preferred stock receive their dividends before any are paid out to common stock holders, and receive a share of remaining assets ahead of common stock holders when the company is liquidated. |
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| Principal | | With respect to savings, this is the initial amount a person provides for an investment. Principal also refers to the amount a borrower owes on a loan ("outstanding balance") minus future interest. |
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| Qualified Plan | | A pension plan that complies with all relevant federal statutes, enabling the plan provider to take advantage of certain tax benefits. |
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| Renewability | | Renewability is a feature available on many term life insurance policies that allows the policy owner to renew coverage at the end of the policy term without having to answer health questions or undergo a medical exam. This feature generally carries an age limit. |
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| Retirement Funding Options | | Financial instruments designed for retirement savings take a number of different forms. The most common types are employee-sponsored savings and investment vehicles, such as 401(k) plans, and Individual Retirement Accounts (IRAs). |
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| Rider | | Additions or amendments to a contract, such as a life insurance policy. |
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| Risk | | When it comes to investing, risk refers to the potential for loss of asset value. There are two common types of investment risk: long term and short term. |
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