Financial Terms Related To Fund

Financial Terms related to Fund
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FUND
12b 1 funds
• Mutual funds that do not charge an upfront or back-end commission, but instead
take out up to 1.25% of average daily fund assets each year to cover the costs of
selling and marketing shares, an arrangement allowed by the SEC's Rule 12b-I
(passed in 1980).
Advanced refunding
• Is the technique of replacing one bond issue by another. This typically occurs when
a municipality can borrow at more favorable terms than the outstanding issue. The
new issue's proceeds are used to purchase government obligations which are held
in escrow. The income and/or appreciation of these government securities is then
used to service the outstanding debt. The escrow may be held until the first call date
or maturity of the initial bond issue. If the escrowed funds retire the original issue at
the first call date then the issue is pre-refunded. This retirement and replacement
process of debt is also known as defeasance.
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Aggressive funding strategy
• A funding strategy under which the firm finances its seasonal needs, and possibly
some of its permanent needs, with short-term debt and its permanent needs with
long-term debt.
Annual fund operating expenses
• For investment companies, the management fee and other expenses, including the
expenses for maintaining shareholder records, providing shareholders with financial
statements, and providing custodial and accounting services. For 12b-1 funds,

selling and marketing costs are included.
Asset allocation fund
• A Mutual Fund that splits its investment assets among stocks, bonds, and other
vehicles in an attempt to provide a consistent return for the investor.
Back end loan fund
• A mutual fund that charges investors a fee to sell (redeem) shares often is ranging
from 4% to 6%. Some back-end load funds impose a full commission if the shares
are redeemed within a designated time, such as one year. The commission
decreases the longer the investor holds the shares. The formal name for the back-
end load is the contingent deferred sales charge, or CDSC.
Balanced fund
• A fund that invests in both stocks and bonds with the goal of reducing risk by
investing in different markets.
• An investment company that invests in stocks and bonds. The same as a balanced
mutual fund.
• Are mutual funds that invest in both stocks and bonds. The stocks can be both
common and preferred. A primary objective is to balance income and growth.
• A Mutual Fund whose stated investment policy is to have at all times some portion
of its investment assets in bonds and preferred stock, as well as in common stock.
This is an attempt to provide both growth and income.
Balanced mutual fund
• This is a fund that buys common stock, preferred stock and bonds. The same as a
balanced fund.
Beta equation mutual funds

• The beta of a fund is determined as follows: [(n) (sum of (xy)) ]-[ (sum of x) (sum of
y)] [(n) (sum of (xx)) ]-[ (sum of x) (sum of x)] where: n = # of observations (36
months) x = rate of return for the S&P 500 Index y = rate of return for the fund.
Beta mutual funds
• The measure of a fund's or stocks risk in relation to the market. A beta of 0.7
means the fund's total return is likely to move up or down 70% of the market change;
1.3 means total return is likely to move up or down 30% more than the market. Beta
is referred to as an index of the systematic risk due to general market conditions that
cannot be diversified away.
Bond arbitrage hedge funds
• Try to capture interest rate differentials or spreads due to mispricing or better

financing than general market participants can attain. Sometimes, there can be a
yield pickup due to convergence between two instruments, a pricing discrepancy
due to inefficient evaluations of senior and junior credit risks, or relative value
differences.
Bond fund
• A fund that holds municipal, corporate, and/or government bonds.
• Are mutual funds that invest in credit instruments. There can be distinctions, such
as, treasury, international, sovereign, mortgage backed, investment grade corporate
and high yield or junk bonds.
• A mutual fund whose investment objective is to provide stable income with a

minimal capital risk. It invests in income-producing instruments, which may include
corporate, government or municipal bonds. See also: Mutual Fund.
Bond refunding decision
• The decision facing firms, when bond interest rates drop, whether to refund
(refinance) existing bonds with new bonds at the lower interest rate.

Cash refund annuity
• A type of refund annuity under which the refund is paid in a lump sum. See refund
annuity and installment refund annuity.
Closed end fund
• See Investment Trust.
• An investment company that sells shares like any other corporation and usually
does not redeem its shares. A publicly traded fund sold on stock exchanges or over
the counter that may trade above or below its net asset value. Related: Open-end
fund.
Closed end investment company or fund
• Is an investment vehicle that issues shares in a fashion similar to other

corporations. The number of shares outstanding is relatively fixed unlike open end
investment funds which tend to have variable shares outstanding. Closed End
shares can trade at a premium or discount to the net asset value.
Commodity funds
• Are investment vehicles that invest in futures and options on futures. Commodities
can include the tradition grains, metals, and livestock as well as stock indices,
currencies, and other financials.
Conservative funding strategy
• A funding strategy under which the firm finances both its seasonal and its
permanent requirements with long-term debt.
Convertible securities hedge funds
• Generally look to purchase the bonds or preferred securities and sell common
shares against these long positions. The intent is to hedge interest or dividend
paying securities with low or no dividend common shares. In the event of a default
the bonds and other securities have priority to the common shares. Also, the bonds

or preferred stocks usually generate positive cash flows whereas the short positions
are generally not responsible for dividend payments. Therefore the fund should have
a positive cash flow and protected by relative seniority position in corporate
securities. These funds also use warrants and options as portfolio instruments.
Cost of funds
• Interest rate associated with borrowing money.
Cost of funds index
• Is a benchmark used for resetting the coupon rate on an adjustable rate mortgage.
Frequently, this is based on the cost of the 11th District Federal Home Loan
Bankfunds. This district includes Arizona, California and Nevada.
Currencies and major foreign market hedge funds
• Invest in securities and derivatives which go across borders. These funds try to
capitalize on interest rate differentials between currencies, varying investment
climates for different countries, relative volatilities in equity or credit markets, and
variations of the other hedge fund themes.
Diversified common stock fund
• A mutual fund that invests its assets in a wide range of Common Stocks. The
fund's objectives may be growth, income, or a combination of both. See also: Growth
Fund; Mutual Fund.
Dividend yield funds
• Indicated yield represents return on a share of a mutual fund held over the past
12months. Assumes fund was purchased 1 year ago. Reflects effect of sales
charges (at current rates), but not redemption charges.
Emerging markets funds
• Are investment vehicles, either open-end or closed-end, which invest in countries

whose economies are becoming more capitalistic. Often this emergence is from
socialistic, communistic or other tightly controlled economic systems. There are also
Hedge Funds which participate in emerging markets.
Emerging markets hedge funds
• Narrow their investment horizon to issues in markets which are not as mature or
liquid as the previous group. However, these less developed markets are believed to
offer greater risk adjusted rates of return. A general perspective is akin to getting in
on the ground floor.
Employee stock fund
• A firm-sponsored program that enables employees to purchase shares of the firm's

common stock on a preferential basis.
Endowment funds
• Investment funds established for the support of institutions such as colleges,

private schools, museums, hospitals, and foundations. The investment income may
be used for the operation of the institution and for capital expenditures.
Equity hedge funds
• Try to long position themselves in stronger or outperform issues while selling short
weaker or poorer prospect securities. Variations of this are: trading large cap issues
versus small caps; using derivatives for enhanced returns; specializing in program
trading; or using leverage to magnify returns.
Exchange traded fund
• Abbreviated ETS. An open-ended Mutual Fund that can be continuously traded

throughout the day. ETFs attempt to replicate the changes of an index of a specific
financial market, so active management is unnecessary. See also: Index Fund.
External funds required plug figure

• Under the judgmental approach for developing a pro forma balance sheet, the
amount of external financing needed to bring the statement into balance.
Fed funds
• See federal funds.
Federal funds
• Non-interest bearing deposits held in reserve for depository institutions at their

district Federal Reserve Bank. Also, excess reserves lent by banks to each other.
• Loan transactions between commercial banks in which the Federal Reserve banks
become involved.
• (1) Non-interest-bearing deposits held by member banks at the Federal Reserve.

(2) Used to denote "immediately available" funds in the clearing sense.
Federal funds market
• The market where banks can borrow or lend reserves, allowing banks temporarily
short of their required reserves to borrow reserves from banks that have excess
reserves.
Federal funds purchased funds
• This term refers to interbank borrowings or the amounts the banks borrow from
each other. These liabilities are not subject to reserve requirements or deposit
insurance. They are short- term uncollateralized loans. More than 90% has a
maturity of 1 day. Costs reflect supply and demand. Subject to large volatility on the
second Tuesday or Wednesday of the reserve maintenance period.
Federal funds rate
• This is the interest rate that banks with excess reserves at a Federal Reserve
district bank charge other banks that need overnight loans. The Fed Funds rate, as it
is called, often points to the direction of U.S. interest rates.
• The rate of interest charged by banks for short-term OVERNIGHT to other banks.

The Federal Reserve Bank through open-market operations establishes this rate.
• The rate of interest at which Fed funds are traded. This rate is currently pegged by
the Federal Reserve through open market operations.
• The interest rate charged by one institution lending federal funds to another.
Forward fed funds
• Fed funds traded for future delivery.
• Fed funds traded for future delivery.
Fund family
• Set of funds with different investment objectives offered by one management

company. In many cases, investors may move their assets from one fund to another
within the family at little or no cost.
Fund manager
• See Portfolio Manager.
Fundamental analysis
• a) A method of evaluating securities by attempting to measure the intrinsic value of

a particular stock. The method is based on fundamental factors, such as revenues,
earnings, future growth, return on equity, profit margins, and so on, to determine a
company's underlying value and potential for future growth. Fundamental analysts
study the overall economy, industry conditions and the financial condition and
management of particular companies. See also: Technical Analysis; b) A method of
security analysis based on fundamental facts found in a company's balance sheet
and income statement e.g. sales, earnings, dividends. These past records are
examined to attempt to predict the company's future growth of sales and earnings as
well as stock price growth, for example.
• Security analysis that seeks to detect missvalued securities by an analysis of the

firm's business prospects. Research analysis often focuses on earnings, dividend
prospects, expectations for future interest rates, and risk evaluation of the firm.
• Is the research approach which considers economic and monetary factors. For
securities it evaluates the company as well as the industry and economy. For
commodities, it looks at supply and demand in terms of actual usage, production and
inventories among other things.
Fundamental beta
• The product of a statistical model to predict the fundamental risk of a security using
not only price data but other market-related and financial data.
Fundamental descriptors
• In the model for calculating fundamental beta, ratios in risk indexes other than
market variability, which rely on financial data other than price data.
Funded debt
• Debt maturing after more than one year.
Funding ratio
• The ratio of a pension plan's assets to its liabilities.
Funding risk
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• Related: interest rate risk
Funds from operations
• Abbreviated FFO. Used by Real Estate Investment Trusts (REITS) to define the
cash flow from their operations. It is calculated by adding Depreciation and
Amortization expenses to earnings, and can be represented as Funds From
Operations Per Share (FFO/S). FFO/S should be used in lieu of EPS when
evaluating REITs and other similar investment trusts.
• Abbreviated FFO. Used by real estate and other investment trusts to define the

cash flow from trust operations. It is earnings with depreciation and amortization
added back. A similar term increasingly used is Funds Available for Distribution
(FAD), which is FFO less capital investments in trust property and the amortization
of mortgages.
Global fund
• A mutual fund that can invest anywhere in the world, including the U.S.
Good funds
• A market expression for immediately available money, that is, Fed funds.
Growth fund
• Are mutual funds that invest in stocks of companies which are expected to
outperform most other firms. This out performance is predicated on faster growth
than comparable firms in the same industry. Also, these industries can be those
which are expected to experience growth rates in excess of an average.
• A diversified common stock fund that has capital appreciation as its primary goal. It
invests in companies that reinvest most of their earnings for expansion, research, or
development. See also: Diversified Common Stock Fund; Mutual Fund.
Growth fund or growth stocks

• A fund that invests in stocks with prices that are above average in relation to their
current earnings because they are considered to have above-average growth
prospects.
Hedge fund
• Are alternative investment vehicles. Hedge fund trading styles are quite variable
from one fund to another. Some are Macro Funds which place positions on
movements in broad economic groups such as currencies, credit, equity and
derivatives markets. Others are more focused on narrow Specialties, such as

Convertible Securities or Mortgage Backed Securities. These funds operate as
limited partnerships. There are limitations on the number of partners, minimum
financial standards and commitments, and liabilities.
• A fund that may employ a variety of techniques to enhance returns, such as both
buying and shorting stocks based on a valuation model.
Hedge fund types
• Are numerous. They reflect different investment styles, product lines, and
geographic regions. Among the more common varieties are:
 Bond Arbitrage
 Convertible Securities
 Currencies and Major Foreign Markets
 Emerging Markets
 Equities
 Macro or Mixed Products and Strategies
 Mortgage Backed Securities
 Stocks and Bonds.
As each name suggests, the hedge fund focuses on a core approach. Actual
programs are complex. Some funds may deploy one or more of these approaches at
any time. Some maybe restricted to one class of securities or markets. The degree
of leverage varies between programs and managers.
High coupon bond refunding
• Refunding of a high-coupon bond with a new, lower coupon bond.
Income fund
• A mutual fund that seeks to provide stable current income by investing in securities

that pay interest or dividends. See also: Mutual Fund.
• A mutual fund providing for liberal current income from investments.
Index fund
• Are investment vehicles such as mutual funds which are based on a specified
benchmark or index. Among the more popular indices are: S&P 500, S&P 100,
EAFE, targeted average maturity dates, and various bond indices such as the
Lehman Aggregate Bond Index.
• A collective fund that attempts to replicate the movements and characteristics of

the Index of a certain financial market. There are many methods of replication, like
holding securities in the same proportion as the index.
• Investment fund designed to match the returns on a stock market index.
Industry fund
• See Sector Fund.
Installment refund annuity
• A type of refund annuity under which the refund is payable in a series of periodic
payments. See refund annuity and cash refund annuity.
Interest impact on sinking fund factor

• Is calculated by the following formula:
Amount = ___i___ z(1+i)t-1 where i is the interest rate and t is expressed decimally
(.05 for 5 percent). Also, t is the time and .5 refers to 1/2 of a year, 2 equals 2 years
and 7.75 equals 7 3/4 years.
International fund
• A mutual fund that can invest only outside the United States.
International monetary fund

• An organization founded in 1944 to oversee exchange arrangements of member
countries and to lend foreign currency reserves to members with short-term balance
of payment problems.
Liability funding strategies
• Investment strategies that select assets so that cash flows will equal or exceed the
client's obligations.
Life income with refund annuity
• An annuity that pays benefits throughout the annuitant s lifetime and guarantees
that total benefit payments will at least equal the purchase price of the annuity.
Load fund
• A mutual fund with shares sold at a price including a large sales charge -- typically
4% to 8% of the net amount indicated. Some no-load funds have distribution fees
permitted by article 12b-1 of the Investment Company Act; these are typically 0.
25%. A true no-load fund has neither a sales charge nor Freddie Mac program, the
aggregation that the fund purchaser receives some investment advice or other
service worthy of the charge.
Low coupon bond refunding
• Refunding of a low coupon bond with a new, higher coupon bond.

Macro hedge funds
• Are those which are more benchmark or index oriented. They tend to be top-down
in approach rather than bottom-up. These Macro Hedge Funds employ strategies
using actual securities, commodities, currencies, futures, and derivatives. They also
use various degrees of leverage to try to outperform the market or benchmark
indices.
Match fund
• A bank is said to match fund a loan or other asset when it does so by buying

(taking) a deposit of the same maturity. The term is commonly used in the
Euromarket.
• A bank is said to match fund a loan or other asset when it does so by buying
(taking) a deposit of the same maturity. The term is commonly used in the
Euromarket.
Matched funding
• Is an asset and liability management technique which offsets fund sources to fund
uses.
Money market fund
• A mutual fund that invests only in short term securities, such as bankers'
acceptances, commercial paper, repurchase agreements and government bills. The
net asset value per share is maintained at $1. 00. Such funds are not federally
insured, although the portfolio may consist of guaranteed securities and/or the fund
may have private insurance protection.
• Mutual fund that invests solely in money market instruments.
• A Mutual Fund that invests in short-term debt instruments. The fund's objective is
to earn interest while maintaining a stable net asset value of $1.00 per share.
Generally sold with no load, the fund may also offer draft-writing privileges and low
opening investments.
• Are mutual funds which invest in short-term instruments such as treasury bills,
commercial paper, and asset backed securities (ABS). Broadly defined, these
investments have maturities, and for some, durations less than a year. Often, these
funds try to keep the average maturity or quantitative duration within 2-3 months.
Also, these funds try to maintain a net asset value (NAV) of $1 per share. However,
this price level is not guaranteed and there have been cases where it was broken. In
the latter case, it is known as breaking a buck.

Money market mutual funds
• Professionally managed portfolios of various popular marketable securities, having

instant liquidity, competitive yields, and low transaction costs.
Mortgage backed securities hedge funds
• Generally focus on being long the actual mortgage backed securities and short
some proxy such as TBAs (To Be Announced), futures, Treasuries or derivatives.
These funds typically purchase highly rated agency paper, CMOs, or REMICs and
finance the positions in the repo market. This financing can often result in gross
asset, principal or market values of $10 billion for an initial cash/equity position of $1
billion dollars. In some respects it is comparable to buying a house with borrowed
money. It is the borrowing which magnifies the performance. If the market quickly
jumps 10 percent higher, then the buyer doubled his investment. Here, it would be
10 percent of $10 billion or a $1billion profit against an initial capitalization of $1
billion. However, if the market declines by 10 percent, then the original investor is
out. If the market went down 25 percent, then the original investor is gone but the
lending institution (bank or brokerage firm) is on the-hook for $1.5 billion. Effectively,
this is what has been recently occurring in the financial industry. The lenders are
becoming defacto new investors, holding losing positions, because of defaults.
Municipal bond fund

• A Mutual Fund that invests in Municipal Bonds and operates either as a unit
investment trust or as an open-end fund. The fund's objective is to maximize
federally tax-exempt income.
Mutual fund
• Mutual funds are pools of money that are managed by an investment company.
They offer investors a variety of goals, depending on the fund and its investment
charter. Some funds, for example, seek to generate income on a regular basis.
Others seek to preserve an investor's money. Still others seek to invest in

companies that are growing at a rapid pace. Funds can impose a sales charge, or
load, on investors when they buy or sell shares. Many funds these days are no load
and impose no sales charge. Mutual funds are investment companies regulated by
the Investment Company Act of 1940. Related: open-end fund, closed-end fund.
• An investment company that pools funds from individuals to by securities to meet

stated investment objectives.
• Also known as Open-End Investment Company or an Open-End Management

Company. An investment company that continuously offers new equity shares in an
actively managed portfolio of securities. All shareholders participate in the gains or
losses of the fund. Shares are issued and redeemed as per demand, and the fund's
Net Asset Value per share (NAV) is determined each day. The shares are
redeemable on any business day at the Net Asset Value. Each mutual fund's
portfolio is invested to match the objective stated in the prospectus. See also: Asset
Allocation Fund; Balanced Fund.
• Is an investment company which the number of shares outstanding varies

according to demand. If investors seek to own more shares, the fund will sell new
ones. If existing shareholders seek to reduce their holdings then the fund will
purchase them at the Net Asset Value. In recent years, there have been new
provisions which can slow down the redemption process. It had been the case that
fund shares were to be redeemed immediately on demand. This type of Investment

Company is also known as an Open End Fund because the number of shares
outstanding can vary widely from day-to-day. Compare to Closed End Fund.
Mutual fund theorem
• A result associated with the CAPM, asserting that investors will choose to invest
their entire risky portfolio in a market-index or mutual fund.
Mutual funds

• Investment companies that receive cash from individuals for investment in both
money and capital market securities.
Net advantage of refunding
• The net present value of the savings from a refunding.
No load fund
• A mutual fund that does not impose a sales commission. Related: load fund
• Mutual funds that do not charge any sales load.
• A mutual fund whose shares are sold without a commission or sales charge. The
shares are distributed directly by the investment company. See also mutual fund; net
asset value.
No load mutual fund
• An open-end investment company, shares of which are sold without a sales

charge. There can be other distribution charges, however, such as Article 12B-1
fees. A true no load fund will have neither a sales charge nor a distribution fee.
Nonrefundable
• Not permitted, under the terms of indenture, to be refundable.
Objective mutual funds

• The fund's investment strategy category as stated in the prospectus. There are
more than 20 standardized categories.
Open end fund
• Also called a mutual fund, an investment company that stands ready to sell new
shares to the public and to redeem its outstanding shares on demand at a price
equal to an appropriate share of the value of its portfolio, which is computed daily at
the close of the market.
Overfunded pension plan

• A pension plan that has a positive surplus (i.e., assets exceed liabilities).
Pension funds
• Investment entities established by employers to provide a pension (retirement

income) to employees during their retirement.
Permanent funding requirement
• A constant investment in operating assets resulting from constant sales over time.
Financing requirements for the firm's fixed assets plus the permanent portion of the
firm's current assets; these requirements remain unchanged over the year.
Pre refunded
• See Advanced Refunding.
Prerefunded bond
• Refunded bond.
Private export funding corporation
• Abbreviated PEFCO. Company that mobilizes private capital for financing the
export of big-ticket items by U.S. firms by purchasing at fixed interest rates the
medium- to long-term debt obligations of importers of U.S. products.
Purchase fund
• Resembles a sinking fund except that money is used only to purchase bonds if
they are selling below their par value.
Pure index fund
• A portfolio that is managed so as to perfectly replicate the performance of the

market portfolio.
Refund annuity

• A life annuity contract that guarantees total benefit payments will at least equal the
purchase price of the annuity. See also cash refund annuity and installment refund
annuity.
Refundable
• Eligible for refunding under the terms of indenture.
Refunded bond
• Also called a prerefunded bond, one that originally may have been issued as a
general obligation or revenue bond but that is now secured by an escrow fund
consisting entirely of direct U.S. government obligations that are sufficient for paying
the bondholders.
Refunding
• Redemption of securities by funds raised through the sale of a new issue.
• Using money from the sale of a new offering to retire an outstanding bond issue at
maturity.
• The redemption of a bond with proceeds received from issuing lower-cost debt
obligations ranking equal to or superior to the debt to be redeemed.
Regional fund
• A mutual fund that invests in a specific geographical area overseas, such as Asia
or Europe.
Revenue fund
• A fund accounting for all revenues from an enterprise financed by a municipal

revenue bond.
Seasonal funding requirement
• An investment in operating assets that varies over time as a result of cyclical sales.
Financing requirements for temporary current assets, which vary over the course of

an operating year.
Sector fund
• Also known as Industry Fund; Specialized Fund. A Mutual Fund whose investment
objective is to capitalize on the return potential provided by investing primarily in a
particular industry or sector of the economy.
Single country fund
• A mutual fund that invests in individual countries outside the United States.
Sinking fund
• Indentures on corporate issues often require that the issuer make annual payments
to a sinking fund, the proceeds of which are used to retire randomly selected bonds
in the issue.
Sinking fund requirement
• A restrictive provision that is often included in a bond indenture providing for the
systematic retirement of bonds prior to their maturity.
• A condition included in some corporate bond indentures that requires the issuer to
retire a specified portion of debt each year. Any principal due at maturity is called the
balloon maturity.
Specialized fund
• See Sector Fund.
Staggered funding
• A way to play the float by depositing a certain proportion of a payroll or payment

into the firm's checking account on several successive days following the actual
issuance of checks.
Stocks and bonds hedge funds
• Are combinations which are analogous to Balanced Mutual Funds but, depending

on the underlying charter, can use higher degrees of leverage or derivatives.
Stopping curve refunding rate
• A refunding rate that falls on the stopping curve.
Surplus funds
• Cash flow available after payment of taxes in the project.
Target funds
• Are mutual funds which invest in specified categories, such as, average maturities
or durations.
Term fed funds
• Fed funds sold for a period of time longer than overnight.
• Fed Funds sold for a period of time longer than overnight.
Two fund separation theorem
• The theoretical result that all investors will hold a combination of the risk-free asset
and the market portfolio.
Underfunded pension plan
• A pension plan that has a negative surplus (i.e., liabilities exceed assets).
Unfunded debt
• Debt maturing within one year (short-term debt). See: funded debt.
Unlimited funds
• The financial situation in which a firm is able to accept all independent projects that
provides an acceptable return.
Value fund or value stocks
• A fund that invests in stocks with prices that are below average in relation to their
current earnings because they are considered to have below-average growth

prospects.
Value funds
• Are mutual or hedge funds which invest in apparently undervalued companies.

These companies on a quantitative basis may exhibit lower-than-average ratios,
such as price/earnings, price/sales, or book value. Nevertheless, these stocks are
viewed by participants as being bargain priced or value attractive.
Vulture funds
• Are investment vehicles which focus on acquiring properties which may be

available due to financial distress. The properties themselves may not be damaged
but the principal owners may be in immediate need of cash. Usually, the term
describes investment activities in real estate or closely held companies which may
not enjoy the liquidity benefits of an exchange listing.

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Aggressive funding strategy

Annual fund operating expenses

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Asset allocation fund

Back end loan fund

Balanced mutual fund

Beta equation mutual funds

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Beta mutual funds

Bond arbitrage hedge funds

• Try to capture interest rate differentials or spreads due to mispricing or better

• A fund that holds municipal, corporate, and/or government bonds.

and high yield or junk bonds.

• A mutual fund whose investment objective is to provide stable income with a

Bond refunding decision

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Closed end fund

• See Investment Trust.

Closed end investment company or fund

• Is an investment vehicle that issues shares in a fashion similar to other

Conservative funding strategy

Convertible securities hedge funds

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• Interest rate associated with borrowing money.

Cost of funds index

Currencies and major foreign market hedge funds

Diversified common stock fund

Fund; Mutual Fund.

Dividend yield funds

Emerging markets funds

• Are investment vehicles, either open-end or closed-end, which invest in countries

Find thousands of financial terms at www.ftpall.com

Emerging markets hedge funds

Employee stock fund

• A firm-sponsored program that enables employees to purchase shares of the firm's

• Investment funds established for the support of institutions such as colleges,

Equity hedge funds

Exchange traded fund

• Abbreviated ETS. An open-ended Mutual Fund that can be continuously traded

External funds required plug figure

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• See federal funds.

• Non-interest bearing deposits held in reserve for depository institutions at their

• (1) Non-interest-bearing deposits held by member banks at the Federal Reserve.

Federal funds market

Federal funds purchased funds

Federal funds rate

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Forward fed funds

• Fed funds traded for future delivery.

• Fed funds traded for future delivery.

• Set of funds with different investment objectives offered by one management

• See Portfolio Manager.

• a) A method of evaluating securities by attempting to measure the intrinsic value of

• Security analysis that seeks to detect missvalued securities by an analysis of the

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• Debt maturing after more than one year.

• The ratio of a pension plan's assets to its liabilities.

• Related: interest rate risk