Category: Investor Definitions

One one-hundredth (.01) of a percentage point. For example, eight percent is equal to 800 basis points.

A company may decide to declare bankruptcy when it suffers from crippling debt.  Federal bankruptcy laws govern how the assets and business of a company will be used to clear its debts. There are two types of bankruptcy available to companies (Chapter 7 and Chapter 11), but regardless of the type of bankruptcy a company… Continue reading BANKRUPTCY FOR A PUBLIC COMPANY

Filing for protection under the federal bankruptcy laws can help companies make plans to repay their debts.  A bankrupt company might use Chapter 11 of the Bankruptcy Code to reorganize its business and try to become profitable again.  During the period of the bankruptcy proceeding, management may continue to run the day-to-day business operations but… Continue reading BANKRUPTCY

The SEC routinely receives questions and complaints from investors about the investment products they have purchased. But not all investments are considered securities under the securities laws. For example, some products, such as notes that have been issued by a bank, may not be securities and are regulated by the banking authorities. If you have… Continue reading BANKING REGULATORS

A sales charge, also known as a “deferred sales charge,” investors pay when they redeem (sell) mutual fund shares. Funds generally use these to compensate brokers.

Investments that have similar characteristics. The three main asset classes are stocks, bonds, and cash.

Asset allocation involves dividing your investments among different categories, such as stocks, bonds, and cash.

In the over-the-counter market, the term “ask” refers to the lowest price at which a market maker will sell a specific number of shares.

The term “bid” refers to the highest price a buyer will pay to buy a specified number of shares of a stock at any given time.  The term “ask”  refers to the lowest price at which a seller will sell the stock. The bid price will almost always be lower than the ask or “offer,” price.… Continue reading ASK PRICE

Arbitration, a form of alternative dispute resolution, is a technique for the resolution of disputes outside the court system.  In arbitration, the parties agree to have their dispute heard by one or more arbitrators and agree to be bound by their decision. Most account agreements between broker-dealers and their customers have arbitration clauses.  The arbitration… Continue reading ARBITRATION AND MEDIATION