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Bad Debt
Open account balance or loan receivable that has proven uncollectible and is written off.


Balance of Payments

System of recording all of a country's economic transactions with the rest of the world during a particular time period.


Balance of Trade

Net difference over a period of time between the value of a country's imports and exports of merchandise.


Balance Sheet

Financial report showing the status of a company's assets, liabilities, and owners' equity on a given day.


Basis point

One one-hundredth of 1 percent. Yield differences among fixed-income securities are stated in basis points


Bear Market

Prolonged period of falling prices.


Bearer security

A security that has no identification as to owner. It is presumed to be owned by the person who holds it. Bearer securities are freely negotiable, since ownership can be quickly transferred from seller to buyer by delivery of the instrument.


Beta
Coefficient measuring a stock's relative volatility. The beta is the covariance of a stock in relation to the rest of the stock market.


Beta
measure of the relative volatility of a stock or other security as compared to the volatility of the entire market (usually measured for a benchmark index). A beta above 1.0 shows greater volatility than the overall market, while betas below 1.0 are less volatile.


Bid

The price at which a buyer will purchase a security.


Bid Price
The price at which a market-maker is willing to purchase a specified quantity of a particular security.


Blue Chip

Common stock of a nationally known company that has a long record of profit growth and dividend payment and a reputation for quality management, products, and services.


Board of Directors

Group of individuals elected, usually at an annual meeting, by the shareholders of a corporation and empowered to carry out certain tasks as spelled out in the corporation's charter.


Bond
Any interest-bearing or discounted government or corporate security that obligates the issuer to pay the bondholder a specified sum of money, usually at specific intervals, and to repay the principal amount of the loan at maturity.


Bond Ratings

An indicator of the creditworthiness of specific bond issues. These ratings are often interpreted as an indication of the likelihood of default on the part of the respective bond issuers. Bonds with the smallest default probability are rated AAA (or Aaa).


Bonus Issue

Also known as a capitalization or scrip issue. This is when a company issues free shares to a company's existing shareholders. No money changes hands and the share price falls pro rata. This is usually used as an exercise to make the shares more marketable.


Book-entry
A method of recording and transferring ownership of securities electronically, eliminating the need for physical certificates.


Bottom-Up Approach

An investment strategy that focuses on individual stocks, rather than general market trends. It assumes strong companies can perform well independent of the market environment.


Broker
Person who acts as an intermediary between a buyer and seller, usually charging a commission.

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Budget
Estimate of revenue and expenditure for a specified period.