Balanced funds

Funds that invest in both stocks and bonds in substantial amounts.

Basis point

Measurement used to quote bonds. One basis point is equal to 0.01%, or one one-hundredth of one percent. 100 basis points is equal to 1%, whereas 50 basis points would equal one half percent, or 0.50%.

Basket

A unit or group of securities. ETFs are some times referred to as baskets.

Benchmark

A standard index used for measuring the performance of an investment. The goal of most money managers and investors is to outperform their respective benchmark.

Benchmark index

An index that correlates with a fund, used to measure a fund manager's performance.

Beta

A measure of volatility. Beta is a fund's volatility measured against the benchmark index, which has a set beta of 1. Therefore, if a fund has a Beta higher than 1, it is moving up and down more than the rest of the market. A fund with a Beta of 2 will move up 20 percent when the market rises 10 percent.

Beta

A volatility measurement of a fund or stock versus the Standard & Poor's 500 Stock Index. A fund or stock with a higher beta than the Standard & Poor's 500 will rise or fall greater. To the contrary, a stock or a fund with a low beta will rise or fall less.

Bid price

Highest price that any buyer is willing to pay for a security at any given time.

Bond

A debt instrument issued by corporations and governments to raise capital. Interest on the outstanding debt is paid to bondholders at specific intervals, with the principal amount of the loan paid on the bond maturity date.

Breakpoints

Mutual funds with front-end loads, or a sales charge, enable investors to reduce front-end sales charges as the amount of that investment increases to certain levels called "breakpoints". Each prospectus will have details on the breakpoints used to reduce the front-end sales charge.