Investment and Finance

Interest rate risk is an increase in prevailing interest rates will cause fixed income securities held by a Mutual fund to decline in value. Longer term bonds are generally more sensitive to interest rate changes than shorter term bonds. Generally, the longer the average maturity of the bonds held by a mutual fund, the more the fund's share price will fluctuate in response to interest rate changes.

Foreign securities risk occurs because foreign securities are generally more volatile and less liquid than U.S. securities in part because of greater political and economic risks and less public information available about the foreign countries.
Issuers of foreign securities are generally not subject to the same degree of regulation as are the U.S. issuers.
The reporting and accounting and auditing standard of foreign countries may differ significantly from U.S. standards.

NAV is the value of a single share of a fund as reported by the fund through Nasdaq. Shares are sold to the public at NAV plus any sales charge and are redeemed at NAV less any redemption charges.
Each fund calculates NAV separately for each class. NAV is calculated by taking the current value of the funds total assets allocated to a specific share and subtracting the liabilities and expenses charged against that class and then dividing that amount by the total number of shares of that class outstanding.
The NAV of each fund is generally based on the market value of the securities held in the fund. If market value is not available then the fair value is used.
The fair value is determined in good faith by procedures approved by the Boards of Directors or Trustees of the Mutual fund.

These bonds refer to U.S. Government bonds. All U.S. government bonds are tax exempt on the state tax return. These bonds are tax deferred as well and earn interest for 30 years. You do not report the income until you turn the bonds in. They can be rolled into HH bonds. EE bonds are bought at half their face value.

HH U.S. government bonds are designed for people who want current income. The interest is paid semi-annually and is federally taxable. EE bond interest is tax deferred until cashed in.

The Expense ratio is the percentage of the assets that were spent to run a mutual fund as of the last annual statement. This includes expenses such as management and advisory fees, overhead costs and the 12b-1 distribution and advertising fees. The expense ratio does not include brokerage costs for trading the portfolio, although these are reported as a percentage of assets to the SEC by the funds in the Statement of Additional Information. The Statement of Additional Information is available to shareholders on request. Neither the expense ratio or the Statement of Additional Information includes the transaction costs of spreads, normally incurred in unlisted securities and foreign stocks. These two costs can add significantly to the reported expenses of a fund. The expense ratio is often termed as an Operating Expense Ratio.

Subscription Right is a privilege granted to owners of certain stocks to purchase newly issued securities in proportion to their holdings usually at prices below the current market price. Rights have a market value of their own and are actively traded. They are different from warrants in that they must be exercised within a relatively short period of time. "Ex-rights" in connection with the rights offering with a stock purchase means shares of stock that are trading without the rights attached. The Ex-rights date is the date on which a share of common stock begins trading "ex-rights", without the right.

"Execution" is the process of completing an order to buy or sell securities. Once a trade is executed, it is reported on a Confirmation Report. The settlement which is the payment and transfer of ownership, occurs in the U.S. between 1 day for mutual funds and 5 days with stocks after an order is executed.

Money markets are for borrowing and lending money for three years or less. The securities in a money market can be either U.S.government bonds, treasury bills or commercial paper from banks and companies. Money market demand accounts are accounts that pay interest based on short-term interest rates. A Money market fund is a mutual fund that invests only in short-term securities, such as commercial paper, bankers acceptances, repurchase agreements and government bills. The net asset value per share is maintained at $1.00. Such funds are not federally insured.