Investment and Finance

A Futures contract is an agreement to make or take delivery of a commodity at a specified Future time and price. The contract is transferable and can be traded like a security. Futures contracts were once limited to commodities, but are now available on financial instruments, currencies and indexes.

A mutual fund Load is a sales charge or commission, usually expressed as a percentage of the amount purchased, paid by the investor for the purchase or sale of certain mutual fund shares. It is considered an up-front charge to get into the fund.

The term Leverage in relation to securities is the principle of increasing return without increasing investment. Buying stock on margin is an example of leverage. In finance, it means the relationship of a firm's debt to its equity, as expressed in the Debt to Equity Ratio. If the company earns a return on the borrowed money greater than the cost of the debt it is successfully applying the principle of leverage.

Maturity value as it relates to securities is the amount an investor receives when a security is redeemed at maturity not including any periodic interest payments. This value usually equals the par value, although on zero coupon, compound interest and multiplier bonds, the principal amount of the security at issuance plus the accumulated investment return on the security is included.

Over the Counter is a market for securities that in most cases are not listed on one of the major stock exchanges. These securities are traded by dealers who act as principals rather than as agents. The over the counter market is the principal market for U.S. government and municipal bonds.

Power of Attorney is the legal right assigned by a person or institution upon another person to act and represent the original person. In the securities industry, a Limited Power of Attorney is given by a customer to a representative of a broker or dealer who would normally give a registered representative trading discretion over the customer's account. The power is limited in that neither securities nor funds may be withdrawn from the account. In the securities industry, an Unlimited Power of Attorney given by a customer to a representative of a broker or dealer would normally give a registered representative full discretion over all transactions in the customer's account.

No Load Mutual Funds are Mutual Funds offered directly to the public at net asset value with no sales charge. Service and distribution fees commonly referred to as "12b-1 Fees" may also be charged by these funds.

A Prospectus is a document that contains important material information for an impending offer of securities. It contains most of the information included in the registration statement. It is used for solicitation purposes by the issuer and underwriters.

A securities Proxy is a formal authorization power of attorney from a stockholder that empowers someone else to vote on his or her behalf.