Category: Financial Terms

Bond ratings: definition and why they matter A bond rating is a letter-grade assessment of a bond issuer’s ability to meet interest and principal payments on time. Ratings—issued by independent agencies—summarize credit risk and directly influence borrowing costs, market demand, and bond prices. Higher-rated bonds are seen as safer and typically carry lower yields; lower-rated…

Bond Quote: Definition and How to Read It A bond quote shows the current market price and key details of a bond. Quotes let investors compare bonds, assess value, and decide whether to buy, hold, or sell. Key points Quotes are usually expressed as a percentage of the bond’s face (par) value. Par is commonly…

Bond Market The bond market—also called the debt market, fixed-income market, or credit market—is where governments, municipalities, and corporations issue and trade debt securities to raise capital. Buyers of bonds lend money to issuers in exchange for periodic interest payments and return of principal at maturity. Key takeaways Bonds finance government projects, corporate operations, and…

Bond Ladder: Overview, Benefits, and Examples A bond ladder is a fixed-income strategy that staggers bond maturities across regular intervals (months or years). Instead of buying one large bond that matures at a single date, an investor holds multiple bonds with different maturity dates so portions of the portfolio mature regularly. This provides steady income,…

Bond Futures: What They Are, How They Work, and How to Buy Them Key takeaways * Bond futures are exchange-traded derivative contracts obligating the buyer or seller to transact a specified bond at a preset price on a future date. * They’re used for hedging interest-rate risk, speculating on bond prices, and arbitrage between cash…

Bond Funds A bond fund is a pooled investment—either a mutual fund or an exchange-traded fund (ETF)—that invests primarily in bonds and other fixed-income securities. Instead of buying individual bonds, investors buy shares in the fund, which provides a diversified portfolio of debt instruments managed by professionals. The main goal of most bond funds is…

Bond ETFs: Definition, How They Work, Types, Pros & Cons What is a bond ETF? A bond exchange-traded fund (ETF) is an ETF that holds a diversified portfolio of fixed-income securities such as government, corporate, or municipal bonds. Like stock ETFs, bond ETFs trade on an exchange throughout the trading day and provide passive exposure…

Bond Equivalent Yield (BEY) What it is Bond Equivalent Yield (BEY) annualizes the return on a discounted (zero‑coupon or discount) security so it can be directly compared with the annual yields of coupon‑paying bonds. It converts the price discount into an annual rate based on days to maturity. Why it matters Allows apples‑to‑apples comparison between…

Bond Discount: What It Is, Why It Happens, and How to Calculate It What is a bond discount? A bond discount occurs when a bond’s market price is below its face (par) value. For typical bonds the par value is $1,000. Investors who buy at a discount receive the full par value at maturity, producing…

Bond Covenants A bond covenant is a legally binding clause in a bond’s contract (the indenture) that either requires the issuer to take specific actions or restricts the issuer from certain activities. Covenants protect bondholders by reducing actions that could impair the issuer’s ability to repay debt, and they protect issuers by clarifying expectations and…

Bonds: How They Work and How to Invest Key takeaways A bond is a fixed-income instrument: you lend money to a government or company in exchange for periodic interest (coupon) and repayment of principal at maturity. Bond prices move inversely to interest rates: when rates rise, bond prices fall; when rates fall, bond prices rise….

Bombay Stock Exchange (BSE) Overview The Bombay Stock Exchange (BSE) is Asia’s first securities market and India’s largest exchange. Founded in 1875 as the Native Share and Stock Brokers’ Association and based in Mumbai, the BSE lists over 5,300 companies and ranks among the world’s major stock exchanges. Key takeaways Established in 1875; the oldest…

Understanding Bollinger Bands Bollinger Bands are a technical analysis tool that frames price action with a moving average and volatility bands. Developed in the 1980s, they help traders and investors assess volatility, identify potential overbought or oversold conditions, and spot consolidation or breakout setups. Key takeaways * Consist of three lines: a center simple moving…

Boiler Room: Definition, How It Operates, and How to Avoid Scams What is a boiler room? A boiler room is an operation—traditionally a high-pressure telemarketing call center—whose salespeople use aggressive tactics to persuade people to buy speculative or fraudulent investments. Targets are often contacted via unsolicited calls or messages and pushed to make quick decisions…

Boilerplate What is boilerplate? Boilerplate is standardized text or code reused across multiple documents, web pages, or software projects with little or no alteration. It provides a ready-made structure—often part of a template—that can be customized slightly for each use. Explore More Resources › Read more Government Exam Guru › Free Thousands of Mock Test…

Boil the Ocean “Boil the ocean” is an idiom used in business and project contexts to describe attempting an impossible task or making a project unnecessarily large, complex, or detailed. It’s a negative critique of scope, approach, or ambition when those factors threaten feasibility. Key takeaways * Means attempting something infeasible or needlessly expansive. *…

Board of Trustees: Definition and Responsibilities Key takeaways * A board of trustees is a governing body responsible for overseeing and managing an organization. * Trustees have a fiduciary duty to protect the interests of stakeholders and hold assets “in trust.” * Boards of trustees are similar to boards of directors and are common in…

Board of Governors A board of governors is a group appointed to oversee the management and strategic direction of an organization. Boards of governors govern a wide range of institutions—government agencies, public corporations, universities, professional associations, and regulatory bodies. In finance, the most prominent example is the Board of Governors of the U.S. Federal Reserve….

Board of Directors (B of D) Key takeaways The board of directors is the governing body that sets strategic direction, oversees senior management, and protects stakeholders’ interests. In public companies, shareholders elect the board; boards act as fiduciaries and focus on major decisions, not day-to-day operations. Effective boards combine diverse skills, independence, clear governance processes,…

Blue Sky Laws Blue sky laws are state securities regulations designed to protect investors from fraud. They require issuers and sellers of securities to register offerings and disclose material information in each state where the securities are offered. These laws operate alongside federal securities laws to promote fair dealing, informed investment decisions, and market integrity….

Understanding Blue Ocean Strategy Blue ocean strategy describes creating or discovering uncontested market space where competition is minimal or irrelevant. Coined by Chan Kim and Renée Mauborgne in their book Blue Ocean Strategy (2005), the concept contrasts sharply with “red oceans,” where businesses fight over shrinking market share in crowded, highly competitive industries. Key characteristics…

Blue-Chip Stocks: Definition, Examples, and Investment Benefits Key takeaways * Blue-chip stocks are shares in large, well-established, financially sound companies with long records of stable performance. * They often pay dividends and appear in major market indexes (e.g., Dow Jones Industrial Average, S&P 500). * Blue chips can provide growth and income and serve as…

Blue Chip What is a blue chip? A blue chip is a publicly traded company with a long track record of financial stability, reliable earnings, strong brand recognition, and generally conservative management. Blue chips are typically industry leaders with large market capitalizations and are often components of major indexes like the S&P 500 or Dow…

Blue Book (Kelley Blue Book) Key takeaways The Blue Book (Kelley Blue Book) provides estimated market prices for new and used vehicles to help buyers, sellers, dealers, and insurers determine fair values. It reports multiple value types: private party, trade-in, suggested retail, certified pre-owned (CPO), and new-car price guidance. Values are derived from large datasets,…

Understanding Trade Blotters: Purpose, How They Work, and Practical Uses Key takeaways * A blotter (trade blotter) is a chronological record of trading activity for a specified period, typically one trading day. * Blotters provide an audit trail for traders, brokers, clearing firms, and regulators and are used for compliance, trade review, and performance analysis….

Bloomberg Terminal Overview The Bloomberg Terminal is a premium financial software platform that delivers real-time market data, news, analytics, trading tools, and secure messaging in a single interface. Widely used by institutional investors, portfolio managers, traders, and analysts, it remains a benchmark for breadth and speed of financial information. Single-user annual subscriptions are roughly $32,000,…

Bloomberg Overview Bloomberg is a global provider of financial news, data, analytics, and media. Its products serve institutional investors, traders, corporate clients, and media audiences, delivering real-time market prices, news, research, and workflow tools across terminals, digital platforms, TV, radio, and print. History Founded in 1981 by Michael Bloomberg. The company launched its flagship Bloomberg…

Blockchain Wallet (Blockchain.com DeFi Wallet): Overview Blockchain Wallet—often called the DeFi Wallet—is the noncustodial wallet service from Blockchain.com. It lets users store private keys, manage Bitcoin, Ether, and other crypto assets, and interact with Blockchain.com’s decentralized exchange (DEX). The wallet also supports cross-chain swaps via Squid, a cross-chain service powered by Axelar. Key points DeFi…

Blockchain-as-a-Service (BaaS) Blockchain-as-a-Service (BaaS) is a cloud-based offering where a third party builds, hosts, and manages the infrastructure and back-end operations required to run blockchain applications. It follows the software-as-a-service (SaaS) model: customers access blockchain functionality without having to design, deploy, or maintain the underlying network. How BaaS works A provider supplies the blockchain infrastructure—nodes,…

Blockchain Key takeaways A blockchain is a decentralized, cryptographically linked ledger that stores data in ordered blocks. Unlike traditional databases, blockchains distribute copies of the ledger across many nodes, creating redundancy and tamper resistance. Blockchains power cryptocurrencies but have broader uses: supply chains, property records, voting, healthcare records, smart contracts, and more. Trade-offs include improved…

Block Trade Explained: Definition, Process, and Market Impact Definition A block trade is a large, privately negotiated securities transaction—typically thousands of shares or hundreds of thousands of dollars in bonds—executed off the public order book to minimize price disruption. These trades are commonly used by institutional investors, hedge funds, and high-net-worth individuals and are facilitated…

Blind Trusts: Definition, How They Work, and Practical Considerations Key takeaways * A blind trust gives an independent trustee full discretion over assets so the trustor and beneficiaries do not know holdings or make investment decisions. * Blind trusts are commonly used to reduce conflicts of interest and to preserve privacy for politicians, executives, and…

Blended Rate Key takeaways A blended rate is an interest rate that combines an existing rate with a new rate, typically when loans are refinanced or multiple debts are pooled. It is calculated as a weighted average of the interest rates on each loan, using outstanding balances as weights. Blended rates are used for mortgages,…

Black Tuesday Black Tuesday refers to October 29, 1929—the day the U.S. stock market plunged in a massive, panicked sell-off that helped usher in the Great Depression. The Dow Jones Industrial Average fell about 12% that day, more than 16 million shares changed hands, and investor confidence collapsed. Key takeaways Black Tuesday (Oct. 29, 1929)…

Key Takeaways A black swan is a rare, unpredictable event that has massive consequences and is often rationalized in hindsight. Standard forecasting tools and historical-based models typically fail to predict black swans and can create false security. Examples include the 2008 housing crash, the COVID-19 pandemic, 9/11, Zimbabwe’s hyperinflation, the dot‑com bust, and the LTCM…