D
Date of Record
Date on which a shareholder must own shares to be entitled to a dividend payment. From the following day, until the day the dividend is actually paid, the stock trades ex-dividend.

Debenture
A bond issued by a corporation which is secured by the general credit or promise to pay of the issuer. It is not backed by collateral such as tangible assets.

Debit Balance
Money owed by the client to the broker.

Debt/Equity Ratio
Long-term debt plus current liabilities divided by the last fiscal year net equity per share of common stock for a given corporation. A ratio above 2:1 or 200% may be excessive and a sign of strained corporate finances.

Debt Securities
Securities representing money borrowed by an issuer that must be paid back at a specific date. The security pays interest or is purchased at a discount to face value.

Debt Service
Cash required by a corporation or municipality to cover all interest and principal payments due in a given year, including sinking fund payments.

Discount Rate
The lending rate that the Federal Reserve Bank charges on loans made to other banks and financial institutions. Changes in this rate tend to have large ripple effects on the rates banks in turn charge their customers. The bond market and sometimes the stock market react sharply to changes in this rate. You can create market timing alerts with it.

Distributions
Capital gains (long or short term), interest, or dividends paid to bond holders and shareholders. These can be received as cash or stock and they are treated as closed lots for tax purposes. Return of capital is also a type of distribution, but it is usually tax exempt. Distributions from mutual fund shares are easily reinvested into more shares and the compounding of reinvested shares can add substantially to the cumulative return of a fund.

Dividend
The periodic, usually quarterly, payment made by a corporation to its shareholders, generally expressed as dividend per share. Dividends represent earnings that are not reinvested by the corporation. Some stocks pay no dividends and others, such as utility companies pay substantial ones that represent a large portion of the total return a shareholder will get from his investment. Dividends are a type of distribution and are usually taxable in year received.

Dividend Frequency
Shows how often a given mutual fund pays a dividend distribution.

Dividend Growth Rate (3 Yr and Current Year)
The unweighted average annual growth rate of annual fiscal year dividends for the last three fiscal years for a given security.

Dividend/Share
Indicates the annual dividend payment for the next 12 months for a given security. Most companies pay dividends quarterly.

Dividend Year Started
The year in which a given corporation started paying dividends to stockholders.

Dow Jones Indices
Indices tracked by the Dow Jones company, a highly reputable information services company; publisher of The Wall Street Journal, Barron's National Business and Financial Weekly, and other influential publications.

Dow Jones Industrial Average (DJIA)
The most commonly followed index of the U.S. stock market. It is comprised of 30 corporations spanning many different industries. It is price weighted, meaning that a $2 change in a $100 per share stock will have a greater affect than a $2 change in a $20 per share stock. The Dow Jones Industrial Average measures (also defined in the glossary) can be used to gauge the health and direction of the stock market; see DJIA 200-Day Moving Average, DJIA Price/Earnings, DJIA Yield, DJIA Price/Book.

DJIA 200-Day Moving Average
This value is calculated by averaging all the closing values of the DJIA for the last 200 days. You can use this and the following measures to create market timing alerts.

DJIA P/E (Price/Earnings)
The latest DJIA value divided by the estimated current year earnings per share (EPS), with the index multiplier taken into account. Readings above 24 and below 8 are considered sell and buy signals respectively by many analysts.

DJIA Yield
The sum of all dividends of all stocks in the DJIA divided by the latest value of the DJIA, adjusted by the multiplier. Readings below 3 and above 6 are considered sell and buy signals respectively.

DJIA Price/Book
The latest value of the DJIA divided by the book value for all DJIA stocks, adjusted by the multiplier. Readings above 2.5 may be a sell signal.

Dow Jones Transportation Average (DJTA)
A index of 20 corporations in the transportation sector, including air, rail, and truck.

Dow Jones Utilities Average (DJUA)
An index of 15 major utility corporations.

Duration of an order
In brokerage, when trading stocks or options, it designates whether a limit trade is valid for Good Until Canceled or Day Only. Market orders all have a duration of Day Only by definition, since they are executed as soon as possible at the market price. It is possible that a market order could arrive after the market close, in which case, it may remain valid at the next market opening.

DVP/RVP Account
If you have not taken special steps to establish a DVP/RVP account with us, you must not select this account type. DVP/RVP accounts relate mainly to institutional trading accounts.

E
Earnings Per Share
The fiscal year earnings divided by common shares outstanding for any given year for a given corporation. The estimated current fiscal year earnings per share includes the actual EPS for quarters that have already been reported plus estimates calculated by the S&P Corporation for any quarters remaining in the fiscal year. Earnings are the principal force behind stock price appreciation. This view displays: Earnings Per Share, Mean Estimate, and Projected 5-Year Growth Rate.

Effective Tax Rate
The flat percentage rate equivalent of a given tax payer's progressive rate. For example, if your taxable income is $55,000 in 1993, the first $22,100 would be taxed at 15%. the next $31,400 at 28%, and the last $1,500 at 31%. The effective rate is approximately 24% applied to the entire $55,000.

Equity
The generic term for ownership interest in an asset. In real estate, it is often used to describe the net of the current value and the mortgage balance. It is also used to describe stock and mutual funds, that is, investments that issue ownership shares.

Equity Security
Instrument representing fractional ownership in a corporation. Stocks are equity securities.

European-style Option
European-style is an option contract that can only be exercised on the expiration date.

Exchange
The principal exchange in which the stock is traded: NYSE = New York Stock Exchange; AMEX = American Stock Exchange; and OTC = Over the Counter. The OTC, unlike the other two, does not have a physical location. It is a network of security dealers, most of whom are connected by a computer link called NASDAQ (National Association of Securities Dealers Automated Quotation System). OTC stocks are found under the NASDAQ listings of your newspaper.

Exchange Call
NYSE requires a margin account to maintain 25% equity. Equity consists of funds and margin eligible securities in a margin account. When the market value of margined securities is less than the minimum equity, a margin call goes out to the client requesting additional equity, i.e. securities or cash. Exchange calls are due immediately.

Ex-Dividend
When a stock trades ex-dividend (without dividend), it means that a new buyer of the security will pay the price with the dividend deducted. Also, the new buyer will not have a tax liability for that dividend as does the buyer who bought on or before the record date (the official date declared by the board of directors to determine who is eligible for the dividend). The actual payment date of the dividend may be a couple of weeks after the record date. If a stock pays a large dividend, you should try to make a purchase after the record date, so to avoid the tax liability on the dividend.

Executed Order
Completed buy or sell transactions.

Exercised on an Option Transaction
When you buy an option you have the right to either purchase or sell stock at a predetermined price. When and if you choose to purchase or sell stock at that predetermined price you are said to be "exercising your right".

Exit Fee
A service charge that equals a percent of a share's NAV, which you pay when you sell your mutual fund shares. Sometimes the exit fee is a flat dollar charge.

Expiration Date of an Option
The last day (in the case of American-style) or the only day (in the case of European-style) on which an option may be exercised. For stock options, this date is the Saturday immediately following the third Friday of the expiration month; however, brokerage firms may set an earlier deadline for notification of an option buyer's intention to exercise. If Friday is a holiday, the last trading day will be the preceding Thursday.

Extended Hours Trading
An extended trading session (on a matched order basis) for NYSE and AMEX. Lasting from 4:15 p.m. to 5:00 p.m. EST, it uses the closing price of a security at the conclusion of the regular trading day to determine the transaction price of the matched orders. Only securities listed on NYSE and AMEX are eligible for the extended session.

F
Face Value
The stated value of a bond certificate when issued and when they are redeemed at maturity. Same as par value or principal. The face value never changes but the current value does. Current value for a bond is (face value x price) divided by 100. Bonds are purchased as units of face value. For example, you buy a $10,000 bond where the current value can be more or less than $10,000, depending on market conditions.

Federal Call
When a client makes certain types of transactions in their margin account, the brokerage firm will issue a call notifying the client if additional equity is required by the settlement date in order to satisfy Federal Regulation T.

Fees & Charges
These items relate to the costs of owning mutual fund shares. This view displays: if it is a Closed fund, Sales Charges, Exit Fee, Expense Ratio, 5-Year Fee, Phone Switch options.

First Call Provisions
Some bonds can be called prior to the maturity date at the issuer's discretion. These bonds are callable. The first call provision describes the time period and the price offered for the first call by the issuer.

Fiscal Policy
A method where governments use taxes and budgeting to raise revenue for public purposes. Another method is monetary policy, which seeks to influence the money supply by raising or lowering interest rates and thereby changing credit demand.

Fiscal Year
Any continuous 12 months which is used by a business or government as its annual accounting period. The U.S. government fiscal year ends on September 30. A fiscal year is designated by the year it ends. For example, an April - March fiscal year 1993 ended on March 31, 1993 and began on April 1, 1992.

Fiscal Year End
Shows the last month of a corporation's fiscal year.

Five-Year Fee
The total cost you might have to pay over 5 years for every $1,000 investment in a given mutual fund. Five-year fee is the best over-all measure for comparing fund costs if you intend to hold onto the fund for at least 5 years.

Flexible Equities
A mutual fund whose holdings can vary between a preponderance of stocks or bonds, depending on market conditions. Flexible funds seek to take advantage of changing market conditions.

Floating Rate
Rather than a fixed interest or coupon rate, some bonds and CDs have a floating interest rate which is adjusted periodically to market conditions. It is also called Variable Rate.

Front-end Load
The percentage of the purchase price that is charged and deducted from the investment. Same as Sales Charge. For example, if you invest $1000 in a 4% front-end load mutual fund, you only purchase $960 worth of shares.

Futures
Investment contracts which specify the quantity and price of a commodity to be purchased or sold at a later date. On contract date, the buyer must take physical possession or make delivery of the commodity, which can only be avoided by closing out the contract(s) before that date. Futures can be used for speculation or hedging.