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Back-end load

A sales fee that you pay when you sell an investment. Also called a "deferred sales charge." The fee often goes down the longer you hold onto the investment.

Balance sheet

A financial statement showing a company's assets, debts and how much money shareholders have invested in the company as at a certain date.

Balanced fund

A mutual fund that generally has the goal to provide capital growth and income and invests in a mix of investments ranging from low to moderate risk. Its goal is to make you a reasonable return. Sample investments: stocks, bonds, and money market funds.

Bank of Canada

The central bank that sets Canada’s money policies. These policies help keep the Canadian dollar stable. They also affect our economy and our money supply. The goal of the Bank of Canada is to keep currency and the financial system stable. They are the sole authority to issue banknotes - bills.

Banker’s acceptance

One of the most popular forms of commercial paper. You loan your money to a corporation for a set period of time. But you don't make interest. Instead, you buy the investment at a discount and get the full value back on the maturity date.

Bankrupt, Bankruptcy

A general term to describe the legal status of when a person or company cannot repay the debts it owes.

Bear market

A weak market where stock prices fall and investor confidence fades. Often happens when an economy is in recession and unemployment is high, with rising prices.

Benchmark

A yardstick that you can use to measure the performance of an investment. Example: a stock market index may be a benchmark you can use to compare how well your own stocks are doing.

Beneficiary

The person(s), institution, trustee or estate you choose to give money, property or other benefits when you die. You may name beneficiaries in your will, insurance policy, retirement plan, annuity, trust or other contracts.

Benefit

Money, goods, or services that you get from your workplace or from a government program such as the Canada Pension Plan.

Beta

Measures how the stock is doing compared to overall stock market. A beta of 1.0 tells you that a stock has been going up and down with the overall stock market and is considered as volatile as the market. A stock with a beta between 0.0 and 1.0 has smaller ups and downs and may be less risky. A beta greater than 1.0 has wider price swings and may be riskier. Stocks with a negative beta are moving opposite to the stock market.

Bid-ask spread

The gap between the price a buyer is willing to pay and the price a seller is willing to accept.

Bid, Bid price

The highest price at which anyone is willing to buy a stock on a stock exchange.

Blue-chip stock

The stock of a leading company with a solid record of strong performance. For example, pays dividends, has a good management team, and is a company of "good" investment value.

Board lot

A standard amount of shares for trading, usually 100 shares. Set by stock exchanges.

Bond

A kind of loan you make to the government or a company. They use the money to run their operations. In turn, you get back a set amount of interest once or twice a year. If you hold bonds until the maturity date, you will get all your money back as well. If you sell early and bond prices are up, you will make money. If prices are down, you will lose money.

Bond laddering

A way to invest in bonds by buying bonds with different maturity dates. This helps you avoid having all your bonds mature when interest rates are down. It also lets you create a steady income from your bonds as they mature on different dates.

Book alue

For investors, it’s what you paid for an investment. For companies, it’s the true value of everything that it owns. If the company had to close its doors and sell everything, the book value is the amount that shareholders would get (amount of net assets that the business owns).

Bottom-up investing

An investment approach that seeks out undervalue companies. This involves using financial ratios and other indicators to pick stocks based on a company’s basic strengths, including its management team. Bottom-up investors hope a stock can perform well even in if its industry or the economy is not doing well.

Branch manager

A person who supervises employees in the branch of an investment firm or bank. Responsible for supervising and overseeing operations of a branch, including its employees.

Broker

A registered person who brings together someone who wants to buy investments with someone who wants to sell. Brokers often charge a fee or commission for buying and selling investments for you.

Brokerage firm

A company, corporation, partnership, or other organization that buys and sells stocks, bonds and other investments for investors.

Budget

A monthly or yearly estimated plan for spending and saving. You work it out based on your income and expenses.

Bull market

A strong market where stock prices rise and investor confidence grows. Often tied to economic recovery or an economic boom, as well as investor optimism.

Buy-sell-agreement

A legal contract between business partners or shareholders about who will own the business in the future. It covers things like: - who can buy each partner or shareholder’s share of the business. - when they can sell. - what price they will get. - what happens if an owner leaves or dies.

Buying on margin

A way to borrow money to buy investments.

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