Business / Taxes Glossary

Treasury Stock: Treasury stock is stock that an issuing company repurchases from its shareholders. A company may buy back its stock for a number of reasons, ranging from preventing a hostile takeover to hav . . . View Full Definition

Trust: When you create a trust, you transfer money or other assets to the trust. You give up ownership of those assets in order to accomplish a specific financial goal or goals, such as protecting . . . View Full Definition

Trustee: A trustee is a person or institution appointed to manage assets for someone else's benefit. For example, a trustee may be responsible for money you have transferred to a trust, or money in c . . . View Full Definition

Truth-In-Lending Act: The Truth-in-Lending Act requires every lender to provide a complete and clear disclosure of the key terms of any lending or leasing arrangement, plus a statement of all costs, before the ag . . . View Full Definition

Turnover Ratio: A mutual fund's turnover ratio measures the percentage of holdings that the fund sells, or turns over, in a year. For example, if a stock fund manager has a portfolio of 100 stocks at the be . . . View Full Definition

Uncovered Option: An uncovered option, also known as a naked option, is an option that is not backed by another position. For example, if you sell a call option without owning the stock that you would have to . . . View Full Definition

Underlying Instrument: An underlying instrument is a security, such as a stock, a commodity, or other type of financial product, such as a stock index, whose value determines the value of a derivative investment o . . . View Full Definition

Underlying Investment: The investments a variable annuity’s separate account fund, a mutual fund, or other fund makes are considered the fund’s underlying investments. The value of a single share or unit of the fu . . . View Full Definition

Undervaluation: Any stock that trades at a lower price than the issuing company's reputation, earnings outlook, or financial situation would seem to merit is considered undervalued. Undervaluation may occur . . . View Full Definition

Underwater: You’re underwater when your employee stock options are out-of-the-money and so currently worthless. For example, if you have options to buy your company stock at a strike price of $50, and t . . . View Full Definition

Underweighted: When you own less of a security, an asset class, or a subclass than your target asset allocation calls for, you are said to be underweighted in that security, asset class, or subclass. For e . . . View Full Definition

Underwriter: An underwriter, typically an investment banker, buys an entire new securities issue from the company or government offering it, and resells the issue as individual stocks or bonds to the pub . . . View Full Definition

Underwriting: Underwriting means insuring. An insurance company underwrites your policy when it agrees to take the risk of insuring your life or covering your medical expenses in exchange for the premium . . . View Full Definition

Uniform Gifts To Minors Act (UGMA): Under the UGMA, you as an adult can set up a custodial account for a minor and put assets such as cash, securities, and mutual funds into it. You pay no fees or charges to set up the account . . . View Full Definition

Uniform Transfers To Minors Act (UTMA): The UTMA allows you as an adult to set up a custodial account for a minor, who owns any assets placed in the account, although he or she can't legally control the account until reaching the . . . View Full Definition

Unit Investment Trust (UIT): A UIT may be a fixed portfolio of bonds with specific maturity dates, a portfolio of income-producing stocks, or a portfolio of all of the securities included in a particular index. Examples . . . View Full Definition

Unit Of Trading: When you buy stocks, bonds, options and commodities futures, it's typical to buy in a particular volume or a particular dollar value, called a round lot or a unit of trading. For example, st . . . View Full Definition

Unit Trust: The category of investment known as a mutual fund in the US is called a unit trust in other parts of the world.

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