Business Glossary: B

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B Fifth letter of a Nasdaq stock descriptor specifying that issue is the Class B shares of the company.

B2B An Internet strategy of dealing directly with businesses, rather than consumers, i.e. business to (2) business.

BA The two-character ISO 3166 country code forBOSNIA AND HERZEGOVINA.

BAM The ISO 4217 currency code for Bosnia & Herzegovinan Convertible Mark.

BAN See: Bank anticipation notes

BAR See: Builders' All Risk

BB The two-character ISO 3166 country code for BARBADOS.

BBD The ISO 4217 currency code for Barbadian Dollar.

BD The two-character ISO 3166 country code for BANGLADESH.

BDT The ISO 4217 currency code for Bangladeshi Taka currency.

BE The two-character ISO 3166 country code for BELGIUM.

BEACON See: Boston Exchange Automated Communication Order-Routing Network

BEARS See: Bonds Enabling Annual Retirement Savings (BEARS)

BEF The ISO 4217 currency code for Belgian Franc.

BF The two-character ISO 3166 country code for BURKINA FASO.

BG The two-character ISO 3166 country code for BULGARIA.

BGL The ISO 4217 currency code for Bulgarian Lev.

BH The two-character ISO 3166 country code for BAHRAIN.

BHD The ISO 4217 currency code for Bahrainian Dinar.

BI The two-character ISO 3166 country code for BURUNDI.

BIC See: Bank Investment Contract

BIF See: Bank Insurance Fund

BIF The ISO 4217 currency code for Burundian Franc.

BIPS See: Basis point.

BIS See: Bank for International Settlements

BJ The two-character ISO 3166 country code for BENIN.

BM The two-character ISO 3166 country code for BERMUDA.

BMD The ISO 4217 currency code for Bermudan Dollar.

BN The two-character ISO 3166 country code for BRUNEI DARUSSALAM.

BND The ISO 4217 currency code for Brunei Darussalam Dollar.

BO The two-character ISO 3166 country code for BOLIVIA.

BOB The ISO 4217 currency code for Bolivian Boliviano.

BOT See: Build Own Transfer

BPS See: Basis point.

BR The two-character ISO 3166 country code for BRAZIL.

BRL The ISO 4217 currency code for Brazilian Real.

BS The two-character ISO 3166 country code for BAHAMAS.

BSD The ISO 4217 currency code for Bahamas Dollar.

BT The two-character ISO 3166 country code for BHUTAN.

BTM See: Book to market.

BTN The ISO 4217 currency code for Bhutan Ngultrum.

BV The two-character ISO 3166 country code for BOUVET ISLAND.

BW The two-character ISO 3166 country code for BOTSWANA.

BWP The ISO 4217 currency code for Botswanan Pula.

BY The two-character ISO 3166 country code for BELARUS.

BYB The ISO 4217 currency code for Belarus Rouble.

BZ The two-character ISO 3166 country code for BELIZE.

BZD The ISO 4217 currency code for Belize Dollar.

Baby bond A bond with a par value of less than $1000.

Back away In the context of general equities, to withdraw from a previously declared interest, indication, or transaction; broker-dealer's failure, as a market maker in a given security, to make good on a bid/offer for the minimum quantity.

Back fee The fee paid on the extension date if the buyer wishes to continue the option.

Back months In the context of futures and options trading, refers to the months of contracts with expiration dates farthest away. See farthest month.

Back office Brokerage house clerical operations that support, but do not include, the trading of stocks and other securities. All written confirmation and settlement of trades, record keeping, and regulatory compliance happen in the back office.

Back on the shelf In the context of general equities, permanently canceled order/interest in a stock by a customer. See: Take a powder.

Back taxes Due taxes that have not been paid on time.

Back up (1) When bond yields rise and prices fall, the market is said to back up. (2) An investor who swaps out of one security into another of shorter current maturity is said to back up.

"Back up the truck" In the context of general equities, "Prepare for a very large buyer."

Backdating In the context of mutual funds, a feature allowing fundholders to use an earlier date on a letter of intent to invest in a mutual fund in exchange for a reduced sales charge, e.g. Giving retroactive value to purchases from the earlier date.

Backed in In the context of general equities, to describe the result of unanticipated events that allow for a purchase at a discount or a sale at a premium.

Back-end load fund A mutual fund that charges investors a fee to sell (redeem) shares, often ranging from 4% to 6%. Some back-end load funds impose a full commission if the shares are redeemed within a designated length of time, such as one year. The commission decreases, the longer the investor holds the shares. The formal name for the back-end load is the contingent deferred sales charge, or CDSC

Back-testing Creating a hypothetical portfolio performance history by applying current asset selection criteria to prior time periods.

Back-to-back financing An intercompany loan channeled through a bank.

Back-to-back loan A loan in which two companies in separate countries borrow each other's currency for a specific time period and repay the other's currency at an agreed-upon maturity.

Backup line A commercial paper issuer's bank line of credit covering maturing notes if, for some reason, selling new notes to cover the maturing notes is not possible.

Backup Line of Credit A bank assurance of funds obtained by an issuer of commercial paper to protect the CP investor from default. The issuer pays a commitment fee to the bank.

Backwardation A market condition in which futures prices are lower in the distant delivery months than in the nearest delivery month. This may occur when the costs of storing the product until eventual delivery are effectively subtracted from the price today. The opposite of contango.

Bad debt A debt that is written off and deemed uncollectible.

Bad delivery Antithesis of good delivery.

Bad title Title to property that does not distinctly confer ownership, usually in the context of real estate.

Bai-kai Two-sided market picture, in Japanese terminology applies mainly to international equities.

Bailing out In the context of securities, refers to selling a security or commodity quickly, regardless of the price. May occur when an investor no longer wants to sustain further losses on a stock.

Also refers to relieving an individual, corporation, or government entity in financial trouble.

Bailout bond A bond issued by the Resolution Funding Corporation (Refcorp) to save the failing savings and loan associations in the late 1980s and early 1990s.

Baker Plan A plan by former U.S. Treasury Secretary James Baker under which 15 principal middle-income debtor countries (the Baker 15) would undertake growth-oriented structural reforms, to be supported by increased financing from the World Bank and continued lending from commercial banks.

Balance of payments A statistical compilation formulated by a sovereign nation of all economic transactions between residents of that nation and residents of all other nations during a stipulated period of time, usually a calendar year.

Balance of trade Net flow of goods (exports minus imports) between two countries.

Balance on goods and services Netting of transaction balances, including the net amount of payments of interest and dividends to foreign investors and investments, as well as receipts and payments resulting from international tourism. Also known as Trade Balance.

Balance sheet Also called the statement of financial condition, it is a summary of a company's assets, liabilities, and owners' equity.

Balance sheet exposure See: Accounting exposure.

Balance sheet identity Total assets = Total liabilities + Total stockholders' equity.

Balanced budget A budget in which the income equals expenditure. See: budget.

Balanced fund An investment company that invests in stocks and bonds. The same as a balanced mutual fund.

Balanced mutual fund This is a fund that buys common stock, preferred stock, and bonds. The same as a balanced fund.

Balloon interest In the context of serial bond issues, the elevated coupon rate on bonds with late maturities.

Balloon maturity Any large principal payment due at maturity for a bond or loan with or without a sinking fund requirement.

Balloon Payment See: Bullet.

Balloon Payment The final (large) payment that repays all the remaining principal and interest of a partially amortized or unamortized loan.

Ballot The document distributed at the annual meeting to shareholders of record who wish to vote their shares in person.

BAN See: Bond anticipation note.

Bank-based corporate governance system Organization of a supervisory board so that it is dominated by bankers and corporate insiders.

Bank anticipation notes (BAN) Notes issued by states and municipalities to obtain interim financing for projects that will eventually be funded long term through the sale of a bond issue.

Bank collection float The time that elapses between when a check is deposited into a bank account and when the funds are available to the depositor, during which period the bank is collecting payment from the payer's bank.

Bank discount basis A convention used for quoting bids and offers for Treasury bills in terms of annualized yield, based on a 360-day year.

Bank draft A draft addressed to a bank.

Bank holding company A company that owns or has controlling interest in two or more banks and/or other bank holding companies.

Bank Insurance Fund (BIF) A unit of the Federal Deposit Insurance Corporation (FDIC) that provides deposit insurance for banks excluding thrifts.

Bank for International Settlements (BIS) An international bank headquartered in Basel, Switzerland, which serves as a forum for monetary cooperation among several European central banks, the Bank of Japan, and the US Federal Reserve System. Founded in 1930 to handle the German payment of World War I reparations, it now monitors and collects data on international banking activity and promulgates rules concerning international bank regulation.

Bank Investment Contract (BIC) Interest guaranteed by the bank in a portfolio over a specific time frame with a specific yield.

Bank line Line of credit that a bank grants to a customer.

Bank Letter of Credit Policy Standards allowing banks to confirm letters of credit by foreign banks supporting the purchase of US exports.

Bank note A term used synonymously with paper money or currency issued by a bank. Notes are, in effect, a promise to pay the bearer on demand the amount stated on the face of the note. Today, only the Federal Reserve Banks are authorized to issue bank notes, i.e. Federal Reserve notes, in the United States.

Bank regulation The formulation and issuance by authorized agencies of specific rules or regulations, under governing law, for the conduct and structure of banking.

Bank run (bank panic) A series of unexpected cash withdrawals caused by a sudden decline in depositor confidence or fear that the bank will be closed by the chartering agency, i.e. many depositors withdraw cash almost simultaneously. Since the cash reserve a bank keeps on hand is only a small fraction of its deposits, a large number of withdrawals in a short period of time can deplete available cash and force the bank to close and possibly go out of business.

Bank trust department Bank department that deals with estates, administers trusts, and provides services such as estate planning advice to its clients.

Bank wire A computer message system linking major banks. It is used not for effecting payments, but as a mechanism to advise the receiving bank of some action that has occurred, e.g., the payment by a customer of funds into that bank's account.

Banker's acceptance A short-term credit investment created by a nonfinancial firm and guaranteed by a bank as to payment. Acceptances are traded at discounts to face value in the secondary market. These instruments have been a popular investment for money market funds. They are commonly used in international transactions.

Banking Delay Time required for processing and clearing a check through the banking system.

Bankmail An agreement between a company engaged in a takeover bid and a bank that the bank will not finance the bid of another acquirer.

Bankruptcy Inability to pay debts. In bankruptcy of a publicly owned entity, the ownership of the firm's assets is transferred from the stockholders to the bondholders.

Bankruptcy cost view The argument that expected indirect and direct bankruptcy costs offset the other benefits from leverage so that the optimal amount of leverage is less than 100% debt financing.

Bankruptcy risk The risk that a firm will be unable to meet its debt obligations. Also referred to as default or insolvency risk.

Bankruptcy view The argument that expected bankruptcy costs preclude firms from financing entirely with debt.

Bar Slang for one million dollars.

Barbell strategy A fixed income strategy in which the maturities of the securities included in the portfolio are concentrated at two extremes.

Barefoot Investor A popular Australian radio program focused on teaching young people financial literacy.

Barefoot pilgrim A slang term for an unsophisticated investor who has lost everything on the stock market. Not to be confused with Barefoot Investor.

Bargain hunter In the context of general equities, purchaser who is extremely selective in the price sought on a transaction.

Bargain-purchase-price option Gives the lessee the option to purchase the asset at a price below fair market value when the lease expires.

Barometer Economic and market data that represent an overall trend. The Dow Jones Industrial Average is an example of a stock market barometer.

BARRA's performance analysis (PERFAN) A method developed by BARRA, a consulting firm in Berkeley, Calif. It is commonly used by institutional investors applying performance attribution analysis to evaluate their money managers' performance.

Barrier options Option contracts that remain dormant until a trigger point (the barrier price) is reached, at which point the call or put option is activated, and results either in a long or short options position, or in the automatic exercise of an options position. One example is an up-and-in call. Assume an exercise price of $50 and a barrier price of $53. If the stock stays below $53, the call option cannot be exercised. If the stock price reaches the $53 barrier price