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Glossary

What is a Liability?

A liability is a legally-binding obligation to settle or pay back a debt. In the case of a company, a liability is recorded on its balance sheet and can include accounts payable, taxes, wages, accrued expenses and deferred revenues. Current...

What is Life Insurance?

Life insurance is intended to cover funeral expenses and help protect against financial trauma that could result from the death of a family member. A named beneficiary receives the proceeds from a life insurance policy (aka "death benefit") upon...

What is Liquid?

Liquid is a way to descibe an asset that can be converted into cash quickly with minimal impact to the price received. Liquid assets are generally regarded similarly to cash because their prices are relatively stable when they are sold on the open...

What are Management Fees?

A management fee is a charge paid to managers of an investment (such as a mutual fund) or investment portfolio for their services that is typically a certain percentage of assets under management. Management fees generally pay for trading,...

What is Microfinance?

Microfinance is an area of financial services focused on empowering and providing lower income individuals with the necessary means to become self-sufficient and creditworthy. The loans provided to these individuals are typically small, but may be...

What is a Money Market Account?

A money market account is a savings account that is highly liquid and insured by the Federal government. Because of these features, they pay a lower interest rate than most other investments. Money market accounts offer many of the same services...

What is a Mortgage?

A mortgage is a loan to finance the purchase of real estate, usually with a specified term, monthly payment and interest rate. With a mortgage, the borrower gives the lender a "lien" on the property as collateral for the loan. In the case of...

What is an Adjustable-rate Mortgage (ARM)?

An Adjustable-rate mortgage (ARM) is a loan with an interest rate that changes on a periodic basis. The change is usually tied to the movement of an economic indicator, most commonly the prime interest rate.   See Also: Ask An Advisor: Which Debt...

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