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Glossary

What is Exchange Rate?

Exchange rate is the rate at which one currency can be converted into another. Exchange rates are a common consideration when traveling to a foreign country and are influenced by several factors, including interest rates, inflation and politics.  ...

What is an Exchange-Traded Fund (ETF)?

Exchange-Traded Fund (ETF) is a fund that is basically a basket of investments, like a mutual fund, that tracks an index, which can be broad like the S&P 500 or narrow like the Japanese Yen index. Unlike a mutual fund, an ETF can be traded like a...

What is the FDIC?

FDIC is short for "Federal Deposit Insurance Corporation." It is a federal agency that insures most bank deposits up to $100,000.   See Also: Where to Stash Your Cash Put Your Money Where the Women Are Protect Your Cash--In a Bond Fund 10...

What is the Federal Reserve ("The Fed")?

The Federal Reserve is one of 12 regional banks throughout the U.S. established to implement the policies of the Federal Reserve Board (that influence interest rates, for example), conduct economic research, maintain reserves (like an emergency...

What is a Fee-Only Financial Planner?

A Fee-Only Financial Planner is a financial professional who only charges fees for services rendered and does not earn commissions from products sold. In theory, this kind of cost structure is preferable, because it eliminates any potential bias...

What is a Fixed Income?

A fixed income is a security that pays a specific interest rate and generally carries less risk than other securities, like stocks.    See Also: Fixing Up Your Fixed Income Smart Strategies for Retirement Income Do You Look Before You Leap? Your...

What is Hedging?

Hedging is an investment strategy to reduce the risk of value change in a security by taking an offsetting position in a related security. Common hedges include trading "options" and "short selling."   See Also: Top 8 Mistakes Investors Make The...

What is Homeowners Insurance?

Homeowners insurance is a form of property insurance required by most mortgage lenders that combines liability and hazard insurance.   See Also: Your DIY Financial Planning Guide Ask An Advisor: What Is a Reverse Mortgage? Ask An Advisor: How to...

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