A

A - Fifth letter of a Nasdaq stock symbol specifying Class A shares.

AAII - American Association of Individual Investors.

(ABO) Accumulated Benefit Obligation - An approximate measure of the liability of a pension plan in the event of a termination at the date the calculation is performed.

Accounts Receivable - Money that is owed to a company for products or services that were sold on credit.

Adjustable Rate Bond (or Preferred Stock) - A security with an interest rate (or dividend rate) that is adjusted each payment period according to a recognized market rate (such as the "prime" interest rate that banks charge, the rate on Treasury bills, etc.).

Adjusted Gross Income - The amount used in the calculation of an individual's income tax liability. It is equal to one's income after certain adjustments are made, but before standardized and itemized deductions and personal exemptions are made.

Advisory Service - A service that offers investment information (usually buy and sell advice) for a fee.

American Depository Receipts (ADRs) - Negotiable certificates, issued by U.S. depository banks, which represent the actual shares of a foreign company's stock that an overseas branch of the depository bank or a custodian is holding.

American Stock Exchange (AMEX) - The second largest national stock exchange in the U.S., where primarily securities of small to mid-size companies are bought and sold. Options on many NYSE stocks are also traded on the AMEX.

Amortization - An accounting term that refers to the reduction in the value of an intangible item, such as a patent or trademark, through periodic reductions in income.

Anniversary Date - The annual recurrence of the policy's effective date. The anniversary date is often the time the owner of a universal life policy is permitted to make changes to the policy, such as increasing the death benefit.

Annual Report - The formal financial statement that a corporation issues annually to its shareholders.

Annual Return - The percentage increase in the value of an investment over a 12-month period or a series of 12-month periods, taking into account compounding of investment dividends or capital gains.

Annuitant - The individual who is entitled to receive the benefits of an annuity.

Annuity - Regular payments to an individual according to a contract, for a specified or an indefinite time period.

Ask Price - The lowest amount a seller is willing to accept for a security at a given time. See bid price.

Asset - Any item of economic value owned by an individual or corporation. Usually refers to items that can be sold and converted to cash. Examples are cash, securities, financial accounts, a house, a car, jewelry and other property.

Asset Allocation - The process of dividing investor funds among several classes of assets to limit risk and increase opportunities for gains.

Asset-Backed Securities - A bond backed by loans or account receivables originated by banks, credit card companies or other credit providers.

Assumed Investment Return (AIR) - The guaranteed rate of return used in variable annuities to set the initial annuity payment.

Average Tax Rate - An individual's average tax rate is the result of total income taxes paid divided by taxable income. For example, if an individual has taxable income for the year of $50,000 and paid income taxes of $10,000, the average tax rate would be 20%. ($10,000 w $50,000 = .20).