Appendix B. Glossary of Financial Terms
- adjustable rate mortgage (ARM)
A mortgage whose interest rate, and hence its monthly payments, can change over the life of the mortgage. The rate is based on some independent index, such as the prime interest rate. The rate is adjusted annually or at some other period specified in the mortgage terms.
- alpha
A measure of mutual fund performance that compares a fund’s beta value with its actual performance. Alpha values above and below zero mean that a fund returned more or less than expected, respectively, based on its beta value.
- annual expense ratio
The amount a mutual fund charges to manage and maintain your account. Expressed as a percentage.
- back-end load
A mutual fund sales charge imposed when you sell your ...
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