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A B C D E F G H I J K L M N O P Q R S T U V W X Y Z #

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Illiquid - Not readily convertible into cash.
Immediate Family - As defined in the NASD Rules Of Fair Practice, an immediate family member includes parents, brothers, sisters, children, father-in-law, mother-in-law, sister-in-law, brother-in-law, and any other relatives who are financially supported. The Rules of Fair Practice use this definition when dealing with practices such as free-riding and withholding. The rules prohibit the sale of hot issues to members of a broker-dealer's immediate family or to persons trading for institutional accounts and their families.
Immediate-or-Cancel (IOC) - An instruction on an order that requires execution of as many lots as can be filled immediately, and the rest canceled.
Imputed Interest - Interest that is considered to have been paid although no actual payment was made. A zero coupon bond, for instance, has imputed annual interest that the IRS requires the bondholder to report.
Inactive Stock - Issue traded on an exchange or in the over-the-counter market in which there is a relatively low volume of transactions.
Income - Earnings, generally from interest or dividends, that are credited or paid to an investor.
Income Before Taxes - Numerical term on an income statement which is the sum of all sales and profits before the subtraction of taxes. It shows how much profit a company would have made without taxes.
Income Bonds - Bonds issued when the ability of the issuing company to pay interest is questioned. They are speculative instruments that pay high rates of interest. A bond that only pays interest if the corporation has sufficient earnings. These bonds are usually traded flat (without accrued interest) and are an alternative to bankruptcy.
Income Dividend - Payments of dividends, interest, or short-term capital gains earned by a fund's portfolio of securities after deducting operating expenses. The prospectus describes how often a fund pays dividends.
Income Stock - Common stock that typically pays a high dividend on a regular basis.
Income Stream - A strategy of arranging bonds so that they produce a consistent series of payments.
Indemnity Bond - Insurance bond from a company allowing financial reimbursement in the case of a lost or stolen security. Also known as Surety Bond.
Indenture - The terms of a corporate bond. Also known as deed of trust, it appears on the face of the bond certificate.
Independent Agent - An insurance agent who represents a number of different insurance companies. These agents can typically offer a wide range of plans and prices, because they work with more companies.
Independent Broker - New York Stock Exchange (NYSE) member that executes orders for other brokers or firms who are not members of the exchange.
Independent Investment Manager - A regulated financial professional who manages investment portfolios for investors, charging a management fee for the services rendered.
Index - A benchmark to measure performance against. It is a statistical composite that measures changes in the economy or in financial markets often expressed in percentage changes from a base period or from the previous month.
Index Fund - A mutual fund that buys securities to match that of a broad-based index such as the Standard & Poor's Index. The fund aims to achieve the same return as the general market.
Index Mutual Funds - Mutual funds that seek to replicate the performance of established securities indices.
Index Option - Option to trade in a particular market or industry group rather than individual stocks.
Indicated Dividend - Total amount of dividends that would be paid on a share of stock over the next 12 months if each dividend were the same amount as the most recent dividend.
Indicated Yield - The yield based on the most recent quarterly rate times four. To determine the yield, divide the annual dividend by the price of the stock. The resulting number is represented as a percentage.
Indication of Interest - Underwriting term meaning a non-binding indication of a client's interest in purchasing securities that are in registration (awaiting effectiveness by the Securities and Exchange Commission). The broker is required to provide the client with a preliminary prospectus on the securities. The indication of interest is non-binding because it is illegal to sell a security that is in the registration process.
Individual Retirement Account (IRA) - A retirement investing tool for employed individuals that allows an annual contribution of earned income up to a maximum of $2,000. Some or all of the individuals may be deductible from current taxes, depending on the individual’s adjusted gross income and coverage by employer-sponsored qualified retirement plans.
Industrial Development Bond (IDB) - A bond issued by a municipality to finance fixed assets that are secured by a lease agreement with a corporation whose payments amortize the debt. IDBs used to be tax-exempt to holders. However, under current tax laws, they are no longer tax-exempt.
Industrial Revenue (ID Revenue, ID Revs, or Industrial Rev) Bond - A form of municipal bond whose issuer's ability to pay interest and principal is based on revenue earned from an industrial complex.
Industry - A category describing a company's primary business activity. This usually is determined by the largest portion of revenue.
Inflation - A persistent and measurable rise in the general level of prices. Inflation is widely measured by the Consumer Price Index, an economic indicator that measures the change in the cost of purchased goods and services.
Inflation Risk - The risk that rising inflation will diminish the rate of real return an investor will realize over time. Information Ratio - This is the ratio of the excess annualized return against the tracking error. The higher the ratio, the better, as it reflects the extent to which the fund has outperformed the benchmark.
Inheritance Tax Waiver - Document received from the tax bureau of certain states consenting to the transfer of securities registered in the name of a decedent.
Initial Public Offering (IPO) - The first public issuance of stock from a company that has not been publicly traded before.
Inside Information - Relevant information about a company that has not yet been made public. It is illegal for holders of this information to make trades based on it.
Insider - Person with nonpublic information on a corporation. Directors, officers and stockholders owning more than 10% of any one class of stock are usually considered insiders.
Insider Dealing - The purchase or sale of shares by someone who possesses "inside" information about the company; i.e., information on the company’s performance and prospects which has not yet been made available to the market as a whole and which, if available, might affect the share price.
Institutional Client - An entity whose primary purpose is to invest its own assets or those held by it in trust for others (includes pension funds, investment companies, insurance companies and banks).
Institutional Investor - Organization that trades large volume of securities such as pension funds, investment companies, and universities.
Insured Bond - A bond that is insured against default by the bond insurer. If the issuer defaults, the insurance company will step in and take over payments of interest and principal when due. Once a bond is insured, it typically carries the rating of the issuer. Most issuers are rated AAA. Municipal bond insurance applies to specific securities held in the portfolio. It does not protect the shareholder against changes in the value of fund shares.
Intangibles Tax - Property tax on non-physical assets such as stocks, bonds and mutual fund shares (Florida, e.g.). Investors are taxed on the amount of income received during the year in addition to end-of-year account value.
Interest - The cost of borrowing money expressed as a percentage rate over a specified amount of time. Also, a share or title in property.
Interest Dates - Displays the frequency and dates that interest on a given bond is paid. By carefully selecting interest dates, you can receive income monthly from a group of bonds, with staggered interest dates.
Interest Earned - Price paid for the use of money, usually expressed as an annual percentage.
Interest-Earning Assets - Principally margin loans to clients, investments, securities available for sale and private banking loans which earn a stated rate of interest.
Interest Expense - In a corporate setting, interest expense is the money the company or corporation pays out in interest on loans.
Interest Rate - The amount charged by a lender for borrowing money, not including fees. Interest rates are generally fixed at a certain level for the entire length of a loan, though they can also vary over time.
Interest Rate Risk - The prospect that Treasury and agency securities will decline in price if economy-wide interest rates rise.
Interim Dividend - A dividend declared part way through a company's financial year, authorized solely by the directors.
Intermediate-Term Bonds - Those maturing five to ten years after original issue.
International Exposure - Invests primarily in securities of companies of developed nations excluding the United States.
International Funds - 1) Mutual Funds that invest primarily in foreign companies. 2) Mutual funds that invest money outside the United States. Some international funds invest in one area of the world, while others are truly global, investing in companies in many different countries. International funds can be volatile and are generally recommended for long-term investing only.
Intrinsic value - The sum of a company's future earnings, minus any long-term debt. Intrinsic value helps investors assign a concrete value to a company.
Inventory/Inventories - For companies, raw materials, items available for sale or in the process of being made ready for sale. They can be individually valued by several different means, including cost or current market value, and collectively by first-in-first-out (FIFO), last-in-first-out (LIFO) or other techniques. The lower value of alternatives is usually used to preclude overstating earnings and assets. For security firms, securities bought and held by a broker or dealer for resale.
Inverse Floaters - An inverse floater is a derivative product primarily used in the municipal market. A broker or other institution takes a bond and splits it into two pieces: a "floater" and an "inverse floater". The floater is a short-term instrument that matures usually every 28 days. The floater is then reissued at the new prevailing short-term interest rate. The inverse floater is a long-term security that receives whatever interest is left over from the original bond after the floater interest is paid.
Inverse Relationship - Correlation between bond price and interest rate movements.
Investment - Process where capital is committed in order to earn a financial return.
Investment Act of 1940 - The primary set of laws that govern the mutual fund industry.
Investment Advisor - Individual or organization who provides investment advice for a fee. In most cases, investment advisors with more than 15 clients must register with the SEC and abide by the Investment Advisors Act of 1940. Brokers, banks and general circulation periodicals are exempted from registration with SEC. Most states require an investment advisor to pass an examination.
Investment Advisers Act of 1940 - This Act was passed to protect investors against potential abuses by investment advisors, who are persons that advise investors about security investments for compensation.
Investment Allocation Objective - One of three investment objectives stated by the client for purpose of Investment Allocation Service, as follows: 1. GROWTH - Primarily interested in Capital appreciation; 2. INCOME TO MEET CURRENT EXPENSES - Primarily interested in current income; and 3. GROWTH WITH SOME INCOME - Primarily interested in capital appreciation but also want to achieve some level of current income.
Investment Banker - See underwriter.
Investment Company - Organization that pools money of investors with common objectives to acquire and manage a portfolio securities.
Investment Grade or Investment Grade Bond - The broad credit designation given to corporate and municipal bonds which have a high probability of being paid and minor, if any, speculative features. Bonds rated Baa and higher by Moody's Investors Service or BBB and higher by Standard & Poor's are deemed by those agencies to be "investment grade."
Investment Horizon (time horizon) - The length of time an individual plans to hold an investment. The longer the investment horizon, the more risk an investor can afford to take, and the higher returns you can earn.
Investment Objective - The identification of attributes associated with an investment or investment strategy, designed to isolate and compare risks, define acceptable levels of risk, and match investments with personal goals.
Investment Trust - Company whose sole business consists of buying, selling and holding shares.
Investment Vehicles - Investment options that offer different levels of fees, service and minimums. Morgan Stanley Investment Management offers a range of investment vehicles such as mutual funds, closed-end funds, variable annuities and separate accounts.
Investor - Individual who commits money in the hopes of earning a profit.
IRA - Individual Retirement Accounts - A tax-deferred retirement plan created by the U.S. government.
IRA Rollover Account - A holding account or conduit for qualified distributions originally distributed from employer-sponsored retirement plans
Irrevocable Living Trust - An irreversible legal plan to transfer funds from the donor to the beneficiary, generally offering tax advantages.
Issue - (1) The process by which a new security is brought to market. (2) Any security.
Issue Date - Month and day that a security is initially issued.
Issued Stock - Stock sold to the public.
Issuer - Organization in which investors own equity interest through stock ownership.