Balance Sheet
Also called the statement of financial condition, it is a summary of a company's assets, liabilities and net worth at a specific time.
Bear
An investor who believes a security or the overall market in one asset class will decline. A bear market is a prolonged period of falling stock or bond prices, usually by 20 percent or more.
Bear Market
An overall downward trend in securities prices that reflects slower economic activity or investors' anticipation of it. In the post-World War II period, bear markets have typically lasted just under 12 months.
Benchmark
A predetermined set of securities whose performance is used for comparison purposes by professional money managers or individual investors. Such sets may be based on published indexes such as the S&P 500 Composite index or may be customized to suit a particular investment strategy.
Big Board
A nickname for the New York Stock Exchange (NYSE), where approximately 3,000 common and preferred stocks are traded. Founded in 1792, the NYSE is the oldest exchange in the United States and the largest. It is located at the corner of Broad and Wall streets in Manhattan. See New York Stock Exchange.
Blue Chip Company
A large, credit-worthy company known for the quality and wide acceptance of its products or services and its ability to make money and often pay dividends. Blue chip shares refer to stocks in these companies.
Board of Directors
Individuals elected by a company's shareholders who carry out certain tasks established in its charter. Boards are usually composed of a combination of inside and outside directors. The inside directors may include certain key executives, such as the chief executive officer, as well as directors who are considered close to the firm, such as representatives from firms that do a substantial amount of business with the company. Outside directors, on the other hand, have no direct connection with the firm. Members of the board serve on various committees created to rule on significant issues at the com-pany. For example, the audit committee oversees the company's accounting methods and the compensation committee rules on executive pay at the company. Good corporate governance involves having strong, independent outside directors and a chairman of the board who is an outside director.
Book Value
A company's total assets minus liabilities, such as debt, and sometimes intangible assets as well. Companies whose shares trade below their book values are often sought out by so-called value investors.
Book Value per Share
A company's book value divided by its shares outstanding. Book value per share reflects accounting valuation but not necessarily market valuation.
Brokerage Firm
A company that conducts various aspects of securities trading, analysis and advisory services. Such firms employ brokers who buy and sell securities for customers' accounts, and investment bankers who provide advice on acquisitions and restructurings to corporate clients. These firms also trade securities for their own profit. Most are publicly traded companies.