Investor Education

Also known as an "investment banker," an underwriter is a middleman between an issuer and the public. The investment banker usually forms an underwriting syndicate to limit risk and commit capital. He or she may also contract with selling groups to help distribute the issue for a concession. In the case of mutual funds, he/she may also be known as a sponsor or distributor. Investment bankers also offer other services, such as advice and counsel on the raising and investment of capital.

The procedure followed when giving securities or cash gifts to minors. A custodian is appointed by the donor and the securities are registered in the name of the custodian (an adult) as custodian for the named minor. There is one custodian and one minor per account. There is no such thing as co-custodians (although their may be co-donors). The account carries the social security number of the minor and the tax liability, if any, is the responsibility of the minor. If the child is under 14 years of age and has more than $1,400 of unearned income, the excess over $1,400 is taxed to the child, but at the parent's highest rate. The custodian is obligated to act in the best interests of the minor.

An investment company directed by a body of trustees rather than a board of directors and able to issue only redeemable securities, each of which represents an undivided participation in a unit of specified securities.

Bonds, notes and bills offered by the Treasury Department, backed by the U.S. Government and U.S. Government Agencies.

The amount by which the market value of portfolio holdings on a given date exceeds or falls short of their cost.