Ascent Private Capital Management

A - C D - F G - I J - L M - O P - R S - U V - Z

529 Plan
A form of college savings accounts the Internal Revenue Code permits universities and states to establish that provides several tax benefits, including a five year acceleration of annual exclusion gifts; also known as a qualified state tuition program (QSTP).

Abatement
The reduction of a gift (bequest) in a will because the estate's assets are insufficient to satisfy all the gifts after the estate's debts, claims, and taxes have been paid; all gifts of the same class abate proportionately unless provided otherwise.

Absolute Return
The actual appreciation or depreciation (return) of a security, expressed as a percentage, in positive (absolute) terms.

Abstract of Trust
A document that briefly outlines a trust's key provisions and existence; also called an affidavit of trust.

Accelerated Return Enhanced Note
A security that provides an investor no downside principal protection against adverse performance of the underlying linked asset or index of the note while providing potential for increased participation (i.e., 200%-300%) additional return linked to the performance of the underlying asset or index if held to maturity. The note is fully exposed to the credit risk of the issuer and their ability to pay (or inability to pay due to credit default/bankruptcy) at expiration.

Accredited Investor
For individuals, the criteria is met by a net worth of more than $1 million or an income of more than $200,000 for the current and each of the previous two years. Other entities such as corporations, partnerships, trusts, and employee benefit plans with at least $5 million in investments. This criteria is governed by Regulation D of the Securities Act of 1933.

Accrued Interest
Interest that has accumulated between the most recent payment, and the sale of a bond or other fixed-income security.

Active Management
An investment management strategy in which an attempt is made to outperform the market,as measured by a particular benchmark or index. The manager takes an active decisionmaking role in choosing which securities to purchase and sell.

Adjudication
The decision of a court with respect to matters of dispute; used most often with regard to judgment of incapacitation or incompetence.

Administrator
The individual or institution appointed by a court to oversee the settlement of the estate of a person who has died without a will.

Against the Box
A short sale of a security which the seller does own but does not want to close out his/her position in, for tax or other reasons.

Agency Security
Securities issued by federally related institutions and U.S. government-sponsored entities, (GSEs). Such agencies were created to reduce borrowing costs for certain sectors of the economy. Agency securities are backed by the full faith and credit of the U.S. government. Examples include the Federal home Loan Mortgage Corporation, or Fannie Mae (FNMA), and the Student Loan Marketing Association (SLMA).

Alpha
A statistic measuring that portion of a stock, fund, or composite's total return attributable to specific or non-market risk. Alpha measures non-market return and indicates how much value has been added or lost. A positive Alpha indicates the fund or composite has performed better than its Beta would predict (i.e., the manager has added value above the benchmark). A negative Alpha indicates a fund or composite has underperformed given the composite's Beta.

Alternative Investments
As used by U.S. Bank, an investment considered to be outside of the traditional asset classes of long-only stocks, bonds and cash. Examples of alternative investments include hedge funds, private equity, options, and financial derivatives.

Amortization
Payment of debt in regular, periodic installments of principal and interest as opposed to interest only payments.

Annual Percentage Rate (APR)
The cost of credit expressed as an annual rate. It would be higher than the interest rate if there are fees, points and other charges associated with the credit. The APR is disclosed to a consumer as a requirement of federal truth in lending statutes.

Annuity
An interest-bearing contract between an individual and a life insurance company that guarantees periodic payments to the individual during a specific time period.

Apportionment
The division, distribution, or disbursement of property among two or more accounts or individuals, as between principal and income.

Arbitrage
The simultaneous purchase and sale of an asset in order to profit from a difference in the price. It is a trade that profits by exploiting price differences of identical or similar financial instruments, on different markets or in different forms. Arbitrage exists as a result of market inefficiencies; it provides a mechanism to ensure prices do not deviate substantially from fair value for long periods of time.

Asking Rents
The publicized asking rent price.

Asset Allocation
The apportionment of one's securities among three classifications: equities, fixed income and cash items.

Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity
A lending program created by the Federal Reserve Board on September 19, 2008 that provided new funding to U.S. financial institutions until October 30, 2009. It provided funding that allowed financial institutions to purchase asset-backed commercial paper from money market mutual funds to prevent default on investors' redemptions.

Asset-Backed Security
Bonds or notes backed by loans, mortgages, or accounts receivable. Banks or other providers of credit sell the loans or receivables to a special trust that repackages them as securities.

Assign
To sign a document transferring ownership of an asset (for example, securities, life insurance) from one individual to either another individual or to a trust.

Attest
To serve as a witness, as to a will.

Auction Rate Securities
Variable rate bonds with long-term (usually 30 years) maturities that pay short-term interest rates through a descending price auction for multiple identical items that occurs every 7, 28 or 35 days.

Autocallable
A note that is automatically mature prior to the scheduled maturity date, if predetermined market conditions are realized.

Bank for International Settlements
An international organization fostering the cooperation of central banks and international monetary policy makers. Established in 1930, it is the oldest international financial organization, and was created to administer the transaction of monies according to the Treaty of Versailles. Among others, its main goals are to promote information sharing and to be a key center for economic research.

Bank of England (BOE)
The central bank for the United Kingdom. (The equivalent of the Federal Reserve in the U.S.)

Barrier
A specified level of an underlying security or index which, if reached, will trigger a "knock in" or "knock out" event within a Structured Note.

Barrier Note
A security that provides an investor with returns linked to the performance of an underlying linked asset or index provided that the asset or index has not reached the barrier price, creating a "knock in" or "knock out" event. The note usually provides an investor full principal protection with either no additional return, or a contingent coupon, if the barrier is reached. The note is fully exposed to the credit risk of the issuer and their ability to pay (or inability to pay due to credit default/bankruptcy) at expiration and 100% of principal could be lost in the case of a default or if the note is not held until maturity.

Basis
The original price or cost of an asset, usually based on the purchase price or, in the case of assets received from an estate, on the appraised value of the assets at the death of the donor.

Basis Point
A unit that is equal to 1/100th of 1% and is used to denote the change in a financial instrument.

Bear/Bull
Terms frequently used to describe the outlook for short- and long-term market performance:* bear refers to the expectation that prices will decline;* bull refers to the belief that stock prices are likely to rise.

Bearer Obligations
A debt instrument that is made payable to the bearer.

Bearish
The sentiment of an investor who believes that a particular security or market is heading downward. The investor is generally pessimistic about the state of a given security and will attempt to profit from a decline in value of a particular security or market.

Beige Book
The commonly used name for the Fed report called the Summary of Commentary on Current Economic Conditions by Federal Reserve District. It is published just before the Federal Open Market Committee (FOMC) meeting on interest rates and is used to inform the members on changes in the economy since the last meeting. Each Federal Reserve bank gathers anecdotal information on current economic conditions in its district.

Below Par
Pertaining to bond prices, a bond trading below par is trading below its nominal value, or face value.

Beneficiary
An individual named as the recipient of the income or principal of an estate or trust.

Bequeath
To give property by will.

Bequest
Property given as a gift under the terms of a will.

Beta
Beta is a measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole. A Beta of 1 indicates that the security's price will move with the market. A Beta of less than 1 means the security will be less volatile than the market. A Beta greater than 1 indicates that the security's price will be more volatile than the market.

Bid Price
The price a potential buyer is willing to pay for a security. In a stock quote, for example, there is a bid/ask spread which, is the difference between what buyers are willing to pay and what sellers are asking. A rule of thumb is that if you are selling a stock, you will generally receive the current bid price.

Bid-to-Cover Ratio
A ratio that compares the number of bids received in a Treasury security auction to the number of bids accepted. A ratio above 2.0 indicates a successful auction comprised of aggressive bids.

Blue Chip Stocks
High-quality, common stock of well-known companies with extended records of earnings and dividends, well-respected management, and prospects for continued strong performance.

Bond
A debt instrument that is a "promise to pay" issued by corporations, federal and state governments, and municipalities to raise capital. The bond issuer promises to pay the holder of the bond the principal amount of the load when the bond matures and a fixed rate of interest periodically during the term of the bond.

Book Value
The net tangible asset value per share of common stock. It is total assets less intangibles, minus total liabilities, minus the redemption value of preferred stock outstanding, divided by the common shares outstanding.

Bottom/Floor
The lowest point an index or underlying security can fall to in a given period.

Brady Bonds
Bonds that are issued by the governments of developing countries. Brady bonds are some of the most liquid emerging market securities. They are named after former U.S. Treasury Secretary Nicholas Brady, who sponsored the effort to restructure emerging market debt instruments.

BRIC
An acronym for the nations of Brazil, Russia, China and India, which are fast emerging economically.

Bridge Financing
A form of interim loan, generally made between a short term loan and a permanent (long term) loan, when the borrower needs to have more time before taking the long term financing.

Buffered Return Enhanced Note
A security that provides a specified range of protection (the "buffer") against adverse performance of the underlying linked asset or index of the note while still providing potential for additional return linked to the performance of the underlying asset or index if held to maturity. Regardless of the "buffer," the note is fully exposed to the credit risk of the issuer and their ability to pay (or inability to pay due to credit default/bankruptcy) at expiration and 100% of principal could be lost in the case of default or if the note is not held until maturity.

Build America Bonds (BAB)
A product of a provision in the Obama Administration stimulus package; volume is expected to reach $100-$150 billion between the period of mid-2009 to late 2010.

Bull/Bear
Terms frequently used to describe the outlook for short- and long-term market performance:* bull refers to the belief that stock prices are likely to rise;* bear refers to the expectation that prices will decline.

Bullish
The sentiment of an investor who believes that a particular security or market is heading upward. The investor is generally optimistic about the state of a given security and will attempt to profit from an increase in value of a particular security or market.

Bureau of Census
A division of the U.S. federal government. Data collected by the Bureau of Census is analyzed and used by policymakers who govern the country and make economic decisions that affect businesses on a day-to-day basis.

Bureau of Economic Analysis (BEA)
An agency of the U.S. Department of Commerce, and one of the world's leading statistical agencies; responsible for producing and communicating economic data.

Business Confidence Index
A measure of the level of optimism of people who run U.S. companies have about the performance of the economy and how they feel about their company's prospects.

Business Risk
The risk that an investment will decline in value as a result of developments within the issuing entity or within the issuing entity's industry.

Call
A provision of a bond indenture, which obliges the issuer the right to redeem an outstanding bond prior to its scheduled maturity. If called, a bond may be redeemed at Par, or at a slight premium to par. It is important to a purchaser to know a bond's call date because it cannot be assumed that interest will be paid on a bond beyond that date.

Call Option
An option contract that gives its holder the right (but not the obligation) to purchase a specified number of shares (usually 100) of the underlying stock at a given strike price, on or before the expiration date of the contract.

Capital
Money used to create income, either as investment in a business or income property.

Capital Gains and Losses
For tax purposes, the difference between the purchase price and selling price.

Capitalization
Market capitalization of a company is calculated by multiplying the number of shares outstanding by the price per share.

Capitalization Rate Compression/Expansion
The shrinking or growing environment of the capitalization rate which is operating income/capital cost.

Cash & Cash Equivalents
Cash and cashlike items such as short-term investments that can be quickly converted to cash. Typical items including: cash, certificates of deposit, commercial paper, short-term investments, temporarily cash investments and time deposits.

Central Bank
An entity responsible for overseeing the monetary system for a nation (or group of nations). In the U.S., this is the Federal Reserve System (commonly known as "the Fed").

Certificate of Deposit (CD)
An arrangement between an investor and a financial institution which calls for the financial institution to pay a specific rate of interest over a set period of time. Certain deposits are FDIC insured up to applicable limits.

Charitable Bequest
A gift of property by a will to a legal charity.

Charitable Lead Annuity Trust (CLAT)
A charitable lead trust in which an annuity is paid to one or more charities for a set term or the life or lives of one or more individuals with the remainder passing to one or more individuals (non-charitable beneficiaries).

Charitable Lead Trust
A trust wherein a charity is the beneficiary of an annuity or unitrust payment during the donor's life with the remainder going to a non-charitable beneficiary upon the grantor's death.

Charitable Lead Unitrust (CLUT)
A charitable lead trust in which a fixed percentage of the trust assets, valued annually, is paid to one or more charities for a set term of years or the life or lives of one or more individuals with the remainder passing to one or more individuals.

Charitable Remainder Annuity Trust (CRAT)
A trust that provides a sum certain, not less than five percent of initial fair market value of all property placed in the trust, to be distributed at least annually to a non-charitable beneficiary, with the remainder to a qualified charity.

Charitable Remainder Unitrust (CRUT)
A trust that provides a fixed percentage, not less than five percent of net fair market value of property, valued annually, to be distributed at least annually to a non-charitable beneficiary, with the remainder to a qualified charity.

CIT Group
A United States bank holding company which provides commercial financing and leasing products, and management advisory services to clients in a variety of industries.

Class
Class is usually used in conjunction with commercial real estate and refers to the quality of property. Class definitions fall with the following guidelines. Class A+: Landmark quality, highrise building with prime central business district location (the best of the Class A buildings). Class A: Generally 100,000 sf or larger (five or more floors), concrete and steel construction, built since 1980, business/support amenities, strong identifiable location/access. Class B: Renovated and in good locations. Newer building are smaller in size, wood frame construction, and/or in non-prime location. Class C: Older, unrenovated of any size in average to fair condition.

CMBX Indexes
A group of indexes made up of 25 branches of commercial mortgage-backed securities (CMBS), each with different credit ratings.

Codicil
An addition or other change to an existing will.

Coincident Economic Index (CEI)
An index published by The Conference Board, a private-sector consulting firm. It is a broad-based measurement of current economic conditions, helping economists and investors to determine which phase of the business cycle the economy is currently experiencing.

Collar
A protective options strategy created by purchasing an out of the money put option while simultaneously writing an out of the money call option.

Collateral
Property pledged as security for a debt, such as real estate as security for a mortgage.

Commercial Mortgage-Backed Securities (CMBS)
A type of mortgage-backed security that is secured by the loan on a commercial property.

Commercial Paper
Unsecured, short-term (usually a maximum of nine months) bearer obligations in denominations from $100,000 to $1 million, issued principally by industrial corporations, finance companies and commercial factors at a discount from face value.

Commercial Paper Funding Facility (CPFF)
An institution created by the Federal Reserve Board on October 27, 2008 as a result of the credit crunch faced by financial intermediaries in the commercial paper market. The CPFF provides liquidity to U.S. issuers of commercial paper registered with the CPFF through a special purpose vehicle that is funded by the Federal Reserve.

Commercial Real Estate
Property that is solely used for business purposes.

Commitment
An agreement, often in writing, between a lender and a borrower to loan money at a future date subject to compliance with stated conditions.

Commitments of Traders (COT)
A report published every Friday by Commodity Futures Trading Commission (CFTC) that seeks to provide investors with up-to-date information on futures market operations.

Commodity
Raw materials and unprocessed goods that are either consumed directly or are processed and resold. Commodities usually fall into the following categories: energy, industrial metals, precious metals, agriculture, and livestock.

Commodity Futures Trading Commission (CFTC)
A U.S. federal agency responsible for ensuring the open and efficient operation of the futures market.

Commodity Research Bureau Index (CRB)
Measures the overall direction of commodity sectors.

Common Stock
Units of ownership that give voting rights to shareholders. (See Preferred Stock.)

Conservator
An individual or institution appointed by a court to care for and manage the property of an incompetent individual who is not a minor. Also called a tutor.

Consumer Confidence Index (CCI)
A survey conducted by The Conference Board, a private-sector consulting firm. The survey gathers responses from 5,000 households on questions regarding expected business and employment conditions and measures how optimistic or pessimistic consumers are with respect to the economy in the near future.

Consumer Price Index (CPI)
A measure of the average change in prices over time in a market basket of goods and services and is one of the most frequently used statistics for identifying periods of inflation and deflation.

Contest of Will
Legal proceedings to prevent or alter distribution of estate assets as described in a will.

Contingent Coupon
A one-time payment at maturity that may be received on a Barrier Note if a barrier is breached during the holding period. The coupon rate is established prior to trade date and is a percentage of only the principal amount invested.

Core Inflation
An indicator of underlying long-term inflation. It is a measure of inflation that excludes certain items that face volatile price movements. It is most often calculated by taking the Consumer Price Index (CPI) and excluding certain items from the index, usually energy and food products.

Corporate Bond
A debt instrument issued by a corporation, in contrast to that issued by a government agency or municipality. Corporate Bonds typically have a par value of $1,000.00, are taxable, and have specified term maturities. They trade on major exchanges or via the over-the counter market.

Cost Basis
In the context of investing, cost basis is the original price, or average price paid for an asset, used to determine the profit/loss, or capital gain.

Covered Call Writing
Selling call options on stocks owned, giving the buyer the right to purchase an investor's shares at the options' strike price if the market price of the stock exceeds the strike price. Seller earns a premium on sale and retains appreciation up to strike price. Option seller maintains exposure to potential price declines in underlying stock.

Credit Default Swaps
An over-the-counter derivative designed to transfer credit risk from one party to another. Two parties enter into an agreement whereby one party pays the other a fixed periodic coupon for the specified life of the agreement. The other party makes no payments unless a specified credit event occurs. Credit events are typically defined to include a material default, bankruptcy or debt restructuring for a specified reference asset.

Credit Rating
A rating given a person or company to establish credit worthiness based upon present financial condition, experience and past credit history.

Credit Risk
Also known as the default risk, it is the risk associated with a bond issuer failing to repay principal and interest in a timely manner.

Current Yield
The annual dollar interest paid by a bond dividend by its market price. It is the actual return rate, not the coupon rate.

Customers' Inventories Index
Based on a survey conducted by ISM of manufacturing supply managers and tracks levels of the inventories maintained by manufacturers.

   
  

Investment products and services are:
Not a deposit    •    Not FDIC insured •    May Lose Value    •    Not bank guaranteed    •    Not insured by any Federal Government Agency

  

This information represents the opinion of U.S. Bank and is not intended to be a forecast of future events or a guarantee of future results. This information is designed to be educational and informative. It is not intended to provide recommendations, to provide specific advice concerning retirement accounts and investment planning, or to meet the needs of any particular investor. Investors should consult with their investment professionals for advice concerning their particular situations.

 Equal Housing Lender. Credit products are offered by U.S. Bank National Association and subject to normal credit approval. Deposit products offered by U.S. Bank National Association. Member FDIC.

U.S. Bank and its representatives do not provide tax or legal advice. Your tax and financial situation is unique. You should consult your tax and/or legal advisor for advice and information concerning your particular situation.

U.S. Bank is not responsible for and does not guarantee the products, services or performance of U.S. Bancorp Investments.

Wealth Impact Planning services are not fiduciary in nature, and Ascent serves in a non-fiduciary role when providing these services.

To the extent Ascent or other divisions of U.S. Bank have investment management or fiduciary administration responsibilities over your accounts under separate agreements, the scope of those agreements shall not be affected as a result of information you provide to Ascent or to which Ascent has access as part of its Wealth Impact Planning services.

Wealth Impact Planning services may include Wealth Dynamics coaching services in order to facilitate your self-assessment of Wealth Impact Planning issues. These services are not psychological or counseling services. Ascent does not engage in the practice of psychology.