In any of those cases, however, face value is repaid at maturity. The death benefit of a life insurance policy, which is the amount the beneficiary receives when the insured person dies, is also known as the policy's face value.

The term is sometimes used more generically, too, to refer to stocks or other securities that are out of favor.

If you own one fund in a family, you can usually transfer assets to another without sales charges-a transaction also known as an exchange. (Unless you hold the funds in a tax-deferred retirement plan, though, you will owe capital gains taxes on any increase in share value of the fund you're moving out of.)

Investing in a family of funds can make diversification and asset allocation easier, provided there are funds within the family that meet your investment criteria. Investing in a family of funds can also simplify recordkeeping.

However, the advantages of consolidating your assets within one fund family are being challenged by the recent proliferation of fund networks, sometimes called fund supermarkets, which make it easy to spread your investments among several fund families.

You can actually qualify for more than $100,000 coverage at a single bank, however, provided your assets are in different types of accounts. For example, you could be insured for $100,000 in an account registered in your own name, $100,000 in your individual retirement account (IRA), and another $100,000 representing your share of jointly held accounts.

The term also describes money the Federal Reserve uses to buy government securities when it wants to take money out of circulation to tighten the money supply and forestall an increase in inflation.

FICA takes 6.2% of every paycheck you receive, up to an annual cap ($84,900 for 2002) set by Congress. Your employer is required to contribute an equal amount. If you're self-employed, you pay as both employer and employee, or 12.4%.

An additional 1.45% of your salary is also withheld, and matched by your employer, to pay for Medicare, a medical trust fund for people over 65. There's no salary cap for this part of your contribution.

Based on its findings, the FOMC determines whether to change interest rates or alter credit policies to curb or stimulate economic growth. It may, for instance, raise the interest rate that the Federal Reserve charges member banks to borrow money. This move would be an effort to tighten the availability of credit in the economy and thereby limit growth. Or it may decide to buy government securities to increase the amount of money in circulation.

Like the other members of the Board, the chairman is appointed by the president of the United States, and has emerged as one of the primary shapers of the American economy and economies throughout the world.

The Federal Reserve System includes 12 regional Federal Reserve banks, 25 Federal Reserve branch banks, all national banks, and some state banks. Member banks must meet the Fed's financial standards. The Fed's Open Market Committee sets interest rates and establishes credit policies, and the New York Federal Reserve Bank puts those policies into action by buying and selling government securities.

However, acting responsibly can be broadly interpreted, and may mean preserving principal to some fiduciaries and producing reasonable growth to others. Fiduciaries include executors, trustees, guardians, and agents appointed in powers of attorney.

A finance charge is expressed as an annual percentage rate (APR) of the amount you borrow, and it can be calculated in a number of different ways. The Truth-in-Lending Law requires your lender to disclose the APR you'll be paying and the way it is calculated before you agree to the terms of the loan.

The FASB periodically revises its rules to make sure corporations fully account for different kinds of income, avoid shifting income from one period to another, and properly categorize their income.

Generally, the contract changes in value in response to changes in the interest rate. Increases in the rate produce falling contract prices, while drops in the rate produce rising contract prices. In most cases, the hedgers who use these contracts are banks and other financial institutions who want to protect their portfolios against sudden changes in value triggered by changing interest rates.

There are two types of financial institutions: Depository institutions, such as banks and credit unions, which pay you interest on your deposit and use the deposit to make loans, and nondepository institutions, such as insurance companies, brokerage firms, and mutual fund companies, which sell financial products. Many financial institutions provide services in both categories.

Fee-only planners charge you by the hour or sometimes charge a flat fee for a specific service. They don't sell products or get sales commissions. Other planners don't charge a fee but earn commissions on the products you buy. Still others charge fees and get commissions but may offset part of their fee with commissions on products you buy.

Financial planning is not regulated, so while accountants, bankers, lawyers, brokers, insurance agents, and other professionals with special training and credentials act as planners, people without credentials may also work as planners.

Professional organizations, such as the International Association of Financial Planning, the Institute of Certified Financial Planners, and the National Association of Personal Financial Advisors, provide information on planners who meet their standards.

At the third level, a smaller portion of resources is invested in more speculative investments with higher potential returns. And the top level, containing the smallest percentage of the overall portfolio, is invested in ventures that have the highest potential return but also the greatest investment risk. Using a financial pyramid to distribute your investments allows you to balance need for stability with your desire for a higher return.

The insurance company invests its assets, including your premium, so there will be money available to pay you a fixed rate of return beginning at a time you select. The issuer of the annuity contract assumes the risk that you could outlive your life expectancy and therefore collect income over a longer period than anticipated.

A fixed annuity differs from a variable annuity, which does not guarantee your rate of return or the amount of your future income but provides the possibility of earning a higher rate of return.

If interest rates rise, a fixed mortgage works in your favor. But if market rates drop, you would have to refinance to take advantage of the lower rate to reduce your mortgage costs. Fixed rate mortgages, which are available in 15-, 20-, and 30-year terms, tend to more common than adjustable rate mortgages except in periods when the market interest rates are high.

A portfolio heavy with fixed-income investments, however, may not provide the protection you need against the effects of inflation, since the rates of return on these securities are generally lower over the long term than the return on more volatile investments, such as common stock. Nonetheless, fixed-income securities provide diversification in a well-balanced investment portfolio and can be a useful source of income.

The amount you put into the plan is not reported to the IRS as income, which means your taxable income is less. However, you have to estimate the amount you'll spend before the tax year begins. And if you don't spend it all, you forfeit any amount that's still in your account at the end of the year.

In banking, the float is the time that elapses from the time you write a check until it clears your account. The same term also refers to the time lag between your depositing a check in the bank and the day the funds become available for use. For example, if you deposit a check on Monday, and you can withdraw the cash on Friday, the float is four days. When you write a check, the float works to your advantage. When you deposit a check, the float works to the bank's advantage.

When a nations currency moves up and down in value against the currency of another nation, the relationship between the two is described as a floating exchange rate. For example, the US dollar is worth more Japanese yen in some periods and less in others. That movement is usually the result of whats happening in the economy of each of the nations and in the economies of their trading partners. A fixed exchange rate, on the other hand, means that two (or more) currencies, such as the US dollar and the Bermuda dollar, always have the same relative value.

Floor traders don't pay commissions, which means they can make a profit on even small changes in price. But they must still abide by trading rules established by the exchange. One of those rules is that client orders take precedence over floor traders' orders.

Large-scale currency trading, with minimums of $1 million, is also considered foreign exchange and can be handled as spot price transactions, forward contract transactions, or swap contracts. Spot transactions are closed within two days, and the others are set for an agreed-upon price at an agreed-upon date in the future.

Unlike a P/E figure based exclusively on past performance-sometimes described as a trailing P/E-a forward P/E may help you evaluate the current price of a stock in relation to what you can reasonably expect to happen to it in the near future. For example, a stock whose current price seems high in relation to last year's earnings may seem more reasonably priced if earnings estimates are higher for the next year. (Of course, the exact opposite could be true as well, which would make the current price seem even higher.)

In a DRIP, a fractional share gives you credit toward the purchase of a full share. With a mutual fund, in contrast, the fractional share is included in your account value.

Freddie Mac provides the dual consumer benefit of providing funds for mortgage lending and offering the opportunity to invest in high-yielding investments backed by the federal government. Its shares are traded on the New York Stock Exchange (NYSE).

Because frontrunning, sometimes known as forward trading, relies on information that isn't available to the general public, its considered unethical in certain circumstances. One example is a broker-dealer who trades at a better price for a personal account than for a clients account. But on the commodities markets, where frontrunning is called dual trading, its an accepted practice.

However, in exchange for providing these services, these firms tend to charge higher commissions and fees than discount or online brokerage firms.

A fundamental analysis might indicate whether the stock is likely to increase or decrease in value in the short- and long-term, and whether its current price is an accurate reflection of its value.

Forms of money, such as dollar bills or euros, are fungible since they can be exchanged or substituted for each other. Similarly, put and call futures contracts on the same commodity that expire on the same date are fungible since a futures contract to buy (a call) can offset, or neutralize, a futures contract to sell (a put).

On the other hand, multiple classes of the same stock may not be fungible. For example, this may occur in markets where citizens of the country are eligible to buy one class of stock and noncitizens a different class. Typically, the shares have different prices and may not be exchanged for each other.

Futures contracts provide some investors, called hedgers, a measure of protection from the volatility of prices on the open market. For example, wine manufacturers are protected when a bad crop pushes grape prices up on the spot market, provided they have a futures contract to buy the grapes at a set price. Similarly, grape growers are protected if prices drop dramatically-if, for example, there's a surplus caused by a bumper crop-provided they have a contract that sets the price at a higher level.

Unlike hedgers, speculators use futures contracts to seek profit on price changes. For example, speculators can make (or lose) money, no matter what happens to the grapes, depending on what they paid for the futures contract and what they can sell it for.

As electronic trading of these products expands, however, buying and selling doesn't always occur on the floor of an exchange, so the term is also being used to describe the activity of trading futures contacts.