With your 401(k), your account balance, also called your accrued benefit, is the amount your 401(k) account is worth on a date that it's valued. For example, if the value of your account on December 31 is $250,000, that's your account balance.

You use your account balance to figure how much you must withdraw from your retirement savings plan each year once you start taking required distributions after you turn 70 1/2. Specifically, you divide the account balance at the end of your plan's fiscal year by your life expectancy to determine the amount you must take from your account during the next fiscal year.

If your 401(k) plan includes an annuity, each time you make a pretax contribution, that amount is added to one or more subaccounts to buy additional accumulation units. The value of your account is figured by multiplying the number of units you own by the dollar value of each unit. That value changes to reflect the changing performance of the underlying investments in the subaccount.

To complete the deal, the acquirer may be willing to pay a higher price per share than the price at which the stock is currently trading. That means shareholders of the target company may realize a substantial gain, which is one reason that some investors are always on the lookout for companies that seem ripe for acquisition.

Sometimes acquisitions are described, more bluntly, as takeovers and other times, more diplomatically, as mergers. Collectively, these activities are referred to as mergers and acquisitions, or M&A, to those in the business.

The initial rate on an ARM is usually lower than the rate on a fixed rate mortgage for the same term, which means it may be easier to qualify for an ARM. You take the risk, however, that interest rates may rise, increasing the cost of your mortgage. Of course, its also possible that the rates may drop, decreasing your payments.

The rate adjustments, which are based on changes in one of the publicly reported indexes that reflect market interest rates, occur at preset times, typically once a year but sometimes every three, five, or seven years. Typically, rate changes on ARMs are capped both annually and over the term of the loan, which helps protect you in the case of a rapid or sustained increase in market rates.

However, certain ARMs allow negative amortization, which means additional interest could accumulate on the outstanding balance if market rates rose higher than the cap. That interest would be due when the loan matured or if you want to prepay.

You figure your AGI on page one of your federal tax return, and it serves as the basis for figuring the income tax you owe. AGI is also used to establish your eligibility for certain tax or financial benefits, such as deducting your IRA contribution or qualifying for personal tax exemptions.

There's also electronic trading in benchmark indexes such as Standard & Poor's 500-stock Index (S&P 500) and the Dow Jones Industrial Average (DJIA) before the US stock markets open for the day. The level of activity and the direction the trading up or down is widely interpreted as an early indicator of what's likely to happen in the market during the day.

The money raised by selling these bonds, also referred to as agency securities, is typically used to make reduced-cost loans available to specific groups, including home buyers, students, or farmers. Interest you earn on some-but not all-of these securities is exempt from state and local income taxes, but it is always federally taxable.

Bonds issued by the federal agencies are backed by the government's full faith and credit, just as US Treasury securities are, but bonds issued by the sponsored corporations are generally not guaranteed.

One investment strategy is to look for stocks whose alphas are high, which means the stocks are undervalued and have the potential to provide a strong return. A stock's alpha is different from its beta, which estimates its price volatility in relation to the market as a whole.

The AMT is actually an extra tax, calculated separately and added to the amount the taxpayer owes in regular income tax. In calculating the AMT, some items that are ususally tax exempt become taxable and special tax rates apply. For example, under AMT rules, income on certain tax-free bonds is taxable. Because increasing numbers of ordinary taxpayers are facing the AMT, there is some pressure on Congress to modify the rules.

Some analysts work for financial institutions, such as mutual fund companies, brokerage firms, and banks. Others work for analytical services, such as Value Line, Inc., Morningstar, Inc., Standard & Poor's, or Moody's Investors Service, or as independent evaluators. Zacks (www.zacks.com) and First Call (www.firstcall.com) make reports from hundreds of different analysts available on their websites, and analysts' commentaries appear regularly in the financial press, and on radio, television, and the Internet.

When the APY is the same as the interest rate that is being paid on an investment, you are earning simple interest. But when the APY is higher than the interest rate, the interest is being compounded, which means you are earning interest on your accumulating interest.

Most annual reports are glossy affairs that also serve as marketing pieces. Copies are generally available from the company's investor relations office, and annual reports may even appear on the company's website. The company's 10-K report is a more comprehensive look at its finances.

Similarly, you're the annuitant if you take distributions from an individual retirement annuity (IRA) or from an individual annuity you buy with after-tax income. If your beneficiary receives annuity income after your death, he or she becomes the annuitant. It's also possible to buy an annuity naming someone other than the buyer a disabled child, for example as annuitant.

Most commonly, an annuity describes the amount you receive from your pension each year, usually in monthly installments. But, in fact, annuity also refers to the annual income you receive from any source, as well as the source itself. For example, some tax-deferred retirement savings plans are called annuities.

When an annuity is offered as part of a qualified plan, such as a 401(k), a 403(b), or tax-sheltered annuity (TSA), you defer tax on your contribution as well as on any earnings, and you typically begin to receive income from the annuity when you retire.

You can also buy other types of annuities, which provide tax-deferred earnings, a source of regular income, or both. For example, you can buy a nonqualified deferred annuity while you're working and get income from it when you retire. Or you can buy an immediate annuity when you retire and receive monthly payments as long as you live.

With nonqualified annuities, there are no federal limits on annual contributions and no required withdrawals. You also have a wide choice of products, which can be structured to fit your particular goals and risk tolerance.

While the number of units does not change, the value of each unit fluctuates to reflect the performance of the underlying investments in the subaccount. That's why the income you receive from a variable annuity may differ from month to month.

Medicare also establishes approved charges for medical procedures and office visits. If you participate in an Original Medicare plan, theres also a legal limit on what a doctor, laboratory, or other medical provider can charge over and above the approved amount.

While an arithmetic index is a more accurate measure of total stock market performance than an index that stresses relatively few high-priced or large-company stocks, some analysts point out that it may also produce higher total return figures than other indexing methods. The best known arithmetic index in the US is the one computed by Value Line, Inc., which tracks the approximately 1,700 stocks the company analyzes regularly.

Bid and ask prices are typically reported to the media for commodities and over-the-counter (OTC) transactions. In contrast, last, or closing, prices are reported for exchange-traded and national market securities. With open-end mutual funds, the ask price is the net asset value (NAV), or the price you get if you sell, plus the sales charge, if one applies.

Similarly, a company's assets include the value of its physical plant, its inventory, and less tangible elements, such as its reputation.

An asset allocation model specifically the percentages of your portfolio allocated to each investment category that's appropriate for you depends on many factors, such as how much time you have to invest, your tolerance for risk, the direction of interest rates, and the market outlook.

Many experts advise you to adjust or rebalance your portfolio at least once a year to bring it back in line with your model or to realign your model as your financial goals change. Brokerage firms regularly revise the allocations they recommend as they take changing economic conditions and their sense of future developments into account.

In contrast, the Nasdaq Stock Market (Nasdaq) is described as a negotiated market because the differences between what buyers are offering and sellers are asking are recorded electronically, and the final price is determined by the market maker.

In an automatic enrollment, the company determines the percentage of earnings you contribute and how your contribution is allocated. You have the right to change either or both of those choices if you stay in the plan. However, if you decide not to participate and take out the money that was deferred from your salary into your account, you'll owe the 10% early withdrawal penalty if you're younger than 59 1/2.

However, many averages are weighted, which means they count stocks with the highest prices or largest market capitalizations more heavily than they do others. That's to account for differences in their impact on the markets and on the economy in general. The most widely followed average is the price-weighted Dow Jones Industrial Average (DJIA), which measures the performance of 30 industrial stocks.