Glossary Terms

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Adjusted Gross Income (AGI)

An interim calculation in the computation of income tax liability. It is computed by subtracting certain allowable adjustments from gross income.


A person appointed by the court to settle an estate when there is no will.

After-Tax Return

The return from an investment after the effects of taxes have been taken into account.

Aggressive Growth Fund

A mutual fund whose primary investment objective is substantial capital gains.

Alternative Minimum Tax

A method of calculating income tax that disallows certain deductions, credits, and exclusions. This was intended to ensure that individuals, trusts, and estates that benefit from tax preferences do not escape all federal income tax liability. People must calculate their taxes both ways and pay the greater of the two.


An insurance-based contract that provides future payments at regular intervals in exchange for current premiums. Annuity contracts are usually purchased from banks, credit unions, brokerage firms, or insurance companies.


Anything owned that has monetary value.

Asset Allocation

The process of repositioning assets within a portfolio to maximize return for a given level of risk. This process is usually done using the historical performance of the asset classes within sophisticated mathematical models.

Asset Class

A category of investments with similar characteristics.


The examination of the accounting and financial documents of a firm by an objective professional. The audit is done to determine the records' accuracy, consistency, and conformity to legal and accounting principles.