EE Savings Bond
A zero coupon bond issued directly by the Treasury in par values ranging from $5 to $10,000. Purchased at half of par, EE savings bonds mature in 12 years and are eligible for extended maturity.

Earned income
Income received as compensation for work, such as salary, wages and self-employment income. By contrast, unearned income includes income from investments. This distinction is used for certain income tax purposes.

Earnings Per Share (EPS)
Net income divided by the number of shares of common stock outstanding.

Earnings Report
A corporate financial statement that reports and nets out all earning and expenses to a profit or loss. It is therefore sometimes referred to as the profit and loss (P&L) statement.

Economic Risk
The risk created by changes in the economy. Business cycles affect businesses and industries differently. For example, some prosper during an economic expansion and do poorly during an economic contraction, while others are largely unaffected by business cycles. See Investment risk.

Effective Date
The first date after the cooling-off period of a new issue that the security can be offered.

Emerging Markets Funds
A fund that invests primarily in the stocks of companies in, or doing business in, developing countries and emerging markets. Emerging market funds usually have an investment objective of long-term growth and are generally considered aggressive stock funds.

Employee Stock Ownership Plan (ESOP)
A retirement plan in which contributions are invested primarily in the employer's stock. The stock is distributed when the employee retires or leaves the company.

Endorsement
Signature on the back of a stock certificate of the person whose name appears on the face of the same. Makes the certificate negotiable.

Energy Stock Funds
A fund that invests primarily in the stocks of companies in the energy business.

Environmental Securities Funds
A fund that invests primarily in securities issued by environmental-related companies. These include companies involved in hazardous waste treatment, waste recycling, and other related areas.

Equipment Trust Bonds
Debt instruments that are issued by some corporations that are backed by "rolling stock" (such as airplanes or locomotives and freight cars).

Equity
The portion in an account that reflects the customer's ownership interest.

Equity Assets
Assets that represent ownership, such as common stocks, in contrast to assets that represent debt, such as bonds. Equity assets fluctuate in value and provide opportunities for growth.

Equity Income Funds
A fund that seeks to provide relatively high current income and growth of income by investing a large portion of its assets in stocks.

Estate
All assets owned and liabilities owed at the time of a person's death.

Estate Settlement Costs
Expenses incurred in distributing assets and paying off debts and taxes as a result of a person's death, including probate costs, administrative expenses, mortgages, personal debts, funeral expenses, state death taxes and federal estate taxes.

Ethical Fund
A fund that only invests in the securities of firms meeting certain social standards. For example, an ethical fund might exclude securities of companies that are known to practice discrimination, that operate in certain countries, or that produce specific products such as alcohol, tobacco, or nuclear weapons.

Eurobonds
A long-term loan issued in a currency other than that of the country or market in which it is issued. Interest is paid without the deduction of tax.

Eurodollar CDs
Certificates of deposit held in U.S. dollars by European, British, and Eastern depository institutions and available to U.S. investors.

European Stock Funds
A fund that invests primarily in the stock of Western European companies.

Ex-Dividend Date
The first day on which the purchaser of the security is not entitled to the dividend. It is also the day that the price of the security drops to the next highest fraction of the dividend amount. The date on which a fund's net asset value will fall by an amount equal to a dividend or capital gains distribution.

Ex-Rights Date
The date after which stocks are traded without subscription rights.

Ex-Warrants Date
The date after which stocks are traded without buyers being entitled to warrants which are to be distributed

Excess Equity
Equity in a margin account above that which is required by Regulation T.

Exchange Privilege
A shareholder service that allows shareholders to move their assets from one fund to another fund within the same mutual fund family, usually without any additional sales charge or fees. Fund groups vary in the specific parameters detailing when or how many times an investor may use the exchange privileges.

Execution Broker ($2.00 Broker)
Broker who owns memberships on various exchanges and executes trades on the exchanges for other brokers - execution only services on listed exchanges. The name of the clearing broker is "given up" when each trade is executed to industry clearance facilities and the trade is reported back to the introducing firm for the customer and street side processing. The charge for this service used to be $2.00 - thus the name "$2.00 Broker."

Executor
A person appointed by the last will of the deceased to carry out the provisions of the will.

Exercise Price
The price per share the holder or owner of a call option would pay to buy the stock from the writer or the price the holder would receive should he sell the stock to the writer when exercising an option. See also Strike Price.

Expense
A fund's cost of doing business. All of a fund's expenses are disclosed in the prospectus as a percentage of assets.

Expense Ratio
A fund's operating expenses, expressed as a percentage of its average net assets. Funds with lower expense ratios are able to distribute a higher percentage of gross income returns to shareholders.

Expiration
The day on which an option contract becomes void.

Expiration Month
The month in which an option or futures contract ceases to exist (expires).

Extended Maturity
A provision whereby a bond continues to pay interest beyond its stated maturity.

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