# Glossary V

## Section V

### VA Mortgage

The government agency that administers benefit programs for veterans, including a guaranteed mortgage loan with little or no down payment. See VA Mortgage.

### Value of a BPS Change

This is a measure used to calculate the dollar price volatility of a bond. When comparing two bonds with the same modified duration, the dollar price change may not be the same even if the yield on the bonds changes by the same number of basis points. This is known as dollar duration and is calculated by multiplying the modified duration x dollar price of the bond x the yield change in basis points. For example, if bond A was priced at 100 and bond B was priced at 105, assuming a 50 basis point change in yield and a 7 year duration, results in the following: Dollar duration for Bond A: 7 x 100 x .005= 3.50; dollar duration for Bond B: 7 x 105 x .005= 3.675 In sum, a 50 basis point change in yield for bond A results in a 3.50 change in price for the bond, versus bond B, which results in a 3.675 price change.

### Value Style

Style of investing that emphasizes undervalued stocks, or stocks trading below their fundamental or intrinsic value. These stocks are typically sold once the fundamental value is reached. Style is generally characterized by higher than average dividend yields; below average P/E ratios; and relatively low price-to-book ratios.

### Variable Interest Rate

An interest rate that changes (goes up or down) based on a specified economic index.

### Venture Capital

Funds invested in enterprises that normally do not have access to conventional sources of capital; usually for a new, risky business venture; providers usually demand a significant portion of the equity ownership.

### Versus Purchase (VSP)

Method used by clients to identify specific shares of securities to be sold. If the client does not choose specific shares at the time of the sale, securities will be sold on a First in First-out (FIFO) method.