Implied Volatility:
The volatility that produces the "best fit" for all underlying option prices on that underlying stock. Implied volatility is derived by taking actual market prices of options and working backwards in a theoretical option-pricing model to find the assumed volatility.

Imputed Interest:
Interest which is not actually paid to bond holders but which the IRS may tax anyway. Common with zero coupon bond interest. See also INTEREST; BOND.

Income Dividend:
pay out to mutual fund shareholders of interest, dividends, and other income. Investors may withdraw the money or re-invest in additional shares of the fund.

Index:
A compilation of numerous stocks and their prices into a single number. E.g. The S&P 100 Index.

Indexing:
Constructing a portfolio to match the performance of a broad-based index, such as the S&P 500. Individuals can do this by purchasing shares in an index mutual fund.

Individual Retirement Account (IRA):
A personal, tax-deferred, retirement account in which an employed person can contribute a maximum amount per year. There are specific rules concerning level of participation and eligibility for an IRA and whether an employee's contributions are tax-deductible. Consult a financial consultant or tax advisor for more details.

Inflation (CPI):
The rise in price of goods and services, or Consumer Price Index (CPI), when too much money chases too few goods on the market. Moderate inflation is a result of economic growth. Hyperinflation (rising at rates of 100% or more annually) causes people to lose confidence in their economy and put their money in hard assets such as gold and real estate.

Inflation Rate:
The annual percentage change in the price of goods and services. At the consumer level, it is the Consumer Price Index (CPI) and at the wholesale level it is the Producer Price Index (PPI).

Institutional Investor:
Large money managers such as banks, pension funds, mutual funds, and insurance companies.

Interest rate risk:
Risk that a change in the interest rates will negatively affect the value of an investors holdings, generally associated with bonds but applying to all investments.

Intermediate Government Bonds:
U.S. government debt instrument having a maturity of between 3 to 10 years.

International Equities Funds:
Stocks purchased from companies based in countries other than the Unites States. International equities can also expose you to foreign currency risk.

Investment:
The use of money to create more money through an appreciating or income-producing asset. See also HOLDINGS.

Iron butterfly:
An option strategy with limited risk and limited profit potential that involves both a long (or short) straddle, and a short (or long) combination. An iron butterfly contains four option strike vs. the regular butterfly spread, which contains only three option strikes. For example, a short iron butterfly might be: buying 1 XYZ May 60 call and 1 May 60 put, and writing 1 XYZ May 65 call and writing 1 XYZ May 55 put.

Issuer:
A legal entity, such as a corporation, municipality, foreign and domestic government and investment trusts, that issues or proposes to issue its securities for sale.