[ C - D ]

Credit quality
A measure of a bond issuer's ability to repay interest and principal in a timely manner.

Debt to capital
Indicates the percentage that debt comprises of total capital; calculated by dividing each underlying fund holding's total debt by total capital. A large debt/capital ratio indicates that a company is highly leveraged.

Diversification
The strategy of investing in different asset classes and among the securities of many issuers in an attempt to lower overall investment risk.

Dividend
A payment of cash or stock from a company's earnings to each stockholder as declared by the company's board of directors.

Duration
A measure of the sensitivity of bond and bond mutual fund prices to interest rate movements. For example, if a bond has a duration of two years, its price would fall about 2% when interest rates rose one percentage point. On the other hand, the bond's price would rise by about 2% when interest rates fell by one percentage point.