Reference

Glossary Terms

Browse our comprehensive glossary of terms. Search, filter by topic, or navigate alphabetically.

463 Total Terms
18 Topics

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8 terms
401(k) A 401(k) is a tax-advantaged retirement savings plan sponsored by an employer. It allows employees to save and… Retirement Planning 403(b) A 403(b) plan is a tax-advantaged retirement savings account designed specifically for employees of certain tax-exempt organizations, such… Retirement Planning 10-Q The 10-Q is a detailed financial report that publicly traded companies in the United States must file with… Financial Statements & Accounting Stocks & Equity Markets

A

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Appraisal An appraisal is a professional estimate of the market value of a property, such as a home, land,… Real Estate & Mortgage Finance Agency bond An agency bond is a debt security issued by a government-sponsored enterprise (GSE) or a federal government agency.… Bonds & Fixed Income Accounts receivable Accounts receivable (AR) is the money owed to a business by its customers for goods or services that… Financial Statements & Accounting

B

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Back-end load A back-end load is a fee that investors pay when they sell or redeem shares in certain types… Mutual Funds, ETFs & Pooled Vehicles Bond A bond is a fixed-income financial instrument that represents a loan made by an investor to a borrower,… Bonds & Fixed Income Bid The bid is the highest price a buyer is willing to pay for a security, such as a… Financial Markets & Market Mechanics

C

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Cash flow Cash flow is the movement of money into and out of a person’s or business’s accounts over a… Personal Finance & Money Management Compound interest Compound interest is the interest calculated on the initial principal, which also includes all of the accumulated interest… Investing Fundamentals Check 21 / Electronic check Check 21 (short for the Check Clearing for the 21st Century Act) and electronic checks revolutionized how paper… Banking & Depository Institutions

D

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Default Default is a financial term that describes the failure of a borrower to meet the legal obligations or… Credit, Debt & Lending Direct deposit Direct deposit is an electronic payment method that transfers funds directly from a payer’s bank account into the… Personal Finance & Money Management Discretionary spending Discretionary spending refers to the money you spend on things you want but don’t necessarily need. It is… Personal Finance & Money Management

E

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Enterprise value (EV) Enterprise Value (EV) is a comprehensive measure of a company’s total value, often used as a more complete… Financial Ratios & Analysis Equity financing Equity financing is a method of raising capital for a company by selling ownership shares, known as equity,… Corporate Finance Exchange An exchange is a regulated marketplace where buyers and sellers come together to trade financial instruments such as… Financial Markets & Market Mechanics

F

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Forward guidance Forward guidance is a communication tool used by central banks, such as the Federal Reserve, to inform the… Monetary & Fiscal Policy Form S-1 Form S-1 is a registration statement filed with the Securities and Exchange Commission (SEC) by companies planning to… Financial Regulation Foreclosure Foreclosure is the legal process that occurs when a homeowner fails to make their mortgage payments, leading the… Real Estate & Mortgage Finance

G

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Gross profit Gross profit is the profit a company makes after deducting the costs directly tied to producing and selling… Financial Statements & Accounting Gross margin Gross margin is a key financial metric that shows how efficiently a company produces and sells its products.… Financial Ratios & Analysis Goodwill Goodwill is an intangible asset that arises when one company purchases another company for a price greater than… Financial Statements & Accounting

H

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Hurdle rate The hurdle rate is the minimum acceptable rate of return on an investment or project that a company… Corporate Finance HSA (Health Savings Account) An HSA, or Health Savings Account, is a tax-advantaged savings account that you can use to pay for… Insurance & Risk Protection Homeowners insurance Homeowners insurance is a type of property insurance that protects an individual’s home and personal belongings against damage,… Insurance & Risk Protection

I

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Income (investment) Investment income is money you earn from your investments without having to work for it actively. Instead of… Investing Fundamentals Internal rate of return (IRR) The Internal Rate of Return (IRR) is a powerful financial metric used to evaluate the profitability of potential… Corporate Finance Itemized deduction An itemized deduction is a specific expense that you can subtract from your Adjusted Gross Income (AGI) to… Taxation

J

2 terms
Jumbo loan A jumbo loan is a type of mortgage used to finance properties that are too expensive for a… Real Estate & Mortgage Finance JOBS Act The JOBS Act, officially the Jumpstart Our Business Startups Act, is a landmark piece of U.S. legislation signed… Financial Regulation

L

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Limit order A limit order is a type of order to buy or sell a security at a specific price… Financial Markets & Market Mechanics Liquidity Liquidity is a financial concept that describes how quickly and easily an asset can be bought or sold… Financial Markets & Market Mechanics Liabilities Liabilities are financial obligations or debts that a company or individual owes to others. They represent claims against… Financial Statements & Accounting

M

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Money supply – M2 Money supply M2 is a broad measure of the total amount of money in an economy. It includes… Monetary & Fiscal Policy Mid-cap Mid-cap, short for mid-capitalization, refers to companies with a market capitalization typically between $2 billion and $10 billion.… Stocks & Equity Markets Money market fund A money market fund is a type of mutual fund that invests in short-term, high-quality, low-risk debt securities.… Mutual Funds, ETFs & Pooled Vehicles

N

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Nonfarm payrolls Nonfarm payrolls are a monthly economic indicator released by the U.S. Bureau of Labor Statistics (BLS) that measures… Economics for Finance Net asset value (NAV) Net asset value (NAV) represents the per-share market value of a mutual fund, exchange-traded fund (ETF), or other… Mutual Funds, ETFs & Pooled Vehicles No-load fund A no-load fund is a type of mutual fund in which shares are sold directly to investors without… Mutual Funds, ETFs & Pooled Vehicles

O

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Open market operations Open market operations (OMO) are the primary tool used by the Federal Reserve System to influence the supply… Monetary & Fiscal Policy Over-the-counter (OTC) Over-the-counter (OTC) trading refers to a decentralized market where financial instruments are traded directly between two parties, without… Financial Markets & Market Mechanics Overdraft An overdraft occurs when you spend more money than you have available in your checking account. In simple… Banking & Depository Institutions

P

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P/E ratio The price-to-earnings (P/E) ratio is one of the most widely used tools for valuing a stock. It compares… Stocks & Equity Markets Price-to-earnings (P/E) The price-to-earnings ratio, commonly known as the P/E ratio, is one of the most widely used metrics in… Financial Ratios & Analysis Primary market The primary market is the financial market where new securities, such as stocks and bonds, are created and… Financial Markets & Market Mechanics

Q

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Qualified dividend A qualified dividend is a type of dividend payment that meets specific criteria set by the Internal Revenue… Taxation Quantitative easing (QE) Quantitative easing (QE) is an unconventional monetary policy tool used by a central bank — like the U.S.… Monetary & Fiscal Policy Qualified plan A qualified plan is a retirement savings plan that meets the requirements of the Internal Revenue Code (IRC)… Retirement Planning

R

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Roth IRA A Roth IRA (Individual Retirement Account) is a powerful retirement savings vehicle that offers tax-free growth and tax-free… Retirement Planning Russell 2000 The Russell 2000 is a stock market index that tracks the performance of roughly 2,000 of the smallest… Stocks & Equity Markets Risk-return tradeoff The risk-return tradeoff is a fundamental concept in investing that describes the direct relationship between the potential reward… Investing Fundamentals

S

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Share class C Share class C is a type of mutual fund share class that typically charges a level load, meaning… Mutual Funds, ETFs & Pooled Vehicles Step-up in basis A step-up in basis is a tax rule that adjusts the cost basis of an inherited asset —… Taxation Stop-limit order A stop-limit order is an advanced trading instruction that combines the features of a stop order and a… Financial Markets & Market Mechanics

T

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Trade deficit A trade deficit occurs when a country imports more goods and services than it exports over a given… Economics for Finance Tax bracket A tax bracket is a range of income subject to a specific tax rate in a progressive tax… Taxation Truth in Lending Act (TILA) The Truth in Lending Act (TILA) is a landmark federal law enacted in 1968 as part of the… Credit, Debt & Lending

U

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Underwater mortgage An underwater mortgage, also known as being in a state of negative equity, occurs when the outstanding balance… Real Estate & Mortgage Finance Underwriting Underwriting is the process by which a lender, insurer, or investment bank evaluates the risk involved in a… Insurance & Risk Protection Universal life insurance Universal life insurance is a type of permanent life insurance that offers flexible premiums, adjustable death benefits, and… Insurance & Risk Protection

V

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Variable annuity A variable annuity is a type of insurance contract that offers a way to save for retirement by… Retirement Planning Vesting Vesting is a legal and financial term that refers to the process by which an employee earns the… Retirement Planning Volatility Volatility is a statistical measure of the dispersion of returns for a given security or market index. In… Investing Fundamentals

W

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Working capital Working capital is a financial metric that represents the difference between a company’s current assets and current liabilities.… Corporate Finance Withholding Withholding is the portion of an employee’s wages that an employer sends directly to the government to cover… Taxation Whole life insurance Whole life insurance is a type of permanent life insurance that provides coverage for the insured’s entire lifetime,… Insurance & Risk Protection

Y

3 terms
Yield curve The yield curve is a graphical representation that shows the relationship between interest rates (yields) and the time… Bonds & Fixed Income Yield Yield is a financial term that measures the income generated by an investment, typically expressed as a percentage… Investing Fundamentals Yield to maturity (YTM) Yield to Maturity (YTM) is the total return anticipated on a bond if it is held until it… Bonds & Fixed Income

Z

2 terms
Zero-based budgeting Zero-based budgeting (ZBB) is a method of budgeting where every expense must be justified for each new period,… Personal Finance & Money Management Zero-coupon bond A zero-coupon bond is a type of bond that does not pay periodic interest payments (coupons) to its… Bonds & Fixed Income