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
10-K The 10-K is an annual report that publicly traded companies must file with the U.S. Securities and Exchange… Financial Statements & Accounting 50/30/20 rule The 50/30/20 rule is a simple and popular budgeting framework that helps individuals manage their after-tax income by… Personal Finance & Money Management 12b-1 fee A 12b-1 fee is an annual fee charged by some mutual funds to cover the costs of marketing,… Mutual Funds, ETFs & Pooled Vehicles

A

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Asset allocation Asset allocation is the investment strategy of dividing a portfolio among different asset classes, such as stocks, bonds,… Investing Fundamentals Accrual accounting Accrual accounting is a fundamental method of financial reporting where revenue and expenses are recorded when they are… Financial Statements & Accounting Accredited investor An accredited investor is an individual or entity that meets specific financial criteria established by the Securities and… Financial Regulation

B

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Bank statement A bank statement is a document issued by a bank or credit union that summarizes all financial transactions… Banking & Depository Institutions Broker A broker is an individual or firm that acts as an intermediary between buyers and sellers in financial… Financial Markets & Market Mechanics Beta Beta (β) is a measure of a stock’s volatility relative to the overall market. It is a key… Corporate Finance Stocks & Equity Markets

C

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Custodian A custodian is a financial institution that holds and safeguards a customer’s financial assets for safekeeping, to minimize… Financial Markets & Market Mechanics Common stock Common stock is a type of ownership in a corporation. When you buy a share of common stock,… Stocks & Equity Markets Capital budgeting Capital budgeting is the process that companies use to evaluate and decide which long-term investments or projects to… Corporate Finance

D

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DuPont analysis The DuPont analysis is a framework for breaking down the fundamental drivers of Return on Equity (ROE) into… Financial Ratios & Analysis Dividend yield Dividend yield is a financial ratio that shows how much a company pays out in dividends each year… Stocks & Equity Markets Dual mandate The Dual Mandate is the primary policy directive given to the Federal Reserve System (the Fed), the central… Monetary & Fiscal Policy

E

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Experian Experian is one of the three major credit reporting agencies (along with Equifax and TransUnion) that collect and… Credit, Debt & Lending Exchange-traded fund (ETF) An exchange-traded fund (ETF) is a type of pooled investment vehicle that combines the diversification of a mutual… Mutual Funds, ETFs & Pooled Vehicles Ex-dividend date The ex-dividend date is a critical milestone in the dividend payment process for stocks. It is the date… Stocks & Equity Markets

F

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Form ADV Form ADV is the uniform registration form that investment advisers must file with the Securities and Exchange Commission… Financial Regulation Fixed expenses Fixed expenses are costs that remain the same amount each month and are essential for your basic living… Personal Finance & Money Management Fund of funds A fund of funds (FOF) is a pooled investment vehicle that invests in a portfolio of other funds… Mutual Funds, ETFs & Pooled Vehicles

G

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Goodwill Goodwill is an intangible asset that arises when one company purchases another company for a price greater than… Financial Statements & Accounting Good-til-cancelled (GTC) A Good-Til-Cancelled (GTC) order is a type of trading instruction that remains active in the market until it… Financial Markets & Market Mechanics Gross profit Gross profit is the profit a company makes after deducting the costs directly tied to producing and selling… Financial Statements & Accounting

H

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Household cash flow Household cash flow is the total amount of money moving into and out of a household over a… Personal Finance & Money Management Homeowners insurance Homeowners insurance is a type of property insurance that protects an individual’s home and personal belongings against damage,… Insurance & Risk Protection Home equity loan A home equity loan is a type of second mortgage that allows homeowners to borrow money using the… Real Estate & Mortgage Finance

I

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Income statement An income statement is one of the three core financial statements used by businesses, investors, and analysts to… Financial Statements & Accounting Investment-grade bond An investment-grade bond is a bond that is considered high quality and low risk by credit rating agencies.… Bonds & Fixed Income Investment Advisers Act of 1940 The Investment Advisers Act of 1940 is a landmark piece of federal legislation that established the legal framework… Financial Regulation

J

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

L

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Loan origination fee A loan origination fee is an upfront charge imposed by a lender to process, underwrite, and fund a… Credit, Debt & Lending Labor force participation rate The labor force participation rate (LFPR) is a key economic metric that measures the percentage of a country’s… Economics for Finance Large-cap Large-cap is a term used to describe a company with a very large market capitalization, typically over $10… Stocks & Equity Markets

M

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Modigliani-Miller theorem The Modigliani-Miller theorem is a foundational theory in corporate finance that, under a specific set of ideal market… Corporate Finance Margin account A margin account is a type of brokerage account that allows an investor to borrow money from their… Financial Markets & Market Mechanics Market order A market order is an instruction to buy or sell a security immediately at the best available current… Financial Markets & Market Mechanics

N

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NCUA The NCUA, or National Credit Union Administration, is an independent federal agency created by the United States Congress… Financial Regulation 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 Needs vs. wants Needs vs. wants is a fundamental concept in personal finance and budgeting that helps individuals distinguish between essential… Personal Finance & Money Management

O

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Order book An order book is a real-time, electronic list of buy and sell orders for a specific financial security,… 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 OCC (Office of the Comptroller of the Currency) The Office of the Comptroller of the Currency (OCC) is an independent bureau within the U.S. Department of… Financial Regulation

P

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Payback period The payback period is a fundamental capital budgeting tool used to evaluate the profitability and risk of a… Corporate Finance PPI (Producer Price Index) The Producer Price Index (PPI) is a crucial economic indicator that measures the average change over time in… Economics for Finance Preferred stock Preferred stock is a unique type of ownership in a company that sits in between common stock and… Stocks & Equity Markets

Q

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Quick (acid-test) ratio The quick ratio, also known as the acid-test ratio, is a stringent measure of a company’s short-term liquidity.… Financial Ratios & Analysis Qualified dividend A qualified dividend is a type of dividend payment that meets specific criteria set by the Internal Revenue… Taxation Quantitative tightening (QT) Quantitative tightening (QT) is a contractionary monetary policy tool used by a central bank, like the Federal Reserve,… Monetary & Fiscal Policy

R

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Roth conversion A Roth conversion is a financial strategy where you transfer funds from a Traditional IRA (or other eligible… Retirement Planning Regulation Best Interest (Reg BI) The Regulation Best Interest (Reg BI) is a rule established by the U.S. Securities and Exchange Commission (SEC)… Financial Regulation Reserve requirement The reserve requirement is a central banking regulation that sets the minimum fraction of customer deposits and liabilities… Monetary & Fiscal Policy

S

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SIMPLE IRA A SIMPLE IRA (Savings Incentive Match Plan for Employees) is a tax-deferred retirement plan designed for small businesses… Retirement Planning Settlement (T+1) Settlement (T+1) refers to the standard timeline by which a securities trade must be finalized after the transaction… Financial Markets & Market Mechanics Share class A Class A shares are a type of mutual fund share class that typically charges a front-end sales load,… Mutual Funds, ETFs & Pooled Vehicles

T

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Thrift / Savings & Loan A thrift institution, also known as a Savings and Loan Association (S&L), is a type of financial institution… Banking & Depository Institutions Tax-exempt Tax-exempt means that certain income, transactions, or entities are not subject to federal or state income taxes. This… Taxation Tracking error Tracking error is a measure of how closely a mutual fund or exchange-traded fund (ETF) follows its benchmark… Mutual Funds, ETFs & Pooled Vehicles

U

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Unemployment rate The unemployment rate is a key economic indicator that measures the percentage of the labor force that is… Economics for Finance 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

V

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Volatility Volatility is a statistical measure of the dispersion of returns for a given security or market index. In… Investing Fundamentals Variable expenses Variable expenses are costs that change from month to month based on your consumption, choices, or needs. Unlike… Personal Finance & Money Management VantageScore VantageScore is a credit scoring model developed by the three major credit bureaus: Equifax, Experian, and TransUnion. It… Credit, Debt & Lending

W

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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 Withholding Withholding is the portion of an employee’s wages that an employer sends directly to the government to cover… Taxation Wire transfer A wire transfer is an electronic method of transferring funds from one person or entity to another, directly… Banking & Depository Institutions

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-coupon bond A zero-coupon bond is a type of bond that does not pay periodic interest payments (coupons) to its… Bonds & Fixed Income 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