Reference

Glossary Terms

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

463 Total Terms
18 Topics

#

8 terms
457 plan A 457 plan is a type of tax-advantaged retirement savings account offered to employees of state and local… Retirement Planning 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 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

A

View all 29 terms →
Above-the-line deduction An above-the-line deduction is a type of tax deduction that you can subtract directly from your gross income… Taxation APR vs. APY APR (Annual Percentage Rate) and APY (Annual Percentage Yield) are two critical measures used in finance to represent… Credit, Debt & Lending Auto liability coverage Auto liability coverage is a fundamental type of auto insurance that pays for injuries and property damage you… Insurance & Risk Protection

B

View all 25 terms →
Bankruptcy – Chapter 7 Bankruptcy – Chapter 7, often called liquidation bankruptcy, is a legal process in the United States that helps… Credit, Debt & Lending Business cycle The business cycle—also called the economic cycle or trade cycle—refers to the natural, recurring fluctuations in economic activity… Economics for Finance Broker-dealer A broker-dealer is a financial firm or individual that engages in the buying and selling of securities for… Financial Markets & Market Mechanics

C

View all 59 terms →
Common stock Common stock is a type of ownership in a corporation. When you buy a share of common stock,… Stocks & Equity Markets Callable bond A callable bond is a type of bond that gives the issuer the right, but not the obligation,… Bonds & Fixed Income Cost of equity The cost of equity is the rate of return that a company must offer to investors to compensate… Corporate Finance

D

View all 36 terms →
Diversification Diversification is a fundamental investment strategy that involves spreading your investments across various asset classes, industries, geographic regions,… Investing Fundamentals Debt Debt is a financial obligation that occurs when one party borrows money from another. The borrower receives a… Credit, Debt & Lending Investing Fundamentals Debt-to-equity The debt-to-equity (D/E) ratio is a key leverage ratio that compares a company’s total liabilities to its shareholder… Financial Ratios & Analysis

E

View all 25 terms →
Early withdrawal penalty An early withdrawal penalty is a fee imposed by the Internal Revenue Service (IRS) when you take money… Retirement Planning Expansion Expansion is a phase of the business cycle where the economy grows for two or more consecutive quarters.… Economics for Finance EBIT EBIT, an acronym for Earnings Before Interest and Taxes, is a key profitability metric that measures a company’s… Financial Ratios & Analysis Financial Statements & Accounting

F

View all 29 terms →
Face / par value Face value, also known as par value, is the stated value of a bond as printed on the… Bonds & Fixed Income FICA / payroll tax FICA, which stands for the Federal Insurance Contributions Act, is a United States federal law that requires a… Taxation Financial goal setting Financial goal setting is the process of defining clear, specific objectives for your money, creating a plan to… Personal Finance & Money Management

G

View all 10 terms →
GAAP GAAP (Generally Accepted Accounting Principles) is a common set of accounting rules, standards, and procedures that companies in… Financial Statements & Accounting Gross Domestic Product (GDP) Gross Domestic Product (GDP) is the total monetary value of all finished goods and services produced within a… Economics for Finance Gift tax The gift tax is a federal tax in the United States imposed on the transfer of property or… Taxation

H

View all 9 terms →
Homeowners insurance Homeowners insurance is a type of property insurance that protects an individual’s home and personal belongings against damage,… Insurance & Risk Protection 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 HELOC A Home Equity Line of Credit (HELOC) is a type of revolving debt that allows you to borrow… Real Estate & Mortgage Finance

I

View all 19 terms →
Index fund An index fund is a type of exchange-traded fund or mutual fund designed to track the performance of… Mutual Funds, ETFs & Pooled Vehicles Investment Company Act of 1940 The Investment Company Act of 1940 is a landmark piece of U.S. federal legislation that created a comprehensive… Financial Regulation 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

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

View all 10 terms →
Large-cap Large-cap is a term used to describe a company with a very large market capitalization, typically over $10… Stocks & Equity Markets Loan-to-value (LTV) Loan-to-Value (LTV) is a critical financial ratio used by mortgage lenders to evaluate the risk of a loan.… Real Estate & Mortgage Finance Long-term capital gains Long-term capital gains are the profits you earn from selling an asset that you have held for more… Taxation

M

View all 23 terms →
Minimum payment The minimum payment is the smallest amount you must pay each month on a credit card or other… Credit, Debt & Lending Minimum balance A minimum balance is the lowest amount of money a bank or credit union requires you to keep… Banking & Depository Institutions Municipal bond (muni) A municipal bond (muni) is a debt security issued by a state, municipality, county, or other government entity… Bonds & Fixed Income

N

View all 18 terms →
Net margin Net margin, also known as net profit margin, is a key profitability ratio that measures how much of… Financial Ratios & Analysis NYSE The New York Stock Exchange (NYSE) is the world’s largest stock exchange by market capitalization, located at 11… Stocks & Equity Markets National debt The national debt is the total amount of money that a country’s federal government has borrowed and has… Monetary & Fiscal Policy

O

View all 12 terms →
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 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 Out-of-pocket maximum The out-of-pocket maximum is the most money you will have to pay for covered healthcare services in a… Insurance & Risk Protection

P

View all 28 terms →
Primary market The primary market is the financial market where new securities, such as stocks and bonds, are created and… Financial Markets & Market Mechanics Price-to-book (P/B) The Price-to-Book (P/B) ratio is a financial ratio used to compare a company’s market value to its book… Financial Ratios & Analysis Private mortgage insurance (PMI) Private mortgage insurance, commonly known as PMI, is a type of insurance that protects the lender (the bank… Real Estate & Mortgage Finance

Q

View all 5 terms →
Quantitative easing (QE) Quantitative easing (QE) is an unconventional monetary policy tool used by a central bank — like the U.S.… Monetary & Fiscal Policy Quantitative tightening (QT) Quantitative tightening (QT) is a contractionary monetary policy tool used by a central bank, like the Federal Reserve,… 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

View all 29 terms →
Rider A rider is an amendment or attachment to an insurance policy that modifies the standard terms, coverage, or… Insurance & Risk Protection Rollover A rollover is the process of moving assets from one retirement account to another without triggering taxes or… Retirement Planning Return on invested capital (ROIC) Return on Invested Capital (ROIC) is a key financial metric that shows how well a company turns the… Financial Ratios & Analysis

S

View all 39 terms →
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 SIPC The Securities Investor Protection Corporation (SIPC) is a nonprofit, membership-funded organization created by the Securities Investor Protection Act… Financial Regulation Soft inquiry A soft inquiry (also known as a soft credit check or soft pull) is a type of credit… Credit, Debt & Lending

T

View all 23 terms →
Treasury notes Treasury notes, often called T-notes, are debt securities issued by the U.S. Department of the Treasury. They are… Bonds & Fixed Income Treasury bonds Treasury bonds (often called T-bonds) are long-term debt securities issued by the U.S. Department of the Treasury to… Bonds & Fixed Income TransUnion TransUnion is one of the three major consumer credit reporting agencies in the United States, alongside Equifax and… Credit, Debt & Lending

U

View all 6 terms →
Umbrella policy An umbrella policy, also known as personal umbrella insurance, is an extra layer of liability insurance that goes… Insurance & Risk Protection Underwater mortgage An underwater mortgage, also known as being in a state of negative equity, occurs when the outstanding balance… Real Estate & Mortgage Finance Unemployment rate The unemployment rate is a key economic indicator that measures the percentage of the labor force that is… Economics for Finance

V

View all 7 terms →
VA loan A VA loan is a mortgage loan in the United States guaranteed by the U.S. Department of Veterans… Real Estate & Mortgage Finance Variable annuity A variable annuity is a type of insurance contract that offers a way to save for retirement by… Retirement Planning VantageScore VantageScore is a credit scoring model developed by the three major credit bureaus: Equifax, Experian, and TransUnion. It… Credit, Debt & Lending

W

View all 7 terms →
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 Weighted average cost of capital (WACC) The Weighted Average Cost of Capital (WACC) is a financial metric that represents the average rate of return… Corporate Finance Withholding Withholding is the portion of an employee’s wages that an employer sends directly to the government to cover… Taxation

Y

3 terms
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 Yield Yield is a financial term that measures the income generated by an investment, typically expressed as a percentage… Investing Fundamentals Yield curve The yield curve is a graphical representation that shows the relationship between interest rates (yields) and the time… 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