Reference

Glossary Terms

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

463 Total Terms
18 Topics

#

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 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 →
Adjusted gross income (AGI) Adjusted Gross Income (AGI) is a key number used in the United States tax system. It represents your… Taxation Assets Assets are economic resources that a business or individual owns or controls, expected to produce future benefits. In… Financial Statements & Accounting Active investing Active investing is a hands-on approach to building and managing an investment portfolio. Instead of simply tracking a… Investing Fundamentals

B

View all 25 terms →
Blue chip Blue chip stocks are shares of large, well-established, and financially sound companies that have a long history of… Stocks & Equity Markets Balance sheet A balance sheet is one of the three core financial statements used by companies, alongside the income statement… Financial Statements & Accounting Bankruptcy – Chapter 11 Bankruptcy – Chapter 11 is a legal process for businesses (and sometimes individuals with high levels of debt)… Credit, Debt & Lending

C

View all 59 terms →
CFTC The CFTC, or Commodity Futures Trading Commission, is an independent federal agency in the United States responsible for… Financial Regulation 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 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

View all 36 terms →
Depreciation Depreciation is a fundamental accounting concept that allocates the cost of a tangible asset over its useful life.… Financial Statements & Accounting Debit card A debit card is a payment card issued by a bank or credit union that allows you to… Banking & Depository Institutions Dot plot The dot plot is a visual chart published by the Federal Open Market Committee (FOMC) that shows individual… Monetary & Fiscal Policy

E

View all 25 terms →
ERISA ERISA, the Employee Retirement Income Security Act of 1974, is a landmark federal law that sets minimum standards… Retirement Planning Exchange rate An exchange rate is the price of one country’s currency expressed in terms of another country’s currency. It… Economics for Finance Early withdrawal penalty An early withdrawal penalty is a fee imposed by the Internal Revenue Service (IRS) when you take money… Retirement Planning

F

View all 29 terms →
Front-end load A front-end load is a sales charge or commission that investors pay when they purchase shares of a… Mutual Funds, ETFs & Pooled Vehicles Fixed-rate mortgage A fixed-rate mortgage is a type of home loan where the interest rate remains constant for the entire… Real Estate & Mortgage Finance 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 →
Gross profit Gross profit is the profit a company makes after deducting the costs directly tied to producing and selling… 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 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 →
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 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

I

View all 19 terms →
Inflation Inflation is the rate at which the general level of prices for goods and services rises over a… Economics for Finance Itemized deduction An itemized deduction is a specific expense that you can subtract from your Adjusted Gross Income (AGI) to… Taxation Inflation-adjusted income Inflation-adjusted income, also called real income, is a measure of how much your purchasing power has changed after… Personal Finance & Money Management

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 →
Limit order A limit order is a type of order to buy or sell a security at a specific price… Financial Markets & Market Mechanics Long-term capital gains Long-term capital gains are the profits you earn from selling an asset that you have held for more… Taxation Liquidity Liquidity is a financial concept that describes how quickly and easily an asset can be bought or sold… Financial Markets & Market Mechanics

M

View all 23 terms →
Margin account A margin account is a type of brokerage account that allows an investor to borrow money from their… Financial Markets & Market Mechanics Money supply – M1 Money supply – M1 is a measure of the most liquid forms of money in an economy. It… Monetary & Fiscal Policy Minimum payment The minimum payment is the smallest amount you must pay each month on a credit card or other… Credit, Debt & Lending

N

View all 18 terms →
Net present value (NPV) Net Present Value (NPV) is a core concept in corporate finance used to evaluate the profitability of an… Corporate Finance 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 Net worth Net worth is a snapshot of your financial health at a single moment. It is calculated by subtracting… Personal Finance & Money Management

O

View all 12 terms →
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 Operating income Operating income, also known as operating profit or operating earnings, measures the profit a company makes from its… Financial Statements & Accounting Operating margin Operating margin is a profitability ratio that measures how much profit a company makes from its core business… Financial Ratios & Analysis

P

View all 28 terms →
Pro forma financial statements Pro forma financial statements are forward-looking financial reports that project a company’s future financial performance based on hypothetical… Corporate Finance Productivity In economics and finance, Productivity measures how efficiently inputs (like labor, capital, and materials) are converted into useful… Economics for Finance Premium In the context of insurance, a premium is the amount of money you pay to an insurance company… Insurance & Risk Protection

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 REIT (Real Estate Investment Trust) A Real Estate Investment Trust, commonly known as a REIT (pronounced “reet”), is a company that owns, operates,… Real Estate & Mortgage Finance Recession A recession is a significant, widespread, and prolonged downturn in economic activity. While there is no single, universally… Economics for Finance

S

View all 39 terms →
Sarbanes-Oxley Act The Sarbanes-Oxley Act (often called SOX) is a landmark U.S. federal law enacted in 2002 to restore public… Financial Regulation Share repurchase A share repurchase, also known as a stock buyback, is a corporate action in which a company buys… Corporate Finance Step-up in basis A step-up in basis is a tax rule that adjusts the cost basis of an inherited asset —… Taxation

T

View all 23 terms →
Term life insurance Term life insurance is a type of life insurance policy that provides coverage for a specific period, or… Insurance & Risk Protection 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 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

View all 6 terms →
Unsecured debt Unsecured debt is a type of loan or credit that is not backed by any form of collateral.… Credit, Debt & Lending Underwater mortgage An underwater mortgage, also known as being in a state of negative equity, occurs when the outstanding balance… Real Estate & Mortgage Finance Umbrella policy An umbrella policy, also known as personal umbrella insurance, is an extra layer of liability insurance that goes… Insurance & Risk Protection

V

View all 7 terms →
Volatility Volatility is a statistical measure of the dispersion of returns for a given security or market index. In… Investing Fundamentals Variable annuity A variable annuity is a type of insurance contract that offers a way to save for retirement by… Retirement Planning 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

W

View all 7 terms →
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 Working capital Working capital is a financial metric that represents the difference between a company’s current assets and current liabilities.… Corporate Finance W-2 A W-2 form, officially called the “Wage and Tax Statement,” is a crucial tax document that employers in… Personal Finance & Money Management

Y

3 terms
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 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