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
1099 A 1099 form is a series of tax documents issued by the Internal Revenue Service (IRS) and used… Taxation 457 plan A 457 plan is a type of tax-advantaged retirement savings account offered to employees of state and local… Retirement Planning 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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Adjustable-rate mortgage (ARM) An Adjustable-Rate Mortgage (ARM) is a type of home loan where the interest rate is not fixed for… Real Estate & Mortgage Finance Aggregate supply Aggregate supply (AS) is the total quantity of goods and services that all firms in an economy are… Economics for Finance Accrual accounting Accrual accounting is a fundamental method of financial reporting where revenue and expenses are recorded when they are… Financial Statements & Accounting

B

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Bond A bond is a fixed-income financial instrument that represents a loan made by an investor to a borrower,… Bonds & Fixed Income 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 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

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Cost of goods sold (COGS) Cost of Goods Sold (COGS) is a key financial metric that represents the direct costs attributable to the… Financial Statements & Accounting Collections Collections refers to the process that debt lenders and creditors use to recover overdue payments from borrowers who… Credit, Debt & Lending CFPB (Consumer Financial Protection Bureau) The Consumer Financial Protection Bureau (CFPB) is a United States government agency responsible for making sure banks, lenders,… Financial Regulation

D

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Debt-to-income (DTI) ratio The Debt-to-Income (DTI) ratio is a personal finance metric that compares your total monthly debt payments to your… Credit, Debt & Lending Dark pool A dark pool is a private electronic marketplace for trading securities, primarily stocks, that operates outside of public… Financial Markets & Market Mechanics Depreciation Depreciation is a fundamental accounting concept that allocates the cost of a tangible asset over its useful life.… Financial Statements & Accounting

E

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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 Expense ratio The expense ratio is the annual fee that all mutual funds, exchange-traded funds (ETFs), and other pooled investment… Mutual Funds, ETFs & Pooled Vehicles Experian Experian is one of the three major credit reporting agencies (along with Equifax and TransUnion) that collect and… Credit, Debt & Lending

F

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Fair Credit Reporting Act (FCRA) The Fair Credit Reporting Act (FCRA) is a federal law enacted in 1970 that promotes the accuracy, fairness,… Credit, Debt & Lending 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 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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Gift tax The gift tax is a federal tax in the United States imposed on the transfer of property or… Taxation Glass-Steagall Act The Glass-Steagall Act (officially the Banking Act of 1933) was a landmark piece of U.S. legislation that created… Financial Regulation 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

H

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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 Hurdle rate The hurdle rate is the minimum acceptable rate of return on an investment or project that a company… Corporate Finance HELOC A Home Equity Line of Credit (HELOC) is a type of revolving debt that allows you to borrow… Real Estate & Mortgage Finance

I

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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 Inflation Inflation is the rate at which the general level of prices for goods and services rises over a… Economics for Finance Interest coverage The interest coverage ratio (also known as times interest earned) is a financial metric that measures a company’s… Financial Ratios & Analysis

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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Large-cap Large-cap is a term used to describe a company with a very large market capitalization, typically over $10… Stocks & Equity Markets Liabilities Liabilities are financial obligations or debts that a company or individual owes to others. They represent claims against… Financial Statements & Accounting 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

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Mortgage-backed security (MBS) A mortgage-backed security (MBS) is a type of investment product that represents a claim on the cash flows… Real Estate & Mortgage Finance 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 Mortgage A mortgage is a type of secured loan used to finance the purchase of real estate, such as… Real Estate & Mortgage Finance

N

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Nominal return Nominal return is the percentage gain or loss on an investment before adjusting for the effects of inflation.… Investing Fundamentals Net margin Net margin, also known as net profit margin, is a key profitability ratio that measures how much of… Financial Ratios & Analysis 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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Operating margin Operating margin is a profitability ratio that measures how much profit a company makes from its core business… Financial Ratios & Analysis 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

P

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Primary market The primary market is the financial market where new securities, such as stocks and bonds, are created and… Financial Markets & Market Mechanics Principal and interest (P&I) Principal and interest (P&I) is the core component of a mortgage payment that goes directly toward paying down… Real Estate & Mortgage Finance Pay stub A pay stub, also known as a paycheck stub, earnings statement, or pay advice, is a document provided… Personal Finance & Money Management

Q

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Qualified plan A qualified plan is a retirement savings plan that meets the requirements of the Internal Revenue Code (IRC)… Retirement Planning 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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Real GDP Real GDP (Gross Domestic Product adjusted for inflation) is a critical economic measure that reflects the total value… Economics for Finance Return on equity (ROE) Return on Equity (ROE) is a powerful financial ratio that measures a company’s profitability by revealing how much… Financial Ratios & Analysis Risk tolerance Risk tolerance is the degree of variability in investment returns that an individual is willing to withstand as… Investing Fundamentals

S

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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 Standard deviation Standard deviation is a statistical measure that quantifies the amount of variation or dispersion in a set of… Investing Fundamentals 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 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 Tax-loss harvesting Tax-loss harvesting is a strategy used by investors to reduce their taxable income by selling investments that have… Taxation

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 Unsecured debt Unsecured debt is a type of loan or credit that is not backed by any form of collateral.… Credit, Debt & Lending Umbrella policy An umbrella policy, also known as personal umbrella insurance, is an extra layer of liability insurance that goes… 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 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 Value stock A value stock is a share of a company that trades at a lower price relative to its… Stocks & Equity Markets

W

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

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 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

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