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 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 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

A

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Actuary An actuary is a highly skilled professional who uses mathematics, statistics, and financial theory to analyze and manage… Insurance & Risk Protection Ask The ask (also called the ask price or offer price) is the lowest price a seller is willing… Financial Markets & Market Mechanics Auto collision coverage Auto collision coverage is a type of car insurance that pays to repair or replace your vehicle if… Insurance & Risk Protection

B

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Below-the-line deduction A below-the-line deduction is an expense that you can subtract from your adjusted gross income (AGI) to reduce… Taxation Benchmark A benchmark is a standard or point of reference against which the performance of an investment, portfolio, or… Investing Fundamentals 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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Cash conversion cycle The Cash Conversion Cycle (CCC) is a key financial metric that measures the time it takes for a… Financial Ratios & Analysis Financial Statements & Accounting Current ratio The current ratio is a financial metric used to measure a company’s ability to pay its short-term obligations… Financial Ratios & Analysis CFTC The CFTC, or Commodity Futures Trading Commission, is an independent federal agency in the United States responsible for… Financial Regulation

D

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Delinquency Delinquency is a term used in credit and lending to describe a situation where a borrower fails to… Credit, Debt & Lending Diversification Diversification is a fundamental investment strategy that involves spreading your investments across various asset classes, industries, geographic regions,… Investing Fundamentals 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

E

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Expansion Expansion is a phase of the business cycle where the economy grows for two or more consecutive quarters.… Economics for Finance Expected return Expected return is a key concept in investing that represents the average amount of profit or loss an… Investing Fundamentals Equity financing Equity financing is a method of raising capital for a company by selling ownership shares, known as equity,… Corporate Finance

F

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Financial literacy Financial literacy is the ability to understand and effectively use various financial skills, including personal financial management, budgeting,… Personal Finance & Money Management 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 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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Growth stock A growth stock is a share in a company that is expected to grow at an above-average rate… Stocks & Equity Markets Gross income Gross income is the total amount of money you earn from all sources before any deductions or taxes… Personal Finance & Money Management 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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Hawkish vs. dovish In the world of central banking and monetary policy, the terms hawkish and dovish describe the general attitude… Monetary & Fiscal Policy HELOC A Home Equity Line of Credit (HELOC) is a type of revolving debt that allows you to borrow… Real Estate & Mortgage Finance 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

I

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Immediate annuity An immediate annuity is a financial contract between you and an insurance company that converts a lump sum… Retirement Planning Inventory turnover Inventory turnover is a key financial ratio that measures how many times a company sells and replaces its… Financial Ratios & Analysis 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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Large-cap Large-cap is a term used to describe a company with a very large market capitalization, typically over $10… Stocks & Equity Markets Leverage Leverage is the strategic use of borrowed capital (debt) to increase the potential return on an investment. In… Corporate 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

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Monthly maintenance fee A monthly maintenance fee is a periodic charge assessed by a financial institution, such as a bank or… Banking & Depository Institutions Mutual fund A mutual fund is a type of investment vehicle that pools money from many investors to purchase a… Mutual Funds, ETFs & Pooled Vehicles Money supply – M2 Money supply M2 is a broad measure of the total amount of money in an economy. It includes… Monetary & Fiscal Policy

N

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Nonrefundable tax credit A nonrefundable tax credit is a type of tax credit that can reduce your tax liability to zero,… Taxation 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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Opportunity cost Opportunity cost is the value of the next best alternative that you give up when you make a… Economics for Finance Operating margin Operating margin is a profitability ratio that measures how much profit a company makes from its core business… Financial Ratios & Analysis 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

P

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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 Price-to-sales (P/S) The Price-to-Sales (P/S) ratio is a valuation metric that compares a company’s stock price to its revenue per… Financial Ratios & Analysis Premium/discount to NAV Premium/discount to Net Asset Value (NAV) is a concept that applies primarily to closed-end funds and exchange-traded funds… Mutual Funds, ETFs & Pooled Vehicles

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 plan A qualified plan is a retirement savings plan that meets the requirements of the Internal Revenue Code (IRC)… Retirement Planning Quantitative easing (QE) Quantitative easing (QE) is an unconventional monetary policy tool used by a central bank — like the U.S.… 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 Renters insurance Renters insurance is a type of policy designed specifically for people who rent their home or apartment. It… Insurance & Risk Protection Revolving debt Revolving debt is a type of credit arrangement that allows borrowers to draw, repay, and re-borrow funds up… Credit, Debt & Lending

S

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Share repurchase A share repurchase, also known as a stock buyback, is a corporate action in which a company buys… Corporate Finance Short selling Short selling, often called shorting, is an investment strategy where a trader borrows shares of a stock and… Financial Markets & Market Mechanics Secondary market The secondary market is a financial marketplace where investors buy and sell previously issued securities, such as stocks,… Financial Markets & Market Mechanics

T

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Trade-off theory The trade-off theory is a core concept in corporate finance that explains how companies decide on their mix… Corporate Finance TransUnion TransUnion is one of the three major consumer credit reporting agencies in the United States, alongside Equifax and… Credit, Debt & Lending 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

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 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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Vesting Vesting is a legal and financial term that refers to the process by which an employee earns the… Retirement Planning Value stock A value stock is a share of a company that trades at a lower price relative to its… Stocks & Equity Markets 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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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 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 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 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

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