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
457 plan A 457 plan is a type of tax-advantaged retirement savings account offered to employees of state and local… Retirement Planning 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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Aggregate demand Aggregate demand (AD) is the total amount of goods and services that all buyers in an economy (consumers,… Economics for Finance Appraisal An appraisal is a professional estimate of the market value of a property, such as a home, land,… Real Estate & Mortgage Finance Accrued interest Accrued interest is the interest that has accumulated on a bond or other fixed-income security since the last… Bonds & Fixed Income

B

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Bankruptcy – Chapter 11 Bankruptcy – Chapter 11 is a legal process for businesses (and sometimes individuals with high levels of debt)… Credit, Debt & Lending 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 Bankruptcy – Chapter 7 Bankruptcy – Chapter 7, often called liquidation bankruptcy, is a legal process in the United States that helps… Credit, Debt & Lending

C

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Credit report A credit report is a detailed record of an individual’s credit history, compiled by consumer reporting agencies (often… Credit, Debt & Lending Closed-end fund A closed-end fund is a type of investment company that raises a fixed amount of capital by selling… Mutual Funds, ETFs & Pooled Vehicles Credit rating – S&P A credit rating from S&P (Standard & Poor’s) is an opinion about the creditworthiness of a borrower, such… Bonds & Fixed Income Credit, Debt & Lending

D

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Dual mandate The Dual Mandate is the primary policy directive given to the Federal Reserve System (the Fed), the central… Monetary & Fiscal Policy Debt financing Debt financing is a method businesses use to raise money by borrowing funds from lenders, with a promise… Corporate Finance Dark pool A dark pool is a private electronic marketplace for trading securities, primarily stocks, that operates outside of public… Financial Markets & Market Mechanics

E

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Equity financing Equity financing is a method of raising capital for a company by selling ownership shares, known as equity,… Corporate Finance Emergency fund An emergency fund is a dedicated savings account specifically set aside to cover unexpected financial surprises or life… Personal Finance & Money Management 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

F

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Financial Industry Regulatory Authority (FINRA) The Financial Industry Regulatory Authority (FINRA) is a private, non-profit organization that acts as a self-regulatory organization (SRO)… Financial Regulation Forward guidance Forward guidance is a communication tool used by central banks, such as the Federal Reserve, to inform the… Monetary & Fiscal Policy Federal funds rate The federal funds rate is the interest rate at which depository institutions (such as banks and credit unions)… Monetary & Fiscal Policy

G

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Gross margin Gross margin is a key financial metric that shows how efficiently a company produces and sells its products.… Financial Ratios & Analysis 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 Domestic Product (GDP) Gross Domestic Product (GDP) is the total monetary value of all finished goods and services produced within a… Economics for Finance

H

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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 Hawkish vs. dovish In the world of central banking and monetary policy, the terms hawkish and dovish describe the general attitude… Monetary & Fiscal Policy

I

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Income (investment) Investment income is money you earn from your investments without having to work for it actively. Instead of… Investing Fundamentals Installment debt Installment debt is a type of loan that is repaid over time with a set number of scheduled… Credit, Debt & Lending 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

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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Liquidity Liquidity is a financial concept that describes how quickly and easily an asset can be bought or sold… Financial Markets & Market Mechanics 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

M

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Marginal tax rate The marginal tax rate is the percentage of tax applied to your last dollar of income. In a… Taxation Market order A market order is an instruction to buy or sell a security immediately at the best available current… Financial Markets & Market Mechanics Minimum balance A minimum balance is the lowest amount of money a bank or credit union requires you to keep… Banking & Depository Institutions

N

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Net (take-home) income Net income, often called take-home pay, is the amount of money you actually receive after all deductions are… Personal Finance & Money Management National debt The national debt is the total amount of money that a country’s federal government has borrowed and has… Monetary & Fiscal Policy Net income Net income is the bottom line of a company’s income statement. It represents the total profit a business… Financial Statements & Accounting

O

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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 Opportunity cost Opportunity cost is the value of the next best alternative that you give up when you make a… Economics for Finance 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

P

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Pay stub A pay stub, also known as a paycheck stub, earnings statement, or pay advice, is a document provided… Personal Finance & Money Management Profitability index The profitability index (PI) is a financial metric used in capital budgeting to evaluate the attractiveness of an… Corporate Finance Pre-approval Pre-approval is a preliminary evaluation by a lender that indicates how much money you may be able to… Real Estate & Mortgage Finance

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 Qualified plan A qualified plan is a retirement savings plan that meets the requirements of the Internal Revenue Code (IRC)… Retirement Planning

R

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Required minimum distribution (RMD) A Required Minimum Distribution (RMD) is the minimum amount you must withdraw from certain retirement accounts each year… Retirement Planning Renters insurance Renters insurance is a type of policy designed specifically for people who rent their home or apartment. It… Insurance & Risk Protection 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

S

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Short-term disability insurance Short-term disability insurance (STD) is a type of insurance policy that provides partial income replacement for a limited… Insurance & Risk Protection Step-up in basis A step-up in basis is a tax rule that adjusts the cost basis of an inherited asset —… Taxation 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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Treasury bills Treasury bills, often called T-bills, are short-term debt securities issued by the U.S. Department of the Treasury. They… Bonds & Fixed Income Trade-off theory The trade-off theory is a core concept in corporate finance that explains how companies decide on their mix… Corporate Finance Time value of money The time value of money (TVM) is a core concept in finance that describes how a sum of… Investing Fundamentals

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 Umbrella policy An umbrella policy, also known as personal umbrella insurance, is an extra layer of liability insurance that goes… Insurance & Risk Protection 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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Variable annuity A variable annuity is a type of insurance contract that offers a way to save for retirement by… 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 Variable expenses Variable expenses are costs that change from month to month based on your consumption, choices, or needs. Unlike… Personal Finance & Money Management

W

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Wash-sale rule The wash-sale rule is a regulation by the Internal Revenue Service (IRS) that prevents investors from claiming a… 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 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 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-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