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 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 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

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 Accounting equation The accounting equation is the fundamental principle of double-entry bookkeeping and the foundation of the balance sheet. It… Financial Statements & Accounting Assets Assets are economic resources that a business or individual owns or controls, expected to produce future benefits. In… 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 Bankruptcy – Chapter 13 Bankruptcy – Chapter 13 is a legal process in the United States that allows individuals with a regular… 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

C

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Checking account A checking account is a type of deposit account held at a financial institution, such as a commercial… Banking & Depository Institutions Personal Finance & Money Management Cost of debt The cost of debt is the effective interest rate a company pays on its borrowed funds, such as… Corporate Finance Core inflation Core inflation is a measure of inflation that excludes the prices of food and energy. These categories are… Economics for Finance

D

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Down payment A down payment is an upfront, partial payment made by a buyer when purchasing a high-value asset, most… Credit, Debt & Lending Real Estate & Mortgage Finance Debt ceiling The debt ceiling (also known as the debt limit) is a legal cap set by the United States… Monetary & Fiscal Policy Deductible A deductible is the amount of money you must pay out of your own pocket for covered healthcare… Insurance & Risk Protection

E

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Experian Experian is one of the three major credit reporting agencies (along with Equifax and TransUnion) that collect and… Credit, Debt & Lending 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 Emergency fund An emergency fund is a dedicated savings account specifically set aside to cover unexpected financial surprises or life… Personal Finance & Money Management

F

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Federal Reserve Chair The Federal Reserve Chair is the head of the Board of Governors of the Federal Reserve System, the… Monetary & Fiscal Policy 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 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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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 Domestic Product (GDP) Gross Domestic Product (GDP) is the total monetary value of all finished goods and services produced within a… Economics for Finance 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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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 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 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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Interest coverage The interest coverage ratio (also known as times interest earned) is a financial metric that measures a company’s… Financial Ratios & Analysis IPO An IPO, or Initial Public Offering, is the process by which a private company sells shares of its… Stocks & Equity Markets Interest on reserve balances (IORB) Interest on reserve balances (IORB) is the interest rate that the Federal Reserve System pays to banks and… Monetary & Fiscal Policy

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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Loan origination fee A loan origination fee is an upfront charge imposed by a lender to process, underwrite, and fund a… Credit, Debt & Lending 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 Labor force participation rate The labor force participation rate (LFPR) is a key economic metric that measures the percentage of a country’s… Economics for Finance

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 Minimum payment The minimum payment is the smallest amount you must pay each month on a credit card or other… Credit, Debt & Lending 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

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 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 Non-discretionary spending Non-discretionary spending, also called essential or mandatory spending, refers to expenses that are necessary for basic living and… Personal Finance & Money Management

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 Open-end fund An open-end fund is a type of mutual fund that can issue an unlimited number of shares. The… Mutual Funds, ETFs & Pooled Vehicles

P

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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 Productivity In economics and finance, Productivity measures how efficiently inputs (like labor, capital, and materials) are converted into useful… Economics for Finance PPI (Producer Price Index) The Producer Price Index (PPI) is a crucial economic indicator that measures the average change over time in… Economics for Finance

Q

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Quantitative tightening (QT) Quantitative tightening (QT) is a contractionary monetary policy tool used by a central bank, like the Federal Reserve,… Monetary & Fiscal Policy Quantitative easing (QE) Quantitative easing (QE) is an unconventional monetary policy tool used by a central bank — like the U.S.… Monetary & Fiscal Policy Qualified dividend A qualified dividend is a type of dividend payment that meets specific criteria set by the Internal Revenue… Taxation

R

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Russell 2000 The Russell 2000 is a stock market index that tracks the performance of roughly 2,000 of the smallest… Stocks & Equity Markets Reconciliation Reconciliation is the process of comparing two sets of financial records to make sure they match. Think of… Banking & Depository Institutions Rider A rider is an amendment or attachment to an insurance policy that modifies the standard terms, coverage, or… Insurance & Risk Protection

S

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Sector fund A sector fund is a type of mutual fund or exchange-traded fund (ETF) that invests exclusively in one… Mutual Funds, ETFs & Pooled Vehicles SEP-IRA A SEP-IRA, or Simplified Employee Pension Individual Retirement Arrangement, is a retirement savings plan designed for self-employed individuals… Retirement Planning Spread The term “spread” in financial markets refers to the difference between two prices, rates, or yields. It is… Financial Markets & Market Mechanics

T

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Target-date fund A target-date fund is a type of mutual fund or exchange-traded fund designed to simplify retirement investing for… Mutual Funds, ETFs & Pooled Vehicles Treasury Inflation-Protected Securities (TIPS) TIPS stands for Treasury Inflation-Protected Securities. These are a special type of Treasury bond issued by the U.S.… 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

U

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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 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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Vesting Vesting is a legal and financial term that refers to the process by which an employee earns the… Retirement Planning Volatility Volatility is a statistical measure of the dispersion of returns for a given security or market index. In… Investing Fundamentals VantageScore VantageScore is a credit scoring model developed by the three major credit bureaus: Equifax, Experian, and TransUnion. It… Credit, Debt & Lending

W

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Working capital Working capital is a financial metric that represents the difference between a company’s current assets and current liabilities.… Corporate Finance 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 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 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