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 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

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Accrual accounting Accrual accounting is a fundamental method of financial reporting where revenue and expenses are recorded when they are… Financial Statements & Accounting Auto liability coverage Auto liability coverage is a fundamental type of auto insurance that pays for injuries and property damage you… Insurance & Risk Protection 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

B

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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 Beneficiary A beneficiary is a person, organization, trust, or estate that is legally designated to receive assets or benefits… Insurance & Risk Protection Bankruptcy – Chapter 13 Bankruptcy – Chapter 13 is a legal process in the United States that allows individuals with a regular… Credit, Debt & Lending

C

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Cash flow statement A cash flow statement is one of the three core financial statements used to evaluate a company’s financial… Financial Statements & Accounting Convexity Convexity is a measure of how the duration of a bond changes as interest rates change. Bonds have… Bonds & Fixed Income Catch-up contribution A catch-up contribution is an additional retirement savings contribution that individuals aged 50 or older are allowed to… Retirement Planning

D

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Discount rate The discount rate is the interest rate that the Federal Reserve System charges commercial banks and other depository… Monetary & Fiscal Policy Debt Debt is a financial obligation that occurs when one party borrows money from another. The borrower receives a… Credit, Debt & Lending Investing Fundamentals Dot plot The dot plot is a visual chart published by the Federal Open Market Committee (FOMC) that shows individual… Monetary & Fiscal Policy

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 Expected return Expected return is a key concept in investing that represents the average amount of profit or loss an… Investing Fundamentals 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

F

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FHA loan An FHA loan is a government-backed mortgage insured by the Federal Housing Administration (FHA), which is part of… Real Estate & Mortgage Finance Foreclosure Foreclosure is the legal process that occurs when a homeowner fails to make their mortgage payments, leading the… Real Estate & Mortgage Finance 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

G

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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 Growth stock A growth stock is a share in a company that is expected to grow at an above-average rate… Stocks & Equity Markets Gift tax The gift tax is a federal tax in the United States imposed on the transfer of property or… Taxation

H

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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 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

I

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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 Income statement An income statement is one of the three core financial statements used by businesses, investors, and analysts to… Financial Statements & Accounting Interest rate An interest rate is the cost of borrowing money or the return earned on savings, expressed as a…

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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Long-term disability insurance Long-term disability insurance (LTD) is a type of insurance policy that provides income replacement if you become unable… Insurance & Risk Protection Liabilities Liabilities are financial obligations or debts that a company or individual owes to others. They represent claims against… Financial Statements & Accounting Limit order A limit order is a type of order to buy or sell a security at a specific price… Financial Markets & Market Mechanics

M

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Money market account A money market account (MMA) is a type of deposit account offered by banks and credit unions that… Banking & Depository Institutions Monetary policy Monetary policy is the set of actions a central bank, like the Federal Reserve System in the United… Monthly maintenance fee A monthly maintenance fee is a periodic charge assessed by a financial institution, such as a bank or… Banking & Depository Institutions

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 Nasdaq The Nasdaq (originally an acronym for the National Association of Securities Dealers Automated Quotations) is a global electronic… Stocks & Equity Markets Nominal GDP Nominal Gross Domestic Product (GDP) is a measure of the total value of all final goods and services… Economics for Finance

O

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Online bank An online bank is a financial institution that operates entirely or primarily through digital channels, such as a… Banking & Depository Institutions Overdraft An overdraft occurs when you spend more money than you have available in your checking account. In simple… Banking & Depository Institutions 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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Premium In the context of insurance, a premium is the amount of money you pay to an insurance company… Insurance & Risk Protection Points (discount points) Discount points, often simply called “points,” are a form of prepaid interest you can pay to your lender… Real Estate & Mortgage Finance Primary market The primary market is the financial market where new securities, such as stocks and bonds, are created and… Financial Markets & Market Mechanics

Q

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Qualified dividend A qualified dividend is a type of dividend payment that meets specific criteria set by the Internal Revenue… Taxation 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

R

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Revolving debt Revolving debt is a type of credit arrangement that allows borrowers to draw, repay, and re-borrow funds up… Credit, Debt & Lending Reserve requirement The reserve requirement is a central banking regulation that sets the minimum fraction of customer deposits and liabilities… Monetary & Fiscal Policy Recession A recession is a significant, widespread, and prolonged downturn in economic activity. While there is no single, universally… Economics for Finance

S

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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 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 SEP-IRA A SEP-IRA, or Simplified Employee Pension Individual Retirement Arrangement, is a retirement savings plan designed for self-employed individuals… Retirement Planning

T

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Thrift / Savings & Loan A thrift institution, also known as a Savings and Loan Association (S&L), is a type of financial institution… Banking & Depository Institutions 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 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 Universal life insurance Universal life insurance is a type of permanent life insurance that offers flexible premiums, adjustable death benefits, and… 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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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 Vesting Vesting is a legal and financial term that refers to the process by which an employee earns the… Retirement Planning

W

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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 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 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