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
50/30/20 rule The 50/30/20 rule is a simple and popular budgeting framework that helps individuals manage their after-tax income by… Personal Finance & Money Management 401(k) A 401(k) is a tax-advantaged retirement savings plan sponsored by an employer. It allows employees to save and… Retirement Planning 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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ACH transfer An ACH transfer is an electronic transfer of money between bank accounts through the Automated Clearing House (ACH)… Banking & Depository Institutions Auto collision coverage Auto collision coverage is a type of car insurance that pays to repair or replace your vehicle if… Insurance & Risk Protection Active investing Active investing is a hands-on approach to building and managing an investment portfolio. Instead of simply tracking a… Investing Fundamentals

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 Beneficiary A beneficiary is a person, organization, trust, or estate that is legally designated to receive assets or benefits… Insurance & Risk Protection Business cycle The business cycle—also called the economic cycle or trade cycle—refers to the natural, recurring fluctuations in economic activity… Economics for Finance

C

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Catch-up contribution A catch-up contribution is an additional retirement savings contribution that individuals aged 50 or older are allowed to… Retirement Planning Callable bond A callable bond is a type of bond that gives the issuer the right, but not the obligation,… Bonds & Fixed Income Current yield The current yield is a measure of the annual income (interest or dividends) generated by a bond or… Bonds & Fixed Income

D

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Day order A day order is a type of order to buy or sell a security that is valid only… Financial Markets & Market Mechanics Dividend yield Dividend yield is a financial ratio that shows how much a company pays out in dividends each year… Stocks & Equity Markets DuPont analysis The DuPont analysis is a framework for breaking down the fundamental drivers of Return on Equity (ROE) into… Financial Ratios & Analysis

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 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 Equity Equity, also known as shareholder’s equity or owner’s equity, represents the residual interest in the assets of an… Financial Statements & Accounting

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 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 Full Retirement Age (FRA) Full Retirement Age (FRA) is the age at which you become eligible to receive your full, unreduced Social… Retirement Planning

G

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GAAP GAAP (Generally Accepted Accounting Principles) is a common set of accounting rules, standards, and procedures that companies in… Financial Statements & Accounting Goodwill Goodwill is an intangible asset that arises when one company purchases another company for a price greater than… Financial Statements & Accounting 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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Hawkish vs. dovish In the world of central banking and monetary policy, the terms hawkish and dovish describe the general attitude… Monetary & Fiscal Policy 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 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

I

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Interest rate An interest rate is the cost of borrowing money or the return earned on savings, expressed as a… 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
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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Limit order A limit order is a type of order to buy or sell a security at a specific price… Financial Markets & Market Mechanics 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 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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Minimum payment The minimum payment is the smallest amount you must pay each month on a credit card or other… Credit, Debt & Lending Mortgage A mortgage is a type of secured loan used to finance the purchase of real estate, such as… Real Estate & Mortgage Finance Market capitalization Market capitalization (or “market cap”) is the total dollar value of a publicly traded company’s outstanding shares of… Stocks & Equity Markets

N

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Net income Net income is the bottom line of a company’s income statement. It represents the total profit a business… Financial Statements & Accounting NCUA The NCUA, or National Credit Union Administration, is an independent federal agency created by the United States Congress… Financial Regulation 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

O

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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 Online bank An online bank is a financial institution that operates entirely or primarily through digital channels, such as a… Banking & Depository Institutions 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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Passive investing Passive investing is a long-term investment strategy that aims to match the performance of a broad market index,… Investing Fundamentals PCE price index The PCE price index, or Personal Consumption Expenditures price index, is a measure of inflation in the United… Economics for Finance Policy limit A policy limit is the maximum amount an insurance company will pay for a covered loss under an… Insurance & Risk Protection

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 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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Return on invested capital (ROIC) Return on Invested Capital (ROIC) is a key financial metric that shows how well a company turns the… Financial Ratios & Analysis Rider A rider is an amendment or attachment to an insurance policy that modifies the standard terms, coverage, or… Insurance & Risk Protection Roth IRA A Roth IRA (Individual Retirement Account) is a powerful retirement savings vehicle that offers tax-free growth and tax-free… Retirement Planning

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 Securities Exchange Act of 1934 The Securities Exchange Act of 1934 is a landmark United States federal law that created the legal framework… Financial Regulation S&P 500 The S&P 500, or Standard & Poor’s 500, is a stock market index that tracks the performance of… Stocks & Equity Markets

T

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Traditional IRA A Traditional IRA (Individual Retirement Account) is a tax-advantaged retirement savings account that allows individuals to contribute pre-tax… Retirement Planning Ticker symbol A ticker symbol, also known as a stock symbol, is a unique series of letters assigned to a… Stocks & Equity Markets Term life insurance Term life insurance is a type of life insurance policy that provides coverage for a specific period, or… Insurance & Risk Protection

U

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Unsecured debt Unsecured debt is a type of loan or credit that is not backed by any form of collateral.… Credit, Debt & Lending Underwriting Underwriting is the process by which a lender, insurer, or investment bank evaluates the risk involved in a… 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

V

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VantageScore VantageScore is a credit scoring model developed by the three major credit bureaus: Equifax, Experian, and TransUnion. It… Credit, Debt & Lending 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 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 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 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

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