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 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

A

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APY APY, which stands for Annual Percentage Yield, is a financial term that shows the real rate of return… Banking & Depository Institutions APR vs. APY APR (Annual Percentage Rate) and APY (Annual Percentage Yield) are two critical measures used in finance to represent… Credit, Debt & Lending Auto comprehensive coverage Auto comprehensive coverage, often simply called comprehensive coverage or “comp,” is an optional part of an auto insurance… Insurance & Risk Protection

B

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Beige Book The Beige Book, formally known as the Summary of Commentary on Current Economic Conditions by Federal Reserve District,… Monetary & Fiscal Policy Bear market A bear market is a prolonged period of declining prices in a financial market, typically defined as a… Stocks & Equity Markets Bid The bid is the highest price a buyer is willing to pay for a security, such as a… Financial Markets & Market Mechanics

C

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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 Cost of equity The cost of equity is the rate of return that a company must offer to investors to compensate… Corporate Finance Cost of debt The cost of debt is the effective interest rate a company pays on its borrowed funds, such as… Corporate Finance

D

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Dot plot The dot plot is a visual chart published by the Federal Open Market Committee (FOMC) that shows individual… Monetary & Fiscal Policy Defined benefit plan A defined benefit plan, often called a pension plan, is an employer-sponsored retirement plan that guarantees a specific,… Retirement Planning Dividend A dividend is a distribution of a portion of a company’s earnings to its shareholders, typically in the… Stocks & Equity Markets

E

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Expected return Expected return is a key concept in investing that represents the average amount of profit or loss an… Investing Fundamentals EBITDA EBITDA is an acronym that stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a widely… Financial Statements & Accounting ERISA ERISA, the Employee Retirement Income Security Act of 1974, is a landmark federal law that sets minimum standards… Retirement Planning

F

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Federal Reserve Board The Federal Reserve Board, often called the Federal Reserve Board of Governors, is the main governing body of… Financial Regulation FDIC The Federal Deposit Insurance Corporation (FDIC) is an independent agency of the United States government that protects depositors… Financial Regulation 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

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 Glass-Steagall Act The Glass-Steagall Act (officially the Banking Act of 1933) was a landmark piece of U.S. legislation that created… Financial Regulation 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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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 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 High-yield (junk) bond A high-yield bond, commonly known as a junk bond, is a type of bond that offers a higher… Bonds & Fixed Income

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 IPO An IPO, or Initial Public Offering, is the process by which a private company sells shares of its… Stocks & Equity Markets Installment debt Installment debt is a type of loan that is repaid over time with a set number of scheduled… Credit, Debt & Lending

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 Leverage Leverage is the strategic use of borrowed capital (debt) to increase the potential return on an investment. In… Corporate 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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Money market account A money market account (MMA) is a type of deposit account offered by banks and credit unions that… Banking & Depository Institutions Money supply – M3 Money supply M3 is a broad measure of the total amount of money circulating in an economy. It… Monetary & Fiscal Policy Minimum payment The minimum payment is the smallest amount you must pay each month on a credit card or other… Credit, Debt & Lending

N

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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 Nonfarm payrolls Nonfarm payrolls are a monthly economic indicator released by the U.S. Bureau of Labor Statistics (BLS) that measures… Economics for Finance Nonrefundable tax credit A nonrefundable tax credit is a type of tax credit that can reduce your tax liability to zero,… Taxation

O

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Operating margin Operating margin is a profitability ratio that measures how much profit a company makes from its core business… Financial Ratios & Analysis 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 Operating income Operating income, also known as operating profit or operating earnings, measures the profit a company makes from its… Financial Statements & Accounting

P

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Pension A pension is a type of retirement plan that promises to pay a regular, fixed income to employees… Retirement Planning Pecking order theory The pecking order theory is a corporate finance concept that explains how companies prioritize their sources of financing.… Corporate Finance Preferred stock Preferred stock is a unique type of ownership in a company that sits in between common stock and… Stocks & Equity Markets

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 Qualified plan A qualified plan is a retirement savings plan that meets the requirements of the Internal Revenue Code (IRC)… Retirement Planning 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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Refinancing Refinancing is the process of replacing an existing loan (usually a mortgage) with a new loan that has… Real Estate & Mortgage Finance Russell 2000 The Russell 2000 is a stock market index that tracks the performance of roughly 2,000 of the smallest… Stocks & Equity Markets Renters insurance Renters insurance is a type of policy designed specifically for people who rent their home or apartment. It… Insurance & Risk Protection

S

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Securities and Exchange Commission (SEC) The Securities and Exchange Commission (SEC) is the primary federal agency responsible for enforcing federal securities laws, regulating… Financial Regulation Share class I (institutional) Share class I (institutional) is a category of mutual fund shares designed specifically for institutional investors, such as… Mutual Funds, ETFs & Pooled Vehicles Stock split A stock split is a corporate action where a company increases the number of its outstanding shares by… Stocks & Equity Markets

T

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Time value of money The time value of money (TVM) is a core concept in finance that describes how a sum of… Investing Fundamentals TransUnion TransUnion is one of the three major consumer credit reporting agencies in the United States, alongside Equifax and… Credit, Debt & Lending Traditional IRA A Traditional IRA (Individual Retirement Account) is a tax-advantaged retirement savings account that allows individuals to contribute pre-tax… Retirement Planning

U

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Universal life insurance Universal life insurance is a type of permanent life insurance that offers flexible premiums, adjustable death benefits, and… Insurance & Risk Protection Unsecured debt Unsecured debt is a type of loan or credit that is not backed by any form of collateral.… Credit, Debt & Lending 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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Vesting Vesting is a legal and financial term that refers to the process by which an employee earns the… Retirement Planning Variable expenses Variable expenses are costs that change from month to month based on your consumption, choices, or needs. Unlike… Personal Finance & Money Management 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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Withholding Withholding is the portion of an employee’s wages that an employer sends directly to the government to cover… Taxation Working capital Working capital is a financial metric that represents the difference between a company’s current assets and current liabilities.… Corporate Finance Wire transfer A wire transfer is an electronic method of transferring funds from one person or entity to another, directly… Banking & Depository Institutions

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 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

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