Reference

Glossary Terms

Browse our comprehensive glossary of terms. Search, filter by topic, or navigate alphabetically.

463 Total Terms
18 Topics

#

8 terms
401(k) A 401(k) is a tax-advantaged retirement savings plan sponsored by an employer. It allows employees to save and… 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 457 plan A 457 plan is a type of tax-advantaged retirement savings account offered to employees of state and local… Retirement Planning

A

View all 29 terms →
Adjusted gross income (AGI) Adjusted Gross Income (AGI) is a key number used in the United States tax system. It represents your… Taxation Auto collision coverage Auto collision coverage is a type of car insurance that pays to repair or replace your vehicle if… Insurance & Risk Protection APR vs. APY APR (Annual Percentage Rate) and APY (Annual Percentage Yield) are two critical measures used in finance to represent… Credit, Debt & Lending

B

View all 25 terms →
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 Benchmark A benchmark is a standard or point of reference against which the performance of an investment, portfolio, or… Investing Fundamentals Bankruptcy – Chapter 11 Bankruptcy – Chapter 11 is a legal process for businesses (and sometimes individuals with high levels of debt)… Credit, Debt & Lending

C

View all 59 terms →
Credit spread A credit spread is the difference in yield between a corporate or government bond and a benchmark bond… Bonds & Fixed Income Credit score (FICO) A credit score (FICO) is a three-digit number that lenders use to quickly evaluate your creditworthiness — how… Credit, Debt & Lending Cash flow Cash flow is the movement of money into and out of a person’s or business’s accounts over a… Personal Finance & Money Management

D

View all 36 terms →
Deferred annuity A deferred annuity is a type of retirement savings contract offered by insurance companies. With a deferred annuity,… Retirement Planning Dow Jones Industrial Average The Dow Jones Industrial Average (DJIA), often simply called “the Dow,” is one of the oldest and most… Stocks & Equity Markets Depreciation Depreciation is a fundamental accounting concept that allocates the cost of a tangible asset over its useful life.… Financial Statements & Accounting

E

View all 25 terms →
Equity financing Equity financing is a method of raising capital for a company by selling ownership shares, known as equity,… Corporate Finance Equity Equity, also known as shareholder’s equity or owner’s equity, represents the residual interest in the assets of an… Financial Statements & Accounting Enterprise value (EV) Enterprise Value (EV) is a comprehensive measure of a company’s total value, often used as a more complete… Financial Ratios & Analysis

F

View all 29 terms →
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 Forward guidance Forward guidance is a communication tool used by central banks, such as the Federal Reserve, to inform the… Monetary & Fiscal Policy Foreclosure Foreclosure is the legal process that occurs when a homeowner fails to make their mortgage payments, leading the… Real Estate & Mortgage Finance

G

View all 10 terms →
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 Goodwill Goodwill is an intangible asset that arises when one company purchases another company for a price greater than… Financial Statements & Accounting 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

H

View all 9 terms →
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 Hard inquiry A hard inquiry (also called a hard pull or hard credit check) is a record of when a… Credit, Debt & Lending

I

View all 19 terms →
Interest rate An interest rate is the cost of borrowing money or the return earned on savings, expressed as a… 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 IPO An IPO, or Initial Public Offering, is the process by which a private company sells shares of its… Stocks & Equity Markets

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

View all 10 terms →
Large-cap Large-cap is a term used to describe a company with a very large market capitalization, typically over $10… Stocks & Equity Markets Liquidity Liquidity is a financial concept that describes how quickly and easily an asset can be bought or sold… Financial Markets & Market Mechanics Liabilities Liabilities are financial obligations or debts that a company or individual owes to others. They represent claims against… Financial Statements & Accounting

M

View all 23 terms →
Money supply – M1 Money supply – M1 is a measure of the most liquid forms of money 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 Market maker A market maker is a financial firm or individual that continuously quotes both a buy (bid) and sell… Financial Markets & Market Mechanics

N

View all 18 terms →
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 NCUA insurance NCUA insurance refers to the deposit insurance coverage provided by the National Credit Union Administration (NCUA) to members… Banking & Depository Institutions

O

View all 12 terms →
Overdraft An overdraft occurs when you spend more money than you have available in your checking account. In simple… Banking & Depository Institutions Operating margin Operating margin is a profitability ratio that measures how much profit a company makes from its core business… Financial Ratios & Analysis Open market operations Open market operations (OMO) are the primary tool used by the Federal Reserve System to influence the supply… Monetary & Fiscal Policy

P

View all 28 terms →
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 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 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

View all 5 terms →
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 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

View all 29 terms →
Russell 2000 The Russell 2000 is a stock market index that tracks the performance of roughly 2,000 of the smallest… Stocks & Equity Markets Retained earnings Retained earnings represent the cumulative portion of a company’s net income that is not distributed to shareholders as… Financial Statements & Accounting Real GDP Real GDP (Gross Domestic Product adjusted for inflation) is a critical economic measure that reflects the total value… Economics for Finance

S

View all 39 terms →
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 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 Standard deduction The standard deduction is a specific dollar amount that reduces the income on which you are taxed. It… Taxation

T

View all 23 terms →
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 Traditional IRA A Traditional IRA (Individual Retirement Account) is a tax-advantaged retirement savings account that allows individuals to contribute pre-tax… Retirement Planning Total return Total return is a comprehensive measure of an investment’s performance that captures all sources of value change over… Investing Fundamentals

U

View all 6 terms →
Unemployment rate The unemployment rate is a key economic indicator that measures the percentage of the labor force that is… Economics for Finance Underwriting Underwriting is the process by which a lender, insurer, or investment bank evaluates the risk involved in a… Insurance & Risk Protection Universal life insurance Universal life insurance is a type of permanent life insurance that offers flexible premiums, adjustable death benefits, and… Insurance & Risk Protection

V

View all 7 terms →
Volatility Volatility is a statistical measure of the dispersion of returns for a given security or market index. In… Investing Fundamentals Variable expenses Variable expenses are costs that change from month to month based on your consumption, choices, or needs. Unlike… Personal Finance & Money Management VantageScore VantageScore is a credit scoring model developed by the three major credit bureaus: Equifax, Experian, and TransUnion. It… Credit, Debt & Lending

W

View all 7 terms →
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 Wash-sale rule The wash-sale rule is a regulation by the Internal Revenue Service (IRS) that prevents investors from claiming a… Taxation Working capital Working capital is a financial metric that represents the difference between a company’s current assets and current liabilities.… 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-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