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
1099 A 1099 form is a series of tax documents issued by the Internal Revenue Service (IRS) and used… Taxation 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 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

A

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Asset turnover Asset turnover is a financial ratio that measures how efficiently a company uses its assets to generate sales… Financial Ratios & Analysis Financial Statements & Accounting Auto comprehensive coverage Auto comprehensive coverage, often simply called comprehensive coverage or “comp,” is an optional part of an auto insurance… Insurance & Risk Protection Above-the-line deduction An above-the-line deduction is a type of tax deduction that you can subtract directly from your gross income… Taxation

B

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Bankruptcy – Chapter 13 Bankruptcy – Chapter 13 is a legal process in the United States that allows individuals with a regular… Credit, Debt & Lending Bond A bond is a fixed-income financial instrument that represents a loan made by an investor to a borrower,… Bonds & Fixed Income 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

C

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Cost of debt The cost of debt is the effective interest rate a company pays on its borrowed funds, such as… Corporate Finance 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 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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Debt financing Debt financing is a method businesses use to raise money by borrowing funds from lenders, with a promise… Corporate Finance Debit card A debit card is a payment card issued by a bank or credit union that allows you to… Banking & Depository Institutions Diversification Diversification is a fundamental investment strategy that involves spreading your investments across various asset classes, industries, geographic regions,… Investing Fundamentals

E

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Expense ratio The expense ratio is the annual fee that all mutual funds, exchange-traded funds (ETFs), and other pooled investment… Mutual Funds, ETFs & Pooled Vehicles Equity Equity, also known as shareholder’s equity or owner’s equity, represents the residual interest in the assets of an… Financial Statements & Accounting EPS (earnings per share) EPS (earnings per share) is a financial metric that shows how much profit a company earns for each… Stocks & Equity Markets

F

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Federal funds rate The federal funds rate is the interest rate at which depository institutions (such as banks and credit unions)… Monetary & Fiscal Policy Full Retirement Age (FRA) Full Retirement Age (FRA) is the age at which you become eligible to receive your full, unreduced Social… Retirement Planning FDIC insurance The Federal Deposit Insurance Corporation (FDIC) is an independent agency of the United States government that protects depositors… Banking & Depository Institutions

G

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Goodwill Goodwill is an intangible asset that arises when one company purchases another company for a price greater than… Financial Statements & Accounting 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 margin Gross margin is a key financial metric that shows how efficiently a company produces and sells its products.… Financial Ratios & Analysis

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 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 Hurdle rate The hurdle rate is the minimum acceptable rate of return on an investment or project that a company… Corporate Finance

I

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Income (investment) Investment income is money you earn from your investments without having to work for it actively. Instead of… Investing Fundamentals 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 Index fund An index fund is a type of exchange-traded fund or mutual fund designed to track the performance of… Mutual Funds, ETFs & Pooled Vehicles

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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Liabilities Liabilities are financial obligations or debts that a company or individual owes to others. They represent claims against… Financial Statements & Accounting 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 Long-term capital gains Long-term capital gains are the profits you earn from selling an asset that you have held for more… Taxation

M

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Money market fund A money market fund is a type of mutual fund that invests in short-term, high-quality, low-risk debt securities.… Mutual Funds, ETFs & Pooled Vehicles Market capitalization Market capitalization (or “market cap”) is the total dollar value of a publicly traded company’s outstanding shares of… Stocks & Equity Markets Municipal bond (muni) A municipal bond (muni) is a debt security issued by a state, municipality, county, or other government entity… Bonds & Fixed Income

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 Net worth Net worth is a snapshot of your financial health at a single moment. It is calculated by subtracting… Personal Finance & Money Management Net present value (NPV) Net Present Value (NPV) is a core concept in corporate finance used to evaluate the profitability of an… Corporate Finance

O

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Open market operations Open market operations (OMO) are the primary tool used by the Federal Reserve System to influence the supply… Monetary & Fiscal Policy Overdraft An overdraft occurs when you spend more money than you have available in your checking account. In simple… Banking & Depository Institutions 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

P

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Principal Principal is the original sum of money borrowed in a loan or the original amount invested, before any… Credit, Debt & Lending PCAOB The PCAOB (Public Company Accounting Oversight Board) is a nonprofit corporation established by the Sarbanes-Oxley Act of 2002.… Financial Regulation 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

Q

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Quantitative easing (QE) Quantitative easing (QE) is an unconventional monetary policy tool used by a central bank — like the U.S.… Monetary & Fiscal Policy 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 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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Roth conversion A Roth conversion is a financial strategy where you transfer funds from a Traditional IRA (or other eligible… Retirement Planning Revenue Revenue (also called sales, turnover, or the top line) is the total amount of money a company earns… Financial Statements & Accounting Required minimum distribution (RMD) A Required Minimum Distribution (RMD) is the minimum amount you must withdraw from certain retirement accounts each year… Retirement Planning

S

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Small-cap Small-cap stocks are shares of companies with a relatively small market capitalization, typically ranging from about $250 million… Stocks & Equity Markets Share buyback / repurchase A share buyback, also known as a share repurchase, is a corporate action in which a company buys… 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

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Treasury notes Treasury notes, often called T-notes, are debt securities issued by the U.S. Department of the Treasury. They are… Bonds & Fixed Income 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 Title insurance Title insurance is a specialized form of indemnity insurance that protects real estate buyers and lenders against financial… Real Estate & Mortgage Finance

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 Unemployment rate The unemployment rate is a key economic indicator that measures the percentage of the labor force that is… Economics for Finance 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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Variable expenses Variable expenses are costs that change from month to month based on your consumption, choices, or needs. Unlike… Personal Finance & Money Management Value stock A value stock is a share of a company that trades at a lower price relative to its… Stocks & Equity Markets 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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Wire transfer A wire transfer is an electronic method of transferring funds from one person or entity to another, directly… Banking & Depository Institutions 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 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

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-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