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

A

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Asset allocation Asset allocation is the investment strategy of dividing a portfolio among different asset classes, such as stocks, bonds,… Investing Fundamentals Accrual accounting Accrual accounting is a fundamental method of financial reporting where revenue and expenses are recorded when they are… Financial Statements & Accounting Asset class An asset class is a group of investments that share similar characteristics, behave similarly in the marketplace, and… Investing Fundamentals

B

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Broker A broker is an individual or firm that acts as an intermediary between buyers and sellers in financial… Financial Markets & Market Mechanics Bond fund A bond fund is a type of pooled investment vehicle—typically a mutual fund or an exchange-traded fund (ETF)—that… Mutual Funds, ETFs & Pooled Vehicles Bull market A bull market is a prolonged period in financial markets when prices of assets, most commonly stocks, rise… Stocks & Equity Markets

C

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Correlation Correlation is a statistical measure that describes the degree to which two securities move in relation to each… Investing Fundamentals Closing costs Closing costs are the fees and expenses paid by homebuyers and sellers at the end of a real… Real Estate & Mortgage Finance Credit report A credit report is a detailed record of an individual’s credit history, compiled by consumer reporting agencies (often… Credit, Debt & Lending

D

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Dodd-Frank Act The Dodd-Frank Wall Street Reform and Consumer Protection Act (commonly known as the Dodd-Frank Act) is a landmark… Financial Regulation Dot plot The dot plot is a visual chart published by the Federal Open Market Committee (FOMC) that shows individual… Monetary & Fiscal Policy Debt-to-equity The debt-to-equity (D/E) ratio is a key leverage ratio that compares a company’s total liabilities to its shareholder… Financial Ratios & Analysis

E

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Exchange rate An exchange rate is the price of one country’s currency expressed in terms of another country’s currency. It… Economics for Finance Elasticity Elasticity is an economic concept that measures how much one economic variable changes in response to a change… Economics for Finance 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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Fixed-rate mortgage A fixed-rate mortgage is a type of home loan where the interest rate remains constant for the entire… Real Estate & Mortgage Finance Fixed expenses Fixed expenses are costs that remain the same amount each month and are essential for your basic living… Personal Finance & Money Management Face / par value Face value, also known as par value, is the stated value of a bond as printed on the… Bonds & Fixed Income

G

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Gross profit Gross profit is the profit a company makes after deducting the costs directly tied to producing and selling… 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 Gross income Gross income is the total amount of money you earn from all sources before any deductions or taxes… Personal Finance & Money Management

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 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 Homeowners insurance Homeowners insurance is a type of property insurance that protects an individual’s home and personal belongings against damage,… Insurance & Risk Protection

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 Investment Advisers Act of 1940 The Investment Advisers Act of 1940 is a landmark piece of federal legislation that established the legal framework… Financial Regulation Inflation Inflation is the rate at which the general level of prices for goods and services rises over a… Economics for Finance

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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Large-cap Large-cap is a term used to describe a company with a very large market capitalization, typically over $10… Stocks & Equity Markets 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 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

M

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Marginal tax rate The marginal tax rate is the percentage of tax applied to your last dollar of income. In a… Taxation Mutual fund A mutual fund is a type of investment vehicle that pools money from many investors to purchase a… Mutual Funds, ETFs & Pooled Vehicles Mortgage-backed security (MBS) A mortgage-backed security (MBS) is a type of investment product that represents a claim on the cash flows… Real Estate & Mortgage Finance

N

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Nonfarm payrolls Nonfarm payrolls are a monthly economic indicator released by the U.S. Bureau of Labor Statistics (BLS) that measures… Economics for Finance Nominal GDP Nominal Gross Domestic Product (GDP) is a measure of the total value of all final goods and services… Economics for Finance NYSE The New York Stock Exchange (NYSE) is the world’s largest stock exchange by market capitalization, located at 11… Stocks & Equity Markets

O

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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 Out-of-pocket maximum The out-of-pocket maximum is the most money you will have to pay for covered healthcare services in a… Insurance & Risk Protection Ordinary dividend An ordinary dividend is a type of payment that a corporation makes to its shareholders from its profits,… Taxation

P

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Pecking order theory The pecking order theory is a corporate finance concept that explains how companies prioritize their sources of financing.… Corporate Finance Pro forma financial statements Pro forma financial statements are forward-looking financial reports that project a company’s future financial performance based on hypothetical… Corporate Finance Passive investing Passive investing is a long-term investment strategy that aims to match the performance of a broad market index,… Investing Fundamentals

Q

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Qualified plan A qualified plan is a retirement savings plan that meets the requirements of the Internal Revenue Code (IRC)… Retirement Planning 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

R

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Risk-return tradeoff The risk-return tradeoff is a fundamental concept in investing that describes the direct relationship between the potential reward… Investing Fundamentals Return on equity (ROE) Return on Equity (ROE) is a powerful financial ratio that measures a company’s profitability by revealing how much… Financial Ratios & Analysis Real GDP Real GDP (Gross Domestic Product adjusted for inflation) is a critical economic measure that reflects the total value… 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 Secondary offering A secondary offering, also known as a follow-on public offering (FPO), occurs when a company that is already… Stocks & Equity Markets Standard deviation Standard deviation is a statistical measure that quantifies the amount of variation or dispersion in a set of… Investing Fundamentals

T

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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 TransUnion TransUnion is one of the three major consumer credit reporting agencies in the United States, alongside Equifax and… Credit, Debt & Lending

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 Umbrella policy An umbrella policy, also known as personal umbrella insurance, is an extra layer of liability insurance that goes… 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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Volatility Volatility is a statistical measure of the dispersion of returns for a given security or market index. In… Investing Fundamentals VA loan A VA loan is a mortgage loan in the United States guaranteed by the U.S. Department of Veterans… Real Estate & Mortgage Finance Variable annuity A variable annuity is a type of insurance contract that offers a way to save for retirement by… Retirement Planning

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 Wire transfer A wire transfer is an electronic method of transferring funds from one person or entity to another, directly… Banking & Depository Institutions 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 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 Yield Yield is a financial term that measures the income generated by an investment, typically expressed as a percentage… Investing Fundamentals

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