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
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 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 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

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 ACH transfer An ACH transfer is an electronic transfer of money between bank accounts through the Automated Clearing House (ACH)… Banking & Depository Institutions Adjusted gross income (AGI) Adjusted Gross Income (AGI) is a key number used in the United States tax system. It represents your… Taxation

B

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Budget A budget is a detailed financial plan that estimates your income and expenses over a specific period, typically… Personal Finance & Money Management 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 Backdoor Roth A Backdoor Roth is a legal strategy that allows high-income earners to contribute to a Roth IRA, even… Retirement Planning

C

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Credit rating – S&P A credit rating from S&P (Standard & Poor’s) is an opinion about the creditworthiness of a borrower, such… Bonds & Fixed Income Credit, Debt & Lending Check 21 / Electronic check Check 21 (short for the Check Clearing for the 21st Century Act) and electronic checks revolutionized how paper… Banking & Depository Institutions Checking account A checking account is a type of deposit account held at a financial institution, such as a commercial… Banking & Depository Institutions Personal Finance & Money Management

D

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Direct deposit Direct deposit is an electronic payment method that transfers funds directly from a payer’s bank account into the… Personal Finance & Money Management Debt financing Debt financing is a method businesses use to raise money by borrowing funds from lenders, with a promise… Corporate Finance Defined contribution plan A defined contribution plan is a retirement savings plan where the employer, employee, or both make regular contributions… Retirement Planning

E

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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 Experian Experian is one of the three major credit reporting agencies (along with Equifax and TransUnion) that collect and… Credit, Debt & Lending EBITDA EBITDA is an acronym that stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a widely… 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 Form S-1 Form S-1 is a registration statement filed with the Securities and Exchange Commission (SEC) by companies planning to… Financial Regulation Financial Industry Regulatory Authority (FINRA) The Financial Industry Regulatory Authority (FINRA) is a private, non-profit organization that acts as a self-regulatory organization (SRO)… Financial Regulation

G

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Growth stock A growth stock is a share in a company that is expected to grow at an above-average rate… Stocks & Equity Markets 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 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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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 Homeowners insurance Homeowners insurance is a type of property insurance that protects an individual’s home and personal belongings against damage,… Insurance & Risk Protection Hard inquiry A hard inquiry (also called a hard pull or hard credit check) is a record of when a… Credit, Debt & Lending

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 horizon An investment horizon is the total length of time an investor expects to hold a security or a… Investing Fundamentals Investment Company Act of 1940 The Investment Company Act of 1940 is a landmark piece of U.S. federal legislation that created a comprehensive… Financial Regulation

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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Long-term capital gains Long-term capital gains are the profits you earn from selling an asset that you have held for more… Taxation Liquidity Liquidity is a financial concept that describes how quickly and easily an asset can be bought or sold… Financial Markets & Market Mechanics 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 – M1 Money supply – M1 is a measure of the most liquid forms of money in an economy. It… Monetary & Fiscal Policy Micro-cap A micro-cap (or micro-cap stock) refers to the equity of a publicly traded company with a relatively small… Stocks & Equity Markets

N

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NCUA The NCUA, or National Credit Union Administration, is an independent federal agency created by the United States Congress… Financial Regulation Net income Net income is the bottom line of a company’s income statement. It represents the total profit a business… Financial Statements & Accounting National debt The national debt is the total amount of money that a country’s federal government has borrowed and has… Monetary & Fiscal Policy

O

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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 Operating margin Operating margin is a profitability ratio that measures how much profit a company makes from its core business… Financial Ratios & Analysis

P

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Price-to-book (P/B) The Price-to-Book (P/B) ratio is a financial ratio used to compare a company’s market value to its book… Financial Ratios & Analysis Pecking order theory The pecking order theory is a corporate finance concept that explains how companies prioritize their sources of financing.… Corporate Finance PCE price index The PCE price index, or Personal Consumption Expenditures price index, is a measure of inflation in the United… Economics for Finance

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 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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Russell 2000 The Russell 2000 is a stock market index that tracks the performance of roughly 2,000 of the smallest… Stocks & Equity Markets Reserve requirement The reserve requirement is a central banking regulation that sets the minimum fraction of customer deposits and liabilities… Monetary & Fiscal Policy Rollover A rollover is the process of moving assets from one retirement account to another without triggering taxes or… Retirement Planning

S

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Share class A Class A shares are a type of mutual fund share class that typically charges a front-end sales load,… Mutual Funds, ETFs & Pooled Vehicles SIPC The Securities Investor Protection Corporation (SIPC) is a nonprofit, membership-funded organization created by the Securities Investor Protection Act… Financial Regulation Settlement (T+1) Settlement (T+1) refers to the standard timeline by which a securities trade must be finalized after the transaction… Financial Markets & Market Mechanics

T

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Target-date fund A target-date fund is a type of mutual fund or exchange-traded fund designed to simplify retirement investing for… Mutual Funds, ETFs & Pooled Vehicles Tax-loss harvesting Tax-loss harvesting is a strategy used by investors to reduce their taxable income by selling investments that have… Taxation Trade-off theory The trade-off theory is a core concept in corporate finance that explains how companies decide on their mix… Corporate Finance

U

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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 Underwriting Underwriting is the process by which a lender, insurer, or investment bank evaluates the risk involved in a… Insurance & Risk Protection

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 Vesting Vesting is a legal and financial term that refers to the process by which an employee earns the… Retirement Planning 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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Wash-sale rule The wash-sale rule is a regulation by the Internal Revenue Service (IRS) that prevents investors from claiming a… Taxation 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 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 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-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