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 457 plan A 457 plan is a type of tax-advantaged retirement savings account offered to employees of state and local… Retirement Planning 1099 A 1099 form is a series of tax documents issued by the Internal Revenue Service (IRS) and used… Taxation

A

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Ask The ask (also called the ask price or offer price) is the lowest price a seller is willing… Financial Markets & Market Mechanics Assets Assets are economic resources that a business or individual owns or controls, expected to produce future benefits. In… Financial Statements & Accounting 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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Beige Book The Beige Book, formally known as the Summary of Commentary on Current Economic Conditions by Federal Reserve District,… Monetary & Fiscal Policy Blue chip Blue chip stocks are shares of large, well-established, and financially sound companies that have a long history of… Stocks & Equity Markets Benchmark A benchmark is a standard or point of reference against which the performance of an investment, portfolio, or… Investing Fundamentals

C

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Current assets Current assets are a category of assets on a company’s balance sheet that are expected to be converted… Financial Statements & Accounting Credit rating – Fitch A Fitch credit rating is an opinion from the Fitch Ratings agency about the creditworthiness of a borrower,… Bonds & Fixed Income Credit, Debt & Lending Current liabilities Current liabilities are a company’s short-term financial obligations that are due within one year (or within the business’s… Financial Statements & Accounting

D

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Debt Debt is a financial obligation that occurs when one party borrows money from another. The borrower receives a… Credit, Debt & Lending Investing Fundamentals Down payment A down payment is an upfront, partial payment made by a buyer when purchasing a high-value asset, most… Credit, Debt & Lending Real Estate & Mortgage Finance Debt-to-income (DTI) ratio The Debt-to-Income (DTI) ratio is a personal finance metric that compares your total monthly debt payments to your… Credit, Debt & Lending

E

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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 Equity Equity, also known as shareholder’s equity or owner’s equity, represents the residual interest in the assets of an… Financial Statements & Accounting Expected return Expected return is a key concept in investing that represents the average amount of profit or loss an… Investing Fundamentals

F

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Full Retirement Age (FRA) Full Retirement Age (FRA) is the age at which you become eligible to receive your full, unreduced Social… Retirement Planning 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 Free cash flow (FCF) Free cash flow (FCF) is the cash a company generates after spending the money required to maintain or… Corporate Finance

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 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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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 Hard inquiry A hard inquiry (also called a hard pull or hard credit check) is a record of when a… Credit, Debt & Lending 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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Installment debt Installment debt is a type of loan that is repaid over time with a set number of scheduled… Credit, Debt & Lending Interest coverage The interest coverage ratio (also known as times interest earned) is a financial metric that measures a company’s… Financial Ratios & Analysis Interest rate An interest rate is the cost of borrowing money or the return earned on savings, expressed as a…

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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Loan origination fee A loan origination fee is an upfront charge imposed by a lender to process, underwrite, and fund a… Credit, Debt & Lending Limit order A limit order is a type of order to buy or sell a security at a specific price… 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

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Municipal bond (muni) A municipal bond (muni) is a debt security issued by a state, municipality, county, or other government entity… Bonds & Fixed Income Market order A market order is an instruction to buy or sell a security immediately at the best available current… Financial Markets & Market Mechanics Mid-cap Mid-cap, short for mid-capitalization, refers to companies with a market capitalization typically between $2 billion and $10 billion.… Stocks & Equity Markets

N

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Needs vs. wants Needs vs. wants is a fundamental concept in personal finance and budgeting that helps individuals distinguish between essential… Personal Finance & Money Management NCUA The NCUA, or National Credit Union Administration, is an independent federal agency created by the United States Congress… Financial Regulation Nonfarm payrolls Nonfarm payrolls are a monthly economic indicator released by the U.S. Bureau of Labor Statistics (BLS) that measures… Economics for 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 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 OCC (Office of the Comptroller of the Currency) The Office of the Comptroller of the Currency (OCC) is an independent bureau within the U.S. Department of… Financial Regulation

P

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PCE price index The PCE price index, or Personal Consumption Expenditures price index, is a measure of inflation in the United… Economics for Finance Passive investing Passive investing is a long-term investment strategy that aims to match the performance of a broad market index,… Investing Fundamentals PEG ratio The PEG ratio (Price/Earnings to Growth ratio) is a fundamental financial metric used to evaluate a stock’s value… Financial Ratios & Analysis

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 Quantitative easing (QE) Quantitative easing (QE) is an unconventional monetary policy tool used by a central bank — like the U.S.… Monetary & Fiscal Policy 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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Refundable tax credit A refundable tax credit is a type of tax credit that can reduce your tax liability below zero,… Taxation REIT (Real Estate Investment Trust) A Real Estate Investment Trust, commonly known as a REIT (pronounced “reet”), is a company that owns, operates,… Real Estate & Mortgage Finance Recession A recession is a significant, widespread, and prolonged downturn in economic activity. While there is no single, universally… Economics for Finance

S

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Secondary market The secondary market is a financial marketplace where investors buy and sell previously issued securities, such as stocks,… Financial Markets & Market Mechanics 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 Share class B Share class B is a type of mutual fund share class that typically does not charge an upfront… Mutual Funds, ETFs & Pooled Vehicles

T

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Treasury auction A Treasury auction is the primary method used by the U.S. Department of the Treasury to borrow money… Monetary & Fiscal Policy 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 Truth in Lending Act (TILA) The Truth in Lending Act (TILA) is a landmark federal law enacted in 1968 as part of the… Credit, Debt & Lending

U

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Unsecured debt Unsecured debt is a type of loan or credit that is not backed by any form of collateral.… Credit, Debt & Lending Underwriting Underwriting is the process by which a lender, insurer, or investment bank evaluates the risk involved in a… 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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Vesting Vesting is a legal and financial term that refers to the process by which an employee earns the… Retirement Planning VantageScore VantageScore is a credit scoring model developed by the three major credit bureaus: Equifax, Experian, and TransUnion. It… Credit, Debt & Lending 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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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 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 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 curve The yield curve is a graphical representation that shows the relationship between interest rates (yields) and the time… 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 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