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
403(b) A 403(b) plan is a tax-advantaged retirement savings account designed specifically for employees of certain tax-exempt organizations, such… Retirement Planning 401(k) A 401(k) is a tax-advantaged retirement savings plan sponsored by an employer. It allows employees to save and… 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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Accounts receivable Accounts receivable (AR) is the money owed to a business by its customers for goods or services that… Financial Statements & Accounting AMT (Alternative Minimum Tax) The Alternative Minimum Tax, commonly known by its acronym AMT, is a separate tax system in the United… Taxation Assets Assets are economic resources that a business or individual owns or controls, expected to produce future benefits. In… Financial Statements & Accounting

B

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Budget deficit A budget deficit occurs when a government’s total expenditures exceed its total revenues over a specific period, typically… Monetary & Fiscal Policy 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 Beige Book The Beige Book, formally known as the Summary of Commentary on Current Economic Conditions by Federal Reserve District,… Monetary & Fiscal Policy

C

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CPI (Consumer Price Index) The Consumer Price Index (CPI) is a key economic indicator that measures the average change over time in… Economics for Finance CAPM (Capital Asset Pricing Model) The Capital Asset Pricing Model (CAPM) is a financial model that describes the relationship between systematic risk and… Corporate Finance Charge-off A charge-off is a formal declaration by a creditor, typically a bank, credit card issuer, or lender, that… Credit, Debt & Lending

D

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Dollar-cost averaging Dollar-cost averaging (DCA) is an investment strategy where a fixed dollar amount of a particular asset—such as shares… Investing Fundamentals Disposable income Disposable income, also known as disposable personal income (DPI), is the amount of money an individual or household… Personal Finance & Money Management Delinquency Delinquency is a term used in credit and lending to describe a situation where a borrower fails to… Credit, Debt & Lending

E

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EBIT EBIT, an acronym for Earnings Before Interest and Taxes, is a key profitability metric that measures a company’s… Financial Ratios & Analysis 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 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

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 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 Financial literacy Financial literacy is the ability to understand and effectively use various financial skills, including personal financial management, budgeting,… Personal Finance & Money Management

G

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Glass-Steagall Act The Glass-Steagall Act (officially the Banking Act of 1933) was a landmark piece of U.S. legislation that created… Financial Regulation Gross income Gross income is the total amount of money you earn from all sources before any deductions or taxes… Personal Finance & Money Management 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

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Hurdle rate The hurdle rate is the minimum acceptable rate of return on an investment or project that a company… Corporate Finance Hawkish vs. dovish In the world of central banking and monetary policy, the terms hawkish and dovish describe the general attitude… Monetary & Fiscal Policy 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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Internal rate of return (IRR) The Internal Rate of Return (IRR) is a powerful financial metric used to evaluate the profitability of potential… Corporate Finance 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 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

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 disability insurance Long-term disability insurance (LTD) is a type of insurance policy that provides income replacement if you become unable… Insurance & Risk Protection Limit order A limit order is a type of order to buy or sell a security at a specific price… 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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Monthly maintenance fee A monthly maintenance fee is a periodic charge assessed by a financial institution, such as a bank or… Banking & Depository Institutions 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 Market capitalization Market capitalization (or “market cap”) is the total dollar value of a publicly traded company’s outstanding shares of… 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 Net worth Net worth is a snapshot of your financial health at a single moment. It is calculated by subtracting… Personal Finance & Money Management Non-discretionary spending Non-discretionary spending, also called essential or mandatory spending, refers to expenses that are necessary for basic living and… Personal Finance & Money Management

O

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Operating income Operating income, also known as operating profit or operating earnings, measures the profit a company makes from its… Financial Statements & Accounting 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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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 Pay-yourself-first Pay-yourself-first is a foundational principle in financial literacy and personal money management that flips traditional budgeting on its… Personal Finance & Money Management Pay stub A pay stub, also known as a paycheck stub, earnings statement, or pay advice, is a document provided… Personal Finance & Money Management

Q

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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 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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Revolving debt Revolving debt is a type of credit arrangement that allows borrowers to draw, repay, and re-borrow funds up… Credit, Debt & Lending Regulation D Regulation D is a rule from the U.S. Securities and Exchange Commission (SEC) that allows companies to raise… Financial Regulation Rebalancing Rebalancing is the process of realigning the weightings of a portfolio of assets by periodically buying or selling… Investing Fundamentals

S

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SIMPLE IRA A SIMPLE IRA (Savings Incentive Match Plan for Employees) is a tax-deferred retirement plan designed for small businesses… Retirement Planning Securities Act of 1933 The Securities Act of 1933 is a landmark piece of federal legislation enacted in the United States in… Financial Regulation SIPC The Securities Investor Protection Corporation (SIPC) is a nonprofit, membership-funded organization created by the Securities Investor Protection Act… Financial Regulation

T

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Terminal value Terminal value is a crucial concept in corporate finance that represents the estimated value of a business or… Corporate Finance Trade-off theory The trade-off theory is a core concept in corporate finance that explains how companies decide on their mix… Corporate Finance Term life insurance Term life insurance is a type of life insurance policy that provides coverage for a specific period, or… Insurance & Risk Protection

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

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 VantageScore VantageScore is a credit scoring model developed by the three major credit bureaus: Equifax, Experian, and TransUnion. It… Credit, Debt & Lending Vesting Vesting is a legal and financial term that refers to the process by which an employee earns the… Retirement Planning

W

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Working capital Working capital is a financial metric that represents the difference between a company’s current assets and current liabilities.… Corporate Finance 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 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 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