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 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 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

A

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ACH transfer An ACH transfer is an electronic transfer of money between bank accounts through the Automated Clearing House (ACH)… Banking & Depository Institutions Ask The ask (also called the ask price or offer price) is the lowest price a seller is willing… Financial Markets & Market Mechanics Accredited investor An accredited investor is an individual or entity that meets specific financial criteria established by the Securities and… Financial Regulation

B

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Bid The bid is the highest price a buyer is willing to pay for a security, such as a… Financial Markets & Market Mechanics Bank statement A bank statement is a document issued by a bank or credit union that summarizes all financial transactions… Banking & Depository Institutions 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 – 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 Commercial bank A commercial bank is a financial institution that provides a wide range of services to individuals, businesses, and… Banking & Depository Institutions Comparative advantage Comparative advantage is a fundamental economic theory that explains how countries, businesses, or individuals can benefit from trade,… Economics for Finance

D

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Deductible A deductible is the amount of money you must pay out of your own pocket for covered healthcare… Insurance & Risk Protection Disposable income Disposable income, also known as disposable personal income (DPI), is the amount of money an individual or household… Personal Finance & Money Management Depreciation Depreciation is a fundamental accounting concept that allocates the cost of a tangible asset over its useful life.… Financial Statements & Accounting

E

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Equity financing Equity financing is a method of raising capital for a company by selling ownership shares, known as equity,… Corporate Finance Experian Experian is one of the three major credit reporting agencies (along with Equifax and TransUnion) that collect and… Credit, Debt & Lending Equity Equity, also known as shareholder’s equity or owner’s equity, represents the residual interest in the assets of an… Financial Statements & Accounting

F

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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 FDIC The Federal Deposit Insurance Corporation (FDIC) is an independent agency of the United States government that protects depositors… Financial Regulation 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 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 profit Gross profit is the profit a company makes after deducting the costs directly tied to producing and selling… Financial Statements & Accounting GAAP GAAP (Generally Accepted Accounting Principles) is a common set of accounting rules, standards, and procedures that companies in… Financial Statements & Accounting

H

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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 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 Hawkish vs. dovish In the world of central banking and monetary policy, the terms hawkish and dovish describe the general attitude… Monetary & Fiscal Policy

I

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Investment horizon An investment horizon is the total length of time an investor expects to hold a security or a… Investing Fundamentals Investment-grade bond An investment-grade bond is a bond that is considered high quality and low risk by credit rating agencies.… Bonds & Fixed Income Income statement An income statement is one of the three core financial statements used by businesses, investors, and analysts to… Financial Statements & Accounting

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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Limit order A limit order is a type of order to buy or sell a security at a specific price… Financial Markets & Market Mechanics 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 Large-cap Large-cap is a term used to describe a company with a very large market capitalization, typically over $10… Stocks & Equity Markets

M

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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 Monthly maintenance fee A monthly maintenance fee is a periodic charge assessed by a financial institution, such as a bank or… Banking & Depository Institutions Money supply – M2 Money supply M2 is a broad measure of the total amount of money in an economy. It includes… Monetary & Fiscal Policy

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 No-load fund A no-load fund is a type of mutual fund in which shares are sold directly to investors without… Mutual Funds, ETFs & Pooled Vehicles 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 Overdraft An overdraft occurs when you spend more money than you have available in your checking account. In simple… Banking & Depository Institutions 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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Payback period The payback period is a fundamental capital budgeting tool used to evaluate the profitability and risk of a… Corporate Finance PCAOB The PCAOB (Public Company Accounting Oversight Board) is a nonprofit corporation established by the Sarbanes-Oxley Act of 2002.… Financial Regulation 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 plan A qualified plan is a retirement savings plan that meets the requirements of the Internal Revenue Code (IRC)… Retirement Planning Quantitative tightening (QT) Quantitative tightening (QT) is a contractionary monetary policy tool used by a central bank, like the Federal Reserve,… 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

R

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Reconciliation Reconciliation is the process of comparing two sets of financial records to make sure they match. Think of… Banking & Depository Institutions Rollover A rollover is the process of moving assets from one retirement account to another without triggering taxes or… Retirement Planning Return on invested capital (ROIC) Return on Invested Capital (ROIC) is a key financial metric that shows how well a company turns the… Financial Ratios & Analysis

S

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Stock split A stock split is a corporate action where a company increases the number of its outstanding shares by… Stocks & Equity Markets Security A security is a tradable financial instrument that holds monetary value and represents ownership, a creditor relationship, or… Investing Fundamentals Sinking fund A sinking fund is a strategic financial tool used by individuals, corporations, and governments to set aside money… Personal Finance & Money Management

T

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Traditional IRA A Traditional IRA (Individual Retirement Account) is a tax-advantaged retirement savings account that allows individuals to contribute pre-tax… Retirement Planning Tracking error Tracking error is a measure of how closely a mutual fund or exchange-traded fund (ETF) follows its benchmark… Mutual Funds, ETFs & Pooled Vehicles 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 Umbrella policy An umbrella policy, also known as personal umbrella insurance, is an extra layer of liability insurance that goes… Insurance & Risk Protection Unsecured debt Unsecured debt is a type of loan or credit that is not backed by any form of collateral.… Credit, Debt & Lending

V

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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 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

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 Withholding Withholding is the portion of an employee’s wages that an employer sends directly to the government to cover… Taxation 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 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-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