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
401(k) A 401(k) is a tax-advantaged retirement savings plan sponsored by an employer. It allows employees to save and… Retirement Planning 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-K The 10-K is an annual report that publicly traded companies must file with the U.S. Securities and Exchange… Financial Statements & Accounting

A

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Asset class An asset class is a group of investments that share similar characteristics, behave similarly in the marketplace, and… Investing Fundamentals Auto collision coverage Auto collision coverage is a type of car insurance that pays to repair or replace your vehicle if… Insurance & Risk Protection Asset allocation Asset allocation is the investment strategy of dividing a portfolio among different asset classes, such as stocks, bonds,… Investing Fundamentals

B

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Bull market A bull market is a prolonged period in financial markets when prices of assets, most commonly stocks, rise… Stocks & Equity Markets Benchmark A benchmark is a standard or point of reference against which the performance of an investment, portfolio, or… Investing Fundamentals 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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Closing costs Closing costs are the fees and expenses paid by homebuyers and sellers at the end of a real… Real Estate & Mortgage Finance Cash value Cash value is a feature of permanent life insurance policies, such as whole life insurance and universal life… Insurance & Risk Protection Credit spread A credit spread is the difference in yield between a corporate or government bond and a benchmark bond… Bonds & Fixed Income

D

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Delinquency Delinquency is a term used in credit and lending to describe a situation where a borrower fails to… Credit, Debt & Lending 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 Day order A day order is a type of order to buy or sell a security that is valid only… Financial Markets & Market Mechanics

E

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Expansion Expansion is a phase of the business cycle where the economy grows for two or more consecutive quarters.… Economics for Finance Estate tax The estate tax is a federal tax imposed on the transfer of a deceased person’s assets to their… Taxation Elasticity Elasticity is an economic concept that measures how much one economic variable changes in response to a change… Economics for Finance

F

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Face / par value Face value, also known as par value, is the stated value of a bond as printed on the… Bonds & Fixed Income Federal Reserve Board The Federal Reserve Board, often called the Federal Reserve Board of Governors, is the main governing body of… Financial Regulation 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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Gross profit Gross profit is the profit a company makes after deducting the costs directly tied to producing and selling… Financial Statements & Accounting 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 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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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 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 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

I

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Itemized deduction An itemized deduction is a specific expense that you can subtract from your Adjusted Gross Income (AGI) to… Taxation Income statement An income statement is one of the three core financial statements used by businesses, investors, and analysts to… Financial Statements & Accounting Income (investment) Investment income is money you earn from your investments without having to work for it actively. Instead of… Investing Fundamentals

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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Liabilities Liabilities are financial obligations or debts that a company or individual owes to others. They represent claims against… Financial Statements & Accounting 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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Money market account A money market account (MMA) is a type of deposit account offered by banks and credit unions that… Banking & Depository Institutions 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 – M3 Money supply M3 is a broad measure of the total amount of money circulating in an economy. It… Monetary & Fiscal Policy

N

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Nasdaq The Nasdaq (originally an acronym for the National Association of Securities Dealers Automated Quotations) is a global electronic… Stocks & Equity Markets Net (take-home) income Net income, often called take-home pay, is the amount of money you actually receive after all deductions are… Personal Finance & Money Management Net present value (NPV) Net Present Value (NPV) is a core concept in corporate finance used to evaluate the profitability of an… Corporate Finance

O

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Ordinary dividend An ordinary dividend is a type of payment that a corporation makes to its shareholders from its profits,… Taxation 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 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

P

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Productivity In economics and finance, Productivity measures how efficiently inputs (like labor, capital, and materials) are converted into useful… Economics for Finance 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 Policy limit A policy limit is the maximum amount an insurance company will pay for a covered loss under an… Insurance & Risk Protection

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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Reserve requirement The reserve requirement is a central banking regulation that sets the minimum fraction of customer deposits and liabilities… Monetary & Fiscal Policy Revenue Revenue (also called sales, turnover, or the top line) is the total amount of money a company earns… Financial Statements & Accounting 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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Savings account A savings account is a deposit account held at a bank or other financial institution that is designed… Banking & Depository Institutions Share repurchase A share repurchase, also known as a stock buyback, is a corporate action in which a company buys… Corporate Finance S&P 500 The S&P 500, or Standard & Poor’s 500, is a stock market index that tracks the performance of… Stocks & Equity Markets

T

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Tax bracket A tax bracket is a range of income subject to a specific tax rate in a progressive tax… Taxation Trade deficit A trade deficit occurs when a country imports more goods and services than it exports over a given… Economics for Finance Title insurance Title insurance is a specialized form of indemnity insurance that protects real estate buyers and lenders against financial… Real Estate & Mortgage Finance

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 Variable expenses Variable expenses are costs that change from month to month based on your consumption, choices, or needs. Unlike… Personal Finance & Money Management VantageScore VantageScore is a credit scoring model developed by the three major credit bureaus: Equifax, Experian, and TransUnion. It… Credit, Debt & Lending

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 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 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-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