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
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 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 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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Asset turnover Asset turnover is a financial ratio that measures how efficiently a company uses its assets to generate sales… Financial Ratios & Analysis Financial Statements & Accounting Auto liability coverage Auto liability coverage is a fundamental type of auto insurance that pays for injuries and property damage you… Insurance & Risk Protection Adjustable-rate mortgage (ARM) An Adjustable-Rate Mortgage (ARM) is a type of home loan where the interest rate is not fixed for… Real Estate & Mortgage Finance

B

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Beta Beta (β) is a measure of a stock’s volatility relative to the overall market. It is a key… Corporate Finance Stocks & Equity Markets Business cycle The business cycle—also called the economic cycle or trade cycle—refers to the natural, recurring fluctuations in economic activity… Economics for Finance Bankruptcy – Chapter 7 Bankruptcy – Chapter 7, often called liquidation bankruptcy, is a legal process in the United States that helps… Credit, Debt & Lending

C

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Cost of debt The cost of debt is the effective interest rate a company pays on its borrowed funds, such as… Corporate Finance 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 CFPB (Consumer Financial Protection Bureau) The Consumer Financial Protection Bureau (CFPB) is a United States government agency responsible for making sure banks, lenders,… Financial Regulation

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 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

E

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Effective tax rate The effective tax rate is the average rate at which an individual or a corporation is taxed on… Taxation Equity Equity, also known as shareholder’s equity or owner’s equity, represents the residual interest in the assets of an… Financial Statements & Accounting Estate tax The estate tax is a federal tax imposed on the transfer of a deceased person’s assets to their… Taxation

F

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Federal Open Market Committee (FOMC) The Federal Open Market Committee (FOMC) is the monetary policy body of the Federal Reserve System in the… Monetary & Fiscal Policy 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 FDIC insurance The Federal Deposit Insurance Corporation (FDIC) is an independent agency of the United States government that protects depositors… Banking & Depository Institutions

G

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Gift tax The gift tax is a federal tax in the United States imposed on the transfer of property or… Taxation GAAP GAAP (Generally Accepted Accounting Principles) is a common set of accounting rules, standards, and procedures that companies in… Financial Statements & Accounting Growth stock A growth stock is a share in a company that is expected to grow at an above-average rate… Stocks & Equity Markets

H

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HELOC A Home Equity Line of Credit (HELOC) is a type of revolving debt that allows you to borrow… Real Estate & Mortgage Finance Hard inquiry A hard inquiry (also called a hard pull or hard credit check) is a record of when a… Credit, Debt & Lending 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

I

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Income statement An income statement is one of the three core financial statements used by businesses, investors, and analysts to… Financial Statements & Accounting Itemized deduction An itemized deduction is a specific expense that you can subtract from your Adjusted Gross Income (AGI) to… Taxation 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

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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Large-cap Large-cap is a term used to describe a company with a very large market capitalization, typically over $10… Stocks & Equity Markets 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 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

M

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Money supply – M2 Money supply M2 is a broad measure of the total amount of money in an economy. It includes… Monetary & Fiscal Policy Mortgage A mortgage is a type of secured loan used to finance the purchase of real estate, such as… Real Estate & Mortgage Finance Maturity In the world of bonds, maturity is the predetermined date on which the issuer must repay the bond’s… Bonds & Fixed Income

N

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Net asset value (NAV) Net asset value (NAV) represents the per-share market value of a mutual fund, exchange-traded fund (ETF), or other… Mutual Funds, ETFs & Pooled Vehicles 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 NYSE The New York Stock Exchange (NYSE) is the world’s largest stock exchange by market capitalization, located at 11… Stocks & Equity Markets

O

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Online bank An online bank is a financial institution that operates entirely or primarily through digital channels, such as a… Banking & Depository Institutions Open market operations Open market operations (OMO) are the primary tool used by the Federal Reserve System to influence the supply… Monetary & Fiscal Policy Operating income Operating income, also known as operating profit or operating earnings, measures the profit a company makes from its… Financial Statements & Accounting

P

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Points (discount points) Discount points, often simply called “points,” are a form of prepaid interest you can pay to your lender… Real Estate & Mortgage Finance Productivity In economics and finance, Productivity measures how efficiently inputs (like labor, capital, and materials) are converted into useful… Economics for Finance Pro forma financial statements Pro forma financial statements are forward-looking financial reports that project a company’s future financial performance based on hypothetical… Corporate Finance

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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Real GDP Real GDP (Gross Domestic Product adjusted for inflation) is a critical economic measure that reflects the total value… Economics for Finance Roth IRA A Roth IRA (Individual Retirement Account) is a powerful retirement savings vehicle that offers tax-free growth and tax-free… Retirement Planning Routing number / ABA A routing number, also known as an ABA number (American Bankers Association number), is a unique nine-digit code… Banking & Depository Institutions

S

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Secured debt Secured debt is a type of loan or credit that is backed by an asset, known as collateral.… Credit, Debt & Lending 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 Stop-limit order A stop-limit order is an advanced trading instruction that combines the features of a stop order and a… Financial Markets & Market Mechanics

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 Time value of money The time value of money (TVM) is a core concept in finance that describes how a sum of… Investing Fundamentals TransUnion TransUnion is one of the three major consumer credit reporting agencies in the United States, alongside Equifax and… Credit, Debt & Lending

U

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Underwater mortgage An underwater mortgage, also known as being in a state of negative equity, occurs when the outstanding balance… Real Estate & Mortgage Finance Unemployment rate The unemployment rate is a key economic indicator that measures the percentage of the labor force that is… Economics for 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 annuity A variable annuity is a type of insurance contract that offers a way to save for retirement by… Retirement Planning 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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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 Working capital Working capital is a financial metric that represents the difference between a company’s current assets and current liabilities.… Corporate Finance 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 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 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