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 50/30/20 rule The 50/30/20 rule is a simple and popular budgeting framework that helps individuals manage their after-tax income by… Personal Finance & Money Management 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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Accrual accounting Accrual accounting is a fundamental method of financial reporting where revenue and expenses are recorded when they are… Financial Statements & Accounting Accrued interest Accrued interest is the interest that has accumulated on a bond or other fixed-income security since the last… Bonds & Fixed Income Auto collision coverage Auto collision coverage is a type of car insurance that pays to repair or replace your vehicle if… Insurance & Risk Protection

B

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Bear market A bear market is a prolonged period of declining prices in a financial market, typically defined as a… Stocks & Equity Markets 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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Copay A copay (short for copayment) is a fixed dollar amount you pay out-of-pocket for a covered healthcare service,… Insurance & Risk Protection Convexity Convexity is a measure of how the duration of a bond changes as interest rates change. Bonds have… Bonds & Fixed Income Contribution limit A contribution limit is the maximum amount of money that an individual or their employer can legally deposit… Retirement Planning

D

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Debt-to-equity The debt-to-equity (D/E) ratio is a key leverage ratio that compares a company’s total liabilities to its shareholder… Financial Ratios & Analysis Debt ceiling The debt ceiling (also known as the debt limit) is a legal cap set by the United States… Monetary & Fiscal Policy Deductible A deductible is the amount of money you must pay out of your own pocket for covered healthcare… Insurance & Risk Protection

E

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Elasticity Elasticity is an economic concept that measures how much one economic variable changes in response to a change… Economics for Finance Equifax Equifax is one of the three major credit bureaus (along with Experian and TransUnion) that collect and maintain… Credit, Debt & Lending Expense ratio The expense ratio is the annual fee that all mutual funds, exchange-traded funds (ETFs), and other pooled investment… Mutual Funds, ETFs & Pooled Vehicles

F

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Federal Reserve Chair The Federal Reserve Chair is the head of the Board of Governors of the Federal Reserve System, the… Monetary & Fiscal Policy Fixed expenses Fixed expenses are costs that remain the same amount each month and are essential for your basic living… Personal Finance & Money Management Fiduciary duty Fiduciary duty is a legal obligation that requires one party, known as the fiduciary, to act solely in… Financial Regulation

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 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 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 Hurdle rate The hurdle rate is the minimum acceptable rate of return on an investment or project that a company… Corporate Finance

I

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Interest coverage The interest coverage ratio (also known as times interest earned) is a financial metric that measures a company’s… Financial Ratios & Analysis Investment Company Act of 1940 The Investment Company Act of 1940 is a landmark piece of U.S. federal legislation that created a comprehensive… Financial Regulation Installment debt Installment debt is a type of loan that is repaid over time with a set number of scheduled… Credit, Debt & Lending

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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Liquidity Liquidity is a financial concept that describes how quickly and easily an asset can be bought or sold… Financial Markets & Market Mechanics 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

M

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Monetary policy Monetary policy is the set of actions a central bank, like the Federal Reserve System in the United… 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 Market maker A market maker is a financial firm or individual that continuously quotes both a buy (bid) and sell… Financial Markets & Market Mechanics

N

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NCUA The NCUA, or National Credit Union Administration, is an independent federal agency created by the United States Congress… Financial Regulation Nonrefundable tax credit A nonrefundable tax credit is a type of tax credit that can reduce your tax liability to zero,… Taxation 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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Opportunity cost Opportunity cost is the value of the next best alternative that you give up when you make a… Economics for Finance 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 Open market operations Open market operations (OMO) are the primary tool used by the Federal Reserve System to influence the supply… Monetary & Fiscal Policy

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 Preferred stock Preferred stock is a unique type of ownership in a company that sits in between common stock and… Stocks & Equity Markets PPI (Producer Price Index) The Producer Price Index (PPI) is a crucial economic indicator that measures the average change over time in… Economics for Finance

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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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 Risk-return tradeoff The risk-return tradeoff is a fundamental concept in investing that describes the direct relationship between the potential reward… Investing Fundamentals Rider A rider is an amendment or attachment to an insurance policy that modifies the standard terms, coverage, or… Insurance & Risk Protection

S

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Share class I (institutional) Share class I (institutional) is a category of mutual fund shares designed specifically for institutional investors, such as… Mutual Funds, ETFs & Pooled Vehicles Short selling Short selling, often called shorting, is an investment strategy where a trader borrows shares of a stock and… Financial Markets & Market Mechanics Short-term disability insurance Short-term disability insurance (STD) is a type of insurance policy that provides partial income replacement for a limited… Insurance & Risk Protection

T

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Treasury Inflation-Protected Securities (TIPS) TIPS stands for Treasury Inflation-Protected Securities. These are a special type of Treasury bond issued by the U.S.… 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 Trade-off theory The trade-off theory is a core concept in corporate finance that explains how companies decide on their mix… Corporate Finance

U

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Unemployment rate The unemployment rate is a key economic indicator that measures the percentage of the labor force that is… Economics for Finance Unsecured debt Unsecured debt is a type of loan or credit that is not backed by any form of collateral.… Credit, Debt & Lending 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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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 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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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 Withholding Withholding is the portion of an employee’s wages that an employer sends directly to the government to cover… Taxation Working capital Working capital is a financial metric that represents the difference between a company’s current assets and current liabilities.… 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 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-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