Reference

Glossary Terms

Browse our comprehensive glossary of terms. Search, filter by topic, or navigate alphabetically.

463 Total Terms
18 Topics

#

8 terms
457 plan A 457 plan is a type of tax-advantaged retirement savings account offered to employees of state and local… 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-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

A

View all 29 terms →
Asset allocation Asset allocation is the investment strategy of dividing a portfolio among different asset classes, such as stocks, bonds,… Investing Fundamentals Asset class An asset class is a group of investments that share similar characteristics, behave similarly in the marketplace, and… Investing Fundamentals Aggregate demand Aggregate demand (AD) is the total amount of goods and services that all buyers in an economy (consumers,… Economics for Finance

B

View all 25 terms →
Beneficiary A beneficiary is a person, organization, trust, or estate that is legally designated to receive assets or benefits… Insurance & Risk Protection Bid-ask spread The bid-ask spread is the difference between the highest price a buyer is willing to pay for an… Stocks & Equity Markets Bid The bid is the highest price a buyer is willing to pay for a security, such as a… Financial Markets & Market Mechanics

C

View all 59 terms →
Contribution limit A contribution limit is the maximum amount of money that an individual or their employer can legally deposit… Retirement Planning Current yield The current yield is a measure of the annual income (interest or dividends) generated by a bond or… Bonds & Fixed Income Current assets Current assets are a category of assets on a company’s balance sheet that are expected to be converted… Financial Statements & Accounting

D

View all 36 terms →
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 Dodd-Frank Act The Dodd-Frank Wall Street Reform and Consumer Protection Act (commonly known as the Dodd-Frank Act) is a landmark… Financial Regulation

E

View all 25 terms →
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 Emergency fund An emergency fund is a dedicated savings account specifically set aside to cover unexpected financial surprises or life… Personal Finance & Money Management Expansion Expansion is a phase of the business cycle where the economy grows for two or more consecutive quarters.… Economics for Finance

F

View all 29 terms →
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 Forward guidance Forward guidance is a communication tool used by central banks, such as the Federal Reserve, to inform the… Monetary & Fiscal Policy Federal funds rate The federal funds rate is the interest rate at which depository institutions (such as banks and credit unions)… Monetary & Fiscal Policy

G

View all 10 terms →
Growth stock A growth stock is a share in a company that is expected to grow at an above-average rate… Stocks & Equity Markets Gift tax The gift tax is a federal tax in the United States imposed on the transfer of property or… Taxation 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

H

View all 9 terms →
HELOC A Home Equity Line of Credit (HELOC) is a type of revolving debt that allows you to borrow… 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 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

View all 19 terms →
Interest rate An interest rate is the cost of borrowing money or the return earned on savings, expressed as a… 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 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
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

View all 10 terms →
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 Liquidity Liquidity is a financial concept that describes how quickly and easily an asset can be bought or sold… Financial Markets & Market Mechanics

M

View all 23 terms →
Monetary policy Monetary policy is the set of actions a central bank, like the Federal Reserve System in the United… Modigliani-Miller theorem The Modigliani-Miller theorem is a foundational theory in corporate finance that, under a specific set of ideal market… Corporate 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

View all 18 terms →
Net worth Net worth is a snapshot of your financial health at a single moment. It is calculated by subtracting… Personal Finance & Money Management Nominal GDP Nominal Gross Domestic Product (GDP) is a measure of the total value of all final goods and services… Economics for Finance 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

O

View all 12 terms →
Operating margin Operating margin is a profitability ratio that measures how much profit a company makes from its core business… Financial Ratios & Analysis Ordinary dividend An ordinary dividend is a type of payment that a corporation makes to its shareholders from its profits,… Taxation Open-end fund An open-end fund is a type of mutual fund that can issue an unlimited number of shares. The… Mutual Funds, ETFs & Pooled Vehicles

P

View all 28 terms →
Price-to-sales (P/S) The Price-to-Sales (P/S) ratio is a valuation metric that compares a company’s stock price to its revenue per… Financial Ratios & Analysis Primary market The primary market is the financial market where new securities, such as stocks and bonds, are created and… Financial Markets & Market Mechanics Private mortgage insurance (PMI) Private mortgage insurance, commonly known as PMI, is a type of insurance that protects the lender (the bank… Real Estate & Mortgage Finance

Q

View all 5 terms →
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 plan A qualified plan is a retirement savings plan that meets the requirements of the Internal Revenue Code (IRC)… Retirement Planning 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

View all 29 terms →
REIT (Real Estate Investment Trust) A Real Estate Investment Trust, commonly known as a REIT (pronounced “reet”), is a company that owns, operates,… Real Estate & Mortgage Finance Risk tolerance Risk tolerance is the degree of variability in investment returns that an individual is willing to withstand as… Investing Fundamentals Required minimum distribution (RMD) A Required Minimum Distribution (RMD) is the minimum amount you must withdraw from certain retirement accounts each year… Retirement Planning

S

View all 39 terms →
Share repurchase A share repurchase, also known as a stock buyback, is a corporate action in which a company buys… Corporate Finance Standard deviation Standard deviation is a statistical measure that quantifies the amount of variation or dispersion in a set of… Investing Fundamentals Supply and demand Supply and demand is a fundamental economic model that explains how prices are determined in a market economy.… Economics for Finance

T

View all 23 terms →
Thrift / Savings & Loan A thrift institution, also known as a Savings and Loan Association (S&L), is a type of financial institution… Banking & Depository Institutions Target-date fund A target-date fund is a type of mutual fund or exchange-traded fund designed to simplify retirement investing for… Mutual Funds, ETFs & Pooled Vehicles Tax-loss harvesting Tax-loss harvesting is a strategy used by investors to reduce their taxable income by selling investments that have… Taxation

U

View all 6 terms →
Unsecured debt Unsecured debt is a type of loan or credit that is not backed by any form of collateral.… Credit, Debt & Lending 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

View all 7 terms →
Vesting Vesting is a legal and financial term that refers to the process by which an employee earns the… Retirement Planning Variable annuity A variable annuity is a type of insurance contract that offers a way to save for retirement by… Retirement Planning Volatility Volatility is a statistical measure of the dispersion of returns for a given security or market index. In… Investing Fundamentals

W

View all 7 terms →
Withholding Withholding is the portion of an employee’s wages that an employer sends directly to the government to cover… Taxation Wash-sale rule The wash-sale rule is a regulation by the Internal Revenue Service (IRS) that prevents investors from claiming a… 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-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