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 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

A

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Appraisal An appraisal is a professional estimate of the market value of a property, such as a home, land,… Real Estate & Mortgage Finance Assets Assets are economic resources that a business or individual owns or controls, expected to produce future benefits. In… Financial Statements & Accounting Aggregate demand Aggregate demand (AD) is the total amount of goods and services that all buyers in an economy (consumers,… Economics for Finance

B

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Balance sheet A balance sheet is one of the three core financial statements used by companies, alongside the income statement… Financial Statements & Accounting Bull market A bull market is a prolonged period in financial markets when prices of assets, most commonly stocks, rise… Stocks & Equity Markets 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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Cash flow Cash flow is the movement of money into and out of a person’s or business’s accounts over a… Personal Finance & Money Management Cash value Cash value is a feature of permanent life insurance policies, such as whole life insurance and universal life… Insurance & Risk Protection 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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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 Debt Debt is a financial obligation that occurs when one party borrows money from another. The borrower receives a… Credit, Debt & Lending Investing Fundamentals Dividend payout ratio The dividend payout ratio is a financial metric that measures the proportion of a company’s earnings distributed to… Financial Ratios & Analysis

E

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Employer match An employer match is a contribution made by an employer to an employee’s retirement savings plan, typically a… Retirement Planning Estate tax The estate tax is a federal tax imposed on the transfer of a deceased person’s assets to their… Taxation Effective tax rate The effective tax rate is the average rate at which an individual or a corporation is taxed on… Taxation

F

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Free cash flow (FCF) Free cash flow (FCF) is the cash a company generates after spending the money required to maintain or… Corporate Finance Financial goal setting Financial goal setting is the process of defining clear, specific objectives for your money, creating a plan to… Personal Finance & Money Management Fund of funds A fund of funds (FOF) is a pooled investment vehicle that invests in a portfolio of other funds… Mutual Funds, ETFs & Pooled Vehicles

G

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Growth stock A growth stock is a share in a company that is expected to grow at an above-average rate… Stocks & Equity Markets Good-til-cancelled (GTC) A Good-Til-Cancelled (GTC) order is a type of trading instruction that remains active in the market until it… Financial Markets & Market Mechanics 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

H

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Homeowners insurance Homeowners insurance is a type of property insurance that protects an individual’s home and personal belongings against damage,… Insurance & Risk Protection 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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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 IRS Form 1040 IRS Form 1040, officially titled the “U.S. Individual Income Tax Return,” is the standard federal income tax form… Taxation Inflation-adjusted income Inflation-adjusted income, also called real income, is a measure of how much your purchasing power has changed after… Personal Finance & Money Management

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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Loan origination fee A loan origination fee is an upfront charge imposed by a lender to process, underwrite, and fund a… Credit, Debt & Lending Large-cap Large-cap is a term used to describe a company with a very large market capitalization, typically over $10… Stocks & Equity Markets 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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Municipal bond (muni) A municipal bond (muni) is a debt security issued by a state, municipality, county, or other government entity… Bonds & Fixed Income Mutual fund A mutual fund is a type of investment vehicle that pools money from many investors to purchase a… Mutual Funds, ETFs & Pooled Vehicles Money market fund A money market fund is a type of mutual fund that invests in short-term, high-quality, low-risk debt securities.… Mutual Funds, ETFs & Pooled Vehicles

N

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Non-discretionary spending Non-discretionary spending, also called essential or mandatory spending, refers to expenses that are necessary for basic living and… Personal Finance & Money Management 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 Net income Net income is the bottom line of a company’s income statement. It represents the total profit a business… Financial Statements & Accounting

O

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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 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 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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Price-to-book (P/B) The Price-to-Book (P/B) ratio is a financial ratio used to compare a company’s market value to its book… Financial Ratios & Analysis 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 Payback period The payback period is a fundamental capital budgeting tool used to evaluate the profitability and risk of a… Corporate Finance

Q

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Quantitative easing (QE) Quantitative easing (QE) is an unconventional monetary policy tool used by a central bank — like the U.S.… Monetary & Fiscal Policy Qualified dividend A qualified dividend is a type of dividend payment that meets specific criteria set by the Internal Revenue… Taxation Qualified plan A qualified plan is a retirement savings plan that meets the requirements of the Internal Revenue Code (IRC)… Retirement Planning

R

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Refundable tax credit A refundable tax credit is a type of tax credit that can reduce your tax liability below zero,… Taxation Refinancing Refinancing is the process of replacing an existing loan (usually a mortgage) with a new loan that has… Real Estate & Mortgage Finance Real GDP Real GDP (Gross Domestic Product adjusted for inflation) is a critical economic measure that reflects the total value… Economics for Finance

S

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Stagflation Stagflation is an unusual and troubling economic condition where the economy experiences both stagnant growth (or a recession)… Economics for Finance Secondary market The secondary market is a financial marketplace where investors buy and sell previously issued securities, such as stocks,… Financial Markets & Market Mechanics Step-up in basis A step-up in basis is a tax rule that adjusts the cost basis of an inherited asset —… Taxation

T

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Treasury bills Treasury bills, often called T-bills, are short-term debt securities issued by the U.S. Department of the Treasury. They… Bonds & Fixed Income 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 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 Underwater mortgage An underwater mortgage, also known as being in a state of negative equity, occurs when the outstanding balance… Real Estate & Mortgage Finance

V

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Variable expenses Variable expenses are costs that change from month to month based on your consumption, choices, or needs. Unlike… Personal Finance & Money Management Variable annuity A variable annuity is a type of insurance contract that offers a way to save for retirement by… 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 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 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 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

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