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 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

A

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Aggregate supply Aggregate supply (AS) is the total quantity of goods and services that all firms in an economy are… Economics for Finance Accrual accounting Accrual accounting is a fundamental method of financial reporting where revenue and expenses are recorded when they are… Financial Statements & Accounting ACH transfer An ACH transfer is an electronic transfer of money between bank accounts through the Automated Clearing House (ACH)… Banking & Depository Institutions

B

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Broker-dealer A broker-dealer is a financial firm or individual that engages in the buying and selling of securities for… Financial Markets & Market Mechanics Budget deficit A budget deficit occurs when a government’s total expenditures exceed its total revenues over a specific period, typically… Monetary & Fiscal Policy Bull market A bull market is a prolonged period in financial markets when prices of assets, most commonly stocks, rise… Stocks & Equity Markets

C

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Credit union A credit union is a member-owned, not-for-profit financial cooperative that provides traditional banking services to its members. Unlike… Banking & Depository Institutions Conventional loan A conventional loan is a type of mortgage that is not insured or guaranteed by a government agency… Real Estate & Mortgage Finance CAPM (Capital Asset Pricing Model) The Capital Asset Pricing Model (CAPM) is a financial model that describes the relationship between systematic risk and… Corporate Finance

D

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Dealer A dealer is a financial intermediary who buys and sells securities, such as stocks and bonds, for their… Financial Markets & Market Mechanics Defined benefit plan A defined benefit plan, often called a pension plan, is an employer-sponsored retirement plan that guarantees a specific,… Retirement Planning Down payment A down payment is an upfront, partial payment made by a buyer when purchasing a high-value asset, most… Credit, Debt & Lending Real Estate & Mortgage Finance

E

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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 Expected return Expected return is a key concept in investing that represents the average amount of profit or loss an… Investing Fundamentals 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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Fixed expenses Fixed expenses are costs that remain the same amount each month and are essential for your basic living… Personal Finance & Money Management 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 FDIC The Federal Deposit Insurance Corporation (FDIC) is an independent agency of the United States government that protects depositors… Financial Regulation

G

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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 Growth stock A growth stock is a share in a company that is expected to grow at an above-average rate… Stocks & Equity Markets Gross income Gross income is the total amount of money you earn from all sources before any deductions or taxes… Personal Finance & Money Management

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 Hard inquiry A hard inquiry (also called a hard pull or hard credit check) is a record of when a… Credit, Debt & Lending Hawkish vs. dovish In the world of central banking and monetary policy, the terms hawkish and dovish describe the general attitude… Monetary & Fiscal Policy

I

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Index fund An index fund is a type of exchange-traded fund or mutual fund designed to track the performance of… Mutual Funds, ETFs & Pooled Vehicles Investment-grade bond An investment-grade bond is a bond that is considered high quality and low risk by credit rating agencies.… Bonds & Fixed Income 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
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 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 Leverage Leverage is the strategic use of borrowed capital (debt) to increase the potential return on an investment. In… Corporate Finance

M

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Monthly maintenance fee A monthly maintenance fee is a periodic charge assessed by a financial institution, such as a bank or… Banking & Depository Institutions 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 Margin account A margin account is a type of brokerage account that allows an investor to borrow money from their… Financial Markets & Market Mechanics

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 NCUA insurance NCUA insurance refers to the deposit insurance coverage provided by the National Credit Union Administration (NCUA) to members… Banking & Depository Institutions 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

O

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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 Overdraft An overdraft occurs when you spend more money than you have available in your checking account. In simple… Banking & Depository Institutions Opportunity cost Opportunity cost is the value of the next best alternative that you give up when you make a… Economics for Finance

P

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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 Passive investing Passive investing is a long-term investment strategy that aims to match the performance of a broad market index,… Investing Fundamentals 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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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 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

R

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Russell 2000 The Russell 2000 is a stock market index that tracks the performance of roughly 2,000 of the smallest… Stocks & Equity Markets Refinancing Refinancing is the process of replacing an existing loan (usually a mortgage) with a new loan that has… Real Estate & Mortgage Finance Rule of 72 The Rule of 72 is a simple, widely used mental math shortcut that estimates how long it will… Investing Fundamentals

S

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Soft inquiry A soft inquiry (also known as a soft credit check or soft pull) is a type of credit… Credit, Debt & Lending Short selling Short selling, often called shorting, is an investment strategy where a trader borrows shares of a stock and… Financial Markets & Market Mechanics Share class (Class A/B/C) Share class (Class A/B/C) refers to different categories of shares offered by a mutual fund, each with its… Stocks & Equity Markets

T

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Term life insurance Term life insurance is a type of life insurance policy that provides coverage for a specific period, or… Insurance & Risk Protection 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 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

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 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

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

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-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