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

A

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Amortization Amortization is an accounting and finance concept that refers to the process of spreading out the cost of… Financial Statements & Accounting Accredited investor An accredited investor is an individual or entity that meets specific financial criteria established by the Securities and… Financial Regulation Authorized participant An Authorized Participant (AP) is a large financial institution, such as a market maker, broker-dealer, or bank, that… Mutual Funds, ETFs & Pooled Vehicles

B

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Bond fund A bond fund is a type of pooled investment vehicle—typically a mutual fund or an exchange-traded fund (ETF)—that… Mutual Funds, ETFs & Pooled Vehicles 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 Bond A bond is a fixed-income financial instrument that represents a loan made by an investor to a borrower,… Bonds & Fixed Income

C

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Credit rating – S&P A credit rating from S&P (Standard & Poor’s) is an opinion about the creditworthiness of a borrower, such… Bonds & Fixed Income Credit, Debt & Lending Current assets Current assets are a category of assets on a company’s balance sheet that are expected to be converted… Financial Statements & Accounting Cost of equity The cost of equity is the rate of return that a company must offer to investors to compensate… Corporate Finance

D

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Dollar-cost averaging Dollar-cost averaging (DCA) is an investment strategy where a fixed dollar amount of a particular asset—such as shares… Investing Fundamentals Delinquency Delinquency is a term used in credit and lending to describe a situation where a borrower fails to… Credit, Debt & Lending 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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EBITDA EBITDA is an acronym that stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a widely… Financial Statements & Accounting Ex-dividend date The ex-dividend date is a critical milestone in the dividend payment process for stocks. It is the date… Stocks & Equity Markets Equity financing Equity financing is a method of raising capital for a company by selling ownership shares, known as equity,… Corporate Finance

F

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Federal Reserve Board The Federal Reserve Board, often called the Federal Reserve Board of Governors, is the main governing body of… Financial Regulation Form S-1 Form S-1 is a registration statement filed with the Securities and Exchange Commission (SEC) by companies planning to… Financial Regulation Fixed expenses Fixed expenses are costs that remain the same amount each month and are essential for your basic living… Personal Finance & Money Management

G

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Gross margin Gross margin is a key financial metric that shows how efficiently a company produces and sells its products.… Financial Ratios & Analysis 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 Gross profit Gross profit is the profit a company makes after deducting the costs directly tied to producing and selling… Financial Statements & Accounting

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 Hurdle rate The hurdle rate is the minimum acceptable rate of return on an investment or project that a company… Corporate Finance HSA (Health Savings Account) An HSA, or Health Savings Account, is a tax-advantaged savings account that you can use to pay for… Insurance & Risk Protection

I

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Investment horizon An investment horizon is the total length of time an investor expects to hold a security or a… Investing Fundamentals 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 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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Long-term capital gains Long-term capital gains are the profits you earn from selling an asset that you have held for more… Taxation Liabilities Liabilities are financial obligations or debts that a company or individual owes to others. They represent claims against… Financial Statements & Accounting Limit order A limit order is a type of order to buy or sell a security at a specific price… Financial Markets & Market Mechanics

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 Maturity In the world of bonds, maturity is the predetermined date on which the issuer must repay the bond’s… Bonds & Fixed Income Mortgage A mortgage is a type of secured loan used to finance the purchase of real estate, such as… Real Estate & Mortgage Finance

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 Net (take-home) income Net income, often called take-home pay, is the amount of money you actually receive after all deductions are… Personal Finance & Money Management Nonfarm payrolls Nonfarm payrolls are a monthly economic indicator released by the U.S. Bureau of Labor Statistics (BLS) that measures… Economics for 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 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 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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Pecking order theory The pecking order theory is a corporate finance concept that explains how companies prioritize their sources of financing.… Corporate 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 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

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 plan A qualified plan is a retirement savings plan that meets the requirements of the Internal Revenue Code (IRC)… Retirement Planning 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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Reconciliation Reconciliation is the process of comparing two sets of financial records to make sure they match. Think of… Banking & Depository Institutions Risk tolerance Risk tolerance is the degree of variability in investment returns that an individual is willing to withstand as… Investing Fundamentals Reserve requirement The reserve requirement is a central banking regulation that sets the minimum fraction of customer deposits and liabilities… Monetary & Fiscal Policy

S

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Secondary market The secondary market is a financial marketplace where investors buy and sell previously issued securities, such as stocks,… Financial Markets & Market Mechanics 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 Settlement (T+1) Settlement (T+1) refers to the standard timeline by which a securities trade must be finalized after the transaction… Financial Markets & Market Mechanics

T

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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 Trade-off theory The trade-off theory is a core concept in corporate finance that explains how companies decide on their mix… Corporate Finance Treasury notes Treasury notes, often called T-notes, are debt securities issued by the U.S. Department of the Treasury. They are… Bonds & Fixed Income

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 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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VantageScore VantageScore is a credit scoring model developed by the three major credit bureaus: Equifax, Experian, and TransUnion. It… Credit, Debt & Lending 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 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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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 Whole life insurance Whole life insurance is a type of permanent life insurance that provides coverage for the insured’s entire lifetime,… Insurance & Risk Protection

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