Financial Dictionary

  •  Accounting Rate of Return (ARR)

This is a budgeting metric that is used to quickly determine the expected rate of return of an investment, acquisition or a project.

  • Acid-Test Ratio

Also known as the quick ratio, it helps to quickly assess a company’s capacity to pay off its current liabilities without having to get supplementary financing. It’s an important indicator of a company’s financial standing.

  • Acquisition

This is when a company procures a significant number of shares in another company, just enough to gain control of that company.

  • Adverse Selection

This is a phenomenon that occurs when there is unequal information between buyers and sellers of a particular financial instrument or security.

  • After-Hours Trading

This is the time frame outside trading hours within which an investor buys and sells securities.

  • Analysis of Variance (ANOVA)

This is a statistical tool used to predict price movements of securities and to determine the cause of stock price variability.

  • Angel Investor

This is an individual who invests a set sum in a startup in exchange for equity in that company

  • Annuity

This is a long-term investment provided by an insurance company that helps you stem the risk of outlasting your income.

  • Applicable Federal Rate (AFR)

This is the smallest possible interest rate allowed by the Internal Revenue Service for private loans.

  • Artificial Intelligence (AI)

This is the adaptation or mimicking of how the human mind works into a system of machines primarily to increase efficiency of certain financial processes.

  • Asset

This is a financial resource owned with expectations of growing returns over time.

  • Asset Management

This is the partial or total overseeing of a client’s portfolio by a financial service institution. 

  • Asset Turnover Ratio

This is an instrument that measures the value of a company’s sales or revenue against the value of its assets.

  • Automated Teller Machine (ATM)

This is an electronic, computer-controlled money dispensing machine where customers make self-serviced transactions via their bank card. 

  • Average True Range (ATR) 

This is a technical analysis tool used to measure the volatility of an asset price within a set period.

  • Balanced Scorecard

This is a management metric that assesses an organization’s goals and helps to outline actionable steps to reach those goals.

  • Balance Sheet

This is a financial overview or a statement that reports a company’s financial performance over a set period of time.

  • Bank Identification Numbers

These are the first four to six digits on your credit/ debit card and is used by your financial institution to process and match transactions.

  • Bankruptcy

This is the inability of a financial institution or an individual to fulfill their financial debts and/or obligations.

  • Baye’s Theorem

This is a phenomenon used to determine the probability of an uncertain event. For example calculating the risk of money-lending to certain borrowers.

  • Bear Market

This is a market situation where prices decline for an extended time period.

  • Bond

This is simply a financial contract made between two companies.

  • Break-Even Analysis

This is an assessment done to determine at what probable period a new product or business will start to yield profits.

  • Bucket-shop 

This is an exploitative brokerage firm that partakes in unregulated, fraudulent sales tactics

  • Budget

This is a projection of financial revenue over a stated period of time.

  • Budget Deficit

This is a shortfall that occurs when income or revenue is less than expenses. 

  • Business Cycle

This is the changing course of economic activity over a stipulated length of time.

This is the sum of appropriate business guidelines, policies and practices that guide all business activities.

  • Business Model

This is an overview of a company’s structure, practices and overall performance based on stated metrics.

  • Business-to-Consumer

This is a direct sales chain between a business and its intended consumer.

  • Business Valuation

This is an estimation done to determine the financial worth of a business.

  • Callable Bond

This is type of bond where the issuer can cease all interest payments and return investor’s capital before bond maturity.

  • Capital Asset Pricing Model (CAPM)

This is a model used to ascertain the expected rate of return of an asset.

  • Capital Expenditure

This includes all expenses made by an organization to cover and maintain its physical and fixed assets

  • Capitalism

This is a system whereby all means of production are privately controlled by individuals or businesses.

  • Central Limit Theorem (CLT)

This is a phenomenon used to evaluate data from various distribution patterns.

  • Chartered Financial Analyst (CFA)

This is a professional distinction issued by the CFA instuitae to regulate and certify the integrity of a financial analyst

  • Code of Ethics

This is a collection of stated guidelines intended to guide business professionals into being honest and upright.

  • Coefficient of Variation (CV)

This measures the relative distribution of data set around a mean.

  • Collateral

This is an asset accepted as security of a loan.

  • Command Economy

This is a centrally planned economy that determines production and price of every good produced.

  • Comparative Advantage

This assesses an economy’s ability to produce a competitive good at a lower opportunity cost than any of its similar partners.

  • Compound Interest

This is additional interest to the principal sum of a loan or deposit.

  • Conflict Theory

This is a phenomenon that proposes that society will perpetually be in a state of conflict because of the constant competition for limited resources.

  • Consumer Price Index (CPI)

This is a statistical estimate of the change in price of a collection of goods and services.

  • Contribution Margin

His shows the net amount of revenue available after using variable costs to account for fixed expenses.

  • Convertible Securities

These are debt stocks that can be converted into the available common stocks of an issuing company.

  • Convexity of a Bond

This is a phenomenon that explains the relationship between price and yield for a non-callable bond.

  • Correlation

This measures the changes between two securities in relation to each other.

  • Debenture

This is a financial, collateral-free instrument used to borrow money at fixed interest rates

  • Debt Ratio

This measures the extent to which a company’s assets are backed by debt.

  • Debt-Service Coverage Ratio (DSCR)

This is an instrument used to quantify a company’s liquid ability to offset its debt.

  • Debt-to-Equity Ratio (D/E)

This indicates what portion of a company’s shareholder equity is used to fund the company.

  • Delisted stock

This is a stock that has been removed from the stock exchange market.

  • Derivative

This is a contract that derives its value from an existing asset.

  • Dilution

This is a reduction in the number of available shares controlled by a company’s shareholder when the company itself issues more available shares and equity.

  • Disbursement

This is simply the activity that entails paying money to run a crucial aspect of a business.

  • Discount Rate

This is the interest rate charged on a loan that investors and banks are expected to pay

  • Distressed securities

This is used to describe a drop in the value of a company’s stock value due to rocky financials and/or unfavourable times

  • Diversification

This involves having a wide mix of financial instruments in your financial portfolio rather than a single investment type

  • Dividend

This is a reward given to shareholders of a company by the company.

  • Dividend Payout Ratio

This is the ratio of total amount of dividends paid out to shareholders against the company’s net income

  • Dividend Yield

This is a financial ratio that shows total dividends paid out by a company in relation to its stock price.

  • Dollar Cost-Averaging

This is the practice whereby an investor invests fixed sums over time regardless of the change in share price over the same stated period

This refers to investigative scrutiny of a business, its underlying issues and an audit of its financial standing.

  • DuPont Analysis

This is an assessment of the component part of a company’s ROE (return on equity)

  • Earnings Before Interest and Taxes (EBIT)

This is an assessment of a company’s financial standing that includes all incomes and expenses except taxes and interest.

  • Earnings Per Share (EPS)

This is the ratio of a company’s net income against the total number of its outstanding shares.

  • Economics

This is a phenomenon that assesses the mechanism through which goods and resources are distributed in a market

  • Economies of Scale

These are cost advantages that come about as a result of efficient production.

  • Endowment Fund

This is a fund put in place to efficiently manage and sustain a pool of  financial investments, usually according to the wishes of its owners.

  • Enterprise Value (EV)

This is an economic indicator of the market value of a business.

  • Entrepreneur

This is an individual who sets out a new business and in most cases, takes all the profits, risks and growth opportunities of the business.

  • Equity

This refers to entire ownership of assets with the liabilities and debts they come with.

  • Ex-dividend

This describes the date specified for a company to allocate dividends to its shareholders.

  • Exchange Rate

This is the comparative value of one currency in relation to another currency

  • Externality

This refers to cost or benefit of transactions incurred by members who do not directly participate in them

  • FAANG Stocks

This is an acronym that refers to the stocks of five renowned American tech companies Facebook, Amazon, Apple, Netflix and Google.

  • Feasibility Study

This is a thorough research that takes every into account every possible outcome and likelihood of a new project’s success based on sources of capital, legal utilities, return on investments and financial projections 

  • Fiduciary

This is a person who stands to act in the best interest of their beneficiary at all times even ahead of their own interest.

  • Financial Institution (FI)

This is an organization that deals with the entirety of the logistics of money and other financials such as investments, bonds, loans, deposits and more.

  • Fiat Money

This is a currency that though has been established as a legal form of tender, has no real intrinsic value

  • Finance

This is an umbrella term for all activities that involves the flow of money, financial securities, investment and the entirety of all other financials.

  • Fixed Income

This is an asset class that pays a fixed amount of interests and dividends at a specified maturity date 

  • Fixed-Income Security

This is a government-issued, financial debt instrument for the purpose of expanding its operations

  • Float

This is the number of available, tradable shares.

  • Front-End Loan

This is a loan paid at the point of your first investment.

  • Four Ps

This refers to the four crucial factors needed to successfully market a product to the public; these are the product, the price, the place and the promotion.

  • Free Market

This is a market environment where supply and demand is allowed to run with no interference from the government.

  • Futures

These are binding contracts to buy or sell a commodity at a predetermined price at a specific time in the future

  • Free Carrier (FCA)

This is a term that means the entire risk, responsibility, and delivery of a certain good is the responsibility of the seller up until it gets to the destination specified by the buyer

  • Free on Board (FOB)

This is a shipment insurance that covers full protection of all cargo in transit up until they get to their destination.

  • Free Trade

This is a diplomatic agreement between the ports of two countries to reduce import and export barriers

  • Fundamentals

This involves detailed information about a company’s financials and all other prevailing economic factors that may affect its financials.

  • Gross Income

This is the total amount of income from all sources that an individual earns in one year before tax deductions

  • Gross Domestic Product

GDP is the final value of the goods and services produced within the geographic boundaries of a country during a specified period of time, normally a year.

  • Gross Margin

This includes the total net sales company revenue after making deductions for cost of goods sold.

  • Gross National Product (GNP)

This is the gross income earned and reported by domestic firms in overseas countries.

  • Gross Profit

This is the profit realized after making deductions for cost of goods and services sold.

  • Gross Profit Margin

Otherwise known as Gross Margin is the total net sales company revenue  after making deductions for cost of goods sold.

  • Guarantor

This is a person who stands in line for a borrower just in case they default on an earlier-agreed monetary deal or loan obligation

  • Hammering

This describes a panic-selling situation on the advent of bad financial news from a company or any other detrimental event projected to cause a plough in company revenue

  • Hard Skills

These are skills learned in educational institutions like college, university or a polytechnic

  • Harmonic Mean

This is the reciprocal mean that is derived from calculating the arithmetic mean of the reciprocals of a particular data set.

  • Head And Shoulders Pattern

This is a chart pattern observed in technical analysis that is usually depicted by two low peaks on either side and a much taller middle peak. It usually heralds a bullish to bearish reversal in the marketplace.

  • Health Maintenance Organizations (HMOs)

This is an insurance organization that provides company-based and individual-based health insurance for a monthly or annual fee

  • Health Savings Account (HSA)

This is a savings account that allows you save money on a pretax basis for expensive medical expenses

  • Hedge

This is an investment that helps to reduce risk that would have otherwise been incurred as a result of adverse price movements.

  • Hedge Fund

This is an investment company that stacks their client’s assets and money into a number of varied investments so as to hedge against unexpected market changes.

  • High-Low Method

This is a means that helps set apart fixed and variable parts of combined costs in spite of limited data.

  • High-Net-Worth Individual (HNWI)

This describes a person or family whose liquid assets is above a particular stated amount 

  • Hold Harmless Clause

This is a clause found in a contract that exempts two individuals from making remunerations for any liabilities or damage caused by either party

  • Home Equity Loan

This is a loan type that allows a homeowner to finance large home expenditures like a renovation or home repair.

  • Homestead Exemption

This is an arrangement that prevents a house owner from selling off a home to pay off debts and taxes

  • Horizontal Integration

This describes the procurement of a business operating in similar niche and in similar industry.

  • Income

This is the total sum of money received in exchange for providing certain products or services

  • Income Statement

This is a formal record of a company’s financial standing over a stated accounting period.

  • Indemnity

This is a comprehensive insurance for damages and/or loss incurred within a contractual agreement between two parties

  • Indemnity Insurance

This is a protective insurance that keeps you from incurring any loss in the event a client sues for customer dissatisfaction.

  • Index Fund

This is a collection of a wide range of financial securities grouped together to in close similarities to a segment of the market

  • Interpersonal Skills

These are social relationship skills a person uses to effectively communicate with others

  • Inventory Turnover

This is an overview that shows how many times a company has sold or replaced inventory in a given time frame.

  • Inverted Yield Curve

This is a graphical illustration that indicates when short-term interest rates exceed long-term interest rates.

  • Invisible Hand

This refers to an unseen force that makes demand and supply in a free market reach equilibrium

  • Irrevocable Trust

This is a type of trust whose terms cannot be modified without due permission from the grantor’s named beneficiary. 

  • Joint and Several Liability

This is legal lingua for financial responsibility that is evenly shared amongst its participants

  •   Joint Probability

This is a statistical measure that weighs the likelihood of two events happening together at the same time.

  • Joint-Stock Company

This is a legal business entity in which shares of the company stock can be exchanged by shareholders

  • Joint Tenancy

This is an agreement between you and one or more parties for joint ownership of a particular asset or financial security, all with equal gainable interests.

  • Joint Venture (JV)

This a business formed as a result of the merger between two different businesses with a common goal objective

  • Junk Bond

This is a bond issued by a company with very unreliable financial strength. These companies are usually small companies or new start ups.

  • Jumbo Loan

This is a mortgage loan with financing that exceeds limits set by the government finance agency.

  • Jurisdiction Risk

This is the risk that comes with doing business, borrowing, lending or doing any monetary transactions in a foreign company

  • Key Performance Indicators (KPI)

This is a performance measurement used to assess a group of quantifiable variables so as to get the big picture of a company’s performance over the sated period of time.

  • Key Person Insurance

This is a form of business insurance a company incurs to safeguard the lives of Key executives in their organization

  • Key Rate Duration

This is an illustration on the yield curve that is seen as the measure of interest rate sensitivity of a portfolio to precise key rates on the yield curve. This is assuming that all maturities are held constant

  • Know Sure Thing (KST)

This is an indicator used in technical analysis to interpret the summed rate of change in stocks and commodities

  • Know Your Client (KYC)

This is an industry standard requirement for due diligence on clients risk appetite, prior financial knowledge and standing

  • Knowledge Economy

This is simply the utilization of knowledge to create goods and services

  • Kiddie Tax

This is a tax imposed on a child’s unearned income on dividends, interests etc. 

  • Kids In Parents’ Pockets Eroding Retirement Savings (KIPPERS)

This is an informal lingua for kids who have finished school and still depend on their parents for upkeep even after reaching legal age

  • Kiosk

A miniature retail location within a larger shopping center.

  1. Kamikaze pricing

This describes a situation where banks put up loans and other financial instruments at ridiculously low interest rates and prices

  • Leverage

This describes the use of borrowed money to increase the potential return of a certain investment

  • Leverage Ratio

This is the ratio of a company’s debt to its equity

  • Leveraged Buyout (LBO)

This is the purchase of another company using borrowed money to meet up to the cost of its acquisition

  • Liability

This is the sum total of money owed by a company or an individual 

  • Liability Insurance

This is a type of insurance that gives legal protection to companies and business owners in the event they face formal lawsuits 

  • Limit Order

This is a set trade order to buy or sell a stock price at a discount or premium price

  • Liquidation

This describes the process of dissolving a business and its assets into distributable cash that would be disbursed to claimants 

  • Liquidity

This describes how easily you can get cash or convert an asset to cash

  • Liquidity Coverage Ratio (LCR)

This is the quantity of high liquid assets put away to meet short term obligations

  • Liquidity Ratio

This is also known as Liquidity Coverage Ratio (LCR). and is the quantity of high liquid assets put away to meet short term obligations

  • Mixed Economic System

This is a system that jointly combines some aspects of socialism and capitalism.

  • Monetarism

This is a phenomenon that proposes money as the major determinant of economic activity.

  • Monetary Policy

This is the sum total of all decided actions and guidelines  taken by a nation’s financial figure heads and experts

  • Money Laundering

This describes a range of illegal activities carried out to conceal the true origin of ill-gotten money by diverting them into legitimate businesses or a complex network of bank transfers.

  • Money Market Account

This is a type of interest-earning savings account offered by a financial institution. 

  • Monopolistic Competition

This is a competition between two or more companies with identical products where they all leave a production inadequacy that cause supply to not meet market demand.

  • Moore’s Law

This law postulates that the number of transistors on a microchip doubles every two years even with the halving of computer costs. This translates to more efficient work machines for way less.

  • Moving Average Convergence Divergence (MACD)

This is an indicator that depicts trend momentum between two moving averages of a security’s price

  • Multi-Level Multilevel Marketing

This is a marketing tactic used by some businesses where old distributors persuade new distributors who also go on to persuade new recruits, the number of recruits garnered then determines pay percentage.

  • Mutual Fund

This is a financial pool of money from different investors that is then used to invest in financial securities.

  • Mutually Exclusive

This is used to describe an investment that stops you from taking another different investment

  • Net Profit Margin

This is derived by dividing your net income by your total sales revenue.

  • Net Worth

This is the valuation of a person’s worth by their assets minus their owed liabilities

  • Netting

This is a phenomenon whereby risk exposure or obligation in financial contracts is reduced by combining two or more positions

  • Network Marketing

This is a business model that uses person-to-person sales representatives to make sales revenue.

  • Networking

This describes a group of financial securities and the interlinking connection between them either by physical or digital transactions

  • New York Stock Exchange (NYSE)

This is the largest securities exchange in the world by market capital and the hub for about 70 of the biggest world corporations.

  • Negative Correlation

This occurs when two prices of two individual stocks move in opposite directions from each other 

  • Net Asset Value (NAV)

This is the value of a fund’s asset after deducting the value of its liabilities 

  • Net Income (NI)

This is the value of an entity’s income after deducting cost of goods sold

  • Net Operating Income (NOI)

This determines an entity’s revenue after total operating expenses and losses have been deducted.

  • Offset

This describes you taking the opposite position away from an original opening position. This is done to reduce the risk incurred and thus reduce the gain from an open position

  • Oligopoly

This is a market structure characterized by very few market players but many buyers. The result? They all come together to increase their prices since they have few competitions and thus earn bigger profits because of it

  • Onerous Contract

This describes an agreement that cost more for a company to fulfill than revenues they’ll get in return

  • Online Banking

This is a channel through which a customer can carry out daily bank transactions via the internet

  • Open Market Operations

These are steps taken by a country’s central bank to regulate the supply of money to a bank or a group of banks which in turn will be made available for loans to individuals and businesses

  • Outsourcing

This is a practice employed when companies want to cut employment costs so they hire an outdoor company to perform designated tasks at a lower cost. 

  •  Over-The-Counter (OTC)

This describes the process through which financial securities are traded and exchanged via a broker dealer network

  • Over-The-Counter Market

This is a decentralized market that involves trading over-the-counter stocks

  • Overdraft

This is a credit extension offered by a lending institution after your account balance hits zero, that is you can still withdraw cash even when you have money in your account

  • Overhead

This is the running fixed expense of operating a company 

  • Profit and Loss Statement (P&L)

This is an income statement that summarizes a company’s profits, revenue and expenses across a time period

  • Promissory Note

This is a written promise by one member to pay another member a stated money sum on demand or a specific future date

  • Prospectus

This is a disclosure document that is filled with the Security Exchange Commission (SEC) and provides extensive details about particular financial securities for potential buyers

  • Public Limited Company (PLC)

This is a separate legal entity that trades its shares publicly on the stock exchange to the general public

  • Put Option

This is a stock instrument that confers on its owner the right to sell an asset at a predetermined price rate and at a specific date too.

  • Penny Stocks Trade

This is any small company stock that trades at a price lower than $5

  • Per Capita GDP

This is a metric used to measure the size of a country’s population by breaking down the country’s economic output per person.

  • Perfect Competition

This is an ideal market scenario where all market participant have full and equal knowledge advantage, with no transaction cost and an ample presence of producers and consumers competing with each other

  • Personal Finance

This describes the sum total of an individual’s financial management that includes budgeting, saving, income generation, investing and retirement planning 

  • Phillips Curve

This is a concept that graphically explains the inverse relationship between unemployment rate and inflation.

  • Quarter on Quarter (QOQ)

This is a metric used to quantify the performance in one quarter compared to the same quarter of a different year. 

  • Quasi Contract

This is a court-imposed legal agreement between two parties such that it prevents one party from benefiting unfairly at the other person’s expense even though there exists no contract between them

  • Quick Assets

This refers to total assets owned by a company that can be quickly and easily converted into cash or are already in cash 

  • Quick Ratio

This helps to quickly assess a company’s capacity to pay off its current liabilities without having to get supplementary financing. It’s an important indicator of a company’s financial standing. It’s also known as the Acid test ratio

  • Quintiles

This is one out of a range of data that has been divided into five equal values.

  • Quota

This is a government-backed trade restriction that limits the number of goods a country can import or export during a specific period

  • Quality of Earnings

This is the proportion of income that is realized as a result of lower cost prices or higher  sales.

  • Quality Management

This is the act of inspecting and overseeing different tasks within an organization such that they each yield excellent results 

  • Quantitative Analysis (QA)

This involves the pooling of data from different sources to gain accurate financial insight.

  • Quantitative Easing

Thus involves a policy where the country’s central bank buys government bonds and other financial securities so as to pump more money to circulate around the economy

  • Receivables Turnover Ratio

This is a metric used to measure how long a company can extend credits and afford to quickly pay off its debt too

  • Registered Investment Advisor (RIA)

This is an investment firm that manages the financials of high networth individuals and generally offers investment and financial advice to their client 

  • Regression

This is a statistical tool used to determine how strongly related one dependent variable is to a couple of other independent variables. 

  • Relative Strength Index (RSI)

This is an indicator used in technical charting to determine overbought or oversold market conditions 

  • Renewable Resource

This is a resource that can be used in perpetuity because it is naturally replenished e.g wind energy, solar energy, hydrothermal pressure.

  • Racketeering

This includes a series of crimes committed at a federal or state level

  • Rate of Return

This refers to the total net gain or loss of an investment or financial security over a specified period of time

This phenomenon explains that most people would most likely go with a choice that’s most in line with their personal preferences

  • Real Estate

This refers to a collection of lands, buildings, properties along with the natural resources within its surrounding vicinity

  • Real Estate Investment Trust (REIT)

This refers to a company that sells income-generating properties

  • Short Selling

This phenomenon explains when an investor borrows and sells an asset when it’s high with the hopes of buying it back when the price drops so as to make a profit

  • Social Media

This is a collection of digital-based platforms that facilitate the quick sharing of content in various forms: music, pictures, text etc.

  • Social Responsibility

This describes the onus placed on an individual to act uprightly and to the best interest of their immediate environment and society as a whole

  • Solvency Ratio

This is a criteria used to measure how quickly a company can clear its debt and meet other company long-term obligations

  • Spread

This describes the difference between the ask and bid price of a particular financial instrument

  • Subsidiary

This refers to a sub-company under a much larger parent company

  • Supply Chain

This is an established production chain network between producers and suppliers up until when it gets down to its consumer

  • Sustainability

This describes a situation where your long-term needs are always going to be met while not neglecting your present needs too.

  • Systematic Sampling

This is a statistical sampling technique where each member of a select group is picked at regular periods to form a sample

  • Securities and Exchange Commission (SEC)

This is an independent agency responsible for regulating the transaction of securities and the activities of investors.

  • Security

These are financial tools used to garner capital in public and private markets

  • Series 63

The Series 63 is a securities exam and license that confers on the holder the ability to request orders for any type of security in a particular state.

  • Technical Analysis

This involves a collection of financial evaluation carried out on the charts where trends and patterns are used to identify good trading opportunities

  • Tenancy in Common (TIC)

This refers to an arrangement where two or more individuals can share ownership rights to a property or landed asset

  • Term Life Insurance

This is a life insurance policy that provides insurance at a fixed rate over a period of time

  • Terminal Value (TV)

This is the present value of a given security at some point in the future based on a stated expected rate of return

  • Third World

This is used to describe a developing country with poor socioeconomic conditions and low income level 

  • Trust

This describes a relationship between three parties : – the Trustor that gives the trustee the overseeing rights on behalf of a (usually minor) third party

  • Trust Fund

This is a legal entity that allows someone manage and oversee properties and assets on behalf of 

  • Trustee

This is a person appointed to oversee properties and assets on behalf of a third (usually minor) party

  • Turnover

This refers to how quickly a business can sell off its inventory.

  • Underwriting

This situation describes one where a financial institution bears the financial risk of a second party for a stated fee.

  • Unearned Income

This is the sum total of income earned from sources outside employment e.g dividends from stock investments, interest from saving etc.

  • Unemployment

This describes the inability of a population actively seeking jobs to find one

  • Unemployment Rate

This refers to the proportion of a country’s workforce that is jobless.

  • Unicorn

This describes a private startup business with valuation of over $1billion.

  • Upside

This refers to the probable increase in price of any financial instrument

  • U.S. Dollar Index (USDX)

This is a financial instrument that measures the relative strength of the US dollar currency against a basket of other currencies from major US trading partners

  • U.S. Savings Bonds

This is a government bond issued to US citizens so as to fund the US government’s spending

  • Utilities Sector

This is a particular group of public service company responsible for the provision of basic amenities like water, electricity and natural gas.

  • Utility

This is the degree to which a consumer is satisfied from using a particular product or service

  • Variability

This is the degree to how much a set of data diverge from its mean value

  • Variable Annuity

This is a contract that allows you to choose from a select range of investments whose performance determine the level of retirement income you get 

  • Variable Cost

These are corporate expenses that proportionally vary according to the volume of inventory available

  • Variance

This is the measure of how dispersed a set of observations are.

  • Value Added

This is the difference between the price of a product and the cost of producing said product.

  • Value Chain

This is the sum total of activities needed to create a product or service.

  • Value Investing

This describes a stock-picking strategy where you pick stocks trading lower than their book value because you believe they’ll appreciate over time.

  • Value Proposition

This is the product value promised to a customer by a company.

  • Value at Risk (VaR)

This assesses the level of financial risk obtainable within a company over a specified period of time

  • Value-Added Tax (VAT)

This is the tax payable on purchasing a product

  • White-Collar Crime

This is an often benign crime committed by a fraudulent professional for monetary gains

  • White Paper

This is a type of report intended to highlight or promote an organization, audience, products or service

  • Wholesale Price Index (WPI)

This measures the summative changes in price in the different stages it encounters before getting to retail stage

  • Wire Fraud

This is a dubious crime committed to defraud an individual or financial organization of money or other valuable items.

  • Wire Transfers

This is an electronic transfer of funds done across a network of banks.

  • Withholding Allowance

This is an exemption that allows a lower than usual amount to be withheld from an employee’s paycheck.

  • Withholding Tax

This is a designated amount an employer deducts from its employees wages/salary payable as tax to the government.

  • Working Capital (NWC)

This is the difference between a company’s short-term assets and short-term liabilities.

  • Works-in-Progress (WIP)

This refers to a company’s partially-finished goods or goods yet to undergo final stage of production and are thus awaiting sale and/ or valuation.

  • World Trade Organization (WTO)

This is an international body that oversees global trade rule amongst nations

  • XD

This is a symbol used to denote an ex-dividend security.

  • Xenocurrency

This is a general term given to any currency that trades outside of its country borders.

  • X-Inefficiency

This is a term used to analyze costs in imperfectly competitive markets.

  • X-Mark Signature

This is a signature made in place of an actual signature for the sake of disabled or illiterate people.

  • Yield Curve Risk

This entails the risk associated with a fixed income investment where one could possibly experience an untoward shift in market interest rates.

  • Yield Maintenance

This is a prepayment fee that borrowers pay to banks to compensate them for the loss of interest resulting from the prepayment of a loan. 

  • Year of Assessment

This refers to the year income tax is evaluated and charged.

  • Yield on Cost (YOC)

This is the ratio of a security’s annual dividend rate to the average cost basis of the investments.

  • Yield on Earning Assets

This assesses the liquidity of a financial firm by taking a broad look at the total interest, dividend and fee income earned on loans and investments as a percentage of average earning assets.

  • Yield to Call

This refers to the aggregate return paid at the maturity of a bond

  1. yearling bond

This is money borrowed by a local authority payable within a year.

  • Yellow Sheets

This contains quotations such as yield, volume, high, low, closing, and bid-ask spread.

  • Yield

This is the amount of monetary gain realized on an investment over a set period of time

  • Yield curve

This is a graphical representation of the different interest rates of different bonds that each have different maturity rates

  • Yield gap

This is the difference between the yield of a long term government bond against the dividend yield of an equity.

  • Yield to Maturity (YTM)

This is the total expected return on a bond if held to maturity

  • Yield to Worst (YTW)

This refers to the lowest minimum yield obtainable on a bond.

  • Yield Variance

This is the degree to which the cost differential between actual and standard output have an effect on production process

  • Yuppie

This is an informal finance lingua used to denote a young urban professional

  • Yearly Rate Of Return Method

This is the net gain or loss of a security or investment over a one year period.

  • Yearly Renewable Term (YRT)

This is an insurance policy that offers security for a time period of one year and renews automatically.

  • Yield

This refers to cash returns generated on a security over a period of time.

  • Yield Basis

This is a price-quoting method whereby a fixed income security is quoted as a yield percentage rather than as a dollar value

  • Z-Score

This is used to assess the relationship of  a value to the mean of a group of values

  • Z-Test

This is a statistical test used to evaluate the difference between two known means of a large sample size

  • Zero-Beta Portfolio

This is a portfolio that moves independently of market prices and is thus unaffected by risks but yields lower interest rates.

  • Zero-Bound

This refers to the reduction of short-term interest rates to zero for the purpose of reviving the economy.

  • Zero Coupon Inflation Swap

This is an income stream exchange of fixed rate payment for payment at the rate of  an inflation.

  • Zero Coupon Swap

This is an interest rate derivative of fixed-for-floating cash flows whereby the fixed side is paid as one big sum at the time of its maturity

  • Zero Cost Collar

This is a trading strategy done to hedge losses by buying options that cancel one another.

  • Zero-Coupon Bond

This is a bond that is repaid at face value at the time of maturity

  • Zero-One Integer Programming

This concept basically utilizes mutually exclusive yes or nos to proffer solutions to certain situations

  • Zero-Rated Goods

These are goods that are subjected to VAT but the VAT rate is zero percent.

  • Zero-Sum Game

This is a phenomenon that explains how one person’s total loss is another person’s total gain therefore making net benefit zero

  • Zero-Volatility Spread (Z-spread)

This is a static spread that measures the price of a security to its present cash flow value.

  • Zeta Model

This is a model that estimates the probability of a company going bankrupt and non-liquid within a period of two years