📈 Finance

The percentage charged by a lender on a loan or paid by a bank on deposits, expressed annually.

Interest calculated on both the principal and the accumulated interest from previous periods.

A loan secured by real estate property, repaid in regular installments over a set term.

A numerical rating (300”“850) representing a person's creditworthiness based on their credit history.

An asset pledged by a borrower to secure a loan, which the lender can seize upon default.

The process of paying off a loan through regular installments of principal and interest over time.

A banking system where banks hold only a fraction of deposits in reserve and lend out the rest.

A financial derivative that transfers the credit risk of a reference entity from one party to another.

A share of ownership in a corporation, entitling the holder to a portion of the company's earnings and assets.

A fixed-income debt instrument where an investor loans money to an entity in exchange for regular interest payments.

Exchange-Traded Fund ”” a basket of securities that trades on a stock exchange like an individual stock.

A pooled investment vehicle managed by professionals, collecting money from many investors to buy securities.

A collection of financial investments held by an individual or institution, including stocks, bonds, and cash.

A portion of a company's earnings distributed to shareholders, typically paid quarterly in cash or additional shares.

The income generated by an investment, expressed as a percentage of its cost or current market value.

Price-to-Earnings ratio ”” a valuation metric comparing a company's stock price to its earnings per share.

A financial statement showing a company's assets, liabilities, and shareholders' equity at a specific point in time.

A financial statement summarizing revenues, expenses, and profits over a specific period of time.

A financial statement showing the inflows and outflows of cash from operating, investing, and financing activities.

The systematic allocation of the cost of a tangible asset over its useful life.

Earnings Before Interest, Taxes, Depreciation, and Amortization ”” a measure of core operational profitability.

Return on Investment ”” the percentage gain or loss on an investment relative to its cost.

Money owed to a business by its customers for goods or services already delivered but not yet paid for.

The percentage of revenue remaining after subtracting the cost of goods sold.

A period of rising financial markets, typically defined as a 20% or more increase from recent lows.

A period of declining financial markets, typically defined as a 20% or more drop from recent highs.

A statistical measure of the dispersion of returns for a security or market index over a period of time.

The ease with which an asset can be converted to cash without significantly affecting its market price.

The total market value of a company's outstanding shares, calculated as share price times shares outstanding.

Initial Public Offering ”” the process by which a private company first sells its shares to the public.

Borrowing and selling a security with the intention of buying it back later at a lower price for profit.

Gross Domestic Product ”” the total monetary value of all goods and services produced in a country over a period.

The rate at which the general level of prices for goods and services rises, eroding purchasing power.

A general decline in prices for goods and services, which can signal weak economic demand.

A significant decline in economic activity lasting more than a few months, often defined as two consecutive quarters of negative GDP growth.

Government use of spending and taxation to influence the economy and manage economic cycles.

Central bank actions controlling the money supply and interest rates to achieve macroeconomic goals.

The value of the next-best alternative forgone when making an economic decision.

The economic model explaining how price and quantity of goods are determined by the interaction of buyers and sellers.

The process of creating a plan to allocate income across expenses, savings, and investments.

A dedicated cash reserve to cover unexpected expenses or income loss, typically 3”“6 months of living expenses.

The total value of a person's assets minus their total liabilities, reflecting overall financial health.

A US employer-sponsored retirement savings plan allowing pre-tax contributions with tax-deferred growth.

An expense subtracted from gross income to reduce the amount of income subject to tax.

A valuation method estimating the present value of future cash flows using a discount rate.

Weighted Average Cost of Capital ”” the average rate a company must earn to satisfy all capital providers.

The use of debt to amplify potential investment returns, also increasing potential losses.

The difference between a company's current assets and current liabilities, measuring short-term liquidity.

The mix of debt and equity financing a company uses to fund its operations and growth.

The difference between the present value of cash inflows and outflows, used to evaluate investment profitability.