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Browse terms from business, finance, tech and science

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Dictionary A-Z

Actively Managed Funds

Actively managed funds are investment funds in which a portfolio manager or team makes decisions about how to allocate assets in order to outperform the market.

Actuary

An actuary is a professional who analyzes financial risks using mathematics, statistics, and financial theory, often working in insurance and pension industries.

Allocation Rate

The allocation rate is the percentage of an investor's capital that is actually invested in a financial product after deducting any initial charges or fees.

Annual Equivalent Rate

The Annual Equivalent Rate (AER) is the effective interest rate on savings or investments over a year, taking into account the effect of compounding.

Annuity

An annuity is a financial product that provides a series of payments made at equal intervals, typically used as a retirement income stream.

Antifragile

Antifragility, coined by Nassim Taleb, describes systems that grow stronger from stress and shocks, unlike resilience, which just resists damage.

Arbitrage

Arbitrage is the simultaneous purchase and sale of an asset in different markets to profit from price discrepancies.

Auditors

Auditors are professionals who examine and verify the accuracy of financial statements and ensure that companies comply with accounting standards and regulations.

Balance Sheet

A balance sheet is a financial statement that provides a snapshot of a company's financial position at a specific point in time, detailing its assets, liabilities, and shareholders' equity.

Big Bath

A corporate strategy where a company reports exaggerated losses in a single period to lower future tax obligations and reset financial performance expectations.

Black Swan

A black swan is an unpredictable and rare event with severe consequences, often beyond what is normally expected in a situation.

Blue Chip

Blue chip refers to a nationally recognized, well-established, and financially sound company known for its reliable earnings, high quality, and stability.

Bond

A bond is a fixed-income investment where an investor loans money to an entity (corporate or governmental) for a defined period at a fixed interest rate.

Borrower

A borrower is an individual or entity that takes out a loan from a lender with the obligation to repay the borrowed amount, usually with interest, over a specified period.

Bridging Loan

A bridging loan is a short-term loan used to bridge the gap between buying a new property and selling an existing one.

Broker

A broker is a licensed professional who buys and sells financial securities on behalf of clients in exchange for a commission or fee.

Buildings Insurance

Buildings insurance covers the cost of repairing or rebuilding a property if it is damaged or destroyed by events such as fire, storm, or flood.

Bull Market

A bull market is a financial market condition in which prices are rising or are expected to rise, typically characterized by investor optimism and confidence.

Buy-to-let Mortgage

A buy-to-let mortgage is a type of loan specifically designed for individuals who purchase residential properties to rent them out.

Buyout

A buyout is the acquisition of a controlling interest in a company, often by purchasing its shares, to take over its management and operations.

Capital Gains

Capital gains are the profits earned from the sale of an asset, such as stocks, bonds, or real estate, when the selling price exceeds the purchase price.

Capital Gains Tax

Capital gains tax is a tax levied on the profit realized from the sale of a capital asset, such as stocks, bonds, or real estate.

Capital Ratio

Capital ratios are financial metrics that measure a bank's capital relative to its risk-weighted assets, ensuring the bank can absorb potential losses.

Central Bank

A central bank is a national financial institution that manages a country's currency, money supply, and interest rates, and oversees its banking system.

Chapter 11 Bankruptcy

Chapter 11 bankruptcy is a legal process that allows businesses to reorganize and restructure their debts while continuing to operate.

Collateral

Collateral is an asset a borrower offers to a lender as security for a loan. If the borrower defaults, the lender can seize and sell the collateral to recover the loan amount.

Commercial Paper

Commercial paper is an unsecured, short-term debt instrument issued by corporations to meet immediate funding needs.

Consumer Price Index

The Consumer Price Index (CPI) is a measure that examines the weighted average of prices of a basket of consumer goods and services, used to track inflation.

Contents Insurance

Contents insurance covers the loss or damage of personal belongings within a home due to events like theft, fire, or flooding.

Corporate Raiders

Corporate raiders are investors who buy a significant stake in a company to influence its management and policies, often aiming to increase its stock price for a profit.

Cost-Push Inflation

Cost-push inflation occurs when the overall price levels rise due to increased costs of production, such as wages and raw materials.

Credit Crunch

A credit crunch is a financial situation where there is a sudden and severe reduction in the availability of loans or credit from banks and other lenders.

Credit Risk

Credit risk is the potential for loss resulting from a borrower's failure to repay a loan or meet contractual obligations.

Derivative

Derivatives in finance are contracts whose value is based on an underlying asset, index, or rate. They include options, futures, and swaps, and are used for hedging or speculation.

EBITDA

EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It measures a company's operating performance and profitability.

Factoring

Factoring is a financial transaction where a business sells its accounts receivable to a third party at a discount to improve cash flow.

Gateway

A gateway is a network node that connects two networks, allowing data to flow between them, such as the internet and a local network.

Hedge Fund

Hedge funds are investment funds that pool capital from accredited investors to pursue aggressive investment strategies for high returns.

Investment Trust

An investment trust is a publicly traded closed-end fund that pools investors' money to invest in diversified portfolios of stocks or assets.

Java

Java is a high-level, object-oriented programming language known for its portability, security features, and widespread use in web and mobile applications.

Kernel

The kernel is the core component of an operating system that manages system resources and provides essential services for applications.

Lender

A lender is an individual or institution that provides funds to a borrower with the expectation of being repaid, typically with interest, over an agreed period.

Leveraged Buyout (LBO)

A leveraged buyout (LBO) is a financial strategy where a company is acquired using a significant amount of borrowed money.

Median

The median is the middle value in a sorted list of numbers. It divides the data set into two equal halves.

Nominal Interest Rate

The nominal interest rate is the stated rate on a loan or investment before adjusting for inflation or compounding frequency.

Object Oriented Programming

Object-Oriented Programming (OOP) is a programming paradigm where programs are organized around objects and data rather than actions.

Price-to-Earnings Ratio

The Price-to-Earnings ratio (P/E ratio) is a financial metric used to assess a company's valuation by comparing its stock price to its earnings per share (EPS).

Quantum Computing

Quantum computing leverages quantum mechanics to perform computations exponentially faster than classical computers.

Read-Only Memory

Read-Only Memory (ROM) is computer memory that retains data even when powered off, used primarily for permanent storage of firmware.

Short Selling

Short selling is a trading strategy where investors borrow stocks, sell them at current prices, and aim to buy them back later at lower prices to profit.

Tracker Funds

Tracker funds, also known as index funds, replicate the performance of a specific market index, aiming to match its returns.

Underclocking

Underclocking is reducing a computer's clock speed to decrease power consumption, heat generation, and extend battery life.