A-B Trust

A trust structure splitting assets into two trusts (A for the surviving spouse, B for beneficiaries) to minimize estate taxes and protect assets.

A-Shares

Mutual fund shares with a front-end sales load, reducing the invested amount; typically have lower expense ratios than other share classes.

AAA

The highest credit rating from agencies like S&P or Moody’s, indicating minimal default risk for bonds or issuers.

AARP

A U.S. nonprofit advocating for people over 50, offering financial planning, insurance, and retirement resources.

Abenomics

Economic policies under Japanese PM Shinzo Abe (2012-2020) using monetary easing, fiscal stimulus, and structural reforms to boost growth.

Ability-to-Pay Taxation

A tax system where rates increase with income or wealth, aiming for fairness based on financial capacity.

Abnormal Return

Investment return exceeding what’s expected based on risk and market performance, often tied to specific events.

Absolute Advantage

A country or entity’s ability to produce a good more efficiently (lower cost or resources) than others.

Absolute Return

The total return of an investment or portfolio, ignoring benchmarks, often used in hedge funds.

Absorption Costing

An accounting method allocating all manufacturing costs (fixed and variable) to products, used for financial reporting.

Absorption Rate

The rate at which inventory or real estate is sold or leased in a market, often expressed as months of supply.

Accelerated Depreciation

A method writing off an asset’s cost faster than straight-line depreciation, reducing early taxable income.

Acceleration Clause

A loan contract provision allowing lenders to demand immediate repayment if specific conditions are breached.

Acceptable Quality Level (AQL)

The maximum defect rate in a product batch considered acceptable during quality inspections.

Accepting Risk

Choosing to bear potential financial loss without mitigation, often due to low probability or cost of avoidance.

Accidental Death and Dismemberment Insurance (AD&D)

Insurance paying benefits for accidental death or severe injury (e.g., loss of limbs or sight).

Accidental Death Benefits

Additional insurance payout if the policyholder dies from an accident, often added to life insurance policies.

Account Balance

The net amount in an account, reflecting deposits, withdrawals, interest, or fees.

Account in Trust

An account managed by a trustee for a beneficiary, often for estate planning or minors.

Account Number

A unique identifier for a bank, brokerage, or financial account used for transactions and tracking.

Account Statement

A periodic summary of account activity, including transactions, balances, and fees, issued by financial institutions.

Accountability

The obligation of individuals or entities to justify actions or decisions, often in financial reporting or governance.

Accountant

A professional who prepares, analyzes, and audits financial records to ensure accuracy and compliance.

Accountant Responsibility

The duty of accountants to adhere to ethical standards, accuracy, and regulations like GAAP or IFRS.

Accounting

The process of recording, summarizing, and reporting financial transactions to track business performance.

Accounting Conservatism

A principle favoring lower profits and asset values to avoid overstatement, ensuring prudent financial reporting.

Accounting Cycle

The steps to record and report financial transactions, from journal entries to financial statements, in a period.

Accounting Equation

Assets = Liabilities + Equity; the foundation of double-entry bookkeeping.

Accounting Information System (AIS)

Software or processes managing financial data for accounting, reporting, and decision-making.

Accounting Method

Rules determining how transactions are recorded, e.g., cash or accrual accounting.

Accounting Policies

Specific rules and procedures a company uses to prepare financial statements, ensuring consistency.

Accounting Principles

Standardized guidelines (e.g., GAAP or IFRS) governing financial reporting for accuracy and transparency.

Accounting Profit

Revenue minus explicit costs (e.g., wages, rent), excluding implicit costs like opportunity costs.

Accounting Rate of Return (ARR)

A measure of project profitability, calculated as average annual profit divided by initial investment.

Accounting Ratio

Financial metrics (e.g., debt-to-equity) used to analyze a company’s performance or financial health.

Accounting Standard

Formal guidelines (e.g., FASB, IFRS) ensuring consistent and transparent financial reporting.

Accounting Theory

The conceptual framework explaining and guiding accounting practices and standards.

Accounts Payable (AP)

Short-term liabilities for goods or services purchased on credit, due within a year.

Accounts Payable Turnover Ratio

Measures how quickly a company pays its suppliers, calculated as purchases divided by average AP.

Accounts Receivable (AR)

Amounts owed to a company for goods or services sold on credit, typically due within a year.

Accounts Receivable Aging

A report categorizing AR by time outstanding (e.g., 30, 60, 90 days) to assess collection risk.

Accounts Receivable Financing

Borrowing against AR to improve cash flow, often through factoring or loans.

Accredited Asset Management Specialist (AAMS)

A designation for financial advisors skilled in asset management and financial planning.

Accredited In Business Valuation (ABV)

A credential for CPAs specializing in business valuation for mergers, taxes, or litigation.

Accredited Investor

An individual or entity meeting SEC income/asset thresholds, eligible for private investments.

Accretion

The gradual increase in an asset’s value, often for bonds bought below par value.

Accretion of Discount

The process of increasing a bond’s book value as it approaches maturity, reflecting its discount.

Accretive

An acquisition or action increasing earnings per share or value for shareholders.

Accrual Accounting

Recording revenue and expenses when earned or incurred, not when cash changes hands.

Accruals

Adjustments in accrual accounting for revenues earned or expenses incurred but not yet recorded.

Accrue: Definition, How It Works, and 2 Main Types of Accruals

To accumulate over time; accruals include accrued expenses (e.g., unpaid wages) and accrued revenues (e.g., unbilled services).

Accrued Expense

Costs incurred but not yet paid, like wages or utilities, recorded in accrual accounting.

Accrued Income

Revenue earned but not yet received, like interest or rent, recorded in accrual accounting.

Accrued Interest

Interest earned or owed but not yet paid, often on bonds or loans.

Accrued Liability

Obligations (e.g., taxes, wages) recorded but not yet paid in accrual accounting.

Accrued Revenue

Income earned but not yet received, like unbilled services, recorded in accrual accounting.

Accumulated Depreciation

The total depreciation expense recorded for an asset over its useful life, reducing its book value.

Accumulated Other Comprehensive Income

Unrealized gains/losses (e.g., from foreign currency or investments) reported in equity, not net income.

Accumulation Phase

The period when an investor builds wealth, typically through regular contributions to retirement accounts.

Accumulation/Distribution Indicator (A/D)

A technical indicator tracking money flow into/out of a security based on price and volume.

Acid-Test Ratio

A liquidity measure (cash + receivables + short-term investments ÷ current liabilities) assessing ability to pay short-term obligations.

Acquisition

One company purchasing another, often to gain assets, market share, or synergies.

Acquisition Accounting

The process of recording an acquisition’s assets, liabilities, and goodwill on the buyer’s balance sheet.

Acquisition Cost

The total cost of acquiring an asset, including purchase price, fees, and related expenses.

Acquisition Premium

The excess paid over a target company’s market value in an acquisition.

Active Management

A portfolio strategy where managers actively select securities to outperform a benchmark.

Activist Investor

An investor pushing for changes (e.g., strategy, governance) in a company to boost shareholder value.

Activities of Daily Living (ADL)

Basic tasks (e.g., eating, bathing) used to assess eligibility for long-term care insurance.

Activity-Based Budgeting (ABB)

Budgeting based on the costs of activities needed to achieve business objectives, not historical spending.

Activity-Based Costing (ABC)

Assigning costs to products/services based on activities consumed, improving cost accuracy.

Activity-Based Management (ABM)

Using ABC data to optimize business processes and improve efficiency or profitability.

Activity Cost Driver

A factor (e.g., machine hours) causing costs in activity-based costing systems.

Activity Ratios

Metrics (e.g., inventory turnover) measuring how efficiently a company uses its assets.

Actual Deferral & Actual Contribution Percentage Test (ADP/ACP)

IRS tests ensuring 401(k) plans don’t favor highly compensated employees in contributions.

Actuarial Gain Or Loss

Unexpected changes in pension plan obligations due to demographic or investment performance shifts.

Actuarial Life Table

A statistical table showing life expectancy and mortality rates, used for insurance and pensions.

Actuarial Science

The discipline using math and statistics to assess risk in insurance and finance.

Ad Valorem Tax

A tax based on an item’s assessed value, like property or sales tax.

Add-On Interest

Interest calculated on the original loan amount and added to the principal, increasing total repayment.

Additional Child Tax Credit

A refundable tax credit for families with children, up to $1,600 per child (2025), beyond the non-refunded portion.

Additional Paid-In Capital

The amount shareholders pay above a stock’s par value during issuance, recorded in equity.

Addition Rule for Probabilities

A statistical rule for calculating the probability of multiple events occurring, used in risk analysis.

Adhesion Contract

A standardized contract with non-negotiable terms, often favoring the drafter (e.g., insurance policies).

Adjudication

The legal process of resolving disputes or claims, often in courts or arbitration.

Adjustable Life Insurance

A life insurance policy allowing changes in premiums, coverage, or terms to suit needs.

Adjustable-Rate Mortgage (ARM)

A mortgage with an interest rate that adjusts periodically based on an index, affecting payments.

Adjusted Closing Price

A stock’s closing price adjusted for dividends, splits, or other corporate actions.

Adjusted EBITDA

Earnings before interest, taxes, depreciation, and amortization, adjusted for non-recurring items to reflect core profitability.

Adjusted Funds From Operations (AFFO)

A REIT metric adjusting FFO for maintenance costs and non-cash items, reflecting cash available for distribution.

Adjusted Gross Income (AGI)

Total income minus specific deductions (e.g., IRA contributions), used to calculate taxable income.

Adjusted Present Value (APV)

A valuation method adding the present value of a project’s cash flows and financing benefits (e.g., tax shields).

Adjusting Journal Entry

Entries made to correct or update accounts at period-end, ensuring accurate financial statements.

Administrative Expenses

Overhead costs (e.g., salaries, utilities) not directly tied to production or sales.

Administrative Services Only (ASO)

A plan where an employer self-funds health benefits, hiring a third party for administrative tasks.

Advance/Decline Line (A/D)

A market indicator tracking the number of advancing vs. declining stocks to gauge market breadth.

Advance Payment

Payment made before goods or services are delivered, often to secure a contract.

Advanced Internal Rating-Based (AIRB)

A Basel II approach allowing banks to use internal models to estimate credit risk for capital requirements.

Adverse Possession

Gaining legal title to property by occupying it openly for a statutory period without owner objection.

Adverse Selection

A situation where one party in a transaction has more information, leading to suboptimal outcomes (e.g., insurance).

Advertising Budget

Funds allocated for marketing campaigns, based on sales, objectives, or competitive needs.

Affiliate

A company or individual with a formal relationship to another entity, often for marketing or business purposes.

Affiliate Marketing

Earning commissions by promoting others’ products or services, often via online platforms.

Affiliated Companies

Companies under common control or ownership, often sharing resources or strategies.

Affirmative Action

Policies promoting equal opportunities for underrepresented groups in employment or education.

Affordable Care Act

U.S. 2010 healthcare reform law expanding coverage, mandating insurance, and regulating markets.

After-Tax Real Rate of Return

Investment return adjusted for taxes and inflation, reflecting true purchasing power gain.

After-Hours Trading

Stock trading outside regular exchange hours, often with lower liquidity and higher volatility.

After-Tax Contribution

Retirement plan contributions made with taxed income, allowing tax-free withdrawals of contributions.

After-Tax Income

Income remaining after deducting all taxes, available for spending or saving.

Agency Bond

Debt issued by government-sponsored entities (e.g., Fannie Mae), considered low-risk but not fully guaranteed.

Agency by Necessity

A legal relationship where one party acts for another in emergencies without prior authorization.

Agency Costs

Costs from conflicts of interest between principals (e.g., shareholders) and agents (e.g., managers).

Agency Problem

Conflicts when agents prioritize their interests over those of principals, like shareholders or clients.

Agency Theory

A framework analyzing principal-agent relationships, addressing conflicts and aligning incentives.

Agent

A person or entity acting on behalf of another, like a broker or trustee, in financial dealings.

Aggregate Demand

Total demand for goods and services in an economy at a given price level and time.

Aggregate Stop-Loss Insurance

Insurance limiting an employer’s liability for self-funded health plan claims above a threshold.

Aggregate Supply

Total output of goods and services an economy can produce at a given price level.

Aggregation

Combining multiple financial accounts or data for analysis, reporting, or investment purposes.

Aggressive Investment Strategy

A high-risk, high-reward approach focusing on growth assets like stocks or speculative ventures.

Agribusiness

The sector encompassing farming, food production, and related industries like processing and distribution.

Air Waybill (AWB)

A document for air cargo shipments, detailing terms, conditions, and tracking information.

Aktiengesellschaft (AG)

A German term for a corporation with shareholders, similar to a U.S. public company.

Alan Greenspan

Former Federal Reserve Chairman (1987-2006), known for monetary policy influencing economic cycles.

Aleatory Contract

A contract where outcomes depend on uncertain events, like insurance or derivatives.

Algorithmic Trading

Automated trading using computer algorithms to execute orders based on predefined criteria.

All Risks

Insurance covering all perils except those explicitly excluded, often for property or cargo.

Allocated Loss Adjustment Expenses (ALAE)

Costs directly tied to settling specific insurance claims, like legal fees.

Allocational Efficiency

Optimal resource distribution in an economy, maximizing output with minimal waste.

Allotment Definition, Reasons for Raising Shares, IPOs

Issuing new shares to raise capital, often during IPOs, to fund growth or dilute ownership.

Allowance for Bad Debt

A reserve for estimated uncollectible receivables, reducing reported AR on the balance sheet.

Allowance for Credit Losses

A reserve for expected loan defaults, used by banks under CECL accounting standards.

Allowance for Doubtful Accounts

Synonym for allowance for bad debt, estimating uncollectible AR to adjust financials.

Alpha

Excess return of an investment over its benchmark, adjusted for risk, measuring manager skill.

Alphabet Stock

Google’s stock (GOOGL, GOOG) split into classes with different voting rights post-restructuring.

Altcoin

Any cryptocurrency other than Bitcoin, like Ethereum or Litecoin, often with unique features.

Alternative Depreciation System (ADS)

An IRS depreciation method with longer recovery periods, used for specific assets or tax situations.

Alternative Investment

Non-traditional assets like private equity, hedge funds, or real estate, often less liquid.

Alternative Minimum Tax (AMT)

A parallel tax system ensuring high earners pay a minimum tax by limiting deductions.

Alternative Trading System (ATS)

Non-exchange trading platforms (e.g., dark pools) facilitating securities trades with less transparency.

Altman Z-Score

A formula predicting bankruptcy risk using financial ratios like profitability and leverage.

Always Be Closing (ABC)

A sales mantra emphasizing persistent efforts to finalize deals or transactions.

Amalgamation

The merger of two or more companies into a new entity, combining assets and liabilities.

Amended Return

A revised tax return correcting errors or updating information from a prior filing.

American Depositary Receipt (ADR)

A U.S.-traded security representing shares in a foreign company, simplifying cross-border investing.

American Depositary Share (ADS)

The actual share unit underlying an ADR, representing ownership in a foreign company.

American Dream

The ideal of achieving prosperity and upward mobility through hard work in the U.S.

American Express Card

A credit or charge card issued by American Express, often with rewards or premium benefits.

American Opportunity Tax Credit (AOTC)

A tax credit up to $2,500 for qualified education expenses for eligible students.

American Option

An option contract exercisable any time before expiration, unlike European options.

American Stock Exchange History: From AMEX to NYSE American

A U.S. exchange, rebranded NYSE American in 2017, focusing on small-cap and ETF trading.

Americans with Disabilities Act (ADA)

A 1990 U.S. law prohibiting discrimination against disabled individuals in employment and services.

Amortizable Bond Premium

The excess paid over a bond’s par value, amortized over its life to reduce taxable income.

Amortization of Intangibles

Spreading the cost of intangible assets (e.g., patents) over their useful life for accounting.

Amortization Schedule

A table detailing loan payments, showing principal, interest, and balance over time.

Amortized Bond

A bond with its premium or discount gradually adjusted to par value over its term.

Amortized Loan

A loan repaid in equal installments, covering principal and interest over a fixed period.

Amsterdam Stock Exchange (AEX)

The primary Dutch stock exchange, listing major companies and the AEX index.

Analysis of Variance (ANOVA)

A statistical method comparing means across groups, used in financial research.

Android Operating System

Google’s mobile OS, relevant in fintech for app-based banking and trading platforms.

Anchoring

A behavioral bias where initial information influences financial decisions, like stock pricing.

Anchoring and Adjustment

Adjusting decisions from an initial reference point, often leading to biased financial choices.

Angel Investor: Definition and How It Works

A wealthy individual funding startups for equity, often supporting early-stage ventures.

Animal Spirits

Psychological factors driving economic decisions, like confidence or fear, per Keynes.

Annual Equivalent Rate (AER)

The annualized interest rate accounting for compounding, used for savings or loans.

Annual General Meeting (AGM)

A yearly shareholder meeting to discuss company performance, elect directors, and vote on policies.

Annual Percentage Rate (APR)

The annualized cost of borrowing, including interest and fees, expressed as a percentage.

Annual Percentage Yield (APY)

The effective annual return on an investment, factoring in compounding interest.

Annual Report

A comprehensive document detailing a company’s financial performance, operations, and strategy for the year.

Annual Return

The yearly gain or loss on an investment, expressed as a percentage of initial value.

Annual Turnover

The rate at which assets, inventory, or employees are replaced or sold annually.

Annualize

Converting short-term data (e.g., monthly returns) to an annual rate for comparison.

Annualized Income

Income projected over a year based on partial data, used for tax or budgeting purposes.

Annualized Income Installment Method

A method to avoid underpayment penalties by calculating tax based on annualized income.

Annualized Rate of Return

The geometric average return over a period, expressed as an annual percentage.

Annualized Total Return

The compounded yearly return of an investment, including dividends and capital gains.

Annuitant

The recipient of annuity payments, typically for retirement or insurance purposes.

Annuitization

Converting an annuity’s accumulated value into a stream of periodic payments.

Annuity

A financial product providing regular payments over time, often for retirement income.

Annuity Due

An annuity with payments made at the start of each period, increasing present value.

Annuity Table

A chart showing present values or payment factors for annuities based on rates and terms.

Anomaly

An unexpected market or financial outcome deviating from standard models or expectations.

Anti-Dilution Provision

A clause protecting investors from equity dilution by adjusting share ownership in new issuances.

Anti-Dumping Duty

A tariff on imported goods sold below fair value to protect domestic industries.

Anti Money Laundering (AML)

Regulations preventing illegal funds from entering the financial system, requiring compliance.

Anticipatory Breach

When one party signals they won’t fulfill a contract, allowing legal remedies before the breach.

Antitrust

Laws preventing monopolies and promoting competition, like the Sherman Act in the U.S.

Appellate Courts

Courts reviewing lower court decisions for legal errors, not retrying cases.

Applicable Federal Rate (AFR)

IRS-set interest rates for loans, used for tax purposes like intra-family loans.

Application Programming Interface (API)

Software allowing financial systems (e.g., trading platforms) to exchange data or execute transactions.

Application-Specific Integrated Circuit (ASIC)

A chip designed for specific tasks, like cryptocurrency mining, improving efficiency.

Applied Economics

Using economic theories to solve real-world financial or policy problems.

Appraisal

An expert valuation of an asset’s worth, like property or business, for loans or sales.

Appraisal Costs

Expenses for quality control inspections to ensure products meet standards.

Appraisal Management Company (AMC)

A firm overseeing real estate appraisals to ensure independence and compliance.

Appreciation

An increase in an asset’s value over time, like real estate or stocks.

Appropriation

Allocating funds or resources for specific purposes, often in budgeting or government spending.

Appropriation Account

An accounting record tracking allocated profits or funds for specific uses, like dividends.

Aptitude Test

An assessment of skills or abilities, used in finance for hiring or certification.

Arab League

A regional organization of Arab states, impacting economic and trade policies.

Arbitrage

Profiting from price differences of the same asset across markets, exploiting inefficiencies.

Arbitrage Pricing Theory (APT)

A model pricing assets based on multiple risk factors, not just market returns.

Arbitrageur

A trader exploiting price differences in markets to earn risk-free profits.

Arbitration

A dispute resolution process where a neutral party decides, often used in financial contracts.

Arc Elasticity

A measure of elasticity using average price and quantity to assess responsiveness.

Arithmetic Mean

The average of a dataset, used in finance to calculate returns or performance metrics.

Arm's Length Transaction

A deal between unrelated parties acting in their own interests, ensuring fair pricing.

Arms Index (TRIN)

A technical indicator dividing advancing/declining stocks by their volume to gauge market strength.

Aroon Indicator

A technical tool identifying trend changes and strength using price highs and lows.

Aroon Oscillator

A derived indicator from Aroon, measuring trend strength by subtracting Aroon Down from Up.

Arrow's Impossibility Theorem

A theory showing no voting system can perfectly meet all fairness criteria, relevant in governance.

Article 50

EU treaty clause allowing member states to exit, famously used by the UK for Brexit.

Articles of Association

A document outlining a company’s internal rules, like shareholder rights and board duties.

Articles of Incorporation

Legal documents filed to create a corporation, specifying its structure and purpose.

Artificial Intelligence

Technology mimicking human reasoning, used in finance for trading, risk analysis, and fraud detection.

Ascending Channel

A technical chart pattern showing rising prices within parallel trendlines, indicating a bullish trend.

Ascending Triangle

A bullish chart pattern with a flat upper resistance line and rising lower support, signaling breakout potential.

Asia-Pacific Economic Cooperation (APEC)

A forum promoting trade and economic cooperation among 21 Asia-Pacific economies.

Asian Development Bank

A regional bank financing infrastructure and development projects in Asia and the Pacific.

Asian Financial Crisis

A 1997-1998 economic crisis in Asia, triggered by currency devaluations and speculative attacks.

Asian Infrastructure Investment Bank (AIIB)

A China-led bank funding infrastructure projects in Asia to promote economic development.

Ask

The lowest price a seller is willing to accept for a security or asset.

Assemble to Order (ATO)

A production strategy where products are built after receiving orders, balancing customization and efficiency.

Assessed Value

The value assigned to property by a tax authority for taxation purposes.

Asset

Anything of value owned by a company or individual, like cash, property, or investments.

Asset Allocation

Dividing investments among asset classes (e.g., stocks, bonds) to balance risk and return.

Asset-Backed Commercial Paper (ABCP)

Short-term debt backed by assets like receivables, issued by banks or corporations.

Asset-Backed Security (ABS)

A security backed by pooled assets like loans or mortgages, distributing risk to investors.

Asset-Based Approach

A valuation method based on a company’s net assets, used in liquidations or acquisitions.

Asset-Based Lending

Loans secured by assets like inventory or receivables, often used for working capital.

Asset Class

A group of investments with similar characteristics, like stocks, bonds, or real estate.

Asset Coverage Ratio

A measure of a company’s ability to cover debt with assets, calculated as assets ÷ liabilities.

Asset Financing

Funding obtained by using assets as collateral, like equipment or property loans.

Asset-Liability Committee (ALCO)

A bank committee managing risks from mismatches between assets and liabilities.

Asset/Liability Management

Strategies to align a company’s assets and liabilities to manage risks and ensure liquidity.

Asset Management

Professional management of investments to achieve financial goals for clients or institutions.

Asset Management Company (AMC)

A firm managing investment funds or portfolios, like mutual funds or ETFs.

Asset Protection

Strategies to shield assets from creditors, lawsuits, or taxes, often via trusts.

Asset Retirement Obligation

A liability for the future cost of retiring an asset, like decommissioning a plant.

Asset Swap

Exchanging one asset’s cash flows (e.g., fixed for floating rates) to adjust risk or return.

Asset Swapped Convertible Option Transaction (ASCOT)

A complex derivative combining convertible bonds with an asset swap for tailored risk exposure.

Asset Turnover Ratio

A measure of efficiency, calculated as revenue ÷ total assets, showing asset utilization.

Asset Valuation

Determining the worth of assets, using methods like market, income, or cost approaches.

Assets Under Management (AUM)

The total market value of assets managed by a financial institution or advisor.

Assignment

Transferring rights or obligations (e.g., a loan or contract) to another party.

Assortment Strategies

Retail plans for selecting product variety to meet customer demand and optimize sales.

Assumable Mortgage

A mortgage transferable to a new buyer, often with the same terms, subject to lender approval.

Assurance

Services (e.g., audits) ensuring financial statements or processes are accurate and compliant.

Assurance Services

Professional services enhancing the reliability of financial or operational information for stakeholders.

Asymmetric Information

When one party in a transaction has more or better information, potentially causing market inefficiencies.

At Par

When a security’s market price equals its face value, common for bonds at issuance.

Atomic Swaps

Direct, trustless cryptocurrency trades across blockchains using smart contracts, bypassing exchanges.

At The Money

An option with a strike price equal to the current market price of the underlying asset.

Attorney-in-Fact

A person authorized to act on another’s behalf in legal or financial matters via power of attorney.

Attribution Analysis

Evaluating a portfolio’s performance by breaking down returns to specific investment decisions or factors.

Attrition

Natural reduction in customers, employees, or assets, often impacting financial projections.

Auction Market

A market where buyers and sellers compete via bids and offers, like stock exchanges.

Audit

An independent review of financial statements or processes to ensure accuracy and compliance.

Audit Committee

A board subcommittee overseeing financial reporting, audits, and internal controls.

Audit Risk

The risk that an auditor issues an incorrect opinion on financial statements due to errors or fraud.

Auditor

A professional examining financial records to verify accuracy and compliance with standards.

Auditor's Opinion

An auditor’s statement on the fairness and accuracy of financial statements, e.g., unqualified or adverse.

Auditor's Report

A formal document summarizing audit findings, including the auditor’s opinion on financials.

Augmented Product

A product with added features or services (e.g., warranties) enhancing its core value.

Austerity

Government policies reducing spending or increasing taxes to cut deficits, often during economic crises.

Australian Securities Exchange (ASX)

Australia’s primary stock exchange, listing equities, ETFs, and other securities.

Autarky

An economy self-sufficient and closed to international trade, rare in modern finance.

Authorized Stock

The maximum shares a company can issue, as specified in its articles of incorporation.

Autocorrelation

The correlation of a time series with its own past values, used in financial modeling.

Automated Clearing House (ACH)

A U.S. electronic network for processing batch payments, like direct deposits or bill payments.

Automated Customer Account Transfer Service (ACATS)

A system for transferring securities between brokerage accounts efficiently.

Automated Teller Machine (ATM)

A machine for banking transactions like withdrawals or deposits, accessible 24/7.

Automatic Bill Payment

Recurring payments set up to deduct automatically from an account for bills.

Automatic Premium Loan

A life insurance feature borrowing against cash value to pay unpaid premiums, preventing lapse.

Automatic Stabilizer

Economic policies (e.g., unemployment benefits) that automatically counter economic fluctuations.

Autonomous Consumption

Essential spending by households regardless of income, like food or housing.

Autonomous Expenditure

Spending independent of income levels, like government or fixed business investments.

Autoregressive

A statistical model where current values depend on past values, used in forecasting.

Autoregressive Integrated Moving Average (ARIMA)

A time-series model combining autoregression, differencing, and moving averages for forecasting.

Available Balance

Funds in an account available for use, excluding holds or pending transactions.

Available-for-Sale Security

Investments held for potential sale, reported at fair value with unrealized gains/losses in equity.

Average Age Of Inventory

The average time inventory is held, calculated as 365 ÷ inventory turnover ratio.

Average Annual Growth Rate (AAGR)

The average yearly increase in a metric, like revenue, over a period.

Average Annual Return (AAR)

The average yearly return of an investment, not accounting for compounding.

Average Inventory

The mean inventory level over a period, used in turnover or efficiency calculations.

Average Collection Period

The average days to collect receivables, calculated as 365 ÷ AR turnover ratio.

Average Cost Basis

The average cost of acquiring an investment, used to calculate gains or losses.

Average Cost Method

An inventory valuation method averaging the cost of goods available for sale.

Average Daily Balance Method

Calculating interest based on the average daily account balance over a period.

Average Daily Rate (ADR)

A hotel metric dividing total room revenue by rooms sold, indicating pricing strength.

Average Daily Trading Volume (ADTV)

The average number of shares traded daily, indicating a security’s liquidity.

Average Directional Index (ADX)

A technical indicator measuring trend strength, regardless of direction, for trading decisions.

Average Life

The weighted average time until a bond’s principal is repaid, used for MBS or loans.

Average Outstanding Balance

The average unpaid balance on a loan or credit account over a period.

Average Propensity to Consume

The fraction of income spent on consumption, used in economic analysis.

Average Return

The mean return of an investment over multiple periods, used for performance evaluation.

Average Selling Price (ASP)

The average price at which goods or services are sold, used in revenue analysis.

Average True Range (ATR)

A technical indicator measuring price volatility based on high-low ranges over a period.

Axe

A trader’s strong interest in buying or selling a specific security, often influencing market dynamics.