Terms Beginning With 'E'
Terms Beginning With 'E'
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E-Mini
Smaller-sized futures contracts, like S&P 500 E-Mini, traded electronically for accessibility.
EAFE Index
MSCI index tracking developed market stocks in Europe, Australasia, and Far East.
Early Adopter
A person or firm adopting new financial products or technologies early, like cryptocurrencies.
Early Exercise
Exercising an option before its expiration, typically for American-style options.
Earmarking
Allocating funds for a specific purpose, like taxes or project financing.
Earned Income
Income from work or services, like wages or business profits, not investments.
Earned Income Credit (EITC)
A U.S. tax credit for low-to-moderate-income workers, reducing tax liability.
Earned Premium
Insurance premium collected for coverage provided during a period.
Earnest Money
A deposit showing buyer commitment in real estate or contract deals.
Earnings
A company’s net income or profit after expenses, taxes, and costs.
Earnings Announcement
A public statement of a company’s financial performance, typically quarterly.
Earnings Before Interest After Taxes (EBIAT)
Net income before interest but after taxes, measuring operational profitability.
Earnings Before Interest and Taxes (EBIT)
Profit before interest and taxes, reflecting core business performance.
Earnings Before Interest, Depreciation and Amortization (EBIDA)
EBIT plus depreciation and amortization, assessing cash flow potential.
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)
Profit before interest, taxes, depreciation, and amortization, measuring operational efficiency.
Earned Income Credit (EIC)
Synonym for EITC, a tax credit for low-income workers.
Earnings Call
A conference call discussing a company’s financial results with investors and analysts.
Earnings Credit Rate (ECR)
A bank rate offsetting service fees based on account balances.
Earnings Estimate
Analysts’ predictions of a company’s future earnings, guiding investment decisions.
Earnings Management
Manipulating financial reports within legal limits to meet targets or expectations.
Earnings Multiplier
Price-to-earnings ratio, showing how much investors pay per dollar of earnings.
Earnings Per Share (EPS)
Net income divided by outstanding shares, measuring per-share profitability.
Earnings Power Value
A valuation estimating a company’s sustainable earnings, assuming stable operations.
Earnings Report
A financial statement detailing a company’s revenue, expenses, and profits.
Earnings Yield
EPS divided by stock price, showing earnings relative to market value.
Earnout
A payment tied to future performance, often in acquisitions, to align seller-buyer interests.
Easement In Gross
A right to use another’s property without ownership, like utility access.
Eavesdropping Attack
Unauthorized interception of financial data or communications, risking security.
EBIT/EV Multiple
EBIT divided by enterprise value, assessing profitability relative to company value.
EBITA
Earnings before interest, taxes, and amortization, excluding depreciation.
EBITDA Margin
EBITDA divided by revenue, measuring operational profitability as a percentage.
EBITDA/EV Multiple
EBITDA divided by enterprise value, evaluating cash flow relative to company value.
EBITDA-to-Interest Coverage Ratio
EBITDA divided by interest expense, assessing ability to cover interest payments.
EBITDA-to-Sales Ratio
EBITDA divided by sales, showing profit margin from operations.
EBITDAR
EBITDA plus rent, used for businesses with significant lease expenses.
eCash
Digital currency for online transactions, often centralized, unlike cryptocurrencies.
Eclectic Paradigms
A framework combining multiple theories to explain international business or investment.
ECN Broker
A broker using electronic communication networks for direct market access, reducing spreads.
Econometrics
Statistical methods applied to economic data for forecasting or policy analysis.
Economic Calendar
A schedule of economic events, like GDP releases, impacting financial markets.
Economic Capital
Internal capital a firm holds to cover risks, beyond regulatory requirements.
Economic Collapse
A severe, sudden breakdown of an economy, causing widespread financial distress.
Economic Conditions
The state of an economy, like growth or recession, affecting financial decisions.
Economic Cycle
Fluctuations in economic activity, including expansion, peak, contraction, and recovery.
Economic Depreciation
The decline in an asset’s value due to market or economic factors.
Economic Efficiency
Optimal resource use to maximize output with minimal waste.
Economic Equilibrium
A state where supply equals demand, stabilizing prices and quantities.
Economic Exposure
Risk of financial loss from changes in exchange rates or economic conditions.
Economic Forecasting
Predicting economic trends, like GDP or inflation, to guide financial planning.
Economic Growth
An increase in an economy’s output of goods and services over time.
Economic Growth Rate
The percentage increase in real GDP, indicating economic expansion.
Economic Indicator
Data (e.g., unemployment, CPI) signaling economic health or trends.
Economic Integration
Combining economies through trade agreements or unions, like the EU.
Economic Justice
Fair distribution of economic resources and opportunities, reducing inequality.
Economic Life
The period an asset remains useful for generating income or value.
Economic Moat
A competitive advantage (e.g., brand, patents) protecting a firm’s profits.
Economic Order Quantity (EOQ)
The optimal order size minimizing inventory costs, balancing holding and ordering costs.
Economic Profit (or Loss)
Revenue minus explicit and implicit costs, like opportunity costs.
Economic Recovery
The phase after a recession where economic activity rebounds.
Economic Recovery Tax Act of 1981 (ERTA)
A U.S. law cutting taxes and boosting investment incentives.
Economic Rent
Income earned from resources (e.g., land) beyond what’s needed for use.
Economic Shock
An unexpected event disrupting economic stability, like a supply chain crisis.
Economic Stimulus
Government actions (e.g., spending, rate cuts) to boost economic activity.
Economic Value
The worth of an asset or business based on its cash flow potential.
Economic Value Added (EVA)
Profit after deducting the cost of capital, measuring value creation.
Economic Value of Equity (EVE)
A bank’s net equity value, sensitive to interest rate changes.
Economics
The study of resource allocation, production, and consumption in markets.
Economies of Scale
Cost reductions per unit as production scales up, enhancing profitability.
Economies of Scope
Cost savings from producing multiple products together, leveraging shared resources.
Economist
A professional analyzing economic data and trends to inform financial decisions.
Economy
A system of production, consumption, and resource distribution in a region.
EdTech
Technology for education, impacting financial markets via startup investments.
Education Loan
A loan for educational expenses, often with deferred repayment until after graduation.
Education IRA
A tax-advantaged account (Coverdell ESA) for education expenses, with contribution limits.
Effective Annual Interest Rate
The actual annual interest rate, accounting for compounding, on loans or investments.
Effective Dates
The period when a financial contract or policy is active.
Effective Duration
A measure of a bond’s price sensitivity to interest rate changes, for non-linear bonds.
Effective Gross Income (EGI)
Rental income minus vacancies and collection losses, used in real estate.
Effective Interest Rate Method
Amortizing bond premiums/discounts based on effective yield, for accurate accounting.
Effective Tax Rate
Total tax paid divided by taxable income, showing actual tax burden.
Effective Yield
A bond’s true return, factoring in purchase price and compounding interest.
Efficiency
Maximizing output with minimal resources, critical in financial operations.
Efficiency Ratio
Non-interest expenses divided by revenue, measuring bank operational efficiency.
Efficient Frontier
A portfolio mix offering the highest return for a given risk level, per MPT.
Efficient Market Hypothesis (EMH)
Theory that asset prices reflect all available information, making outperformance difficult.
Egalitarianism
A belief in equal economic and social opportunities, influencing policy.
Elastic
Demand or supply highly sensitive to price changes, impacting financial strategies.
Elasticity
A measure of how sensitive demand or supply is to price or income changes.
Elective-Deferral Contribution
Pre-tax contributions to retirement plans, like 401(k), reducing taxable income.
Electronic Bill Payment and Presentment (EBPP)
Online systems for receiving and paying bills electronically.
Electronic Check
A digital version of a paper check, processed electronically for payments.
Electronic Commerce (e-commerce)
Buying/selling goods or services online, impacting financial transactions.
Electronic Communication Network
A system matching buy/sell orders directly, reducing trading costs.
Electronic Data Gathering, Analysis and Retrieval (EDGAR)
SEC’s database for public company filings, used by investors.
Electronic Federal Tax Payment System (EFTPS)
IRS system for electronic tax payments, used by businesses and individuals.
Electronic Filing (E-File)
Submitting tax returns digitally, streamlining IRS processing.
Electronic Fund Transfer Act
A U.S. law protecting consumers in electronic financial transactions.
Electronic Money
Digital currency or funds used for electronic transactions, like mobile payments.
Electronic Payments Network (EPN)
A U.S. system for processing electronic payments, like ACH transfers.
Electronic Retailing (E-tailing)
Online retail, impacting financial markets and consumer spending.
Elevator Pitch
A brief pitch summarizing a financial idea or investment opportunity.
Elliott Wave Theory
A technical analysis method predicting price movements via wave patterns.
Email Money Transfer (EMT)
A direct electronic transfer of funds via email, common in Canada.
Embargo
A government restriction on trade, impacting financial markets and supply chains.
Embezzlement
Illegally taking funds or assets entrusted to one’s care, like in financial roles.
Emergency Banking Act of 1933
U.S. law stabilizing banks post-Great Depression via closures and reforms.
Emergency Fund
Savings for unexpected expenses, recommended at 3-6 months of living costs.
Emerging Industry
A new or rapidly growing sector, like fintech, attracting investment.
Emerging Market Economy
Developing nations with growing markets, like BRICS, offering high-risk/high-return opportunities.
Emerging Markets Bond Index (EMBI)
A benchmark tracking bonds from emerging market countries.
Emerging Markets Index (MSCI)
An index tracking equities in emerging markets, guiding investment decisions.
Emigration
Leaving a country, impacting labor markets and economic growth.
Eminent Domain
Government power to seize private property for public use, with compensation.
Empire Building
Managers expanding their control or company size, often at shareholders’ expense.
Empirical Rule
A statistical rule stating 68-95-99.7% of data lies within 1-2-3 standard deviations.
Employee Buyout (EBO)
Employees purchasing a company, often to prevent closure or restructuring.
Employee Retirement Income Security Act (ERISA)
A U.S. law regulating private pension and benefit plans for employee protection.
Employee Stock Option (ESO)
Options granting employees the right to buy company stock at a set price.
Employee Stock Ownership Plan (ESOP)
A plan giving employees company stock, often as a retirement benefit.
Employee Stock Purchase Plan (ESPP)
A program allowing employees to buy company stock at a discount.
Employer Identification Number (EIN)
A U.S. tax ID for businesses, used for tax and financial reporting.
Employers' Liability Insurance
Coverage for employer liability due to employee injuries or workplace claims.
Employment Agency Fees
Costs for hiring services, often deductible business expenses.
Employment Insurance (EI)
Canadian program providing income support for unemployed or specific life events.
Employment-to-Population Ratio
Percentage of working-age population employed, indicating labor market health.
Encroachment
Unauthorized use of another’s property, impacting real estate or financial disputes.
Encumbrance
A claim (e.g., lien) restricting a property’s transfer or use.
End-to-End
A process covering all stages, like financial transaction or supply chain management.
Endogenous Growth Theory
Economic growth driven by internal factors, like innovation or human capital.
Endogenous Variable
A variable influenced within a financial or economic model, not externally.
Endorsement
A signature authorizing a check or contract, or an insurance policy amendment.
Endowment
Funds donated to institutions, often invested to generate perpetual income.
Endowment Effect
Valuing owned assets more highly, impacting financial decisions or negotiations.
Energy Return on Investment (EROI)
Energy output divided by energy input, assessing energy production efficiency.
Energy Risk Professional (ERP)
A certification for professionals managing energy market risks.
Energy Sector
Companies involved in energy production or distribution, like oil or renewables.
Engagement Letter
A contract outlining services and fees, common in financial or legal agreements.
Engel's Law
As income rises, the proportion spent on food decreases, impacting consumer trends.
Enhanced Oil Recovery (EOR)
Techniques increasing oil extraction, relevant to energy investments.
Enrolled Agent (EA)
A tax professional authorized to represent clients before the IRS.
Enron
A U.S. energy company that collapsed in 2001 due to accounting fraud.
Enterprise Multiple
Enterprise value divided by EBITDA, comparing company value to earnings.
Enterprise Resource Planning (ERP)
Software integrating financial and operational processes for efficiency.
Enterprise Risk Management (ERM)
A framework managing all risks (e.g., financial, operational) across an organization.
Enterprise Value (EV)
A company’s total value, including market cap, debt, and minus cash.
Enterprise-Value-to-Revenue Multiple (EV/R)
EV divided by revenue, assessing valuation relative to sales.
Enterprise Value-to-Sales (EV/Sales)
Synonym for EV/R, used to compare company value to revenue.
Entity Theory
An accounting view treating a business as a separate entity from its owners.
Entrepreneur
An individual starting or running a business, taking financial risks for profit.
Envelope
A budgeting method allocating cash to specific expense categories.
Environmental Economics
Studying the economic impact of environmental policies or resource use.
Environmental Protection Agency (EPA)
U.S. agency regulating environmental policies, impacting business costs and ESG.
Environmental, Social, and Governance (ESG) Investing
Investing based on environmental, social, and governance criteria, prioritizing sustainability.
EOS
A blockchain platform for decentralized apps, used in DeFi and smart contracts.
Equal Credit Opportunity Act (ECOA)
A U.S. law prohibiting credit discrimination based on race, gender, or other factors.
Equal Employment Opportunity Commission (EEOC)
U.S. agency enforcing workplace anti-discrimination laws, impacting hiring costs.
Equal Weight
An index or portfolio weighting all components equally, regardless of size.
Equated Monthly Installment (EMI)
Fixed monthly payments for loans, covering principal and interest.
Equation of Exchange
MV = PQ, relating money supply and velocity to price level and output.
Equilibrium
A market state where supply equals demand, stabilizing prices.
Equilibrium Quantity
The quantity supplied and demanded at the equilibrium price.
Equitable Relief
Non-monetary remedies, like injunctions, in financial or legal disputes.
Equity
Ownership interest in a company or asset, like stocks or home equity.
Equity Accounting
Recording investments in associates, reflecting proportional profits/losses.
Equity Capital Market (ECM)
Markets for issuing and trading equity securities, like IPOs or stock offerings.
Equity Co-Investment
Investors joining private equity firms to fund specific deals, sharing risks/rewards.
Equity Compensation
Paying employees with stock or options, aligning interests with shareholders.
Equity Derivative
A derivative based on stock prices, like options or futures.
Equity-Efficiency Tradeoff
Balancing fair resource distribution with economic efficiency in policy or finance.
Equity Financing
Raising capital by selling company shares, diluting ownership but avoiding debt.
Equity Fund
A mutual fund or ETF investing primarily in stocks for growth or income.
Equity-Linked Note (ELN)
A debt instrument with returns tied to an equity index or stock performance.
Equity-Linked Security (ELKS)
A hybrid security combining fixed income with equity-based returns.
Equity Market
Markets for trading stocks, representing ownership in companies.
Equity Method
Accounting for investments where the investor has significant influence, not control.
Equity Multiplier
Total assets divided by equity, measuring financial leverage.
Equity Premium Puzzle (EPP)
The unexplained gap between expected stock and bond returns.
Equity Risk Premium
The excess return stocks offer over risk-free assets, compensating for risk.
Equity Swap
A derivative exchanging future cash flows based on equity performance.
Equivalent Annual Annuity Approach (EAA)
Comparing projects by converting cash flows to equivalent annual values.
Equivalent Annual Cost (EAC)
Annualized cost of owning and operating an asset, used in capital budgeting.
Erosion
A decline in a company’s market share or profits due to competition or innovation.
Error Term
The unexplained portion of a statistical model, capturing random variation.
Errors and Omissions Insurance (E&O)
Coverage for professional mistakes, like financial advisory errors, causing client losses.
Escheat
Transferring unclaimed assets (e.g., bank accounts) to the government.
Escrow
Funds or assets held by a third party until transaction conditions are met.
Escrow Agent
A neutral party managing escrow funds or assets during a transaction.
Escrow Agreement
A contract outlining terms for holding funds or assets in escrow.
Escrowed Shares
Shares held in escrow, often during mergers or IPOs, until conditions are met.
Esoteric Debt
Complex or unconventional debt instruments, like bespoke CDOs, with unique risks.
Estate
All assets owned by an individual at death, subject to estate planning or taxes.
Estate Planning
Arranging asset distribution and tax minimization for after death.
Estate Tax
A tax on assets transferred at death, applied above a certain threshold.
Estimated Ultimate Recovery (EUR)
Total recoverable resources (e.g., oil) from a project over its life.
Estoppel
A legal principle preventing someone from contradicting prior statements or actions.
Ether (ETH)
The cryptocurrency of the Ethereum blockchain, used for transactions and smart contracts.
Ethereum Classic (ETC)
A blockchain from Ethereum’s 2016 fork, maintaining the original chain.
Ethereum
A blockchain platform for decentralized apps and smart contracts, powered by Ether.
Ethical Investing
Investing aligned with moral values, like avoiding tobacco or supporting sustainability.
Euro
The official currency of the Eurozone, used by 19 EU countries.
Euro Interbank Offer Rate (Euribor)
A benchmark rate for interbank lending in the Eurozone.
Euro Medium Term Notes (EMTN)
Flexible debt securities issued in the Eurozone, with varying maturities.
Euro Overnight Index Average (Eonia)
A benchmark for overnight Eurozone interbank lending rates, replaced by €STR.
Eurobond
A bond issued in a currency not native to the issuer’s country, often in USD.
Euroclear
A clearinghouse settling securities transactions, primarily in Europe.
Eurocurrency
Currency held outside its home country, like USD in European banks.
Eurocurrency Market
A market for trading Eurocurrencies, facilitating international finance.
Eurodollar
U.S. dollars held in banks outside the U.S., used in global finance.
Euromarket
The international market for Eurocurrencies and Eurobonds, enabling cross-border lending.
Europe, Middle East, and Africa (EMEA)
A regional grouping for financial or business operations across these areas.
European Banking Authority (EBA)
An EU agency overseeing banking regulations and stability.
European Central Bank (ECB)
The central bank managing Eurozone monetary policy and the euro.
European Community (EC)
A predecessor to the EU, promoting economic integration among member states.
European Currency Unit (ECU)
A basket of EU currencies, a precursor to the euro, used until 1999.
European Economic and Monetary Union (EMU)
EU framework for economic integration and the euro’s adoption.
European Monetary System (EMS)
A 1979-1999 system stabilizing EU exchange rates before the euro.
European Option
An option exercisable only at expiration, unlike American options.
European Sovereign Debt Crisis
A 2009-2014 crisis involving high debt and deficits in Eurozone countries.
European Union (EU)
A political and economic union of 27 European countries, impacting trade and finance.
Eurozone
EU countries using the euro as their official currency.
EV/2P Ratio
Enterprise value divided by proven and probable reserves, used in energy valuation.
Evening Star
A bearish candlestick pattern signaling a potential price reversal after an uptrend.
Event Study
Analyzing market reactions to specific events, like earnings or mergers.
Evergreen Contract
A contract automatically renewing unless terminated, common in financial agreements.
Evergreen Funding
Continuous or revolving funding, often for startups or projects.
Evergreen Loan
A loan with flexible repayment, often replenished, like a line of credit.
Ex-Ante
Before an event, like forecasting returns before an investment decision.
Ex-Date
The date a stock trades without its dividend, affecting buyer eligibility.
Ex-Dividend
A stock trading without the right to receive the upcoming dividend.
Ex Gratia Payment
A voluntary payment made without legal obligation, often as goodwill.
Ex-Post
After an event, like analyzing actual returns post-investment.
Ex Works (EXW)
A trade term where the buyer assumes all costs and risks from the seller’s premises.
Excess Capacity
Unused production capacity, reducing efficiency and profitability.
Excess Cash Flow
Cash generated beyond operational and debt needs, available for investment or dividends.
Excess of Loss Reinsurance
Insurance covering losses above a specified threshold, protecting insurers.
Excess Reserves
Bank reserves beyond regulatory requirements, held at central banks.
Excess Return
Returns above a benchmark or risk-free rate, measuring outperformance.
Exchange
A marketplace for trading securities, like NYSE or NASDAQ.
Exchange Control
Government restrictions on currency or capital flows, impacting trade.
Exchange of Futures for Physical (EFP)
Trading futures for the underlying asset, used in commodities.
Exchange Rate
The rate at which one currency converts to another, affecting trade and investments.
Exchange Rate Mechanism (ERM)
A system stabilizing exchange rates, used in the EMS before the euro.
Exchange Ratio
The number of shares offered in a merger or acquisition per target share.
Exchange Traded Derivative
Standardized derivatives traded on exchanges, like options or futures.
Exchange-Traded Fund (ETF)
A fund tracking an index or asset, traded like a stock on exchanges.
Exchange-Traded Note (ETN)
A debt instrument tracking an index, traded on exchanges, with credit risk.
Exchange Traded Product (ETP)
A broad category including ETFs and ETNs, traded on exchanges.
Excise Tax
A tax on specific goods, like alcohol or fuel, often to discourage use.
Exculpatory Clause
A contract provision limiting liability, common in financial agreements.
Execution
Completing a financial transaction, like filling a buy or sell order.
Executive MBA
An MBA program for working professionals, often with a financial focus.
Executor
A person managing an estate’s assets and distribution per a will.
Exempt Employee
Workers not eligible for overtime pay, typically salaried professionals.
Exempt Income
Income not subject to taxes, like certain municipal bond interest.
Exempt-Interest Dividend
Tax-free dividends from municipal bond funds, appealing to high-income investors.
Exempt Transaction
Securities transactions exempt from registration, like private placements.
Exemption
A tax or regulatory relief, like deductions or securities exemptions.
Exercise
Using the right to buy or sell an asset under an options contract.
Exercise Price
The price at which an option holder can buy/sell the underlying asset.
Exit Strategy
A plan to sell or exit an investment or business, maximizing value.
Exogenous Growth
Economic growth driven by external factors, like technology or trade.
Exotic Option
Non-standard options with complex terms, like barrier or binary options.
Expanded Accounting Equation
Assets = Liabilities + Equity + Revenues - Expenses, including operations.
Expansion
An economic phase of growth, with rising GDP and employment.
Expansionary Policy
Monetary or fiscal actions (e.g., rate cuts, spending) to stimulate growth.
Expatriate
A person living abroad, impacting financial planning or tax obligations.
Expectations Theory
A theory predicting interest rates based on expected future short-term rates.
Expected Loss Ratio (ELR Method)
Estimating insurance losses as a percentage of premiums, used in pricing.
Expected Value
The weighted average of possible outcomes, used in financial decisions.
Expected Return
The anticipated return on an investment, based on probabilities or models.
Expected Utility
A decision-making concept weighing outcomes by their utility and probability.
Expedited Funds Availability Act (EFAA)
A U.S. law regulating how quickly banks make deposited funds available.
Expenditure Method
Calculating GDP by summing consumption, investment, government spending, and net exports.
Expense
Costs incurred in business operations, like rent or wages, reducing income.
Expense Ratio
A fund’s operating expenses divided by assets, impacting investor returns.
Experience Ratings in Insurance
Premium adjustments based on an insured’s past claims or risk profile.
Expiration Date
The date an option or contract becomes void if not exercised.
Expiration Time
The specific time on the expiration date when an option contract expires.
Expiration Date (Derivatives)
The date a derivative contract ceases to exist, requiring exercise or settlement.
Explicit Cost
Direct, measurable costs, like wages or materials, recorded in accounting.
Exploration & Production (E&P)
Activities in finding and extracting natural resources, like oil or gas.
Exponential Growth
Growth at an increasing rate, like compound interest in investments.
Exponential Moving Average (EMA)
A weighted moving average emphasizing recent prices, used in trading.
Export Credit Agency
A government-backed entity financing exports to promote trade.
Export Trading Company (ETC)
A firm facilitating exports, often handling logistics or financing.
Export
Selling goods/services abroad, impacting trade balances and currencies.
Exposure at Default (EAD)
The estimated loss if a borrower defaults, used in credit risk models.
Express Warranty
A seller’s explicit guarantee about a product’s quality or performance.
Expropriation
Government seizure of private assets, often with compensation, affecting investments.
Extended Trading
Trading outside regular market hours, with lower liquidity and higher volatility.
External Debt
Debt owed by a country to foreign creditors, like bonds or loans.
External Economies of Scale
Cost benefits from industry-wide growth, like infrastructure improvements.
Externality
Costs or benefits affecting third parties, like pollution or innovation spillovers.
Externality of Production
External costs/benefits from production, like environmental impact, affecting markets.
Extraordinary General Meetings (EGM)
Shareholder meetings outside AGMs to address urgent issues, like mergers.
Extraordinary Item
Non-recurring gains/losses (e.g., asset sales) reported separately in financials.
Extrinsic Value
The portion of an option’s price due to time and volatility, not intrinsic value.
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