L Share Annuity Class

Annuity shares with lower fees, designed for long-term investors.

Labor Intensive

Industries or processes requiring significant human effort, increasing costs.

Labor Market

The supply and demand for workers, influencing wages and employment.

Labor Market Flexibility

Ease of hiring, firing, or adjusting wages, impacting economic efficiency.

Labor Productivity

Output per worker or hour, a key economic and business metric.

Labor Theory Of Value (LTV)

Marxist theory that value derives from labor input, influencing economic thought.

Labor Union

An organization advocating for workers’ rights, affecting labor costs and policies.

Laddering

Spreading investments across maturities or assets to manage risk or liquidity.

Laffer Curve

A model showing tax revenue peaks at an optimal rate, then declines.

Laggard

A stock or sector underperforming the market, often in decline.

Lagging Indicator

Economic or financial metrics reflecting past conditions, like unemployment rates.

Laissez-Faire

An economic philosophy of minimal government intervention in markets.

Lambda

An option’s leverage measure, showing price change relative to the underlying.

Lancaster University Management School (LUMS)

UK business school offering finance and management programs.

Land

A production factor or real estate asset, valued for development or investment.

Land Contract

A seller-financed real estate purchase agreement, bypassing traditional mortgages.

Land Trust

A legal entity holding land title, often for privacy or estate planning.

Land Value

The worth of land, excluding improvements, used in real estate valuation.

Land Value Tax (LVT)

A tax on land’s unimproved value, encouraging efficient land use.

Landlocked

Property without direct public access, reducing value or development potential.

Landlord

A property owner leasing to tenants, generating rental income.

Lapping Scheme

Fraud covering misappropriated funds by using later receipts, common in accounts.

Lapse

Termination of an insurance policy or option due to non-payment or expiration.

Large Cap (Big Cap)

Companies with market capitalization over $10 billion, often stable investments.

Large Trader

An entity trading large securities volumes, requiring SEC reporting.

Larry Ellison

Oracle co-founder and billionaire, influential in tech and investment sectors.

Last In, First Out (LIFO)

Inventory method selling newest goods first, affecting tax and profits.

Last Mile

Final delivery stage in supply chains, impacting logistics costs.

Last Trading Day

The final day to trade a futures or options contract before expiration.

Last Twelve Months (LTM)

Financial metrics from the past 12 months, used for valuation.

Last Will And Testament

A legal document directing asset distribution after death.

Late Fee

A penalty for delayed payments, common in loans or credit cards.

Law of Demand

Demand increases as prices fall, guiding pricing and market strategies.

Law of Diminishing Marginal Productivity

Additional inputs yield smaller output gains, impacting cost efficiency.

Law of Diminishing Marginal Returns

Beyond a point, extra inputs produce less output, affecting production costs.

Law of Diminishing Marginal Utility

Additional consumption yields less satisfaction, influencing spending behavior.

Law of Large Numbers

Large samples reduce variability, used in financial risk and insurance.

Law of One Price

Identical goods have the same price in efficient markets, like forex.

Law of Supply

Supply increases as prices rise, shaping production and market dynamics.

Law of Supply and Demand

Prices balance supply and demand, driving market equilibrium.

Lawful Money

Currency legally recognized for transactions, like U.S. dollars.

Layaway

A payment plan for goods, held until fully paid, used in retail.

Layoff

Temporary or permanent job cuts, impacting labor costs and markets.

Lead Bank

The primary bank in a loan syndicate, coordinating terms and distribution.

Lead Time

Time between initiating and completing a process, like order fulfillment.

Leadership

Guiding teams or firms, critical for financial strategy and performance.

Leadership Grid

A model assessing leadership styles based on task and people orientation.

Leading Indicator

Metrics predicting future economic or market trends, like consumer confidence.

Leads and Lags

Adjusting payment or receipt timing to manage currency or cash flow risks.

Leakage

Economic losses, like savings or imports, reducing domestic spending impact.

Lean Six Sigma

A methodology combining efficiency (Lean) and quality (Six Sigma) in operations.

Lean Startup

A business model emphasizing rapid testing and minimal resources, used in fintech.

Learning Curve

Improved efficiency with experience, reducing costs in financial processes.

Lease

A contract renting property or assets for a specified period and payment.

Lease Extension

Prolonging a lease term, impacting rental income or property costs.

Lease Option

A lease with an option to buy the property, blending renting and ownership.

Lease Payments

Periodic payments for leasing an asset, like rent for equipment or property.

Lease Rate

The cost of leasing, expressed as a percentage or fixed amount.

Leaseback

Selling an asset and leasing it back, freeing capital while retaining use.

Leasehold

Property leased for a term, not owned, affecting real estate value.

Leasehold Improvement

Enhancements to leased property, depreciated over the lease term.

Least Squares Criterion

A method minimizing squared errors in regression, used in financial modeling.

Least Squares Method

Statistical technique fitting data to a model, used in financial forecasting.

Least-Preferred Coworker Scale

A leadership assessment tool, relevant for financial team management.

Ledger Balance

The actual account balance at the start of a business day, excluding pending transactions.

Ledger Wallet

A hardware cryptocurrency wallet, securing digital assets offline.

FTX

A collapsed crypto exchange, known for fraud and mismanagement by 2022.

Leg

A single component of a multi-part trade, like one side of a spread.

Legal Lending Limit

The maximum a bank can lend to one borrower, set by regulations.

Legal Monopoly

A government-granted exclusive right to provide a service or product.

Legal Rate of Interest

The maximum interest rate allowed by law, preventing usury.

Legal Separation

A legal status splitting spouses’ finances without divorce, affecting tax filings.

Legal Tender

Currency legally required to be accepted for debts, like USD.

Legislative Risk

Risk of financial losses due to new laws or regulations.

Lehman Aggregate Bond Index

A broad bond index, now Bloomberg Barclays, tracking U.S. bond markets.

Lehman Brothers

A bank whose 2008 collapse triggered the global financial crisis.

Lehman Formula

A fee structure for investment banking services, based on deal size.

Lemons Problem

Information asymmetry where buyers can’t assess quality, like in used markets.

Lender

An entity providing loans, expecting repayment with interest.

Lender of Last Resort

A central bank providing emergency loans to prevent financial system collapse.

Leptokurtic Distributions

Statistical distributions with fat tails, indicating higher risk in finance.

Less-Developed Countries (LDC)

Nations with lower GDP and development, often targets for aid or investment.

Lessee

A tenant renting property or assets under a lease agreement.

Lessor

The owner leasing property or assets to a lessee for payment.

Letter of Comfort

A non-binding assurance of support, often from a parent company.

Letter of Credit

A bank guarantee ensuring payment for goods or services, used in trade.

Letter of Guarantee

A promise to cover a debt or obligation if the primary party defaults.

Letter of Indemnity

A document protecting against losses in financial or trade transactions.

Letter of Intent (LOI)

A non-binding agreement outlining deal terms, like in acquisitions.

Level 1

Basic exchange quote data showing bid/ask prices and volumes.

Level 2

Detailed market data showing order book depth, used by traders.

Level 3

Complex, illiquid assets valued using models, not market prices.

Level 1 Assets

Highly liquid assets with observable market prices, like stocks or bonds.

Level 2 Assets

Assets valued with some market inputs, like OTC securities, less liquid than Level 1.

Level 3 Assets

Illiquid assets valued using internal models, like complex derivatives.

Level Death

A life insurance payout structure with fixed benefits, not increasing over time.

Level-Premium Insurance

Insurance with consistent premiums over time, common in life policies.

Leverage

Using debt to amplify investment returns or risks.

Leverage Ratio

Debt-to-equity or similar metrics measuring financial leverage and risk.

Leveraged Buyback

A company using borrowed funds to repurchase its shares, boosting EPS.

Leveraged Buyout (LBO)

Acquiring a company using significant debt, often secured by its assets.

Leveraged Employee Stock Ownership Plan (LESOP)

An ESOP funded by loans, giving employees stock ownership.

Leveraged ETF

An ETF using derivatives or debt to amplify index returns, increasing risk.

Leveraged Lease

A lease where the lessor borrows to finance the leased asset.

Leveraged Loan

A high-risk loan to a borrower with significant debt or low credit, often syndicated.

Leveraged Loan Index (LLI)

An index tracking leveraged loan performance, like the S&P/LSTA index.

Leveraged Recapitalization

Restructuring a company’s capital with debt to boost shareholder value or deter takeovers.

Levered Free Cash Flow (LFCF)

Cash flow after debt payments, available to equity holders.

Levy

A tax or legal seizure of assets to satisfy debts or obligations.

Liability

A financial obligation, like loans or accounts payable, on a balance sheet.

Liability Driven Investment (LDI)

Investing to match liabilities, like pension funds aligning with future payouts.

Liability Insurance

Coverage for damages or injuries caused to others, like malpractice insurance.

Liar Loan

A mortgage with unverified borrower information, common pre-2008 crisis.

Liar's Poker

A Michael Lewis book depicting Wall Street’s high-stakes trading culture.

Libel

False written statements harming reputation, relevant in financial lawsuits.

Liberty Bond

U.S. bonds issued during WWI to fund war efforts, now historical.

LIBOR Curve

A yield curve based on LIBOR rates, used for pricing loans or derivatives.

LIBOR Scandal

Manipulation of LIBOR rates by banks, uncovered in 2012, impacting markets.

Licensee

An entity granted rights to use intellectual property or operate under a license.

Licensing Agreement

A contract granting permission to use intellectual property, like patents, for fees.

Licensing Fee

Payment for using licensed intellectual property or services.

Lien

A legal claim on assets to secure debt repayment, like a mortgage.

Lien Sale

Auctioning property to satisfy an unpaid lien, common in tax or foreclosure cases.

Lien Waiver

A document relinquishing lien rights, often used in construction or real estate.

Life Annuity

An annuity paying until the annuitant’s death, providing lifelong income.

Life Cycle

Stages of a product, company, or economy, guiding investment strategies.

Life-Cycle Fund

A fund adjusting asset allocation based on investor age or retirement timeline.

Life-Cycle Hypothesis (LCH)

Theory that people save and spend based on lifetime income expectations.

Life Estate

Property ownership for the duration of one’s life, reverting afterward.

Life Expectancy

Average lifespan, used in insurance or retirement planning calculations.

Life Income Fund (LIF)

Canadian retirement account with restricted withdrawals, ensuring long-term income.

Life Insurance

A policy paying beneficiaries upon the insured’s death, often tax-advantaged.

Life Settlement

Selling a life insurance policy for cash, typically to investors.

Lifestyle Creep

Gradually increasing spending as income rises, reducing savings.

Lifetime Cost

Total cost of owning an asset, like a home, including maintenance and financing.

Lifetime Learning Credit

U.S. tax credit for education expenses, up to $2,000 per return.

LIFO Liquidation

Selling older inventory under LIFO, inflating profits and taxes.

LIFO Reserve

The difference between LIFO and FIFO inventory values, reported in accounting.

Lightning Network

A Bitcoin scaling solution for faster, cheaper transactions off-chain.

Like-for-Like Sales

Sales comparisons for the same stores or periods, excluding new openings.

Like-Kind Exchange

Swapping similar assets (e.g., real estate) tax-free under IRS Section 1031.

Like-Kind Property

Assets of the same type eligible for tax-free exchange, like real estate.

Lilly Ledbetter Fair Pay Act

2009 U.S. law extending time to sue for pay discrimination, impacting labor costs.

Limit Down

The maximum daily price drop allowed for a security or futures contract.

Limit Order

An order to buy/sell a security at a specified price or better.

Limit Order Book

A record of all limit orders for a security, showing bid/ask depth.

Limited Common Elements

Shared property features in condos, like parking, assigned to specific owners.

Limited Company (LC)

A business with limited liability, like an LLC or corporation, protecting owners.

Limited Government

Minimal government intervention in markets, favoring free-market policies.

Limited Liability

Owners’ financial responsibility limited to their investment, protecting personal assets.

Limited Liability Company (LLC)

A business structure combining corporate liability protection with tax flexibility.

Limited Partner

An investor in a partnership with limited liability and no management role.

Limited Partnership (LP)

A partnership with general and limited partners, the latter having limited liability.

Limited Partnership Unit (LPU)

Ownership shares in a limited partnership, often traded publicly.

Limited Power of Attorney (LPOA)

Authority to act in specific financial or legal matters, not broad control.

Lindahl Equilibrium

A theoretical state where public goods are funded based on individual benefits.

Line Chart

A graph plotting data points connected by lines, used in price tracking.

Line Graph

Synonym for line chart, showing trends like stock prices over time.

Line of Best Fit

A regression line minimizing errors, used in financial forecasting.

Line of Business Limitations

Restrictions on a firm’s activities, often in insurance or banking regulations.

Line of Credit (LOC)

A flexible loan allowing borrowing up to a set limit, with interest on drawn amounts.

Linear Relationship

A direct or inverse correlation between variables, like price and demand.

Linearly Weighted Moving Average (LWMA)

A moving average giving more weight to recent prices, used in trading.

Linked Savings Account

A savings account tied to checking for overdraft protection or transfers.

Lintner's Model

A dividend policy model balancing payout stability with earnings growth.

Lipper Indexes

Benchmarks tracking mutual fund performance by category, like equity or bond funds.

Liquid Alternatives

Alternative investments, like hedge funds, with higher liquidity than traditional alternatives.

Liquid Asset

Cash or easily convertible assets, like stocks, with minimal price impact.

Liquid Market

A market with high trading volume, allowing easy buying/selling without price swings.

Liquidate

Converting assets to cash, often to settle debts or exit investments.

Liquidated Damages

Pre-agreed penalties for contract breaches, like late project delivery.

Liquidating Dividend

A dividend paid during a company’s liquidation, distributing remaining assets.

Liquidation

Selling assets to pay debts, often during bankruptcy or business closure.

Liquidation Margin

The minimum margin required to avoid forced asset sales in a margin account.

Liquidation Preference

Priority given to certain investors, like preferred shareholders, in liquidation payouts.

Liquidation Value

The estimated value of assets if sold quickly, often below book value.

Liquidator

A person or entity managing asset sales during bankruptcy or liquidation.

Liquidity

The ease of converting assets to cash without significant loss in value.

Liquidity Adjustment Facility

Central bank tool managing short-term liquidity via repo or reverse repo operations.

Liquidity Coverage Ratio (LCR)

A regulatory ratio ensuring banks hold enough liquid assets for 30-day stress.

Liquidity Crisis

A situation where entities lack cash or liquid assets to meet obligations.

Liquidity Event

An event, like an IPO or sale, converting illiquid assets to cash.

Liquidity Preference Theory

Theory that investors prefer liquid assets, demanding higher yields for illiquidity.

Liquidity Premium

Extra return for holding less liquid assets, compensating for risk.

Liquidity Ratio

Metrics like current ratio, measuring ability to cover short-term obligations.

Liquidity Risk

The risk of being unable to sell assets quickly without loss.

Liquidity Trap

When low interest rates fail to stimulate spending, stalling economic growth.

Liquified Natural Gas (LNG)

Natural gas cooled to liquid form, impacting energy markets and investments.

Lis Pendens

A notice of pending litigation affecting property, impacting title or sales.

Lisbon Treaty

2009 EU treaty enhancing integration, affecting financial regulations and markets.

Listed

Securities traded on a public exchange, like NYSE or NASDAQ.

Listed Option

Standardized options contracts traded on exchanges, like call or put options.

Listed Property

IRS term for assets, like vehicles, with mixed personal/business use, subject to rules.

Listed Security

A security traded on a recognized exchange, ensuring transparency and liquidity.

Listing Agreement

A contract between a seller and broker for listing property or securities.

Listing Requirements

Exchange criteria, like market cap or earnings, for listing securities.

Litecoin Mining

Process of validating Litecoin transactions to earn rewards, using computational power.

Living Trust

A trust managing assets during life and after death, avoiding probate.

Living Wage

A wage sufficient for basic needs, influencing labor costs and policy.

Living Will

A document outlining medical preferences, impacting healthcare financial planning.

LLC Operating Agreement

A document outlining an LLC’s management and financial structure.

Lloyd's Of London

A UK insurance market where syndicates underwrite specialty risks.

Load

A sales fee on mutual funds, like front-end or back-end charges.

Load Fund

A mutual fund with sales charges, reducing investor returns.

Loan

Borrowed money repaid with interest, like mortgages or personal loans.

Loan Application Fee

A fee for processing a loan application, covering administrative costs.

Loan Commitment

A lender’s promise to provide a loan under specified terms.

Loan Committee

A bank group approving or rejecting loan applications based on risk.

Loan Constant

Annual debt service divided by loan amount, measuring repayment burden.

Loan Credit Default Swap (LCDS)

A derivative hedging against loan default, tied to specific loans.

Loan Credit Default Swap Index (Markit LCDX)

An index tracking credit default swaps on syndicated loans.

Loan Grading

Assessing loan risk, like credit ratings, to set terms or pricing.

Loan Life Coverage Ratio (LLCR)

Project cash flows divided by debt, measuring loan repayment ability.

Loan Lock

A guarantee of a mortgage rate for a set period during processing.

Loan Loss Provision

Funds set aside by banks for potential loan defaults, impacting earnings.

Loan Modification

Altering loan terms, like rates or duration, to avoid default.

Loan Note

A written promise to repay a loan, detailing terms and conditions.

Loan Officer

A professional managing loan applications and approvals, often in banks.

Loan Participation Note (LPN)

A security allowing investors to participate in a loan’s returns or risks.

Loan Production Office (LPO)

A bank office originating loans, not taking deposits, for lending expansion.

Loan Servicing

Managing loan payments, escrow, and borrower communication post-origination.

Loan Shark

An illegal lender charging exorbitant interest rates, exploiting borrowers.

Loan Stock

Debt issued as securities, like bonds, often with fixed interest.

Loan Syndication

Multiple lenders funding a single loan, spreading risk, common in large deals.

Loan-to-Cost Ratio (LTC)

Loan amount divided by project cost, used in real estate financing.

Loan-to-Deposit Ratio (LDR)

Loans divided by deposits, measuring a bank’s lending capacity.

Loan-to-Value (LTV)

Loan amount divided by asset value, assessing lending risk, like in mortgages.

Lobby

Influencing legislation or policy, often by financial or corporate groups.

Local Tax

Taxes levied by local governments, like property or sales taxes.

Lock In Profits

Selling an asset to secure gains, avoiding potential market declines.

Lock-Up Agreement

A contract restricting insiders from selling shares post-IPO for a set period.

Lock-Up Period

The time insiders or investors cannot sell shares after an IPO, typically 90-180 days.

Lockbox Banking

A service where customer payments go to a bank-managed postbox, speeding collections.

Locked In

Committing to a financial position or rate, like a fixed mortgage rate.

Locked-In Retirement Account (LIRA)

Canadian retirement account restricting withdrawals until retirement, like an IRA.

Log-Normal Distribution

A statistical distribution used in finance for asset prices, assuming positive values.

Logarithmic Price Scale

A chart scale compressing large price ranges, used in technical analysis.

Logistics

Managing the flow of goods or services, impacting supply chain costs.

London Interbank Bid Rate (LIBID)

The rate banks pay for interbank deposits in London, below LIBOR.

London InterBank Offered Rate (LIBOR)

A benchmark rate for interbank loans, phased out by 2023, replaced by SOFR.

London Metal Exchange (LME)

A global exchange for trading metals futures and options, like copper or aluminum.

London Stock Exchange (LSE)

UK’s primary stock exchange, trading equities and bonds, a global financial hub.

Long Hedge

Buying futures to protect against rising prices, used by commodity buyers.

Long Jelly Roll

An options strategy combining calls and puts across different expirations, balancing risk.

Long Position (Long)

Owning an asset expecting its value to rise, like buying stocks.

Long Put Options

Buying put options to profit from or hedge against a stock’s decline.

Long Run

A period where all inputs are variable, used in economic or financial planning.

Long Straddle

Buying a call and put with the same strike, profiting from large price moves.

Long Synthetic (Synthetic Put)

Combining a long call and short stock to mimic a put option’s payoff.

Long Tail

Low-probability, high-impact events or niche markets, relevant in insurance or sales.

Long Term

Investments or plans held over years, like bonds or retirement savings.

Long-Legged Doji

A candlestick with long shadows and a small body, signaling market indecision.

Long-Run Average Total Cost (LRATC)

Average cost over the long term, guiding production and pricing decisions.

Long/Short Equity

A hedge fund strategy buying undervalued stocks and shorting overvalued ones.

Long/Short Fund

A fund using long and short positions to reduce market risk, seeking alpha.

Long-Tail Liability

Liabilities, like insurance claims, emerging years after the event, e.g., asbestos cases.

Long-Term Assets

Assets held over a year, like property or equipment, on balance sheets.

Long-Term Capital Gain or Loss

Gains/losses on assets held over a year, taxed at lower rates.

Long-Term Capital Management (LTCM)

A hedge fund that collapsed in 1998, nearly destabilizing global markets.

Long-Term Care (LTC) Insurance

Coverage for extended care, like nursing homes, for elderly or disabled.

Long-Term Debt

Obligations due beyond one year, like bonds or mortgages, on balance sheets.

Long-Term Debt to Capitalization Ratio

Long-term debt divided by total capital, measuring financial leverage.

Long-Term Debt to Total Assets Ratio

Long-term debt divided by total assets, assessing debt burden.

Long-Term Equity Anticipation Securities (LEAPS)

Options with expirations up to three years, used for long-term strategies.

Long-Term Growth (LTG)

Expected sustained growth in earnings or revenue, guiding investment valuations.

Long-Term Incentive Plan (LTIP)

Compensation tying rewards to long-term performance, like stock options.

Long-Term Investments

Assets held for years, like stocks or real estate, for growth or income.

Long-Term Liabilities

Debts due beyond one year, like bonds or leases, on balance sheets.

Longitudinal Data

Data collected over time, used in financial or economic trend analysis.

Look-Alike Contracts

Contracts mimicking others’ terms, used in derivatives or structured products.

Lookback Option

An option with a payoff based on the underlying’s optimal past price.

Loophole

A legal gap allowing tax or regulatory avoidance, often controversial.

Lorenz Curve

A graph showing income or wealth inequality, used with Gini Index.

Loss Adjustment Expense (LAE)

Costs of processing insurance claims, like investigations, impacting premiums.

Loss Carryback

Applying current losses to prior years’ taxes for refunds, per IRS rules.

Loss Carryforward

Applying losses to future taxable income to reduce tax liability.

Loss Development

The process of estimating future insurance claim costs based on past trends.

Loss Given Default (LGD)

The amount lost if a borrower defaults, expressed as a percentage.

Loss Leader Strategy

Selling a product at a loss to attract customers, boosting other sales.

Loss Payee

A party, like a lender, receiving insurance payouts for covered losses.

Loss Ratio

Insurance claims paid divided by premiums earned, measuring profitability.

Loss Reserve

Funds set aside by insurers for expected claims, ensuring financial stability.

Lost Decade

Japan’s 1990s economic stagnation, impacting global markets and investment strategies.

Lost Policy Release (LPR)

A document canceling a lost insurance policy, freeing the insurer from liability.

Lot (Securities Trading)

A standardized number of shares or contracts traded, like 100 shares.

Love Money

Funding from family or friends for startups, often informal and high-risk.

Low Exercise Price Option (LEPO)

A deep-in-the-money option resembling a futures contract, with low strike prices.

Low-Hanging Fruit

Easily achievable financial or business opportunities, requiring minimal effort.

Low-Income Housing Tax Credit

U.S. tax credit incentivizing affordable housing development.

Low Interest Rate Environment

A period of low rates, encouraging borrowing but reducing savings yields.

Low/No Documentation Loan

Loans with minimal borrower verification, high-risk, common pre-2008 crisis.

Low Volume Pullback

A price drop on low trading volume, often signaling a temporary dip.

Lower of Cost or Market Method

Valuing inventory at the lower of cost or current market value.

Loyalty Program

Rewards for repeat customers, boosting retention and revenue in financial services.

Ltd. (Limited)

A company structure limiting owner liability, common in the UK or Canada.

Lucrative

Highly profitable, like a high-return investment or business deal.

Luhn Algorithm

A formula validating credit card numbers, used in financial transactions.

Lump-Sum Payment

A single, one-time payment, like a loan payoff or settlement.

Luxury Item

High-cost goods with demand rising with income, like designer goods.

Luxury Tax

A tax on high-end goods or services, like yachts, to raise revenue.