Financial Vocabulary

Note: Some of the words' meanings that Vocabulary.com assigns to the words are not correct. In general, they are correct, but those words have a different meaning in the financial world. For example, Vocabulary.com defines the word "volatility" as "the trait of being unpredictably irresolute". However, in the financial world, volatility is an investment's ability to go through changes in value over time.
Read more...

Start learning with an activity...

  • Practice

    Answer a few questions on each word. Get one wrong? We'll ask some follow-up questions. Use it to prep for your next quiz!
  • Spelling Bee

    Test your spelling acumen. See the definition, listen to the word, then try to spell it correctly. Beat your last streak, or best your overall time. Spellers of the world, untie!
  • Vocabulary Jam

    Compete head-to-head in real-time to see which team can answer the most questions correctly. Start a Jam and invite your friends and classmates to join!

Explore the Words

definitions & notes only words
  1. accounts payable
    a debtor's accounts of money he owes
  2. accounts receivable
    a creditor's accounts of money owed to him
  3. accrual basis
    a method of accounting in which each item is entered as it is earned or incurred regardless of when actual payments are received or made
  4. amortization
    reducing the value of an asset over a period of years
  5. arbitrage
    a hedged investment capturing slight differences in price
  6. asset
    a useful or valuable quality
  7. bankruptcy
    inability to discharge all your debts as they come due
  8. bond
    a certificate of debt issued by a government or corporation
  9. boom
    a state of economic prosperity
  10. broker
    a businessman who buys or sells for another
  11. capital
    assets available for use in the production of further assets
  12. cash basis
    a method of accounting in which each item is entered as payments are received or made
  13. certificate of deposit
    a debt instrument issued by a bank; usually pays interest
  14. commodity
    any good that can be bought and sold
  15. cost of capital
    the opportunity cost of the funds employed as the result of an investment decision; the rate of return that a business could earn if it chose another investment with equivalent risk
  16. cumulative
    increasing by successive addition
  17. debt
    the state of owing something, especially money
    Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
  18. deficit
    an excess of liabilities over assets
  19. depreciation
    decrease in value of an asset due to obsolescence or use
  20. dividend
    earnings of a corporation distributed to its shareholders
  21. economy
    the system of production and distribution and consumption
  22. entrepreneur
    someone who organizes a business venture
  23. equity
    the ownership interest of shareholders in a corporation
  24. exchange traded fund
    a mutual fund that is traded on a stock exchange
  25. fiduciary
    relating to or of the nature of a legal trust
  26. fund
    a reserve of money set aside for some purpose
  27. gross domestic product
    the measure of an economy adopted by the United States in 1991; the total market values of goods and services produced by workers and capital within a nation's borders during a given period (usually 1 year)
  28. growth stock
    stock of a corporation that has had faster than average gains in earnings and is expected to continue to
  29. hedge fund
    a flexible investment company for a small number of large investors (usually the minimum investment is $1 million); can use high-risk techniques (not allowed for mutual funds) such as short-selling and heavy leveraging
  30. internal revenue
    government revenue from domestic sources (excluding customs)
  31. intrinsic
    belonging to a thing by its very nature
  32. invest
    lay out money or resources in an enterprise
  33. investor
    someone who commits capital to gain financial returns
  34. invoice
    an itemized statement of money owed for goods or services
  35. leverage
    investing with borrowed money to amplify potential gains
  36. liability
    an obligation to pay money to another party
  37. margin account
    an account with a securities brokerage in which the broker extends credit
  38. margin call
    a demand by a broker that a customer deposit enough to bring his margin up to the minimum requirement
  39. money market
    a market for short-term debt instruments
  40. mortgage
    a conveyance of property as security for repaying a loan
  41. mutual fund
    the pooled money that is invested in assets
  42. paycheck
    a check issued in payment of wages or salary
  43. portfolio
    a list of financial assets held by a person or institution
  44. premium
    the amount that something is valued above its nominal value
  45. profit
    gain money or materially
  46. real estate
    property consisting of houses and land
  47. recession
    a situation in which the state of the economy declines
  48. return
    the income or profit arising from such transactions as the sale of land or other property
  49. revenue
    the entire amount of income before any deductions are made
    The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income, good cash flow from operations, increase in stock price during the past year and growth in earnings per share.
  50. savings
    a fund of money put by as a reserve
  51. shareholder
    someone who owns stock in a corporation
  52. short selling
    sale of securities or commodity futures not owned by the seller (who hopes to buy them back later at a lower price)
  53. stock
    capital raised by a corporation through the issue of shares
    Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency).
  54. trade
    a particular instance of buying or selling
    We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.
  55. Treasury bill
    a short-term obligation that is not interest-bearing
  56. treasury stock
    stock that has been bought back by the issuing corporation and is available for retirement or resale; it is issued but not outstanding; it cannot vote and pays no dividends
  57. tycoon
    a very wealthy or powerful businessperson
  58. value
    the quality that renders something desirable
  59. vendor
    someone who exchanges goods or services for money
  60. venture capitalist
    a speculator who makes money available for innovative projects (especially in high technology)
  61. volatility
    the trait of being unpredictably irresolute
  62. wager
    stake on the outcome of an issue
Created on November 4, 2012 (updated November 25, 2012)

Sign up, it's free!

Whether you're a student, an educator, or a lifelong learner, Vocabulary.com can put you on the path to systematic vocabulary improvement.