Finance and insurance jargon got you stumped? Brush up on the lingo with my list of commonly used terms.
Aquisition
Noun
An act of purchase of one company by another.
Example: "there were many acquisitions among travel agents".
fr: acquisition
budget
Noun
An estimate of income and expenditure for a set period of tim.
Example: "keep within the household budget".
fr: budget
Capital
Noun
Wealth in the form of money or other assets owned by a person or organization or available or contributed for a particular purpose such as starting a company or investing.
Example: "rates of return on invested capital were high".
fr: capital
Debt
Noun
The state of owing money.
Example: "the firm is heavily in debt".
fr: Dette
Equity
Noun
The value of a mortgaged property after deduction of charges against it.
Example: "people who have built up a significant amount of equity in their homes".
fr: Équité
Futures
Noun
What do futures mean?
Futures are a type of derivative contract agreement to buy or sell a specific commodity asset or security at a set future date for a set price. Futures contracts, or simply "futures," are traded on futures exchanges like the CME Group and require a brokerage account that's approved to trade futures.
Example: If someone buys a July crude oil futures contract (CL), they are saying they will buy 1,000 barrels of oil from the agreed price upon the July expiration, no matter what the market price is at that time.
fr: future
gross income
Noun
The total amount of a person's or organization's income in a particular period before tax is paid on it.
Example: This is my gross income, I wish i did not have to pay taxes on it.
fr: revenu brut
hedge fund
Noun
A hedge fund is an investment vehicle that caters to high-net-worth individuals, institutional investors, and other accredited investors. The term “hedge” is used because these funds historically focused on hedging risk by simultaneously buying and shorting assets in a long-short equity strategy.
Example: These hedge funds are very risky
fr: fonds spéculatifs
Inflation
Noun
Inflation is the decline of purchasing power of a given currency over time.
Example: The inflation increases over the years
fr: Inflation
junk bond
Noun
A junk bond is debt that has been given a low credit rating by a ratings agency, below investment grade. As a result, these bonds are riskier since chances that the issuer will default or experience a credit event are higher.
Example: Junk bons are risky investments
fr: obligations de pacotille
key person insurance
Noun
Key person insurance is a life insurance policy that a company purchases on an owner, a top executive, or another individual critical to the business.
Example: Key person insurance provides assurance to a small business's creditors and employees that the business will continue even if a key person dies.
fr: Assurance vie
Liability
Noun
A liability is something a person or company owes, usually a sum of money.
Example: Financial liabilities are those liabilities in which a company or an individual has a contractual obligation to pay cash or deliver the financial asset.
fr: Dette
Margin
Noun
In finance, the margin is the collateral that an investor has to deposit with their broker or exchange to cover the credit risk the holder poses for the broker or the exchange.
Example: a sum deposited with a broker to cover the risk of loss on a transaction or account.
fr: Marge
Net worth
Noun
Net worth is the value of the assets a person or corporation owns, minus the liabilities they owe.
Example: What is your net worth?
fr: valeur nette
Overdraft
Noun
An overdraft occurs when there isn't enough money in an account to cover a transaction or withdrawal, but the bank allows the transaction anyway.
Example: The overdraft allows the customer to continue paying bills even when there is insufficient money.
fr: découvert financier
Pro rata
Noun
Pro rata is a Latin term used to describe a proportionate allocation. It essentially translates to "in proportion," which means a process where whatever is being allocated will be distributed in equal portions.
Example: They would pay the insurance company on a pro rata basis.
fr: Pro rata
Quick assets
Noun
Quick assets include cash on hand or current assets like accounts receivable that can be converted to cash with minimal or no discounting. Companies tend to use quick assets to cover short-term liabilities as they come up, so rapid conversion into cash (high liquidity) is critical.
Example: Incorporation of fixed assets previously acquired under capital lease arrangements, and the posting of provisions for Quick assets.
fr: Financement rapide des actifs
return on investment
Noun
Return on investment (ROI) is a performance measure used to evaluate the efficiency or profitability of an investment or compare the efficiency of a number of different investments.
Example: The company promised a quick return on investment.
fr: Retour sur investissement
Stock
Noun
A stock (also known as equity) is a security that represents the ownership of a fraction of a corporation. This entitles the owner of the stock to a proportion of the corporation's assets and profits equal to how much stock they own. Units of stock are called "shares.".
Example: I bought my first stock.
fr: Action
trust fund
Noun
a fund consisting of assets belonging to a trust, held by the trustees for the beneficiaries.
fr: fonds de placement
underlying asset
Noun
Underlying asset are the financial assets upon which a derivative's price is based. Options are an example of a derivative. A derivative is a financial instrument with a price that is based on a different asset.
Example: An underlying asset can be used to identify the item within the agreement that provides value to the contract.
fr: actif sous-jacent
volatility
Noun
Ability to change rapidly and unpredictably, especially for the worse.
Example: "the succession of new rulers contributed to the volatility of the situation"
fr: Volatilité
Withholding tax
The amount of an employee's pay withheld by the employer and sent directly to the government as partial payment of income tax.
Example: The withholding tax was deducted from the worker's gross revenue.
fr: retenue d'impôt
X-efficiency
Noun
X-efficiency refers to the degree of efficiency maintained by firms under conditions of imperfect competition. Efficiency in this context means a company getting the maximum outputs from its inputs, including employee productivity and manufacturing efficiency.
fr: x-efficacité
yield variance
Noun
Yield variance is the difference between actual output and standard output of a production or manufacturing process, based on standard inputs of materials and labor. The yield variance is valued at standard cost. Yield variance is generally unfavorable, where the actual output is less than the standard or expected output, but it can be that output expects expectations as well.
Example: Yield variance is a common financial and operational metric within manufacturing industries.
fr: écart sur rendement des matières
Zero-bond
Noun
A zero-coupon bond, also known as an accrual bond, is a debt security that does not pay interest but instead trades at a deep discount, rendering a profit at maturity, when the bond is redeemed for its full face value.
Example: If the horizon comes after the evaluation date, you need zero bond discounting factors in addition to the other input parameters [...].