Key Categories and Examples

• Financial Institutions:
  • SEC: Securities and Exchange Commission. The primary regulatory agency for the U.S. securities market.
  • FED: Federal Reserve System. The central banking system of the United States.
  • FINRA: Financial Industry Regulatory Authority. Regulates brokerage firms and exchange markets.
  • FDIC: Federal Deposit Insurance Corporation. Insures deposits in banks and savings associations.
  • IMF: International Monetary Fund. An international organization that works to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.
  • WB: World Bank. An international financial institution that provides loans and grants to governments of low- and middle-income countries for the purpose of pursuing capital projects.
• Investments and Markets:
  • ROI: Return on Investment. A profitability ratio that measures the return or profit an investment generates relative to its cost.
  • NAV: Net Asset Value. The value of an entity’s assets less the value of its liabilities; often used for mutual funds.
  • EPS: Earnings Per Share. A company’s profit allocated to each outstanding share of common stock.
  • P/E Ratio: Price-to-Earnings Ratio. The ratio for valuing a company that measures its current share price relative to its per-share earnings.
  • IPO: Initial Public Offering. When a private company offers shares to the public for the first time.
  • ETF: Exchange-Traded Fund. A type of investment fund traded on stock exchanges, similar to stocks.
  • MBS: Mortgage-Backed Security. A type of asset-backed security that is secured by a mortgage or collection of mortgages.
  • CDO: Collateralized Debt Obligation. A complex structured finance product that is backed by a pool of loans and other assets.
• Accounting and Finance:
  • GAAP: Generally Accepted Accounting Principles. A common set of accounting rules, standards, and procedures issued by the Financial Accounting Standards Board (FASB).
  • EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization. A measure of a company’s overall financial performance.
  • NPV: Net Present Value. The difference between the present value of cash inflows and the present value of cash outflows over a period of time.
  • IRR: Internal Rate of Return. The discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero.
  • CAPEX: Capital Expenditure. Funds used by a company to acquire, upgrade, and maintain physical assets such as property, plants, buildings, technology, or equipment.
  • OPEX: Operating Expenses. The expenses a business incurs through its normal business operations.
• Loans and Credit:
  • APR: Annual Percentage Rate. The annual rate charged for borrowing or earned through an investment.
  • ARM: Adjustable-Rate Mortgage. A mortgage loan where the interest rate is periodically adjusted based on an index.
  • LTV: Loan-to-Value Ratio. An assessment of lending risk that financial institutions and other lenders examine before approving a mortgage.