| Term | Definition |
|---|---|
| Baby Bond | A long-term, zero-coupon bond bought for a child. |
| Baby Boomer | A person born between 1946 and 1964. |
| Back-End Ratio | A measure of a mutual fund’s expenses, calculated by dividing the fund’s operating expenses by its average net assets. |
| Back Office | The administrative and operational functions of a business. |
| Back Stop | A guarantee or commitment to purchase securities if they are not sold to the public. |
| Back-to-Back Letters of Credit | Two separate letters of credit used to finance a transaction. |
| Backdoor Roth IRA | A strategy for converting a traditional IRA to a Roth IRA, even if income limits prevent direct Roth IRA contributions. |
| Backflush Costing | A simplified cost accounting method. |
| Backlog | Orders that have been received but not yet filled. |
| Backorder | An order for a product that is temporarily out of stock. |
| Backtesting | Testing a trading strategy on historical data. |
| Backup Withholding | Withholding taxes from payments to a taxpayer who has failed to provide a correct tax identification number. |
| Backward Integration | A company’s expansion into upstream activities, such as acquiring a supplier. |
| Backwardation | A market condition where the spot price of a commodity is higher than the futures price. |
| Bad Credit | A poor credit history. |
| Bad Debt | Debt that is unlikely to be collected. |
| Bad Debt Expense | The expense recognized for bad debts. |
| Bag Holder | An investor left holding a stock that has significantly declined in value. |
| Bail Bond | A financial guarantee that ensures a defendant will appear in court. |
| Bail-In | A mechanism for resolving a failing bank by forcing creditors to absorb losses. |
| Bailout | Government financial assistance to prevent the collapse of a failing institution. |
| Bait and Switch | A deceptive marketing practice where a product is advertised at a low price to attract customers, then replaced with a more expensive product. |
| Balance of Payments (BOP) | A record of all economic transactions between a country and the rest of the world. |
| Balance of Trade (BOT) | The difference between a country’s exports and imports. |
| Balance Sheet | A financial statement that reports a company’s assets, liabilities, and equity at a specific point in time. |
| Balanced Budget | A budget where government revenues equal government expenditures. |
| Balanced Fund | A mutual fund that invests in a mix of stocks and bonds. |
| Balanced Investment Strategy | An investment strategy that seeks to balance risk and return. |
| Balanced Scorecard | A performance management tool that measures an organization’s performance across multiple perspectives. |
| Balloon Loan | A loan with a large payment due at the end of the term. |
| Balloon Payment | A large payment due at the end of a loan term. |
| Ballpark Figure | A rough estimate. |
| Baltic Dry Index | An index that measures the cost of shipping raw materials. |
| Bancassurance | The offering of insurance products by banks. |
| Bandwagon Effect | The tendency for people to do things because others are doing them. |
| Bank | A financial institution that accepts deposits and makes loans. |
| Bank Bill Swap Rate (BBSW) | The benchmark interest rate for short-term bank bills in Australia. |
| Bank Capital | The equity and reserves of a bank. |
| Bank Confirmation Letter (BCL) | A letter from a bank verifying the existence of an account. |
| Bank Credit | Credit extended by banks. |
| Bank Deposits | Money held in bank accounts. |
| Bank Identification Number | A code that identifies a bank. |
| Bank Rating | An assessment of a bank’s financial strength. |
| Bank Reserve | Funds held by a bank to meet regulatory requirements. |
| Bank Statement | A summary of transactions in a bank account. |
| Bank Stress Test | An assessment of a bank’s ability to withstand adverse economic conditions. |
| Bank Draft | A check guaranteed by a bank. |
| Bank-Owned Life Insurance (BOLI) | Life insurance policies owned by a bank on the lives of its employees. |
| Banker’s Acceptance | A short-term debt instrument used to finance trade. |
| Bank Guarantee | A guarantee by a bank to fulfill the obligations of a third party. |
| Bank Reconciliation | The process of comparing a bank statement to a company’s records. |
| Bank Run | A situation where many depositors withdraw their money from a bank simultaneously. |
| Bankruptcy | A legal process for dealing with debt. |
| Banner Advertising | Online advertising in the form of banners. |
| Baptism by Fire | A difficult or challenging experience. |
| Barbell | An investment strategy that involves holding both short-term and long-term bonds. |
| Bar Chart | A type of chart that displays data using bars of varying lengths. |
| Bare Trust | A simple trust where the beneficiary has full control of the assets. |
| Barrel Of Oil Equivalent (BOE) | A unit of energy equivalent to the energy contained in a barrel of crude oil. |
| Barrels Of Oil Equivalent Per Day (BOE/D) | A measure of oil and gas production. |
| Barrier Option | An option that comes into existence or ceases to exist if the underlying asset’s price crosses a certain barrier. |
| Barriers to Entry | Obstacles that prevent new companies from entering a market. |
| Barter | The exchange of goods or services without the use of money. |
| Base Effect | The impact of a low or high base value on the calculation of percentage change. |
| Base Pay | The fixed salary or wages earned by an employee, excluding bonuses or other compensation. |
| Base Year | The year used as a reference point for comparison in economic data. |
| Basel I | The first set of international banking regulations issued by the Basel Committee. |
| Basel II | The second set of international banking regulations issued by the Basel Committee. |
| Basel Accords | A set of international banking regulations. |
| Basel III | The third set of international banking regulations issued by the Basel Committee. |
| Baseline | A starting point or benchmark. |
| Basic Earnings Per Share (EPS) | A measure of a company’s earnings per share of common stock. |
| Basic Materials | Companies that produce raw materials, such as metals and minerals. |
| Basis | The difference between the cash price of an asset and the futures price. |
| Basis Point (BPS) | One-hundredth of a percentage point. |
| Term | Definition |
|---|---|
| Basis Risk | The risk that the price of a hedging instrument will not move in perfect correlation with the price of the asset being hedged. |
| Basket of Goods | A fixed set of consumer goods and services whose price is tracked over time to measure inflation. |
| Basket Trade | The simultaneous purchase or sale of a group of securities. |
| BAT Stocks | Stocks of British American Tobacco (BATS), Altria Group (MO), and Philip Morris International (PM). |
| Batch Processing | Processing large volumes of data in batches. |
| Baye’s Theorem | A statistical formula for calculating conditional probabilities. |
| BCG Growth-Share Matrix | A portfolio management tool that classifies businesses based on market share and market growth rate. |
| Beacon Score | A credit score used in the mortgage industry. |
| Bear Call Spread | An options strategy that profits from a decline in the price of the underlying asset. |
| Bear Hug | A hostile takeover bid. |
| Bear Market | A market in which prices are falling. |
| Bear Put Spread | An options strategy that profits from a decline in the price of the underlying asset. |
| Bear Spread | An options strategy that profits from a decline in the price of the underlying asset. |
| Bear Stearns | A former investment bank that collapsed during the 2008 financial crisis. |
| Bear Trap | A situation where a declining market reverses, trapping bearish investors. |
| Bearer Bond | A bond that is unregistered and whose ownership is transferred by physical delivery. |
| Bearer Share | A share of stock whose ownership is transferred by physical delivery. |
| Bearish Engulfing Pattern | A candlestick pattern that suggests a potential reversal to a downtrend. |
| Behavioral Economics | The study of how psychological factors influence economic decision-making. |
| Behavioral Finance | The application of behavioral economics to finance. |
| Bell Curve | A symmetrical distribution of data. |
| Below-the-Line Advertising | Advertising that is not directly measurable, such as public relations and sponsorships. |
| Ben Bernanke | Former Chairman of the Federal Reserve. |
| Benchmark | A standard against which performance is measured. |
| Beneficial Owner | The true owner of an asset, even if it is held in someone else’s name. |
| Beneficiary | A person who receives benefits from a trust, will, or insurance policy. |
| Benefit-Cost Ratio | A measure of the profitability of a project, calculated by dividing the present value of benefits by the present value of costs. |
| Benjamin Graham | An influential investor and professor, known as the “father of value investing.” |
| Berhad (BHD) | A Malaysian term for a public limited company. |
| Berkshire Hathaway | A conglomerate holding company led by Warren Buffett. |
| Bermuda Option | An option that can be exercised at certain specified times. |
| Bernie Madoff | A former financier who ran a massive Ponzi scheme. |
| Bespoke CDO | A customized collateralized debt obligation. |
| Best Alternative to a Negotiated Agreement (BATNA) | The best course of action if a negotiation fails. |
| Best Endeavors | A high level of obligation to achieve a goal. |
| Best Practices | Methods or techniques that have been shown to be the most effective. |
| Beta | A measure of a stock’s volatility relative to the market. |
| Better Business Bureau (BBB) | A non-profit organization that provides ratings and reviews of businesses. |
| Bicameral System | A legislative system with two chambers. |
| Bid | An offer to buy a security. |
| Bid and Ask | The prices at which buyers are willing to buy and sellers are willing to sell a security. |
| Bid-Ask Spread | The difference between the bid price and the ask price. |
| Bid Bond | A guarantee that a bidder will enter into a contract if their bid is accepted. |
| Bid Price | The price a buyer is willing to pay for a security. |
| Bid Size | The number of shares a buyer is willing to buy at the bid price. |
| Big Data | Extremely large and complex datasets. |
| Bilateral Contract | A contract where both parties have obligations. |
| Bilateral Trade | Trade between two countries. |
| Bill Auction | A process used by governments to sell short-term debt securities. |
| Bills of Materials (BOM) | A list of the components needed to manufacture a product. |
| Billing Cycle | The period between billing statements. |
| Bill of Exchange | A financial instrument used in trade. |
| Bill of Lading | A document issued by a carrier acknowledging receipt of cargo for shipment. |
| Binance Coin (BNB) | A cryptocurrency issued by the Binance exchange. |
| Binary Option | An option that pays a fixed amount if the underlying asset’s price moves in a certain direction. |
| Binomial Distribution | A probability distribution that describes the probability of a certain number of successes in a fixed number of trials. |
| Binomial Option Pricing | A method for valuing options. |
| Bioremediation | The use of biological organisms to clean up pollution. |
| Bird In Hand | A certain gain or advantage. |
| Bitcoin | A decentralized digital currency. |
| Bitcoin Cash | A cryptocurrency that is a fork of Bitcoin. |
| Bitcoin Mining | The process of verifying and adding transactions to the Bitcoin blockchain. |
| Bitcoin Misery Index | A measure of Bitcoin market sentiment. |
| Bitcoin Wallet | A software program or hardware device used to store Bitcoin. |
| Black Money | Illegally obtained or untaxed money. |
| Black Box Model | A system whose internal workings are not understood. |
| Black Friday | The Friday after Thanksgiving, a major shopping day in the U.S. |
| Black Market | An illegal market. |
| Black Monday | A stock market crash that occurred on October 19, 1987. |
| Black Scholes Model | A mathematical model for valuing options. |
| Black Swan | An unpredictable event with significant consequences. |
| Black Tuesday | A stock market crash that occurred on October 29, 1929. |
| Blended Rate | An interest rate that is a weighted average of different rates. |
| Blind Trust | A trust where the beneficiary does not know how the assets are invested. |
| Block Trade | A large trade of securities. |
| Blockchain | A distributed ledger technology used to record transactions. |
| Term | Definition |
|---|---|
| Blockchain-as-a-Service (BaaS) | A service that allows users to create and manage blockchain networks without having to build and maintain the infrastructure. |
| Blockchain Wallet | A digital wallet used to store and manage cryptocurrencies. |
| Bloomberg | A financial data and media company. |
| Bloomberg Terminal | A software platform providing financial data and analytics to professionals. |
| Blotter | A record of trades. |
| Blue Book | A publication listing the fair market value of used cars. |
| Blue Chip | A well-established and financially sound company. |
| Blue-Chip Stock | A stock of a large, well-established, and financially sound company. |
| Blue Ocean | A market space where there is little or no competition. |
| Blue Sky Laws | State laws that regulate the offering and sale of securities. |
| Board of Directors (B of D) | A group of individuals elected to represent shareholders and oversee the management of a company. |
| Board of Governors | The governing body of the Federal Reserve System. |
| Board of Trustees | A group of individuals responsible for overseeing an organization, such as a non-profit or educational institution. |
| Boil the Ocean | To attempt a task that is too large or complex. |
| Boilerplate | Standardized or pre-written text used in contracts or other documents. |
| Boiler Room | A high-pressure sales operation, often used to sell fraudulent or worthless investments. |
| Bollinger Band | A technical indicator used to measure market volatility. |
| Bombay Stock Exchange (BSE) | A stock exchange in Mumbai, India. |
| Bond | A debt security issued by a corporation or government. |
| Bond Covenant | A clause in a bond indenture that restricts the issuer’s actions. |
| Bond Discount | The amount by which a bond’s market price is less than its face value. |
| Bond Equivalent Yield (BEY) | A method for comparing the yields of different bonds. |
| Bond ETF | An exchange-traded fund that invests in bonds. |
| Bond Fund | A mutual fund that invests in bonds. |
| Bond Futures | Futures contracts on bonds. |
| Bond Ladder | An investment strategy that involves holding bonds with staggered maturities. |
| Bond Market | The market where bonds are traded. |
| Bond Quote | The current price of a bond. |
| Bond Rating | An assessment of a bond’s creditworthiness. |
| Bond Rating Agencies | Companies that rate bonds. |
| Bond Valuation | The process of determining the fair market value of a bond. |
| Bond Yield | The return on a bond investment. |
| Bondholder | A person or entity that owns bonds. |
| Bonus | Additional compensation paid to an employee. |
| Bonus Depreciation | An accelerated depreciation method that allows businesses to deduct a large portion of an asset’s cost in the first year. |
| Bonus Issue | The distribution of additional shares to existing shareholders. |
| Book Building | The process of determining the demand for a new issue of securities. |
| Book Runners | Investment banks that manage a new issue of securities. |
| Book-to-Bill | A ratio used to measure the demand for a company’s products or services. |
| Book-to-Market Ratio | A ratio used to value a company, calculated by dividing the book value of equity by the market value of equity. |
| Book Value | The net asset value of a company’s assets, calculated by subtracting liabilities from assets. |
| Book Value of Equity Per Share (BVPS) | A measure of a company’s equity per share of common stock. |
| Book Value Per Common Share | Same as Book Value of Equity Per Share. |
| Bookie | A person who accepts bets. |
| Boom And Bust Cycle | A period of economic expansion followed by a period of economic contraction. |
| Bootstrap | To start a business with limited resources. |
| Borrowing Base | The value of assets that a borrower can use as collateral for a loan. |
| Both-to-Blame Collision Clause | A clause in a shipping contract that apportions liability in a collision where both vessels are at fault. |
| Bottleneck | A point of congestion or blockage in a process. |
| Bottom Line | The final result or outcome. |
| Bottom-Up Investing | An investment strategy that focuses on individual companies rather than the overall market. |
| Bounced Check | A check that is not honored by the bank due to insufficient funds. |
| Boundary Conditions | Constraints or limitations that define the scope of a problem or system. |
| Box Spread | An options strategy that combines a long call and a short put with the same strike price, and a short call and a long put with a different strike price. |
| Brain Drain | The emigration of highly skilled or educated individuals. |
| Branch Accounting | Accounting for the operations of a branch of a company. |
| Branch Banking | Banking services provided through a network of branches. |
| Branch Manager | The manager of a branch of a bank or other business. |
| Brand | A name, term, design, or symbol that identifies a product or service. |
| Brand Awareness | The extent to which consumers are familiar with a brand. |
| Brand Equity | The value of a brand. |
| Brand Extension | Using an existing brand name for a new product or service. |
| Brand Identity | The visible elements of a brand, such as color, design, and logo. |
| Brand Loyalty | The tendency of consumers to repeatedly purchase a particular brand. |
| Brand Management | The process of managing a brand. |
| Brand Personality | The human characteristics associated with a brand. |
| Brand Recognition | The ability of consumers to identify a brand. |
| Brazil, Russia, India and China (BRIC) | A group of emerging economies. |
| Brazil, Russia, India, China and South Africa (BRICS) | A group of emerging economies. |
| Breadth Indicator | A technical indicator that measures the participation of stocks in a market rally or decline. |
| Break-Even Price | The price at which an investment or business venture becomes profitable. |
| Break-Even Analysis | A method for calculating the break-even point. |
| Breakeven Point | The point at which total revenue equals total costs. |
| Breakout | A price movement above a resistance level or below a support level. |
| Bretton Woods Agreement and System | An agreement that established a system of fixed exchange rates after World War II. |
| Term | Definition |
|---|---|
| Brexit | The United Kingdom’s withdrawal from the European Union. |
| Brick and Mortar | A traditional retail business with a physical store. |
| Bridge Financing | Short-term financing used to bridge the gap between longer-term financing. |
| Bridge Loan | A short-term loan. |
| Broad Money | A measure of the money supply that includes cash, checking deposits, and other liquid assets. |
| Broker | A person or firm that buys and sells securities on behalf of clients. |
| Broker-Dealer | A financial institution that acts as both a broker and a dealer. |
| Brokerage Account | An account held at a brokerage firm for the purpose of trading securities. |
| Brokerage Company | A company that provides brokerage services. |
| Brokerage Fee | A fee charged by a brokerage firm for its services. |
| Brown Bag Meeting | An informal meeting, often held during lunch. |
| Brownfield Investment | An investment in an existing facility or project. |
| Bubble | A speculative rise in asset prices. |
| Budget | A plan for spending and revenue. |
| Budget Deficit | A situation where government spending exceeds government revenue. |
| Budget Surplus | A situation where government revenue exceeds government spending. |
| Budget Variance | The difference between budgeted amounts and actual amounts. |
| Build America Bonds (BABs) | Taxable municipal bonds issued under the American Recovery and Reinvestment Act of 2009. |
| Build-Operate-Transfer Contract | A type of contract used for infrastructure projects. |
| Bull | An investor who expects prices to rise. |
| Bull Call Spread | An options strategy that profits from a rise in the price of the underlying asset. |
| Bull Market | A market in which prices are rising. |
| Bull Put Spread | An options strategy that profits from a rise in the price of the underlying asset. |
| Bull Spread | An options strategy that profits from a rise in the price of the underlying asset. |
| Bull Trap | A situation where a rising market reverses, trapping bullish investors. |
| Bullet Bond | A bond that pays all of its principal at maturity. |
| Bullet Repayment | A lump-sum repayment of a loan. |
| Bullish Abandoned Baby | A candlestick pattern that suggests a potential reversal to an uptrend. |
| Bullish Engulfing Pattern | A candlestick pattern that suggests a potential reversal to an uptrend. |
| Bullish Harami | A candlestick pattern that suggests a potential reversal to an uptrend. |
| Bundle of Rights | The set of rights associated with property ownership. |
| Bungalow | A small, one-story house with a sloping roof. |
| Bureau of Labor Statistics (BLS) | A U.S. government agency that collects and publishes economic data. |
| Bureaucracy | A large, complex organization. |
| Burn Rate | The rate at which a company is spending its capital. |
| Business | An organization that engages in commercial activities. |
| Business Activities | Actions performed by a business to achieve its objectives. |
| Business Asset | Something of value owned by a business. |
| Business Banking | Banking services provided to businesses. |
| Business Continuity Planning (BCP) | The process of planning for business disruptions. |
| Business Cycle | The periodic ups and downs in economic activity. |
| Business Development Company (BDC) | A company that invests in small and medium-sized businesses. |
| Business Economics | The application of economic theory to business decisions. |
| Business Ecosystems | Networks of interconnected businesses. |
| Business Ethics | Moral principles that guide business conduct. |
| Business Exit Strategy | A plan for selling or closing a business. |
| Business Expenses | Costs incurred by a business. |
| Business Insurance | Insurance that protects a business from various risks. |
| Business Intelligence (BI) | The process of analyzing data to improve business decisions. |
| Business Models | Plans for how a business will generate revenue and profits. |
| Business Plan | A document that outlines a business’s goals and strategies. |
| Business Process Outsourcing | The contracting of business processes to third-party providers. |
| Business Risk | The risk of a business failing. |
| Business-to-Business (B2B) | Transactions between businesses. |
| Business to Consumer (B2C) | Transactions between businesses and consumers. |
| Business to Government (B2G) | Transactions between businesses and government agencies. |
| Business Valuations | The process of determining the fair market value of a business. |
| Butterfly Spread | An options strategy that involves buying and selling calls or puts at different strike prices. |
| Buy and Hold | An investment strategy that involves buying securities and holding them for a long period. |
| Buy and Sell Agreement | An agreement between business owners that restricts the sale of their ownership interests. |
| Buy-In | The purchase of a portion of a business. |
| Buy-In Management Buyout (BIMBO) | A buyout of a company by its management and outside investors. |
| Buy Limit Order | An order to buy a security at or below a specified price. |
| Buy-Side | The investors who buy securities. |
| Buy Stop Order | An order to buy a security at or above a specified price. |
| Buy the Dips | An investment strategy that involves buying securities when their prices decline. |
| Buy to Cover | A transaction to close out a short position. |
| Buy to Open | A transaction to open a long position. |
| Buyback | A company’s repurchase of its own shares. |
| Buyer’s Market | A market in which there are more sellers than buyers. |
| Buying on Margin | Borrowing money from a broker to buy securities. |
| Buying Power | The amount of securities that an investor can buy. |
| Buyout | The acquisition of a controlling interest in a company. |