| Term | Definition |
|---|---|
| C Corporation | A type of corporation that is taxed separately from its owners. |
| C-Suite | The top executives of a company. |
| Call | An option that gives the buyer the right to buy an asset at a specified price. |
| Call Option | Same as Call. |
| Callable Bond | A bond that can be redeemed by the issuer before maturity. |
| Canceled Check | A check that has been paid by the bank. |
| Candlestick | A type of chart used to display price movements. |
| Cap and Trade | A system for reducing pollution by setting a limit on emissions and allowing companies to trade emission allowances. |
| Capacity Utilization Rate | The percentage of a company’s productive capacity that is being used. |
| CAPE Ratio | A valuation metric for the stock market, calculated by dividing the S&P 500 index by the average earnings of the past 10 years. |
| Capital | Financial assets or the value of assets. |
| Capital Account | A record of a country’s international transactions related to assets. |
| Capital Adequacy Ratio (CAR) | A measure of a bank’s capital relative to its risk-weighted assets. |
| Capital Asset | An asset held for investment or business use. |
| Capital Asset Pricing Model (CAPM) | A model used to calculate the expected return on a stock. |
| Capital Budgeting | The process of planning and evaluating investments in long-term assets. |
| Capital Employed | The total amount of capital used by a company. |
| Capital Expenditure | Spending on assets that will benefit a business for more than one year. |
| Capital Gain | The profit from the sale of a capital asset. |
| Capital Gains Tax | A tax on capital gains. |
| Capital Goods | Goods used to produce other goods and services. |
| Capital Improvement | An addition or alteration to a property that increases its value. |
| Capital Investment | Spending on assets that will benefit a business for more than one year. |
| Capital IQ | A financial data and analytics platform. |
| Capital Leases | A type of lease that is treated as a purchase for accounting purposes. |
| Capital Loss Carryover | The ability to deduct capital losses in future years. |
| Capital Market Line (CML) | A line that represents the efficient frontier of risky assets. |
| Capital Markets | Markets where long-term debt and equity securities are traded. |
| Capital Project | A large-scale investment project. |
| Capital Stock | The equity of a corporation. |
| Capital Structure | The mix of debt and equity used to finance a company’s assets. |
| Capitalism | An economic system based on private ownership and free markets. |
| Capitalization | The process of converting income into value. |
| Capitalization Rate | A rate used to estimate the value of an income-producing property. |
| Capitalization Table | A table showing the ownership stakes in a company. |
| Capitalize | To record an expenditure as an asset on the balance sheet. |
| Capitalized Cost | The total cost of an asset, including all costs necessary to put it into use. |
| Capitalized Interest | Interest costs that are added to the cost of an asset. |
| Capitulation | A point in a market decline where investors give up and sell their positions. |
| Carbon Credit | A permit that allows a company to emit a certain amount of greenhouse gases. |
| Carding | Fraudulent use of stolen credit card information. |
| Carriage and Insurance Paid to (CIP) | An Incoterm that specifies that the seller is responsible for delivering goods to a named place and paying for carriage and insurance. |
| Carried Interest | A share of profits earned by a fund manager. |
| Carve-Out | The separation of a business unit from a larger company. |
| Cash Accounting | An accounting method that recognizes revenue when cash is received and expenses when cash is paid. |
| Cash Advance | A loan of cash. |
| Cash-and-Carry-Arbitrage | An arbitrage strategy that involves buying a commodity in one market and selling it in another market. |
| Cash and Cash Equivalents (CCE) | Short-term, highly liquid assets. |
| Cash Back | A reward offered by some credit cards. |
| Cash Balance Pension Plan | A defined benefit pension plan where benefits are expressed as a lump sum. |
| Cash Budget | A budget that forecasts cash inflows and outflows. |
| Cash Conversion Cycle (CCC) | The time it takes for a company to convert its inventory into cash. |
| Cash Cow | A business unit that generates a lot of cash. |
| Cash Dividend | A dividend paid in cash. |
| Cash Equivalents | Short-term, highly liquid assets. |
| Cash Flow | The movement of money into and out of a business. |
| Cash Flow from Financing Activities (CFF) | Cash flow from transactions with lenders and equity holders. |
| Cash Flow from Investing Activities | Cash flow from the purchase and sale of long-term assets. |
| Cash Flow from Operating Activities (CFO) | Cash flow from the day-to-day operations of a business. |
| Cash Flow Statement | A financial statement that reports a company’s cash flows. |
| Cash Management | The process of managing a company’s cash. |
| Cash-on-Cash Return | A measure of the return on a real estate investment. |
| Cash on Delivery (COD) | A payment method where the buyer pays for goods upon delivery. |
| Cash-Out Refinance | A mortgage refinance where the borrower takes out more cash than they owe on their existing mortgage. |
| Cash Ratio | A measure of a company’s liquidity. |
| Cash Surrender Value | The cash value of a life insurance policy. |
| Cash Value Life Insurance | A type of life insurance that has a cash value component. |
| Catalog of Federal Domestic Assistance (CFDA) | A catalog of federal programs that provide assistance to individuals and organizations. |
| Caveat Emptor | A Latin phrase that means “buyer beware.” |
| Central Counterparty Clearing House (CCP) | An entity that clears and settles trades between financial institutions. |
| Central Limit Theorem (CLT) | A statistical theorem that states that the distribution of sample means will approach a normal distribution as the sample size increases. |
| Centrally Planned Economy | An economic system where the government controls the means of production and distribution. |
| Certainty Equivalent | The amount of certain income that an individual would consider equivalent to a risky income. |
| Certificate of Deposit (CD) | A type of deposit account that pays a fixed interest rate for a specified period. |
| Certificate of Insurance (COI) | A document that provides evidence of insurance coverage. |
| Certificate of Origin (CO) | A document that certifies the country of origin of goods. |
| Certified Financial Planner (CFP) | A financial professional who has met certain education and experience requirements. |
| Certified Information Systems Auditor (CISA) | A professional who audits information systems. |
| Certified Management Accountant (CMA) | An accountant who has expertise in management accounting. |
| Certified Public Accountant (CPA) | An accountant who has met certain education and licensing requirements. |
| Ceteris Paribus | A Latin phrase that means “all other things being equal.” |
| Chairman | The leader of a board of directors. |
| Channel Stuffing | The practice of shipping more products to retailers than they can sell. |
| Chapter 11 Bankruptcy | A type of bankruptcy that allows a business to reorganize and continue operating. |
| Chart of Accounts (COA) | A list of all the accounts used by a business. |
| Chartered Accountant (CA) | An accounting professional. |
| Chartered Financial Analyst (CFA) | A financial professional who has met certain education and experience requirements. |
| Chartered Retirement Planning Counselor (CRPC) | A financial professional who specializes in retirement planning. |
| Chattel Mortgage | A loan secured by personal property. |
| Cheapest to Deliver (CTD) | The asset that is cheapest to deliver in a futures contract. |
| Check | A written order to a bank to pay a specified amount. |
| Checking Account | A bank account that allows the holder to write checks. |
| Checks and Balances | A system of checks and balances between different branches of government. |
| Chi Square Statistic | A statistical measure of the difference between observed and expected frequencies. |
| Chief Executive Officer (CEO) | The top executive of a company. |
| Chief Financial Officer (CFO) | The executive responsible for a company’s financial affairs. |
| Chief Operating Officer (COO) | The executive responsible for a company’s day-to-day operations. |
| Chief Technology Officer (CTO) | The executive responsible for a company’s technology strategy. |
| Child Tax Credit | A tax credit for families with children. |
| Chinese Wall | An information barrier between different departments of a financial institution. |
| Churn Rate | The rate at which customers cancel or discontinue their subscriptions. |
| Churning | The practice of excessive trading by a broker to generate commissions. |
| Circular Flow Of Income | The flow of income between households and businesses in an economy. |
| Classical Economics | An economic theory that emphasizes free markets and limited government intervention |
| Term | Definition |
|---|---|
| Clawback | A provision that allows a company to recover compensation from executives under certain circumstances. |
| Clayton Antitrust Act | A U.S. law that prohibits certain anti-competitive practices. |
| Clearing | The process of settling trades. |
| Clearing House | An organization that facilitates clearing. |
| Close Position | To sell a security that was previously bought or to buy a security that was previously sold short. |
| Closed Economy | An economy that does not engage in international trade. |
| Closed-End Fund | A type of investment fund with a fixed number of shares. |
| Cloud Computing | The delivery of computing services over the internet. |
| Chicago Board Options Exchange (CBOE) | A major options exchange. |
| Chicago Mercantile Exchange (CME) | A major futures exchange. |
| Coase Theorem | A theorem that states that private bargaining can lead to efficient resource allocation even in the presence of externalities. |
| Code of Ethics | A set of moral principles that guide conduct. |
| Coefficient of Determination | A statistical measure of the goodness of fit of a regression model. |
| Coefficient of Variation (CV) | A statistical measure of relative risk. |
| CoInsurance | A provision in an insurance policy that requires the insured to pay a percentage of the loss. |
| Collar | An options strategy that limits both gains and losses. |
| Collateral | An asset pledged as security for a loan. |
| Collateralized Debt Obligation (CDO) | A type of structured finance product backed by a pool of debt securities. |
| Collateralized Loan Obligation (CLO) | A type of structured finance product backed by a pool of loans. |
| Collateralized Mortgage Obligation (CMO) | A type of structured finance product backed by a pool of mortgages. |
| Collection Agency | A company that collects debts on behalf of creditors. |
| Collusion | An agreement between competitors to fix prices or engage in other anti-competitive behavior. |
| Combined Loan-To-Value Ratio (CLTV Ratio) | A ratio that compares the total amount of loans secured by a property to the property’s value. |
| Combined Ratio | A measure of an insurance company’s profitability. |
| Command Economy | An economic system where the government controls the means of production and distribution. |
| Commerce | Trade or business. |
| Commercial | Related to trade or business. |
| Commercial Bank | A financial institution that accepts deposits and makes loans to businesses. |
| Commercial Loan | A loan to a business. |
| Commercial Mortgage-Backed Security (CMBS) | A type of mortgage-backed security backed by commercial real estate mortgages. |
| Commercial Paper | Short-term unsecured debt issued by corporations. |
| Commercial Real Estate | Property used for business purposes. |
| Commercialization | The process of bringing a new product or service to market. |
| Commingled Fund | A fund that pools money from multiple investors. |
| Commission | A fee paid to a broker for executing a trade. |
| Commodity | A raw material or agricultural product. |
| Commodity Futures Contract | A contract to buy or sell a commodity at a future date. |
| Commodity Trading Advisor (CTA) | A professional who manages commodity futures accounts. |
| Common Equity Tier 1 (CET1) | A measure of a bank’s core equity capital. |
| Common Law | A legal system based on judicial precedent. |
| Common Size Financial Statement | A financial statement where all items are expressed as a percentage of a base figure. |
| Common Size Income Statement | An income statement where all items are expressed as a percentage of revenue. |
| Common Stock | A type of stock that represents ownership in a company. |
| Communism | A political and economic system in which the means of production are owned by the community. |
| Community Reinvestment Act (CRA) | A U.S. law that encourages banks to lend to low- and moderate-income communities. |
| Comparable Company Analysis (CCA) | A valuation method that compares a company to similar companies. |
| Comparative Advantage | The ability to produce a good or service at a lower opportunity cost than another producer. |
| Comparative1 Market Analysis | An estimate of the value of a property based on recent sales of comparable properties. |
| Compensatory Damages | Damages awarded to compensate the plaintiff for losses suffered. |
| Competitive Intelligence | The process of gathering and analyzing information about competitors. |
| Competitive Advantage | A factor that allows a company to outperform its competitors. |
| Complement | A good or service that is used in conjunction with another good or service. |
| Compliance Officer | A person responsible for ensuring that a company complies with laws and regulations. |
| Compound Annual Growth Rate (CAGR) | The average annual rate of growth over a specified period. |
| Compound Interest | Interest earned on both the principal and accumulated interest. |
| Compounding | The process of earning interest on both the principal and accumulated interest. |
| Comprehensive Income | A measure of a company’s income that includes both net income and other comprehensive income. |
| Comps | Comparable companies. |
| Conditional Probability | The probability of an event occurring given that another event has occurred. |
| Conditional Value at Risk (CVaR) | A measure of the potential loss in the worst-case scenario. |
| Confidence Interval | A range of values within which a population parameter is likely to fall. |
| Conflict of Interest | A situation where a person has a personal interest that could improperly influence their professional duties. |
| Conflict Theory | A sociological theory that emphasizes social inequality and conflict. |
| Conglomerate | A company that operates in a variety of unrelated industries. |
| Consignment | A business arrangement where goods are shipped to a retailer but the retailer does not take ownership of the goods until they are sold. |
| Consolidate | To combine financial statements of a parent company and its subsidiaries. |
| Consolidated Omnibus Budget Reconciliation Act (COBRA) | A U.S. law that gives employees the right to continue their health insurance coverage after leaving their job. |
| Consolidation | The merging of two or more companies. |
| Construction Loan | A short-term loan used to finance the construction of a building. |
| Consumer Credit | Credit extended to consumers. |
| Consumer Discretionary | A sector of the economy that includes companies that produce non-essential goods and services. |
| Consumer Goods | Goods purchased by consumers. |
| Consumer Packaged Goods (CPG) | Goods that are sold in retail stores and are consumed frequently. |
| Consumer Price Index (CPI) | A measure of the average change in prices paid by urban consumers for a basket of consumer goods and services.2 |
| Consumer Surplus | The difference between the price consumers are willing to pay for a good or service and the price they actually pay. |
| Consumer Staples | A sector of the economy that includes companies that produce essential goods and services. |
| Consumerism | A social and economic system that encourages the acquisition of goods and services. |
| Consumption Function | An economic function that shows the relationship between consumption and income. |
| Contango | A market condition where the futures price of a commodity is higher than the spot price. |
| Contingency | A possible future event or condition. |
| Contingent Asset | A possible future asset. |
| Contingent Beneficiary | A beneficiary who will receive benefits only if certain conditions are met. |
| Contingent Convertible | A type of convertible bond that converts to equity only if certain conditions are met. |
| Contingent Liability | A possible future liability. |
| Contingent Value Rights (CVR) | A security that pays out if a specified event occurs. |
| Continuous Compounding | A method of calculating interest where interest is compounded an infinite number of times per year. |
| Contra Account | An account that reduces the balance of another account. |
| Contract For Differences (CFD) | A financial contract that pays the difference between the opening and closing prices of an asset. |
| Contractionary Policy | A monetary or fiscal policy designed to slow down economic growth. |
| Contrarian | An investor who goes against the prevailing market sentiment. |
| Contributed Capital | The amount of capital contributed by shareholders. |
| Contribution Margin | The difference between revenue and variable costs. |
| Controller | The chief accounting officer of a company. |
| Conventional Mortgage | A mortgage that is not insured by a government agency. |
| Convertible Bond | A bond that can be converted into common stock. |
| Convertible Preferred Stock | Preferred stock that can be converted into common stock. |
| Convexity | A measure of the sensitivity of a bond’s price to changes in interest rates. |
| Cook the Books | To fraudulently manipulate financial statements. |
| Copyright | A legal right granted to the creator of original works of authorship. |
| Core Competencies | The key strengths of a company. |
| Corporate Bond | A bond issued by a corporation. |
| Corporate Charter | A legal document that establishes a corporation. |
| Corporate Citizenship | A company’s responsibility to society. |
| Corporate Culture | The shared values and beliefs of a company. |
| Corporate Finance | The financial management of a company. |
| Corporate Governance | The system of rules and practices that directs and controls a company. |
| Corporate Hierarchy | The organizational structure of a company. |
| Term | Definition |
|---|---|
| Corporate Social Responsibility (CSR) | A company’s commitment to operating in an ethical and sustainable manner. |
| Corporate Tax | A tax on a corporation’s profits. |
| Corporation | A legal entity that is separate from its owners. |
| Correction | A short-term decline in stock prices. |
| Correlation | A statistical measure of the relationship between two variables. |
| Correlation Coefficient | A measure of the strength and direction of the linear relationship between two variables. |
| Correspondent Bank | A bank that provides services to other banks in different locations. |
| Cost Accounting | A system for tracking and analyzing the costs of production. |
| Cost and Freight (CFR) | An Incoterm that specifies that the seller is responsible for delivering goods to a port of destination and paying for freight. |
| Cost Basis | The original cost of an asset, plus any commissions or fees. |
| Cost-Benefit Analysis | A method for evaluating the costs and benefits of a project or decision. |
| Cost of Capital | The minimum rate of return a company must earn on its investments. |
| Cost Control | The process of managing costs. |
| Cost of Debt | The interest rate a company pays on its debt. |
| Cost of Equity | The return a company must earn on its equity to satisfy its investors. |
| Cost of Goods Sold (COGS) | The direct costs of producing goods sold by a company. |
| Cost, Insurance and Freight (CIF) | An Incoterm that specifies that the seller is responsible for delivering goods to a port of destination and paying for freight and insurance. |
| Cost of Labor | The total cost of employing workers. |
| Cost of Living | The cost of maintaining a certain standard of living. |
| Cost-of-Living Adjustment (COLA) | An increase in wages or benefits to keep pace with inflation. |
| Cost of Revenue | The expenses directly associated with generating revenue. |
| Cost Per Click (CPC) | The cost of each click on an online advertisement. |
| Cost Per Thousand (CPM) | The cost of displaying an online advertisement to 1,000 people. |
| Cost-Plus Contract | A contract where the contractor is paid for their costs plus a markup. |
| Cost-Push | Inflation caused by rising costs of production. |
| Cost-Volume-Profit (CVP) | Analysis A method for determining the relationship between costs, volume, and profit. |
| Cottage Industry | A small-scale business operated from home. |
| Counteroffer | A response to an offer that changes the terms of the original offer. |
| Counterparty | The other party to a financial transaction. |
| Counterparty Risk | The risk that the other party to a financial transaction will default. |
| Countertrade | The exchange of goods or services for other goods or services. |
| Coupon Rate | The annual interest rate stated on a bond. |
| Covariance | A statistical measure of how two variables move together. |
| Covenant | A restriction in a loan agreement or bond indenture. |
| Cover Letter | A letter sent with a resume to a potential employer. |
| Coverage Ratio | A measure of a company’s ability to meet its debt obligations. |
| Covered Call | An options strategy that involves selling a call option on a stock that you own. |
| Covered Interest Rate Parity | A theory that states that the difference in interest rates between two countries should equal the forward premium or discount on their currencies. |
| Creative Destruction | The process by which new innovations replace old ones. |
| Credit | The ability to borrow money or access goods or services with payment deferred. |
| Credit Analyst | A person who analyzes the creditworthiness of borrowers. |
| Credit Bureau | A company that collects and reports credit information. |
| Credit Card | A card that allows the holder to make purchases on credit. |
| Credit Card Balance | The amount of money owed on a credit card. |
| Credit Card Dump | A list of stolen credit card numbers. |
| Credit Default Swap (CDS) | A financial contract that transfers credit risk from one party to another. |
| Credit Facility | A line of credit or loan agreement. |
| Credit Limit | The maximum amount that can be borrowed on a credit card or line of credit. |
| Credit Linked Note (CLN) | A debt security whose payoff is linked to the creditworthiness of a reference entity. |
| Credit Rating | An assessment of the creditworthiness of a borrower. |
| Credit Report | A report containing credit information about a borrower. |
| Credit Risk | The risk that a borrower will default on a loan. |
| Credit Score | A numerical representation of a borrower’s creditworthiness. |
| Credit Spread | The difference in yield between two bonds. |
| Credit Union | A financial cooperative that provides services to its members. |
| Creditor | A person or entity to whom money is owed. |
| Creditworthiness | The ability to repay a loan. |
| Cross Culture | Relating to different cultures. |
| Cross Elasticity of Demand | A measure of how the demand for one good changes in response to a change in the price of another good. |
| Cross-Sell | To sell additional products or services to existing customers. |
| Crowdfunding | Raising capital from a large number of individuals. |
| Crowding Out Effect | The reduction in private investment due to government borrowing. |
| Crude Oil | Unrefined petroleum. |
| Crypto Token | A digital asset that represents a specific use case on a blockchain. |
| Cryptocurrency | A digital or virtual currency that uses cryptography for security. |
| Cum Dividend | With dividend included. |
| Cum Laude | With honors. |
| Cup and Handle Pattern | A chart pattern that suggests a potential breakout. |
| Currency | A form of money. |
| Currency Carry Trade | A strategy that involves borrowing in a low-interest-rate currency and investing in a high-interest-rate currency. |
| Currency Exchange | The process of converting one currency to another. |
| Currency Peg | A fixed exchange rate between two currencies. |
| Currency Swap | An agreement to exchange currencies at a future date. |
| Current Account | A record of a country’s international transactions related to goods, services, and income. |
| Current Account Deficit | A situation where a country’s imports exceed its exports. |
| Current Assets | Assets that are expected to be converted to cash within one year. |
| Current Liabilities | Liabilities that are due within one year. |
| Current Ratio | A measure of a company’s liquidity. |
| Current Yield | The annual interest payment on a bond divided by its current price. |
| CUSIP Number | A unique identifier for a security. |
| Custodial Account | An account held for a minor. |
| Custodian | A person or institution that manages assets for another party. |
| Customer | A person or entity that buys goods or services. |
| Customer Relationship Management (CRM) | The process of managing interactions with customers. |
| Customer Service | The assistance provided to customers. |
| Customer to Customer (C2C) | Transactions between customers. |
| Cyclical Industry | An industry that is sensitive to the business cycle. |
| Cyclical Stocks | Stocks of companies in cyclical industries. |
| Cyclical Unemployment | Unemployment that rises during economic downturns and falls during economic expansions. |