| Term | Definition |
|---|---|
| E-Mini | A futures contract traded on the CME Globex platform |
| EAFE Index | An index that tracks the performance of stocks in Europe, Australasia, and the Far East |
| Early Adopter | A person who adopts a new product or technology early on |
| Early Exercise | The ability to exercise an option before its expiration date |
| Earmarking | The designation of funds for a specific purpose |
| Earned Income | Income from employment or self-employment |
| Earned Income Credit (EITC) | A tax credit for low- to moderate-income workers |
| Earned Premium | The portion of a premium that has been earned by the insurer |
| Earnest Money | A deposit made by a buyer to show their good faith intention to purchase |
| Earnings | A company’s profits |
| Earnings Announcement | A public release of a company’s earnings information |
| Earnings Before Interest After Taxes (EBIAT) | A company’s earnings after interest but before taxes |
| Earnings Before Interest and Taxes (EBIT) | A company’s earnings before interest and taxes |
| Earnings Before Interest, Depreciation and Amortization (EBIDA) | A company’s earnings before interest, depreciation, and amortization |
| Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) | A company’s earnings before interest, taxes, depreciation, and amortization |
| Earnings Call | A conference call between a company’s management and analysts to discuss earnings |
| Earnings Credit Rate (ECR) | The interest rate paid on excess reserves held at the Federal Reserve |
| Earnings Estimate | An analyst’s prediction of a company’s future earnings |
| Earnings Management | The use of accounting techniques to smooth out earnings |
| Earnings Multiplier | A measure of how much a stock’s price is likely to change in response to a change in earnings |
| Earnings Per Share (EPS) | A company’s earnings divided by the number of outstanding shares |
| Earnings Power Value | A valuation method that estimates the value of a company based on its future earnings |
| Earnings Report | A company’s financial statements |
| Earnings Yield | A company’s earnings per share divided by its stock price |
| Earnout | A payment contingent on the achievement of certain performance targets |
| Easement In Gross | A right to use another person’s land for a specific purpose |
| Eavesdropping Attack | A type of cyberattack where an attacker intercepts communication |
| EBIT/EV Multiple | A valuation metric that compares a company’s EBIT to its enterprise value |
| EBITA | Earnings before interest, taxes, and amortization |
| EBITDA Margin | EBITDA divided by revenue |
| EBITDA/EV Multiple | A valuation metric that compares a company’s EBITDA to its enterprise value |
| EBITDA-to-Interest Coverage Ratio | A measure of a company’s ability to cover its interest expenses |
| EBITDA-to-Sales Ratio | EBITDA divided by sales |
| EBITDAR | Earnings before interest, taxes, depreciation, amortization, and rent |
| eCash | Electronic cash |
| Eclectic Paradigms | A theory that explains foreign direct investment |
| ECN Broker | A broker that uses electronic communication networks |
| Econometrics | The use of statistical methods to study economic data |
| Economic Calendar | A schedule of upcoming economic releases |
| Economic Capital | A measure of a company’s risk capital |
| Economic Collapse | A severe and prolonged economic downturn |
| Economic Conditions | The state of the economy |
| Economic Cycle | The periodic ups and downs in economic activity |
| Economic Depreciation | The decrease in the value of an asset over time due to wear and tear |
| Economic Efficiency | A situation where resources are allocated to their most valued uses |
| Economic Equilibrium | A state of balance in the economy |
| Economic Exposure | The risk that a company’s cash flows will be affected by changes in exchange rates |
| Economic Forecasting | The process of predicting future economic conditions |
| Economic Growth | An increase in the production of goods and services |
| Economic Growth Rate | The percentage change in real GDP |
| Economic Indicator | A statistic that provides information about the economy |
| Economic Integration | The process of reducing trade barriers between countries |
| Economic Justice | A concept of fairness in the distribution of resources |
| Economic Life | The period during which an asset is expected to be useful |
| Economic Moat | A competitive advantage that protects a company from competitors |
| Economic Order Quantity (EOQ) | The optimal order size that minimizes inventory costs |
| Economic Profit (or Loss) | Total revenue minus total costs, including opportunity costs |
| Economic Recovery | A period of increasing economic activity |
| Economic Recovery Tax Act of 1981 (ERTA) | A U.S. tax law that reduced taxes |
| Economic Rent | The payment for a factor of production that exceeds its opportunity cost |
| Economic Shock | An unexpected event that affects the economy |
| Economic Stimulus | Government policies designed to boost economic activity |
| Economic Value | The present value of future cash flows |
| Economic Value Added (EVA) | A measure of a company’s financial performance |
| Economic Value of Equity (EVE) | The value of a company’s equity |
| Economics | The study of how people make choices in the face of scarcity |
| Economies of Scale | A decrease in average cost as output increases |
| Economies of Scope | Cost savings from producing a wider variety of products |
| Economist | A person who studies economics |
| Economy | The system of production, distribution, and consumption of goods and services |
| EdTech | Technology used in education |
| Education Loan | A loan to finance education expenses |
| Education IRA | A tax-advantaged savings account for education expenses |
| Effective Annual Interest Rate | The annual interest rate that takes into account the effect of compounding |
| Effective Dates | The dates on which a contract or agreement takes effect |
| Effective Duration | A measure of the sensitivity of a bond’s price to changes in interest rates |
| Effective Gross Income (EGI) | Rental income minus vacancy and operating expenses |
| Effective Interest Rate Method | An accounting method for amortizing a bond discount or premium |
| Effective Tax Rate | The actual percentage of income paid in taxes |
| Effective Yield | The actual return earned on a bond, taking into account any discounts or premiums |
| Efficiency | The ability to produce the maximum output with the minimum input |
| Efficiency Ratio | A measure of a company’s efficiency |
| Efficient Frontier | The set of optimal portfolios that offer the highest expected return for a given level of risk |
| Efficient Market Hypothesis (EMH) | A theory that states that asset prices fully reflect all available information |
| Egalitarianism | A belief in equality |
| Elastic | Responsive to changes in price or income |
| Elasticity | A measure of responsiveness |
| Elective-Deferral Contribution | A contribution to a retirement plan that is made on a pre-tax basis |
| Electronic Bill Payment and Presentment (EBPP) | A system for paying and viewing bills online |
| Electronic Check | A check that is processed electronically |
| Electronic Commerce (e-commerce) | Buying and selling goods and services online |
| Electronic Communication Network (ECN) | A system that matches buy and sell orders electronically |
| Electronic Data Gathering, Analysis and Retrieval (EDGAR) | A database of company filings with the SEC |
| Electronic Federal Tax Payment System (EFTPS) | A system for paying federal taxes electronically |
| Electronic Filing (E-File) | Filing tax returns electronically |
| Electronic Fund Transfer Act | A U.S. law that protects consumers who use electronic fund transfer services |
| Electronic Money | Money that exists only in electronic form |
| Electronic Payments Network (EPN) | A network that processes electronic payments |
| Electronic Retailing (E-tailing) | Selling goods and services online |
| Elevator Pitch | A short summary of a business or product |
| Elliott Wave Theory | A technical analysis theory that uses wave patterns to predict market movements |
| Email Money Transfer (EMT) | A service for sending money via email |
| Embargo | A ban on trade with a particular country |
| Embezzlement | The theft of funds by someone in a position of trust |
| Emergency Banking Act of 1933 | A U.S. law passed during the Great Depression |
| Emergency Fund | Money set aside for unexpected expenses |
| Emerging Industry | A new industry that is still developing |
| Emerging Market Economy | A country with a rapidly growing economy |
| Emerging Markets Bond Index (EMBI) | An index that tracks the performance of emerging market bonds |
| Emerging Markets Index (MSCI) | An index that tracks the performance of emerging market stocks |
| Emigration | The act of leaving one’s country to settle in another |
| Eminent Domain | The government’s power to take private property for public use |
| Empire Building | The pursuit of growth and power by a company or individual |
| Empirical Rule | A statistical rule that describes the distribution of data in a normal distribution |
| Employee Buyout (EBO) | A buyout of a company by its employees |
| Employee Retirement Income Security Act (ERISA) | A U.S. law that sets standards for most private-sector retirement plans |
| Term | Definition |
|---|---|
| Employee Stock Option (ESO) | An option granted to an employee to purchase company stock |
| Employee Stock Ownership Plan (ESOP) | A type of retirement plan that invests primarily in company stock |
| Employee Stock Purchase Plan (ESPP) | A plan that allows employees to purchase company stock at a discount |
| Employer Identification Number (EIN) | A unique identifier for businesses |
| Employers’ Liability Insurance | Insurance that protects employers from lawsuits by employees injured on the job |
| Employment Agency Fees | Fees paid to employment agencies for finding employees |
| Employment Insurance (EI) | Insurance that provides income replacement to workers who lose their jobs |
| Employment-to-Population Ratio | The percentage of the population that is employed |
| Encroachment | The intrusion onto another person’s property |
| Encumbrance | A claim or liability that is attached to an asset |
| End-to-End | From start to finish |
| Endogenous Growth Theory | A theory that explains economic growth as a result of factors within the economy |
| Endogenous Variable | A variable that is determined within a model |
| Endorsement | A signature on the back of a check |
| Endowment | A fund that is invested to provide income for a specific purpose |
| Endowment Effect | The tendency to value something more if you already own it |
| Energy Return on Investment (EROI) | The ratio of energy produced to energy used |
| Energy Risk Professional (ERP) | A professional who manages energy risk |
| Energy Sector | Companies involved in the production and distribution of energy |
| Engagement Letter | A letter outlining the terms of an engagement |
| Engel’s Law | The observation that the proportion of income spent on food decreases as income rises |
| Enhanced Oil Recovery (EOR) | Methods used to increase oil production from existing wells |
| Enrolled Agent (EA) | A tax professional authorized to represent taxpayers before the IRS |
| Enron | A former energy company that collapsed due to accounting fraud |
| Enterprise Multiple | A valuation metric that compares a company’s enterprise value to its EBITDA |
| Enterprise Resource Planning (ERP) | Software that integrates various business functions |
| Enterprise Risk Management (ERM) | The process of identifying and managing risks |
| Enterprise Value (EV) | The total value of a company, including debt and equity |
| Enterprise-Value-to-Revenue Multiple (EV/R) | A valuation metric that compares a company’s enterprise value to its revenue |
| Enterprise Value-to-Sales (EV/Sales) | Same as Enterprise-Value-to-Revenue Multiple |
| Entity Theory | An accounting theory that treats the business as a separate entity from its owners |
| Entrepreneur | A person who starts a business |
| Envelope | A technical indicator |
| Environmental Economics | The study of how economics affects the environment |
| Environmental Protection Agency (EPA) | A U.S. government agency that protects human health and the environment |
| ESG Investing | Investing based on environmental, social, and governance factors |
| EOS | Enterprise Operating System |
| Equal Credit Opportunity Act (ECOA) | A U.S. law that prohibits discrimination in lending |
| Equal Employment Opportunity Commission (EEOC) | A U.S. government agency that enforces anti-discrimination laws |
| Equal Weight | An investment strategy where each security in a portfolio is given the same weight |
| Equated Monthly Installment (EMI) | A fixed monthly payment on a loan |
| Equation of Exchange | An equation that relates the money supply to the price level |
| Equilibrium | A state of balance |
| Equilibrium Quantity | The quantity supplied and demanded at the equilibrium price |
| Equitable Relief | A court order that requires a party to do or refrain from doing a specific act |
| Equity | Ownership in a company |
| Equity Accounting | An accounting method used for investments in which the investor has significant influence |
| Equity Capital Market (ECM) | The market for equity securities |
| Equity Co-Investment | An investment alongside a private equity firm |
| Equity Compensation | Compensation paid in the form of equity |
| Equity Derivative | A financial instrument whose value is derived from an equity security |
| Equity-Efficiency Tradeoff | The trade-off between fairness and economic efficiency |
| Equity Financing | Raising capital by selling equity |
| Equity Fund | A mutual fund that invests in equity securities |
| Equity-Linked Note (ELN) | A debt security whose return is linked to the performance of an equity security |
| Equity-Linked Security (ELKS) | Same as Equity-Linked Note |
| Equity Market | The market for equity securities |
| Equity Method | An accounting method used for investments in which the investor has significant influence |
| Equity Multiplier | A measure of a company’s financial leverage |
| Equity Premium Puzzle (EPP) | The observation that the historical return on stocks has been much higher than the return on bonds |
| Equity Risk Premium | The additional return investors expect to receive for investing in stocks over risk-free assets |
| Equity Swap | An agreement to exchange cash flows based on the performance of an equity security |
| Equivalent Annual Annuity Approach (EAA) | A capital budgeting method |
| Equivalent Annual Cost (EAC) | The annual cost of owning and operating an asset |
| Erosion | The gradual loss of value |
| Error Term | A variable in a statistical model that represents the unexplained variation |
| Errors and Omissions Insurance (E&O) | Insurance that protects professionals from lawsuits by clients |
| Escheat | The transfer of property to the state when the owner dies without a will |
| Escrow | An arrangement where a third party holds assets until certain conditions are met |
| Escrow Agent | A person or entity that holds assets in escrow |
| Escrow Agreement | A contract that outlines the terms of an escrow arrangement |
| Escrowed Shares | Shares held in escrow |
| Esoteric Debt | Debt that is complex or difficult to value |
| Estate | The assets and liabilities of a deceased person |
| Estate Planning | The process of planning for the distribution of one’s assets after death |
| Estate Tax | A tax on the transfer of property upon death |
| Estimated Ultimate Recovery (EUR) | The total amount of oil or gas that is expected to be recovered from a well |
| Estoppel | A legal doctrine that prevents someone from denying something that they previously asserted was true |
| Ether (ETH) | A cryptocurrency |
| Ethereum Classic (ETC) | A cryptocurrency that is a fork of Ethereum |
| Ethereum | A blockchain platform |
| Ethical Investing | Investing based on ethical considerations |
| Euro | The currency of the Eurozone |
| Euro Interbank Offer Rate (Euribor) | The benchmark interest rate for interbank lending in the Eurozone |
| Euro Medium Term Notes (EMTN) | Debt securities issued in the Euromarket |
| Euro Overnight Index Average (Eonia) | The average interest rate for overnight lending in the Eurozone |
| Eurobond | A bond issued in the Euromarket |
| Euroclear | A clearing and settlement system for international securities transactions |
| Eurocurrency | Currency held outside of its country of origin |
| Eurocurrency Market | The market for Eurocurrencies |
| Eurodollar | U.S. dollars held outside of the United States |
| Euromarket | The market for Eurocurrencies and Eurobonds |
| Europe, Middle East, and Africa (EMEA) | A geographic region |
| European Banking Authority (EBA) | A regulatory agency for the European banking sector |
| European Central Bank (ECB) | The central bank for the Eurozone |
| European Community (EC) | A predecessor to the European Union |
| European Currency Unit (ECU) | A former currency unit of the European Union |
| European Economic and Monetary Union (EMU) | A group of European Union members that adopted the euro |
| European Monetary System (EMS) | A former system of exchange rate coordination in Europe |
| European Option | An option that can only be exercised at its expiration date |
| European Sovereign Debt Crisis | A debt crisis that affected several European countries in the early 2010s |
| European Union (EU) | A political and economic union of European countries |
| Eurozone | The group of European Union members that have adopted the euro |
| EV/2P Ratio | A valuation metric used in the energy sector |
| Evening Star | A bearish candlestick pattern |
| Event Study | A statistical method used to analyze the impact of an event on stock prices |
| Evergreen Contract | A contract that automatically renews |
| Evergreen Funding | Funding that is automatically renewed |
| Evergreen Loan | A loan that is automatically renewed |
| Ex-Ante | Before the fact |
| Ex-Date | The date on which a stock begins trading without a declared dividend |
| Ex-Dividend | Without dividend |
| Ex Gratia Payment | A payment made out of goodwill, not due to a legal obligation |
| Ex-Post | After the fact |
| Ex Works (EXW) | An Incoterm that places the most responsibility on the buyer |
| Excess Capacity | Production capacity that is not being used |
| Excess Cash Flow | Cash flow that is left over after a company has made all necessary investments |
| Excess of Loss Reinsurance | A type of reinsurance that covers losses that exceed a certain amount |
| Term | Definition |
|---|---|
| Excess Reserves | Reserves held by a bank that exceed the required reserves |
| Excess Return | The return on an investment that exceeds the benchmark return |
| Exchange | A marketplace where securities are traded |
| Exchange Control | Restrictions on the flow of currency in and out of a country |
| Exchange of Futures for Physical (EFP) | A transaction where a futures contract is exchanged for the underlying asset |
| Exchange Rate | The price of one currency in terms of another currency |
| Exchange Rate Mechanism (ERM) | A system of fixed exchange rates |
| Exchange Ratio | The ratio of shares offered in a merger or acquisition |
| Exchange Traded Derivative | A derivative contract that is traded on an exchange |
| Exchange-Traded Fund (ETF) | A type of investment fund that is traded on an exchange |
| Exchange-Traded Note (ETN) | A type of debt security that is traded on an exchange and whose return is linked to an underlying index or benchmark |
| Exchange Traded Product (ETP) | A broad term that encompasses ETFs, ETNs, and other similar products |
| Excise Tax | A tax on a specific good or service |
| Exculpatory Clause | A clause in a contract that attempts to relieve one party of liability |
| Execution | The act of completing a trade |
| Executive MBA | A type of MBA program designed for experienced professionals |
| Executor | A person appointed to carry out the wishes of a deceased person as specified in their will |
| Exempt Employee | An employee who is not entitled to overtime pay |
| Exempt Income | Income that is not subject to tax |
| Exempt-Interest Dividend | A dividend that is not subject to federal income tax |
| Exempt Transaction | A transaction that is not subject to registration requirements |
| Exemption | A deduction that reduces taxable income |
| Exercise | The act of using the rights granted by an option contract |
| Exercise Price | The price at which an asset can be bought or sold under an option contract |
| Exit Strategy | A plan for selling a business or investment |
| Exogenous Growth | Economic growth that is driven by factors outside the economy |
| Exotic Option | A complex option with non-standard features |
| Expanded Accounting Equation | Assets = Liabilities + Owner’s Equity + Revenues – Expenses |
| Expansion | A period of increasing economic activity |
| Expansionary Policy | Government policies designed to boost economic activity |
| Expatriate | A person who lives and works in a foreign country |
| Expectations Theory | A theory that states that long-term interest rates are determined by expectations of future short-term interest rates |
| Expected Loss Ratio (ELR Method) | A method for estimating insurance losses |
| Expected Value | The weighted average of possible outcomes |
| Expected Return | The return that an investor expects to receive on an investment |
| Expected Utility | The weighted average of the utility of possible outcomes |
| Expedited Funds Availability Act (EFAA) | A U.S. law that regulates the time it takes for deposited funds to be available for withdrawal |
| Expenditure Method | A method for calculating GDP |
| Expense | A cost incurred by a business |
| Expense Ratio | The annual cost of owning a mutual fund |
| Experience Ratings | A method for calculating insurance premiums based on past claims |
| Expiration Date | The date on which an option contract expires |
| Expiration Time | The time at which an option contract expires |
| Expiration Date (Derivatives) | The date on which a derivative contract expires |
| Explicit Cost | A direct, out-of-pocket cost |
| Exploration & Production (E&P) | Companies involved in the exploration and production of oil and gas |
| Exponential Growth | Growth that increases at a constant percentage rate |
| Exponential Moving Average (EMA) | A type of moving average that gives more weight to recent data |
| Export Credit Agency | A government agency that provides financing and insurance to support exports |
| Export Trading Company (ETC) | A company that facilitates exports |
| Export | To sell goods or services to another country |
| Exposure at Default (EAD) | The estimated loss that would be incurred if a borrower defaults |
| Express Warranty | A written guarantee |
| Expropriation | The government’s seizure of private property |
| Extended Trading | Trading that occurs outside of regular market hours |
| External Debt | Debt owed to foreign creditors |
| External Economies of Scale | Cost savings that accrue to all firms in an industry |
| Externality | A cost or benefit that is imposed on a third party |
| Externality of Production | An externality that arises from the production of a good or service |
| Extraordinary General Meetings (EGM) | A meeting of shareholders to vote on special issues |
| Extraordinary Item | A gain or loss that is unusual and infrequent |
| Extrinsic Value | The portion of an option’s value that is not due to its intrinsic value |