REFERENCE GUIDE
Financial Glossary
Short, plain-language definitions of common terms used in finance and economics.
- Asset
- A resource with economic value that is owned or controlled by a person, organization or institution.
- Bond
- A debt instrument under which an issuer generally agrees to make specified payments and repay principal under stated terms.
- Capital
- Financial resources or other assets used to support activity, production or investment.
- Compound growth
- A process in which accumulated returns can generate additional returns over time. Actual outcomes can be positive or negative.
- Diversification
- Spreading exposure across different assets or sources of risk to reduce reliance on any single one.
- Inflation
- A sustained increase in the general level of prices across an economy.
- Interest rate
- The cost of borrowing or the return paid for lending money, expressed as a percentage over a period.
- Liquidity
- The ease with which an asset can be converted into cash without a substantial impact on its price.
- Market index
- A calculated measure tracking a defined group of assets under specified rules.
- Risk
- Uncertainty about outcomes, including the possibility of loss or an outcome different from what was expected.
- Share / stock
- A financial instrument that generally represents an ownership interest in a company.
- Time horizon
- The period over which funds may be invested or a financial goal is considered.
- Volatility
- A measure or description of how much an asset’s price changes over time.
- Yield
- A measure of income from an asset relative to a stated price or value, calculated according to a particular convention.
Definitions are general educational summaries. Meaning and treatment may vary by context and jurisdiction.