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Business & Finance > Acronyms in Finance > Flashcards

Acronyms in Finance Flashcards

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1
Q

Acronym: ROI

A

Full Form: Return on Investment
Definition: A measure of the profitability of an investment, calculated as the ratio of net profit to the initial cost of the investment.

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2
Q

Acronym: EBITDA

A

Full Form: Earnings Before Interest, Taxes, Depreciation, and Amortization
Definition: A metric used to evaluate a company’s operating performance, excluding non-operating expenses.

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3
Q

Acronym: NAV

A

Full Form: Net Asset Value
Definition: The value of an entity’s assets minus its liabilities, often used in mutual funds to represent per-share value.

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4
Q

Acronym: EPS

A

Full Form: Earnings Per Share
Definition: The portion of a company’s profit allocated to each outstanding share of common stock, used as an indicator of a company’s profitability.

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5
Q

Acronym: IPO

A

Full Form: Initial Public Offering
Definition: The process by which a private company offers its shares to the public for the first time to raise capital.

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6
Q

Acronym: P/E Ratio

A

Full Form: Price-to-Earnings Ratio
Definition: A valuation ratio of a company’s current share price compared to its per-share earnings, used to determine if a stock is over or undervalued.

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6
Q

Acronym: CAGR

A

Full Form: Compound Annual Growth Rate
Definition: The rate of return required for an investment to grow from its beginning balance to its ending balance, assuming profits are reinvested.

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7
Q

Acronym: CFD

A

Full Form: Contract for Difference
Definition: A financial derivative allowing investors to speculate on price movements without owning the underlying asset.

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8
Q

Acronym: SEC

A

Full Form: Securities and Exchange Commission
Definition: A U.S. government agency responsible for regulating the securities industry and protecting investors.

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9
Q

Acronym: FDI

A

Full Form: Foreign Direct Investment
Definition: An investment made by a firm or individual in one country into business interests in another country, typically by acquiring assets or establishing operations.

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10
Q

Acronym: LIBOR

A

Full Form: London Interbank Offered Rate
Definition: A benchmark interest rate at which major global banks lend to one another in the international interbank market.

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10
Q

Acronym: ETF

A

Full Form: Exchange-Traded Fund
Definition: An investment fund that is traded on stock exchanges, much like stocks, and typically aims to track an index.

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11
Q

Acronym: AML

A

Full Form: Anti-Money Laundering
Definition: Laws, regulations, and procedures designed to prevent criminals from disguising illegally obtained funds as legitimate income.

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12
Q

Acronym: FX

A

Full Form: Foreign Exchange
Definition: The market in which currencies are traded, also known as the forex market, where participants can buy, sell, exchange, and speculate on currencies.

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13
Q

Acronym: GDP

A

Full Form: Gross Domestic Product
Definition: The total monetary value of all goods and services produced within a country during a specific period, used to gauge economic performance.

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14
Q

Acronym: GAAP

A

Full Form: Generally Accepted Accounting Principles
Definition: A set of accounting standards, procedures, and principles that companies must follow when preparing their financial statements.

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15
Q

Acronym: NPV

A

Full Form: Net Present Value
Definition: The difference between the present value of cash inflows and outflows of an investment, used to assess its profitability.

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16
Q

Acronym: REIT

A

Full Form: Real Estate Investment Trust
Definition: A company that owns, operates, or finances income-generating real estate, allowing investors to invest in large-scale properties.

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17
Q

Acronym: KYC

A

Full Form: Know Your Customer
Definition: A process that financial institutions and other entities use to verify the identity of their clients, helping prevent fraud and financial crimes.

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18
Q

Acronym: FIFO

A

Full Form: First In, First Out
Definition: An inventory valuation method where the goods purchased or produced first are the ones sold or used first.

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18
Q

Acronym: ESG

A

Full Form: Environmental, Social, and Governance
Definition: A set of standards for a company’s operations that socially conscious investors use to screen potential investments.

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19
Q

Acronym: LIFO

A

Full Form: Last In, First Out
Definition: An inventory valuation method where the most recently produced or acquired items are sold or used first.

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20
Q

Acronym: M&A

A

Full Form: Mergers and Acquisitions
Definition: The consolidation of companies or assets through various financial transactions, including mergers, acquisitions, and consolidations.

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20
Q

Acronym: IRR

A

Full Form: Internal Rate of Return
Definition: A discount rate that makes the net present value of all cash flows from a particular project equal to zero, used to evaluate investment profitability.

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21
Q

Acronym: NIM

A

Full Form: Net Interest Margin
Definition: A measure of the difference between the interest income generated by banks and the interest paid out to lenders, expressed as a percentage of interest-earning assets.

22
Q

Acronym: VaR

A

Full Form: Value at Risk
Definition: A statistical technique used to measure the risk of loss on a specific portfolio of financial assets over a defined period.

23
Q

Acronym: S&P 500

A

Full Form: Standard & Poor’s 500
Definition: A stock market index tracking the stock performance of 500 large companies listed on exchanges in the United States.

24
Q

Acronym: CPI

A

Full Form: Consumer Price Index
Definition: A measure that examines the weighted average of prices of consumer goods and services, such as transportation, food, and medical care, used to gauge inflation.

24
Q

Acronym: PPI

A

Full Form: Producer Price Index
Definition: An index that measures the average change over time in the selling prices received by domestic producers for their output.

25
Q

Acronym: CDO

A

Full Form: Collateralized Debt Obligation
Definition: A complex structured finance product that is backed by a pool of loans and other assets and sold to institutional investors.

26
Q

Acronym: AUM

A

Full Form: Assets Under Management
Definition: The total market value of the investments that an entity, such as a mutual fund or financial institution, manages on behalf of clients.

27
Q

Acronym: SWIFT

A

Full Form: Society for Worldwide Interbank Financial Telecommunication
Definition: A network used by financial institutions to securely transmit information and instructions through a standardized system of codes.

28
Q

Acronym: FDIC

A

Full Form: Federal Deposit Insurance Corporation
Definition: A U.S. government agency that provides insurance to depositors in member banks to protect against bank failures.

29
Q

Acronym: SOX

A

Full Form: Sarbanes-Oxley Act
Definition: A U.S. federal law enacted to protect investors by improving the accuracy and reliability of corporate disclosures.

30
Q

Acronym: OTC

A

Full Form: Over-the-Counter
Definition: The trading of financial securities, such as stocks or bonds, directly between two parties, without the use of a central exchange.

31
Q

Acronym: CDS

A

Full Form: Credit Default Swap
Definition: A financial derivative that allows an investor to “swap” or offset the risk of credit loss on a loan or other debt instrument.

32
Q

Acronym: TARP

A

Full Form: Troubled Asset Relief Program
Definition: A program of the U.S. government to purchase toxic assets and equity from financial institutions to strengthen the financial sector during the 2008 financial crisis.

33
Q

Acronym: ECB

A

Full Form: European Central Bank
Definition: The central bank responsible for monetary policy within the Eurozone, which consists of 19 of the 27 European Union countries that have adopted the euro.

34
Q

Acronym: SME

A

Full Form: Small and Medium-sized Enterprises
Definition: Businesses whose personnel numbers fall below certain limits, usually defined by the number of employees or annual revenue.

35
Q

Acronym: MICR

A

Full Form: Magnetic Ink Character Recognition
Definition: A technology used in the banking industry to verify the legitimacy of paper checks and to facilitate the processing of checks and other documents.

35
Q

Acronym: ATM

A

Full Form: Automated Teller Machine
Definition: An electronic banking outlet that allows customers to complete basic transactions without the need for a branch representative.

36
Q

Acronym: APR

A

Full Form: Annual Percentage Rate
Definition: The yearly interest rate charged on borrowed money or earned through an investment, expressed as a percentage.

37
Q

Acronym: DCF

A

Full Form: Discounted Cash Flow
Definition: A valuation method used to estimate the value of an investment based on its expected future cash flows.

38
Q

Acronym: FASB

A

Full Form: Financial Accounting Standards Board
Definition: An independent nonprofit organization responsible for establishing accounting and financial reporting standards in the U.S.

38
Q

Acronym: FICO

A

Full Form: Fair Isaac Corporation
Definition: A company best known for creating the credit scoring model widely used to determine an individual’s creditworthiness.

38
Q

Acronym: COGS

A

Full Form: Cost of Goods Sold
Definition: The direct costs attributable to the production of goods sold by a company, including materials and labor costs.

39
Q

Acronym: TTM

A

Full Form: Trailing Twelve Months
Definition: A measurement of a company’s financial performance over the past twelve months, used to smooth out seasonal or irregular financial fluctuations.

39
Q

Acronym: WACC

A

Full Form: Weighted Average Cost of Capital
Definition: The average rate of return a company is expected to provide to all its different investors, calculated as the weighted average of equity and debt costs.

40
Q

Acronym: SME

A

Full Form: Subject Matter Expert
Definition: An expert in a particular area or topic, often consulted to provide specific expertise and insight for a financial analysis or project.

41
Q

Acronym: CBOE

A

Full Form: Chicago Board Options Exchange
Definition: The largest U.S. options exchange, which offers options on a variety of financial instruments including stocks, indexes, and interest rates.

42
Q

Acronym: MSCI

A

Full Form: Morgan Stanley Capital International
Definition: A leading provider of global equity, fixed income, and multi-asset indexes, as well as analytics and tools used in global investment decision-making.

43
Q

Acronym: OTCBB

A

Full Form: Over-the-Counter Bulletin Board
Definition: A regulated quotation service that displays real-time quotes, last-sale prices, and volume information for over-the-counter securities.

44
Q

Acronym: NAVPS

A

Full Form: Net Asset Value Per Share
Definition: The value of a mutual fund or ETF’s assets minus liabilities, divided by the number of outstanding shares, used to determine its per-share value.

45
Q

Acronym: PD

A

Full Form: Probability of Default
Definition: A measure of the likelihood that a borrower will be unable to meet its debt obligations, often used in risk management.

46
Q

Acronym: CLO

A

Full Form: Collateralized Loan Obligation
Definition: A security backed by a pool of debt, typically low-rated corporate loans, structured to reduce risk and improve credit ratings.

47
Q

Acronym: FX Swap

A

Full Form: Foreign Exchange Swap
Definition: A financial contract in which two parties exchange currencies and agree to reverse the transaction at a later date.

48
Q

Acronym: AMLD

A

Full Form: Anti-Money Laundering Directive
Definition: EU regulations aimed at preventing money laundering and terrorist financing by establishing standardized financial practices.

49
Q

Acronym: APT

A

Full Form: Arbitrage Pricing Theory
Definition: A theory used to determine the fair market price of a financial asset, considering the relationship between its expected return and multiple macroeconomic factors.

49
Q

Acronym: GNP

A

Full Form: Gross National Product
Definition: The total value of goods produced and services provided by a country during a specific period, including income earned abroad.

50
Q
A
50
Q

Acronym: FINRA

A

Full Form: Financial Industry Regulatory Authority
Definition: A private American self-regulatory organization that oversees brokerage firms and exchange markets to protect investors.

51
Q
A

Business & Finance (32 decks)

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