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Financial dictionary terms starting with “i”
An I Bond is one of two types of savings bonds sold by the U.S. Treasury (the other is the EE Bond). See More.
An Icahn Lift is a rise in stock price associated with an investment by famed activist shareholder Carl Icahn. See More.
In business, the Icarus factor describes what happens when companies become overly dedicated or overly enthusiastic about a project or initiative, and that enthusiasm and dedication becomes a detriment to the company. See More.
An iceberg order is a large order that has been split into several smaller orders to conceal the "real" size of the order. See More.
An identifiable asset is anything that has commercial or exchange value and can provide future economic benefits. Identifiable assets can be tangible or intangible. See More.
An identity fraud reimbursement program is an insurance-like product that reimburses the holder for expenses related to dealing with being a victim of identity theft. See More.
Identity theft is the crime of using another person's personal information, credit history or other identifying characteristics in order to make purchases or borrow money without that person's permission. See More.
Also called unsystematic risk, idiosyncratic risk is price risk associated with a company's particular circumstances. See More.
Also called down time, idle time is when employees or machines are not working but are being paid. See More.
The Ifo Business Climate Survey is a monthly measure of German business activity. See More.
An illegal dividend is a dividend declared in violation of a company's charter or state laws. See More.
Illiquid describes an asset or security that cannot be sold quickly due to a shortage of interested buyers or a lack of an established trading market. Illiquid assets cannot be easily converted into cash without potential for losing a significant per See More.
Immediate payment annuities (also called single-premium immediate annuities or SPIAs) are annuities that begin making payments to the owner immediately (within one year of purchase). See More.
Immunization is a dedicated-portfolio strategy used to manage a portfolio with the goal of making it worth a specific amount at a certain point, usually to fund a future liability. Immunization is one of two kinds of dedicated-portfolio strategi See More.
An impact day is the day on which a company's secondary offering begins trading. See More.
Real estate developers pay an impact fee to cities or other municipalities to offset the town's cost of building the infrastructure to support a private real estate development. See More.
Generally, an impaired asset is an asset whose market value is below book value. See More.
The term impairment refers to assets that are no longer of the same value as in a prior period. An impairment charge is used and the asset is revalued downward and a "charge" is made to net assets. See More.
An implementation lag is the time elapsed between an adverse macroeconomic shock and an effort to counter the shock. See More.
An implied warranty is an unwritten guarantee that a product or service works as expected. See More.
In the tax and import/export world, an import duty (or customs duty) is money collected under a tariff. See More.
In the real estate world, an impound is an account that mortgage companies use to collect property taxes, homeowners insurance, private mortgage insurance and other payments that are required by the homeowner but are not part of principal and interes See More.
Imputed Interest refers to interest that is considered by the IRS to have been paid for tax purposes, even if no interest payment was made. The IRS uses imputed interest as a tool to collect tax revenues on loans that don't pay interest, or stated in See More.
In specie is a Latin term describing the provision of an asset in its physical form rather than in the cash value of the asset. See More.
Securities are held in street name when the name of the broker, not the individual owner, is listed on the certificate. Almost all securities held in brokerage accounts are held in street name. See More.
An inactivity fee is a fee charged by brokerages to clients whose infrequent trading does not satisfy a minimum trading requirement. See More.
An Incentive share option, or ISO, is a type of company share option granted exclusively to employees. It confers an income tax benefit when exercised. ISOs are also referred to as "incentive stock options" or "qualified stock optio See More.
Incentive stock option (ISO) is a type of company stock option granted exclusively to employees. It confers an income tax benefit when exercised. See More.
Inchoate is a legal term indicating that a transaction or activity has been discussed or even agreed upon but is not final or is still incomplete. See More.
Income is an actual or recorded inflow of cash or other assets. The term is used in many different contexts. See More.
An income deposit security (IDS), also known as an enhanced income security (EIS), is an exchange-traded security composed of both an issuer's common shares and its subordinated notes. See More.
Income elasticity of demand is a measure of how much demand for a good/service changes relative to a change in income, with all other factors remaining the same. See More.
Income from operations is income that is generated by the normal operations of a business. See More.
Income funds are mutual funds, ETFs or any other type of fund that seek to generate an income stream for shareholders by investing in securities that offer dividends or interest payments. The funds can hold bonds, preferred stock, common stock or eve See More.
The income statement is one of the three primary financial statements used to assess a company’s performance and financial position (the two others being the balance sheet and the cash flow statement). The income statement summarizes the revenues a See More.
An income stock is a stock in which a taxable payment is declared by a company's board of directors and is given to the shareholders from the current or retained earnings that occur, usually on a quarterly basis. See More.
Income tax refers to annual taxes levied by the federal government and most state governments on individual and business income. By law, businesses and individuals must file federal and state income tax returns every year to determine whether t See More.
An income-oriented ETF is an exchange-traded fund that pays frequent dividends or interest payments to investors in the ETF. See More.
Incorporation means to form a corporation. A corporation is a legal form of business organization. It is sometimes referred to as a "C Corp" in reference to a section of the IRS code governing corporate taxes. See More.
An indenture agreement is the formal contract between a bond issuer and the bondholders. It sets forth the details of all the terms and conditions of the bonds, such as the exact day of their maturity, the timing of the interest payments and how they See More.
An index is a statistical aggregate that measures change. In finance, they usually refer to measures of stock market performance or economic performance. See More.
An index annuity is an annuity that pays a rate of return corresponding to a particular index, such as the S&P 500 Index. See More.
Like other ETFs, an index ETF is essentially a passive mutual fund -- similar to traditional index funds -- that allows investors to purchase a basket of securities in a single transaction. An index ETF mimics part or all of an external index. See More.
Index funds are mutual funds that are designed to track the performance of a particular index. See More.
An index hugger is a type of mutual fund whose performance closely tracks a major stock index. See More.
Introduced in 1981, index options are call or put options on a financial index comprising many stocks. See More.
An indexed annuity is an annuity that pays a rate of return corresponding to a particular index, such as the S&P 500 Index. See More.
Indexing is a passive investment strategy that seeks to mimic or exceed the returns of a designated market index or other proxy. See More.
Indicated yield is the dividend yield on a stock if the most recent dividend is annualized. See More.
The individual mandate refers to Section 5000A of the Patient Protection and Affordable Care Act (PPACA), also known as "Obamacare" or the more generic "health care reform." PPACA is a bill signed into law on March 23, 2010, by Presid See More.
An Individual Retirement Account (IRA) is a government sponsored, tax-deferred personal retirement plan. See More.
In economic terms, an inefficient market is a market in which securities prices are random and not influenced by past events. The idea is also referred to as weak form efficient-market hypothesis or the random walk theory (coined by Princeton economi See More.
Something is inelastic when its price does not vary with the price of another item. It the business world, the term most often refers to how little the price of a good or service changes when the supply of that good or service changes. The formula f See More.
Infant Industry Theory promotes an economic policy that protects young industries in less developed economies until they become established, financially stronger, and capable of withstanding competitive pressures. See More.
Inflation is the rate at which prices rise and purchasing power falls. It is why something that cost $1 in 1980 cost $2.37 in 2005. See More.
Inflation risk, also called purchasing power risk, is the chance that the cash flows from an investment won't be worth as much in the future because of changes in purchasing power due to inflation. See More.
Inflation eats away at the value of every stream of cash flows, including salaries, pension payments and coupon payments. In many cases, the real interest rates on savings accounts are negative. For instance, if a savings account pays 1.5% per year b See More.
Inflation-indexed securities are a form of savings that protects the principal and interest from the erosion of inflation. See More.
The Federal Reserve Bank of New York provides, among other things, gold storage for foreign governments and central banks. This gold is in the form of bars, which allows the bank to weigh it, stack it, and move it easily. In the United States, the Fe See More.
An inheritance includes those assets of an estate that are bequeathed, in whole or in part, to specific heirs. See More.
An inheritance tax, also called an estate tax, is a tax assessed on all or a portion of an inherited estate. Life insurance, pensions, real estate, cars, belongings and debts are all part of one's estate. "Death tax" is generally a p See More.
Initial Jobless Claims is a report issued by the U.S. Department of Labor every Thursday at 8:30am EST. See More.
An initial margin, or initial margin requirement, is the amount an investor must pay in cash for securities before the broker will lend money to that investor to buy more securities. This borrowing gives the investor more purchasing power throug See More.
An initial public offering (IPO) refers to the first time a company publicly sells shares of its stock on the open market. It is also known as "going public." See More.
Injunctions are an alternative to monetary judgments, in which the court might order a party to pay damages to another party. In some cases, they are much better for defendants to deal with; in Jane's case, the monetary damages could have come wi See More.
An insider is an employee, director or any other person who is privy to confidential, nonpublic information about a company. See More.
Insider information refers to confidential information about a company that has not been publicly disclosed. See More.
Insider trading refers to the trading of securities by corporate insiders such as managers or executives. Insider trading can be legal or illegal depending on if the information used to base the trade is public. See More.
In most usages, insolvency is the inability of a company or individual to meet its financial obligations as they come due. In the legal sense of the word, an entity is considered insolvent if its total liabilities exceed its total assets. See More.
Installment debt refers to any loan that is repaid by the borrower in periodic (usually monthly) installments that include principal and interest. See More.
An installment loan is a type of loan that is repaid in periodic installments (usually monthly payments) that include principal and interest. See More.
The Institute for Supply Management (ISM) is a professional association for individuals and companies with an interest in supply management. See More.
An institutional investor is an organization, rather than an individual, that invests on behalf of the organization's members. See More.
Institutional ownership refers to the ownership stake in a company that is held by large financial organizations, pension funds or endowments. Institutions generally purchase large blocks of a company's outstanding shares and can exert considerab See More.
Institutional shares are simply shares that can be bought in bulk. Usually, they do not come with additional rights or privileges; they exist to encourage institutions to make large investments in the funds that offer them. Individuals aren't alw See More.
An insurance score is a number generated by insurance companies based on your credit score and claim history to determine the probability that a policyholder will file a claim in the future. See More.
LIBOR is one of the most widely used benchmarks for short-term interest rates and is unlike the prime rate in the United States, which is somewhat arbitrarily based on certain banks' lending costs plus a profit margin. Borrowers thus generally su See More.
Without interchanges, there would be no electronic banking. The advent of the Internet has increased its use and prevalence, and card issuers get a considerable portion of their revenues from interchange fees. See More.
The term interchange fees, also known as swipe fees, refers to the hidden cost paid by merchants to card-issuing banks and credit card companies for processing credit card and debit card transactions. See More.
Without interchanges, there would be no electronic banking. The advent of the Internet has increased its use and prevalence, and card issuers get a considerable portion of their revenues from interchange fees. Interchange fees are more than just See More.
The interest coverage ratio, also known as times interest earned, is a measure of how well a company can meet its interest-payment obligations. See More.
Interest expense is the cost of money. Interest expense is recorded on the income statement. See More.
Interest Only Strips (IO Strips) are securities with cash flows based entirely on the monthly payments received from a mortgage pool. See More.
An interest rate is the cost of borrowing money, or conversely, the income earned from lending money. Interest rates are expressed as percentage of the principal per period. See More.
The term interest rate ceiling typically refers to the maximum lifetime interest rate charged on an adjustable rate mortgage according to the terms of a mortgage contract. See More.
Interest rate risk is the chance that an unexpected change in interest rates will negatively affect the value of an investment. See More.
An interest rate swap is a contractual agreement between two parties to exchange interest payments. See More.
An interest-only adjustable-rate mortgage (interest-only ARM) is a mortgage in which the borrower only pays the interest on the loan for a set period. See More.
An interest-only mortgage is a mortgage in which the borrower only pays the interest on the loan for a set period. See More.
Interlisting is the listing of any security on two or more different exchanges. See More.
Internal controls are the methods and processes through which a company ensures that the organization is adhering to important policies and obligations. A company's board of directors, management and other executives are responsible for maintaini See More.
Internal rate of return (IRR) is the interest rate at which the net present value of all the cash flows (both positive and negative) from a project or investment equal zero. Internal rate of return is used to evaluate the attractiveness of a proje See More.
The Internal Revenue Service (IRS) is a bureau of the Department of Treasury that is tasked with the enforcement of income tax laws and oversees the collection of federal income taxes. In addition, it is also the responsibility of the IRS to determin See More.
An international banking facility (IBF) is a segregated branch of a domestic bank or financial institution available to only foreign customers. See More.
International bonds are debt securities issued by foreign companies or governments and sold domestically. See More.
International bond funds invest in bonds issued by foreign governments or foreign companies in a variety of markets, industries, and currencies. They allow investors to have an easy way to gain a diverse exposure to foreign securities. See More.
An international currency exchange rate is the rate at which one currency converts to another. See More.
International fund usually refers to an investment or mutual fund composed of international bonds and foreign company stocks. See More.
The International Monetary Fund (IMF) is the central institution embodying the international monetary system and promotes balanced expansion of world trade, reduced trade restrictions, stable exchange rates, minimal trade imbalances, avoidance of cur See More.
An international securities identification number (ISIN) is a universally accepted identifier exclusive to a particular issue of a security. See More.
Intraday refers to price movements of a given security over the course of one day of trading. It is generally used to describe the high and low price of a stock or option during a given trading day or session. See More.
Intrinsic value has two primary connotations in the finance world. In the options-trading world, the term refers to the difference between the option's strike price and the market value of the underlying security. However, the most well-know See More.
Inventory is the collection of unsold products waiting to be sold. Inventory is listed as a current asset on a company's balance sheet. See also inventory management. See More.
Inventory management is the process of ensuring that a company always has the products it needs on hand and that it keeps costs as low as possible. See More.
An inventory reserve is an accounting entry that reflects a reduction in the market value of a company's inventory. See More.
The inventory turnover ratio measures the rate at which a company purchases and resells products to customers. There are two formulas for inventory turnover: Sales See More.
An inverted yield curve, also called a negative yield curve, is a yield curve indicating that short-term yields are higher than long-term yields. See More.
Investing is the strategic purchase or sale of assets in order to produce income or capital gains. See More.
An investment advisor makes investment recommendations to clients and can also be known as a financial advisor. See More.
An investment bank is a financial intermediary that specializes primarily in selling securities and underwriting the issuance of new equity shares to raise capital funds. This is different from a commercial bank, which specializes in deposits and com See More.
The role of an investment banker is to serve as a middle-man between prospective investors and companies that intend to raise capital through the issuance of new stock. Investment bankers are often employed by and represent investment banks. See More.
Investment banking is a category of financial services that specializes primarily in selling securities and underwriting the issuance of new equity shares to help companies raise capital. Investment banking is different from commercial banking, which See More.
Joining an investment club is an excellent way to learn more about investing, and it is not unusual for investment clubs to experience outstanding returns. It is important that members of investment clubs have a long-term outlook, and many clubs See More.
An investment consultant is an educated investment professional who helps people and businesses set and meet long-term financial goals. See More.
Investment grade is a quality designation ascribed by rating agencies to bonds that have little risk of default. See More.
Investment management has two general definitions, one relating to advisory services and the other relating to corporate finance. In the first instance, a financial advisor or financial services company provides investment management by coordinat See More.
An investment manager is an educated investment professional who helps people and businesses set and meet long-term financial goals. See More.
Investment real estate refers to any residential structure owned solely for the purpose of generating investment returns, either through rental income or through market value appreciation. See More.
Investor relations (IR) refers to the function within a public company that is responsible for managing and communicating information to the public pertaining to the company's operations, managerial organization, and financial standing. See More.
The invisible hand is a theory of economics that refers to the self-regulating nature of the marketplace in determining how resources are allocated based on individuals acting in their own self-interest. See More.
The term IOU is the phonetic spelling of the phrase "I Owe You." In bookkeeping, it signifies an outstanding debt. See More.
IPO Lockup refers to the period of time after a company initially goes public during which company insiders are not allowed to sell company shares. See More.
The phrase irrational exuberance was coined by Alan Greenspan, chairman of the Federal Reserve, in a December 5, 1996, speech to the American Enterprise Institute. In the speech, Greenspan asked, “How do we know when irrational exuberance See More.
The IRS Form 1099 is used to report a variety of unique income payments to the IRS. This form is usually used when the taxpayer has received income from other sources besides a wage-paying job. See More.
Created by Barclays Global Investors, iShares are a trademarked brand of exchange-traded funds (ETFs). See More.
Issued shares include all shares that are currently owned by stockholders, company officials, and investors in the public domain. Issued shares do not include shares repurchased by a company. See More.
Issuer refers to a legal entity -- i.e., government, corporation, or investment trust -- that develops, registers and sells securities to the investing public in order to finance its operations. See More.
An itemized deduction is a reduction in taxable income that is dependent on calculations specific to the taxpayer's expenses or situation. Federal, state and local tax codes determine what is deductible and which taxpayers are eligible for itemiz See More.