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Financial dictionary terms starting with “n”
The Nakahara Prize is an award from the Japanese government to Japanese economists under age 45 who have made significant contributions to the world of economics. See More.
A naked call is an options strategy in which an investor sells a call option unassociated with units of the underlying security. See More.
Naked option refers to an option contract which does not comprise ownership of the underlying security by the purchasing or selling party. It is the opposite of a covered option. See More.
Naked position refers to any securities holding which has not been hedged for risk by any accompanying options or futures contracts. See More.
A naked put is a put option which is unaccompanied by the actual units of the underlying security specified in the contract. See More.
Naked shorting refers to the practice of shorting units of a given security in advance of ensuring whether or not they can be borrowed. See More.
Also called a dry trust or a passive trust, with a naked trust, a person transfers assets into a trust in order to pass them on to heirs or beneficiaries. See More.
A naked warrant is a warrant that is not attached to a bond or preferred stock. See More.
A named beneficiary is a person identified as the recipient of benefits from a pension plan, insurance policy, trust or other instrument. See More.
A named fiduciary is a person or entity responsible for managing a qualified retirement plan in accordance with the Employee Retirement Income Security Act (ERISA). See More.
A named perils insurance policy is a policy that covers losses from events specifically named in the policy. See More.
A nanny tax is a colloquial term for the Social Security, Medicare and federal unemployment taxes due on the pay to caregivers. See More.
A nano cap is a company with the smallest market capitalizations in the market place, typically below $50 million. See More.
In the futures market, a narrow basis occurs when the spot price of a commodity is close to the futures price of the same commodity. See More.
Narrow moat refers to the size of a company's competitive advantage. The term is an adaptation of the term "economic moat." See More.
Narrow money is a colloquial term for the total of a country's physical currency plus demand deposits and other liquid assets held by the central bank. The economic term for narrow money is M1. See More.
NASD Rule 2790 is a rule prohibiting FINRA members from buying IPO shares for personal gain. The rule is now just called Rule 2790, because NASD became FINRA in 2007. See More.
Nasdaq, which stands for the National Association of Securities Dealers Automated Quotation system, is a computerized system for stock trading. See More.
The Nasdaq 100 index is one of the most frequently cited "technology" indexes. See More.
The Nasdaq Composite is a broad market index that encompasses about 4,000 issues traded on the NASDAQ National Market. The index first started in February of 1971 with a base value of 100. See More.
In economics, a Nash equilibrium occurs when two companies in a duopoly react to each other's production changes until their prices reach an equilibrium. The term is named after John Nash, who is an American mathematician who won the Nobel Prize i See More.
National accounting, also called macro accounting, is a method of calculating the economic activity of a country or region. See More.
The National Association of Insurance and Financial Advisors (NAIFA) is a trade organization for insurance professionals and financial advisors. See More.
The National Association of Mortgage Brokers (NAMB) is an industry trade group representing mortgage brokers. See More.
The National Association of REALTORS (NAR) is a trade association for real estate professionals. See More.
The National Association of Securities Dealers (NASD) was a regulatory organization that oversaw the securities industry. The Financial Industry Regulatory Authority (FINRA) superseded NASD in 2007. See More.
The National Automated Clearinghouse Association (NACHA) operates the Automated Clearinghouse (ACH) network, which allows companies and consumers to send payments from one account to another. See More.
A national bank is a bank that is a member of the Federal Reserve system and the Federal Deposit Insurance Corp. In global terms, a national bank is a country's central bank. In this context, the Federal Reserve is the United States' nat See More.
The National Bank Surveillance System is a computer system that collects financial information about banks. See More.
The National Best Bid and Offer (NBBO) is the highest bid and lowest offer price quoted on Nasdaq. See More.
The National Bureau of Economic Research (NBER) is a private, nonprofit, nonpartisan research organization that studies the economy. See More.
The National Credit Union Administration (NCUA) is an agency of the United States government that charters and oversees federal credit unions. It was created by Congress in 1970. See More.
A national currency is simply the currency issued by a country's central bank. Currency is a medium of exchange for goods or services within an economy. See More.
National income accounting is a government accounting system to measure economic activity. See More.
The national market system (NMS) is a system that regulates the disclosure and execution of trades across all exchanges. See More.
The National Retail Federation (NRF) is a trade group that represents retailers. See More.
The national savings rate is the percentage of gross domestic product that households, governments and businesses save rather than spend. See More.
Nationalization occurs when a country's government seizes the assets of corporations or resources without paying for those assets. See More.
Natural capital is a term that describes an economy's natural resources such as water, timber or oil. See More.
Natural unemployment is the level of unemployment always present in an economy as industries expand and contract, as technological advances occur, as new generations enter the labor force and as workers voluntarily search for better opportunities. See More.
Near money is a term for highly-liquid assets that are quickly and easily converted into cash. They may also be referred to as cash equivalents. Examples of Near Money Examples of near money investments are interest-bearing savings See More.
Negative amortization occurs when the principal balance on a loan (usually a mortgage) increases because the borrower's payments don't cover the total amount of interest that has accrued. See More.
A negative amortization limit is a clause in a loan that restricts the amount of negative amortization that can occur during the contract. See More.
Negative amortizing loans are loans in which the loan's principal balance increases even though the borrower is making payments on the loan. See More.
Negative arbitrage occurs when the interest rate a borrower pays on its debt is higher than the interest rate the borrower earns on the money that will be used to repay the debt. See More.
A negative assurance is an auditor's written statement that an audit did not uncover any signs of fraud or violations of accounting rules. See More.
Negative authorization is the term for a credit card system that approves or disapproves a credit card transaction based on whether the card appears on lists of stolen, canceled, closed, or lost account numbers. See More.
Negative butterfly refers to a change in the yield curve whereby medium-term yields change by a greater magnitude than short-term and long-term yields. It is important to note that the negative butterfly is the opposite of the positive butterfly, whe See More.
Negative carry means that the price of borrowing money is higher than the returns earned on borrowed money. It is the opposite of positive carry. See More.
Used in foreign exchange (forex), a negative carry pair refers to a situation in which the investor buys the currency of a country with low interest rates and shorts the currency of a country with high interest rates. It is the opposite of a positive See More.
A negative confirmation occurs when entities that have a relationship with an auditor's client indicate they have financial discrepancies or disagreements regarding their accounts with the client. See More.
Negative convexity refers to the shape of a bond's yield curve and the extent to which a bond's price is sensitive to changing interest rates. See More.
Negative correlation describes a relationship in which changes in one variable are associated with opposite changes in another variable. See More.
A negative covenant is a promise a company makes to not exceed certain financial ratios or not conduct certain activities. Negative covenants are almost always found in loan or bond documents. See More.
A negative directional indicator (known as negative DI) is a technical measure of a downtrend's momentum. See More.
Negative float is the amount of time between when a person writes a check and when that check clears the account. See More.
A negative gap occurs when a bank's interest-bearing liabilities exceed its interest-earning assets. See More.
Negative gearing is an investment strategy whereby an investor can deduct any shortfall in income from an investment that does not cover the interest expense and maintenance costs associated with owning a particular asset. Not every country allows ta See More.
Negative goodwill, also called a bargain-purchase amount, occurs when a company buys an asset for less than its fair market value. Negative goodwill is the opposite of goodwill. See More.
In economics, negative growth usually refers to shrinking gross domestic product (GDP). See More.
Negative income tax refers to transfer payments given to families whose reported household income fall below a predetermined amount and qualifies them for a supplemental payment from the government. See More.
In the trading world, negative obligation refers to a stock specialist's responsibility to avoid buying or selling shares for their own accounts in order to match orders. The New York Stock Exchange imposes this rule on its specialists. See More.
A negative pledge clause is lending agreement language designed to prevent borrowers from pledging the same collateral to multiple lenders or otherwise taking actions that might jeopardize the security of existing lenders. See More.
Also called a yield-spread premium, negative points are rebates lenders pay to mortgage brokers or borrowers for mortgages. Negative points are expressed as a percentage of the principal. See More.
A negative volume index (NVI) identifies days in which trading volume of a particular security is substantially lower than other days. See More.
Negative watch is a status that credit-ratings agencies assign to companies that might receive a lower credit rating in the future. See More.
Negatively amortizing loans are loans in which the loan's principal balance (usually a mortgage) increases even though the borrower is making payments on the loan. See More.
Negotiable refers to an item that can be sold or transferred to another party as a form of unconditional payment. Negotiable also means that the terms of an agreement can be adjusted. See More.
A negotiable certificate of deposit (NCD) is a certificate of deposit that differs from a conventional CD in that its terms are negotiated with the issuer. Another difference is that it can be sold in the secondary markets before maturity. The NCD See More.
A negotiable instrument is a signed document that gives the bearer of the document permission to obtain a certain amount of money. See More.
A negotiable order of withdrawal account (NOW) is an interest-earning bank account in which the account holder can write checks against the balance. Most mutual savings banks, commercial banks, savings and loan associations, and credit unions offer N See More.
Negotiation is a process in which two or more parties resolve a dispute or come to a mutual agreement. See More.
Nellie Mae is a subsidiary of Sallie Mae (SLM), the largest originator, funder and servicer of student loans in the United States. Specifically, it is responsible for originating Federal Stafford Loans, PLUS loans, consolidation loans and private loa See More.
Net Advantage to Leasing (NAL) refers to the money a company or individual saves from leasing an asset rather than buying it. See More.
Most commonly used in reference to mutual or closed-end funds, net asset value (NAV) measures the value of a fund's assets, minus its liabilities. NAV is typically calculated on a per-share basis. See More.
In finance, the net asset value (NAV) of a company is its total assets minus total liabilities. It is more often referenced concerning investment funds where NAV is the underlying value of one share of the fund. This is figured by dividing the amount See More.
In finance, the net asset value per share (NAVPS) is the value of one share of a mutual fund. See More.
In finance, net assets refers to the value of a company's assets minus its liabilities. For individuals, the concept is the same as net worth. See More.
Net book value is the value at which a company carries an asset on its balance sheet. It is equal to the cost of the asset minus accumulated depreciation. See More.
Net borrowed reserves are a measure of the difference between what a bank has borrowed from the Federal Reserve and the cash reserves it holds above the required minimum. The opposite of net borrowed reserves is free reserves. The formula for net See More.
A net borrower (also called a "net debtor") is a company, person, country, or other entity that borrows more than it saves or lends. Borrowing can take the form of traditional bank lending, but it also might come in the form of Treasury debt, See More.
Net cash flow refers to the difference between a company's cash inflows and outflows in a given period. In the strictest sense, net cash flow refers to the change in a company's cash balance as detailed on its cash flow statement. See More.
Net change refers to the difference in closing price of a stock, bond, mutual fund, ETF or other traded financial instrument from one period to the next. See More.
The net current asset value per share (NCAVPS) equals a company's current assets divided by its number of shares outstanding. See More.
Net debt per capita is a government's total debt (less cash on hand) per person. See More.
Net debt to assessed valuation is a term used in the municipal bond world to compare the value of debt to the value of the issuer's assets purchased or assessed. See More.
Net debt to estimated valuation is a term used in the municipal bond world to compare the value of debt to the market value of the issuer's assets. It is not the same as net debt to assessed valuation. See More.
Net domestic product (NDP) represents the net book value of all goods and services produced within a nation's geographic borders over a specified period of time. See More.
Net earnings represent the amount of sales revenue left over after all operating expenses, interest, taxes and preferred stock dividends (but not common stock dividends) have been deducted from a company's total revenue. See More.
A net exporter is a country that sells more to other countries than it buys from other countries. Countries are often net exporters in some industries (natural gas, for example) but net importers in others. See More.
Net exports are the difference between a country's total value of exports and total value of imports. Depending on whether a country imports more goods or exports more goods, net exports can be a positive or negative value. See More.
Net free reserves is a measure of how much cash a bank holds above the Federal Reserve's required minimum. The opposite of net free reserves is net borrowed reserves. See More.
A net importer is a country that buys more from other countries than it sells to other countries. Often, countries are net importers in some industries (natural gas, for example) but net exporters in others. See More.
Net income represents the amount of money remaining after all operating expenses, interest, taxes and preferred stock dividends (but not common stock dividends) have been deducted from a company's total revenue. Net income is also See More.
Net income after taxes (NIAT) is the number of sales dollars remaining after all operating expenses, interest, depreciation, taxes and preferred stock dividends have been deducted from a firm's total revenue. See More.
Net interest cost (NIC) is a way to compute the average annual interest expense for a bond issue. See More.
Net interest income is the difference between interest received from assets and interest paid on liabilities. See More.
Net interest margin is the ratio of net interest income to invested assets. See More.
Net interest margin securities (NIMS) provide investors with cash flows from securitized mortgages. The first NIMS came into the marketplace in the mid-1990s. See More.
Net interest rate differential is the difference in interest rates associated with two different currencies or two different economic regions. See More.
In banking, the net interest rate spread is the difference between interest earned on loans, securities, and other interest-earning assets and the interest paid on deposits and other interest-bearing liabilities. See More.
Net investment is the measure of a company's investment in capital assets, such as the property, plants, software and equipment that it uses for operations. See More.
Net investment income is what an investment company receives in capital gains, dividends and interest payments, less administrative fees. See More.
Net lending is an economic measure of whether governments are either providing financial resources to other sectors of the economy or using resources from other sectors of the economy (the latter is called net borrowing). See More.
Net liquid assets are cash and securities that can be converted to cash quickly, minus current liabilities. See More.
An investor is net long when he or she has more long positions than short positions for a particular asset, market sector or portfolio. The concept also applies to commodities trading. Net long is the opposite of net short. See More.
A company reports a net loss when its expenses exceed revenues during a specific period of time. A net loss is the opposite of net income or net profit, which is when a organization's revenue is greater than its expenses. See More.
Net margin is the percentage of revenue remaining after all operating expenses, interest, taxes and preferred stock dividends (but not common stock dividends) have been deducted from a company's total revenue. See More.
Net national product (NNP) is the market value of a nation's goods and services minus depreciation (often referred to as capital consumption). See More.
Net of tax simply means that the number in question is the amount left over after taxes. See More.
The net operating cycle, also called the cash conversion cycle, is the number of days it takes a company to generate revenues with assets. See More.
A net operating loss (NOL) is a negative profit for tax purposes. It usually occurs when a company's tax deductions exceed its taxable, making the company unprofitable. See More.
Net operating profit after tax (NOPAT) is a measure of profit that excludes the costs and tax benefits of debt financing. Put another way, NOPAT is earnings before interest and taxes (EBIT) adjusted for the impact of taxes. See More.
Net operating profit less adjusted taxes (NOPLAT) is a measure of profit that includes the costs and tax benefits of debt financing. Put another way, NOPLAT is earnings before interest and taxes (EBIT) adjusted for the impact of taxes. See More.
A net option premium is the difference between the price paid to purchase an option and the price received from the sale of a different option. See More.
Net payoff is the profit or loss on the sale of a good or service after all the costs of producing and selling that good or service have been subtracted. See More.
Net present value (NPV) is the present value of an investment's expected cash inflows minus the costs of acquiring the investment. See More.
Net Present Value of Growth Opportunities (NPVGO) is the simply the present value of additional cash flows associated with an acquisition, net of the purchase price of the acquisition. Essentially, the concept adds the present value of assets in plac See More.
The net present value rule is the idea that investors and managers should only engage in deals, projects or transactions that have positive net present value (NPV). See More.
Net proceeds refers to the amount of money remaining after an asset has been sold and related expenses have been paid. See More.
Net profit represents the number of sales dollars remaining after all operating expenses, interest, taxes and preferred stock dividends (but not common stock dividends) have been deducted from a company's total revenue. See More.
Net profit margin is the percentage of revenue remaining after all operating expenses, interest, taxes and preferred stock dividends (but not common stock dividends) have been deducted from a company's total revenue. See More.
Net profits interest is the proportion of net profits paid out to a particular investor, according to his or her percentage stake in the company. See More.
The net realizable value (NRV) of an asset is the money a seller expects to receive for the sale of an asset after deducting the costs of selling or disposing of the asset. See More.
Net receivables refers to the net amount of money remaining after deducting the provision for bad debt. It is primarily used in businesses that sell on credit. See More.
Net revenue typically refers to a company's revenue net of discounts and returns. Sometimes, though, the user is referring to net profit, which is sales net of all expenses. See More.
A net revenue pledge requires issuers of municipal bonds to use their net revenues (revenue minus expenses) to pay the principal and interest of the municipal bonds before any other use. See More.
Net sales usually refers to a company's revenue net of discounts and returns. Sometimes, though, the user is referring to net profit, which is sales net of all expenses. See More.
In banking, net settlement is simply the sum of the day's credits and debits. See More.
In finance, net short refers to holding more short positions than long positions in a given security, sector or portfolio. Net short is the opposite of net long. See More.
In economics, net taxes are taxes on production less subsidies received. Alternatively, net taxes are taxes paid to the government less transfer payments. See More.
Net unrealized appreciation (NUA) refers to the difference between the cost of a security or investment and the current market value of that security or investment. See More.
In trading, net volume refers to the difference between a security's uptick volume and its downtick volume. See More.
Net worth refers to the total value of an individual or company expressed as total assets less total liabilities. See More.
The neutrality of money is a theory stating that changes in the money supply only affect prices and wages rather than overall economic productivity. See More.
The new economy refers to the convergence of manufacturing, services and technologies to produce high value-added, technology-enabled, and adaptable industries. See More.
As the name implies, new highs/new lows represents the number of all stocks making new 52-week highs or lows. The result is graphed, and the aggregate number of new highs and new lows is used as a market timing tool. See More.
New Home Sales is an economic indicator released monthly by the United States Census Bureau. The data reflect the number of newly constructed homes purchased in the previous month. See More.
A new paradigm is a new logical framework for understanding a situation. In the financial markets, a new paradigm refers to the shift in the underlying economic rules and factors that affect the markets. See More.
The New York Board of Trade (NYBOT), founded in 1870, is a physical commodity futures exchange located in New York City. The NYBOT trades options and futures on cotton, sugar, coffee, orange juice, and cocoa, as well as interest rates, market indexes See More.
The New York Clearing House Association, founded in 1853, is the country's first and largest bank clearing house. The Clearing House was created to streamline the bank settlement process, which had grown convoluted during America's "Expan See More.
The New York Mercantile Exchange (NYMEX), founded in 1872, is the world's largest physical commodity futures exchange, headquartered in lower Manhattan. NYMEX handles trades worth billions of dollars in commodities that are bought and sold on the See More.
The New York Stock Exchange (NYSE) is the oldest stock exchange in the United States, and it's located on Wall Street in lower Manhattan. It is the world's largest stock exchange by market capitalization of listed companies ($13.39 trillion a See More.
A no penalty CD is a type of certificate of deposit. A certificate of deposit, or CD, is a financial product offered by banks and credit unions for personal savings and investing. It offers an interest rate incentive in exchange for a guaranteed depo See More.
A no-load fund is a mutual fund that does not charge a sales commission to investors. Shares of no-load funds are purchased directly from the fund companies rather than through brokers. See More.
Also called a no-load fund, a no-transaction-fee mutual fund is a mutual fund that does not charge a sales commission to investors. Shares of no-transaction-fee funds are purchased directly from the fund companies rather than through brokers. See More.
Also referred to as face value or par value, nominal value is the value shown on the face of a security certificate or instrument, including currency. The concept most commonly applies to stocks and bonds but is especially important to bond and prefe See More.
A nominee is a person or entity that takes possession of securities or other assets for the purpose of making transactions on behalf of the owner of the securities or other assets. See More.
A non-accredited investor is an individual or organization that does not meet the description of a "sophisticated" investor as defined by the Securities and Exchange Commission. See More.
A non-cash charge is a write down or expense against earnings that does not involve cash. See More.
A non-cash item is an entry on an income statement or cash flow statement correlating to expenses that are essentially just accounting entries rather than actual movements of cash. See More.
The descriptors "exempt" and "non-exempt" are used to describe different categories of employees as defined by the Fair Labor Standards Act (FSLA) according to US Federal employment law. Typically, a non-exempt employee is an hourly wage earner wh See More.
A non-financial asset has a value based on its tangible characteristics and properties. See More.
Non-GAAP earnings (GAAP stands for Generally Accepted Accounting Principles) are measures of profit that don't follow a standard calculation for companies and are not necessarily required in their disclosure. To properly understand non-GAAP earnin See More.
In banking, non-interest income is revenue derived mostly from fees and other activities outside the core activity of lending. See More.
[All of this def is identical to "judicial foreclosure." I don't have a clear sense of what non-judicial is...] A judicial foreclosure occurs when a court allows a lender to seize and sell a borrower's collateral when the borrower has See More.
Non-negotiable refers to something that cannot be bought, sold, exchanged or transferred. Non-negotiable also can refer to a term or condition that is not open to negotiation. See More.
A non-operating asset is an asset that generates income, but is unrelated to the core operations of the company. See More.
A non-qualified plan is a retirement plan to which the IRS does not grant specific tax benefits. See More.
In most states, writing a bad check is at least a misdemeanor, with the consequences growing depending on the state, the amount involved, and whether the transaction crosses state lines. Most NSFs are simply oversights by consumers, so even if the po See More.
Noncallable refers to a security that cannot be redeemed by the issuer prior to maturity. Sometimes, it is referred to as non-redeemable. See More.
Nonfarm payrolls is an economic indicator released by the Department of Labor on the first Monday of each month at 8:30am EST. The data reflect the change in nonfarm payrolls from the previous month. See More.
Nonperforming assets are a bank's nonperforming loans plus the real estate owned by the bank due to foreclosures. See More.
A nonperforming loan is a loan that is close to defaulting or is in default. See More.
A nonqualified option (NQO) is the right but not the obligation to purchase shares of a company, usually the option holder's employer, for a fixed price by a certain date. See More.
Also called a positive yield curve, a normal yield curve is one in which short-term yields are lower than long-term yields. See More.
The North American Free Trade Agreement (NAFTA) is an agreement among the United States, Canada and Mexico designed to remove tariff barriers between the three countries. See More.
Notarizing documents gives them legal weight. Notarization is commonly involved in the creation of wills, trusts, deeds and powers of attorney. Each state sets forth its own requirements for becoming a notary, though most involve passing a test and h See More.
Notaries are important people because they give documents legal weight. Notaries are commonly involved in the creation of wills, trusts, deeds and powers of attorney. Each state sets forth its own requirements for becoming a notary, though most invol See More.
A notice of seizure is a bad thing. During this time, the IRS takes physical custody of the taxpayer's assets, which could range from cash accounts to homes, cars and other assets. See More.
The notice to creditors is a way to inform creditors of their opportunity to make claims against a bankrupt company, an estate or other entity. See More.
Notional principal amounts never change in an interest rate swap, and they are the core of the calculations involved in these transactions. See More.
Notional values are most discussed in derivatives and currency transactions because those transactions often involve hedging, which means that a small amount of money can influence a very large investment. The term helps distinguish between the amoun See More.
The null hypothesis (H0) suggests that there is no statistical significance in a given set of observations. This implies that any kind of deviation or importance you see in a data set is only the result of chance. This is considered to be tr See More.
People who enjoy numismatics often have rare coins that can be quite valuable. But not all numismatics fans have to have money to keep collections. Using a fun site such as wheresgeorge.com, which lets people track the paths of dollar bills (using th See More.