{"id":535,"date":"2023-03-28T16:21:16","date_gmt":"2023-03-28T16:21:16","guid":{"rendered":"https:\/\/pressbooks.ccconline.org\/ppscacc2010principlesoffinance\/?post_type=chapter&p=535"},"modified":"2023-04-02T23:41:53","modified_gmt":"2023-04-02T23:41:53","slug":"glossary-of-key-terms-part-i","status":"publish","type":"chapter","link":"https:\/\/pressbooks.ccconline.org\/ppscacc2010principlesoffinance\/chapter\/glossary-of-key-terms-part-i\/","title":{"raw":"Glossary of Key Terms (Part I)","rendered":"Glossary of Key Terms (Part I)"},"content":{"raw":"
\r\n \t
\r\n

Chapter 9 - Glossary of Key Terms (Part I)<\/h2>\r\n<\/dt>\r\n \t
Bureau of Labor Statistics<\/dt>\r\n \t
a group within the United States Department of Labor that is the primary fact-finding agency for the US government in the fields of labor, statistics, and economics; serves as the principal agency of the US Federal Statistical System<\/dd>\r\n<\/dl>\r\n
\r\n \t
compounding interest<\/dt>\r\n \t
the continual addition of interest to the original principal sum of a loan or deposit, often referred to as interest on interest<\/dd>\r\n<\/dl>\r\n
\r\n \t
compounding period<\/dt>\r\n \t
the period between points in time when interest is paid or added to the principal<\/dd>\r\n<\/dl>\r\n
\r\n \t
consumer price index (CPI)<\/dt>\r\n \t
a measure that examines the weighted average of prices of a basket of consumer goods and services such as transportation, food, and medical care<\/dd>\r\n<\/dl>\r\n
\r\n \t
discount rate<\/dt>\r\n \t
the interest rate used to determine the present value of future cash inflows<\/dd>\r\n<\/dl>\r\n
\r\n \t
Federal Reserve<\/dt>\r\n \t
the central bank system of the United States<\/dd>\r\n<\/dl>\r\n
\r\n \t
financial instrument<\/dt>\r\n \t
an asset or bundle of assets, including monetary contracts between parties, that can be bought, sold, or traded for financial gain<\/dd>\r\n<\/dl>\r\n
\r\n \t
financial risk<\/dt>\r\n \t
the possibility of losing money or purchasing power on an investment, business transaction, or venture or simply due to inflation<\/dd>\r\n<\/dl>\r\n
\r\n \t
Fisher effect<\/dt>\r\n \t
an economic theory created by economist Irving Fisher that describes the relationship between inflation and both real and nominal interest rates<\/dd>\r\n<\/dl>\r\n
\r\n \t
future value (FV)<\/dt>\r\n \t
the value that a current amount will grow to at a given interest rate over a given period of time<\/dd>\r\n<\/dl>\r\n
\r\n \t
gross domestic product (GDP)<\/dt>\r\n \t
the total value of goods produced and services provided in a country during one year<\/dd>\r\n<\/dl>\r\n
\r\n \t
growth rate<\/dt>\r\n \t
the percentage increase of a specific variable within a specific time period; synonymous with\u00a0interest rate<\/em>\u00a0in the context of the time value of money<\/dd>\r\n<\/dl>\r\n
\r\n \t
interest<\/dt>\r\n \t
the amount of money that is paid by a borrower to a lender for the use of their money, typically calculated from an annualized rate<\/dd>\r\n<\/dl>\r\n
\r\n \t
investment<\/dt>\r\n \t
an asset or item acquired with the goal of generating financial gain through increased income or appreciation in value<\/dd>\r\n<\/dl>\r\n
\r\n \t
liquid asset<\/dt>\r\n \t
an asset that can be readily converted into cash within a short period of time<\/dd>\r\n<\/dl>\r\n
\r\n \t
money market investments<\/dt>\r\n \t
low-risk financial instruments such as T-bills, federal notes, commercial paper, certificates of deposit (CDs), repurchase agreements (repos), and bankers\u2019 acceptances, among others<\/dd>\r\n<\/dl>\r\n
\r\n \t
money supply<\/dt>\r\n \t
the total dollar value of legal tender that is available to consumers within an economy at any single point in time<\/dd>\r\n<\/dl>\r\n
\r\n \t
opportunity cost<\/dt>\r\n \t
the loss of potential gain from other alternatives when a single alternative is chosen<\/dd>\r\n<\/dl>\r\n
\r\n \t
present value (PV)<\/dt>\r\n \t
the current value of a future amount, calculated by discounting the future value back at a known discount or interest rate for a specified period of time<\/dd>\r\n<\/dl>\r\n
\r\n \t
real interest rate<\/dt>\r\n \t
a rate of interest that has been adjusted to account for the effects of inflation<\/dd>\r\n<\/dl>\r\n
\r\n \t
single payment or lump sum<\/dt>\r\n \t
a single payment or deposit made at one time, as opposed to a number of smaller payments or deposits made in installments<\/dd>\r\n<\/dl>\r\n
\r\n \t
time value of money (TMV)<\/dt>\r\n \t
the concept that an amount of money is worth more today than the exact same amount of money at some point in the future<\/dd>\r\n<\/dl>\r\n
\r\n \t
Treasury investments<\/dt>\r\n \t
debt obligations such as T-bills (Treasury bills), bonds, and notes issued by the US Department of the Treasury<\/dd>\r\n<\/dl>\r\n
\r\n \t
underinvested<\/dt>\r\n \t
describes an insufficient amount of investment or an investment that is earning an insufficient rate of interest<\/dd>\r\n<\/dl>\r\n
\r\n \t
uninvested<\/dt>\r\n \t
describes cash that is being held in reserve, is not invested in an account or financial instrument, and is not earning interest or any return<\/dd>\r\n<\/dl>\r\n \r\n\r\nAttribution:<\/strong>\r\n\r\nThis chapter is from \u201cPrinciples of Finance\u201d \u00a0https:\/\/openstax.org\/books\/principles-finance\/pages\/1-why-it-matters<\/a> by Dahlquist and Knight. This book is licensed under the CC-BY<\/a> 4.0 license. 2022 OpenStax.\r\n\r\nhttps:\/\/openstax.org\/books\/principles-finance\/pages\/1-key-terms<\/a>\r\n\r\nAccess for free at https:\/\/openstax.org\/books\/principles-finance\/pages\/7-key-terms<\/a>","rendered":"
\n
\n<\/dt>\n
Bureau of Labor Statistics<\/dt>\n
a group within the United States Department of Labor that is the primary fact-finding agency for the US government in the fields of labor, statistics, and economics; serves as the principal agency of the US Federal Statistical System<\/dd>\n<\/dl>\n
\n
compounding interest<\/dt>\n
the continual addition of interest to the original principal sum of a loan or deposit, often referred to as interest on interest<\/dd>\n<\/dl>\n
\n
compounding period<\/dt>\n
the period between points in time when interest is paid or added to the principal<\/dd>\n<\/dl>\n
\n
consumer price index (CPI)<\/dt>\n
a measure that examines the weighted average of prices of a basket of consumer goods and services such as transportation, food, and medical care<\/dd>\n<\/dl>\n
\n
discount rate<\/dt>\n
the interest rate used to determine the present value of future cash inflows<\/dd>\n<\/dl>\n
\n
Federal Reserve<\/dt>\n
the central bank system of the United States<\/dd>\n<\/dl>\n
\n
financial instrument<\/dt>\n
an asset or bundle of assets, including monetary contracts between parties, that can be bought, sold, or traded for financial gain<\/dd>\n<\/dl>\n
\n
financial risk<\/dt>\n
the possibility of losing money or purchasing power on an investment, business transaction, or venture or simply due to inflation<\/dd>\n<\/dl>\n
\n
Fisher effect<\/dt>\n
an economic theory created by economist Irving Fisher that describes the relationship between inflation and both real and nominal interest rates<\/dd>\n<\/dl>\n
\n
future value (FV)<\/dt>\n
the value that a current amount will grow to at a given interest rate over a given period of time<\/dd>\n<\/dl>\n
\n
gross domestic product (GDP)<\/dt>\n
the total value of goods produced and services provided in a country during one year<\/dd>\n<\/dl>\n
\n
growth rate<\/dt>\n
the percentage increase of a specific variable within a specific time period; synonymous with\u00a0interest rate<\/em>\u00a0in the context of the time value of money<\/dd>\n<\/dl>\n
\n
interest<\/dt>\n
the amount of money that is paid by a borrower to a lender for the use of their money, typically calculated from an annualized rate<\/dd>\n<\/dl>\n
\n
investment<\/dt>\n
an asset or item acquired with the goal of generating financial gain through increased income or appreciation in value<\/dd>\n<\/dl>\n
\n
liquid asset<\/dt>\n
an asset that can be readily converted into cash within a short period of time<\/dd>\n<\/dl>\n
\n
money market investments<\/dt>\n
low-risk financial instruments such as T-bills, federal notes, commercial paper, certificates of deposit (CDs), repurchase agreements (repos), and bankers\u2019 acceptances, among others<\/dd>\n<\/dl>\n
\n
money supply<\/dt>\n
the total dollar value of legal tender that is available to consumers within an economy at any single point in time<\/dd>\n<\/dl>\n
\n
opportunity cost<\/dt>\n
the loss of potential gain from other alternatives when a single alternative is chosen<\/dd>\n<\/dl>\n
\n
present value (PV)<\/dt>\n
the current value of a future amount, calculated by discounting the future value back at a known discount or interest rate for a specified period of time<\/dd>\n<\/dl>\n
\n
real interest rate<\/dt>\n
a rate of interest that has been adjusted to account for the effects of inflation<\/dd>\n<\/dl>\n
\n
single payment or lump sum<\/dt>\n
a single payment or deposit made at one time, as opposed to a number of smaller payments or deposits made in installments<\/dd>\n<\/dl>\n
\n
time value of money (TMV)<\/dt>\n
the concept that an amount of money is worth more today than the exact same amount of money at some point in the future<\/dd>\n<\/dl>\n
\n
Treasury investments<\/dt>\n
debt obligations such as T-bills (Treasury bills), bonds, and notes issued by the US Department of the Treasury<\/dd>\n<\/dl>\n
\n
underinvested<\/dt>\n
describes an insufficient amount of investment or an investment that is earning an insufficient rate of interest<\/dd>\n<\/dl>\n
\n
uninvested<\/dt>\n
describes cash that is being held in reserve, is not invested in an account or financial instrument, and is not earning interest or any return<\/dd>\n<\/dl>\n

 <\/p>\n

Attribution:<\/strong><\/p>\n

This chapter is from \u201cPrinciples of Finance\u201d \u00a0https:\/\/openstax.org\/books\/principles-finance\/pages\/1-why-it-matters<\/a> by Dahlquist and Knight. This book is licensed under the CC-BY<\/a> 4.0 license. 2022 OpenStax.<\/p>\n

https:\/\/openstax.org\/books\/principles-finance\/pages\/1-key-terms<\/a><\/p>\n

Access for free at https:\/\/openstax.org\/books\/principles-finance\/pages\/7-key-terms<\/a><\/p>\n","protected":false},"author":101,"menu_order":1,"template":"","meta":{"pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"class_list":["post-535","chapter","type-chapter","status-publish","hentry"],"part":36,"_links":{"self":[{"href":"https:\/\/pressbooks.ccconline.org\/ppscacc2010principlesoffinance\/wp-json\/pressbooks\/v2\/chapters\/535","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/pressbooks.ccconline.org\/ppscacc2010principlesoffinance\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/pressbooks.ccconline.org\/ppscacc2010principlesoffinance\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/pressbooks.ccconline.org\/ppscacc2010principlesoffinance\/wp-json\/wp\/v2\/users\/101"}],"version-history":[{"count":4,"href":"https:\/\/pressbooks.ccconline.org\/ppscacc2010principlesoffinance\/wp-json\/pressbooks\/v2\/chapters\/535\/revisions"}],"predecessor-version":[{"id":1287,"href":"https:\/\/pressbooks.ccconline.org\/ppscacc2010principlesoffinance\/wp-json\/pressbooks\/v2\/chapters\/535\/revisions\/1287"}],"part":[{"href":"https:\/\/pressbooks.ccconline.org\/ppscacc2010principlesoffinance\/wp-json\/pressbooks\/v2\/parts\/36"}],"metadata":[{"href":"https:\/\/pressbooks.ccconline.org\/ppscacc2010principlesoffinance\/wp-json\/pressbooks\/v2\/chapters\/535\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/pressbooks.ccconline.org\/ppscacc2010principlesoffinance\/wp-json\/wp\/v2\/media?parent=535"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/pressbooks.ccconline.org\/ppscacc2010principlesoffinance\/wp-json\/pressbooks\/v2\/chapter-type?post=535"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/pressbooks.ccconline.org\/ppscacc2010principlesoffinance\/wp-json\/wp\/v2\/contributor?post=535"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/pressbooks.ccconline.org\/ppscacc2010principlesoffinance\/wp-json\/wp\/v2\/license?post=535"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}