Finance Dictionary ( daily finance terms and concepts will be added and discussed)

Generally Accepted Accounting Principles

Abbreviated GAAP. The standard guidelines for financial accounting, including rules and standards for summarizing and recording transactions, and for the preparation of financial statements. GAAP accepts various accounting methods, and simply serves as a set of guidelines to help standardize procedures.
 
GNMA Pass-Through Certificate

Fixed-income securities that represent an undivided interest in a pool of federally insured mortgages put together by GNMA, the Government National Mortgage Association (Ginnie Mae).
 
Good ‘Til Canceled

Abbreviated GTC. This is an order to buy or sell a security that is good until the investor cancels it. Most brokerage firms let GTC orders automatically expire after 30 - 60 days.
 
Government Security

A debt obligation of the U.S. government, backed by its full faith, credit and taxing power, and regarded as having no risk of default. The government issues short-term Treasury Bills, medium-term Treasury notes, and long-term Treasury bonds.
 
Gross Domestic Product

Abbreviated GDP. A measure of output from United States factories and related consumption in the United States. It includes consumption, government purchases, investments, and exports minus imports. It does not include products made by U.S. companies in foreign markets.
 
Growth Fund
A diversified common stock fund that has capital appreciation as its primary goal. It invests in companies that reinvest most of their earnings for expansion, research, or development.
 
Growth Stock
A company with excellent prospects for above-average future increases (or growth) for sales, earnings, and price. Look for a company that is a leader in its industry.
 
Guaranteed Investment (Interest) Contract
Abbreviated GIC. Debt instrument sold in large denominations often bought for retirement plans. The word guaranteed refers to the interest rate paid on the GIC; the principal is at risk.
 
Hedge

An investment made in order to reduce the risk of adverse price movements in a security. Normally, a hedge consists of a protecting position in a related security.
 
High Yield
The highest Dividend Yield for a particular year. It is useful to measure the current dividend yield against the historical high yield. If the current yield is lower, then there may be room for an increase in dividend to bring the yield closer to the former high
 
Implied Growth
The future growth rate for earnings, implied by the company’s average Return On Equity and Return On Earnings retention rates.
 
Income Statement
Also Known as the Earnings Report. The portion of a financial report showing income and expenses, and comparing them the same period last year.
 
Index
A statistical measure of the changes in a portfolio representing a market. The Standard & Poor’s 500 is the most well-known index, which measures the overall change in the value of the 500 stocks of the largest firms in the U.S.
 
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