Terms Starting with A

Absolute advantage refers to the ability of a country, individual, or company to produce a good or service more efficiently than its competitors using fewer resources.

The accounting equation is a fundamental principle of financial accounting that represents the relationship between a company's assets, liabilities, and equity.

The Accounting Rate of Return (ARR) is a financial metric used to measure the expected profitability of an investment, calculated by dividing the average annual profit by the initial investment cost.

The Acid-Test Ratio, also known as the quick ratio, measures a company's ability to meet its short-term obligations with its most liquid assets without relying on inventory.

An acquisition is a corporate action where one company purchases most or all of another company's shares to gain control of that company.

Adverse selection refers to a situation where sellers have information that buyers do not, or vice versa, leading to transactions that favor the party with more information.

After-hours trading refers to the buying and selling of securities outside the standard trading hours of major stock exchanges.

Alpha is a measure of an investment's performance relative to a benchmark, indicating the excess return an investor receives from an investment compared to the market.

Amalgamation is the process of combining two or more companies into a single new entity, often to achieve operational efficiencies or strategic advantages.

An American Depositary Receipt (ADR) is a certificate issued by a U.S. bank representing a specified number of shares in a foreign stock traded on a U.S. exchange.

The American Dream is a national ethos of the United States, symbolizing the opportunity for prosperity and success through hard work and determination.

Analysis of Variance (ANOVA) is a statistical method used to determine if there are any statistically significant differences between the means of three or more independent (unrelated) groups.

An angel investor is an individual who provides capital for a business start-up, usually in exchange for convertible debt or ownership equity.

Annual Percentage Rate (APR) is the annual rate charged for borrowing or earned through an investment, adjusted for the frequency of compounding.

An annuity is a financial product that pays out a fixed stream of payments to an individual, primarily used as an income stream for retirees.

The Applicable Federal Rate (AFR) is the minimum interest rate set by the IRS for private loans to avoid tax implications.

The yearly cost of a loan including interest and fees, expressed as a percentage.

Artificial Intelligence (AI) in finance refers to the use of machine learning algorithms and computational methodologies to manage financial data, predict market trends, and automate trading and investment decisions.

An asset is any resource owned by an individual or entity that is expected to provide future economic benefits.

Asset management is the process of developing, operating, maintaining, and selling assets in a cost-effective manner to maximize their value.

The asset turnover ratio measures how efficiently a company uses its assets to generate sales revenue.

Assets Under Management (AUM) refers to the total market value of the investments that a financial institution manages on behalf of its clients.

Automated Clearing House (ACH) is a network used for electronic funds transfers and payments in the United States.

An Automated Teller Machine (ATM) is an electronic banking outlet that allows customers to complete basic transactions without the need for a branch representative.

Average True Range (ATR) is a technical analysis indicator used to measure market volatility by decomposing the entire range of an asset price for that period.