Category: Financial Terms

Global Recession: Meaning, Measurement, History, and Impact What is a global recession? A global recession is a prolonged, synchronized downturn in economic activity across many countries. It involves declines in output and a weakening of other macroeconomic indicators—trade, capital flows, employment, industrial production, oil consumption, per‑capita investment, and consumption—transmitted across borders by trade and financial…

Global Macro Hedge Fund What it is A global macro hedge fund is an actively managed investment fund that seeks to profit from large-scale economic and political events. Managers form macroeconomic views about countries or regions and place directional bets across asset classes—stocks, bonds, currencies, commodities, futures, and options—using long and short positions or volatility-oriented…

Global Macro Strategy: Overview and How It Works A global macro strategy is an investment approach that builds portfolios based on forecasts about large-scale economic, political, and policy developments. Managers take long and short positions across multiple asset classes—including equities, fixed income, currencies, and commodities—to profit from anticipated shifts in interest rates, trade flows, monetary…

Global Investment Performance Standards (GIPS): Definition and Uses Overview Global Investment Performance Standards (GIPS) are voluntary, industry-wide standards that define how investment managers calculate and present historical investment performance. Developed and maintained under the auspices of the CFA Institute and governed by the GIPS Executive Committee, GIPS aim to promote transparency, consistency, and comparability across…

Global Industry Classification Standard (GICS) The Global Industry Classification Standard (GICS) is a taxonomy for assigning publicly traded companies to consistent sectors and industries. It was developed by MSCI and Standard & Poor’s to help investors, analysts, and index providers compare companies, build diversified portfolios, and benchmark performance. How GICS is organized GICS uses a…

What Is a Global Fund? A global fund is a mutual fund or exchange-traded fund (ETF) that invests in securities anywhere in the world, including the investor’s home country. It seeks to identify attractive investments from a worldwide universe of stocks, bonds, or both. Global funds can be actively managed or passively track an index,…

Global Financial Stability Report (GFSR) The Global Financial Stability Report (GFSR) is a semiannual assessment published by the International Monetary Fund (IMF) that evaluates risks to global financial stability, with particular attention to emerging-market financing. It appears twice a year (typically April and October) and highlights vulnerabilities, potential stress scenarios, and policy recommendations for central…

Global Depositary Receipt (GDR) A global depositary receipt (GDR) is a negotiable financial certificate issued by a depositary bank that represents ownership of shares in a foreign company. GDRs let companies raise capital and list securities on exchanges outside their home market, while giving investors a way to buy foreign equity without opening foreign brokerage…

Global Bonds: Definition and How They Work A global bond is a debt security issued and traded outside the country whose currency is used to denominate the bond. Issuers include sovereigns and multinational corporations that tap multiple capital markets simultaneously—typically Europe, Asia, and the Americas—to raise large amounts of capital. How global bonds work Issuance…

Understanding Glide Paths: Investment Strategies for Target-Date Funds Key takeaways * A glide path defines how a target-date fund shifts its asset allocation (stocks vs. bonds) as the target date approaches. * Glide paths typically become more conservative over time, reducing equity exposure and increasing fixed-income or cash-like assets. * Common glide-path types: declining (equities…

Glass Cliff: Definition, Research, Examples, vs. Glass Ceiling The glass cliff describes a pattern in which women—and other underrepresented groups—are promoted into leadership roles during periods of crisis, downturn, or heightened risk. Because these roles are precarious and the chance of failure is higher, the appointments leave those leaders especially vulnerable to blame, dismissal, and…

The Glass Ceiling: Definition, History, Effects, and Examples The “glass ceiling” is a metaphor for the invisible barriers that prevent certain groups—most commonly women and racial minorities—from advancing into senior management and executive roles. These barriers are usually unwritten and arise from cultural norms, implicit bias, and structural practices that limit career progression despite qualifications….

Give-Up Trades: Definition, Mechanics, and Examples A give-up trade is an arrangement where one broker executes a transaction on behalf of another broker and then “gives up” or credits the trade to the client’s broker in the official record. This practice helped ensure timely execution when the client’s broker could not act directly, especially during…

Gibraltar Pound (GIP): What It Is and Gibraltar’s Economy Overview The Gibraltar pound (GIP) is the official currency of Gibraltar, a British Overseas Territory located at the southern tip of the Iberian Peninsula. The GIP is pegged to the British pound sterling (GBP) at a 1:1 fixed rate and circulates alongside UK-issued banknotes and coins…

Understanding the Gini Index: A Concise Guide to Income Inequality Key takeaways * The Gini index measures income or wealth inequality on a scale from 0 (perfect equality) to 1 (perfect inequality); it is often expressed as 0–100. * Wealth Gini values tend to be higher than income Gini values because wealth is more concentrated…

Gilts Gilts are government bonds issued by the United Kingdom (and, by extension, similar debt securities in other Commonwealth countries such as India). The name comes from the gilded edges of historical certificates and has come to signify a high-quality, low-risk sovereign debt. Gilts offer regular coupon payments and return the principal at maturity; they…

Gilt-Edged Securities What they are Gilt-edged securities, commonly called gilts, are high-grade bonds issued by governments (notably the U.K.) and by some well-established corporations. The term originates from the original British government bond certificates, which had gilded (golden) edges. As investments, gilts are regarded as low-risk instruments that offer predictable income but typically lower yields…

Gilt-Edged Bond (Gilts) Key takeaways Gilts are high-quality, low-risk bonds issued by governments (notably the U.K.) and some large corporations. They offer predictable income through regular coupon payments and return of principal at maturity. Gilts are sensitive to interest-rate changes and typically yield less than riskier securities. The U.K. also issues index-linked gilts whose payments…

Understanding the Gig Economy The gig economy refers to a labor market made up of short-term, temporary, contract, and freelance work instead of traditional full-time employment. It includes on-demand services, project-based work, and independent contracting. While it offers flexibility and new income opportunities, it also shifts benefits and employment protections from employers to workers. Key…

Gift Tax Return A gift tax return documents transfers of property or money that exceed IRS gift-tax exemptions. The return is filed on IRS Form 709 by the giver (donor) when required. It is not a tax on returned gifts. Key points Annual exclusion: an individual can give up to the annual exclusion amount per…

Key Takeaways * The federal gift tax applies to transfers of money or property made without full consideration when those transfers exceed annual or lifetime exclusions. * For tax year 2025: annual exclusion is $19,000 per recipient; lifetime gift (and estate) tax exclusion is $13.99 million. * Gifts over the annual exclusion generally must be…

Gift Splitting: Definition, How It Works, and Key Rules Key takeaways * Gift splitting lets a married couple treat a gift as made half by each spouse, effectively doubling the annual gift tax exclusion available to a couple. * For 2024 the annual exclusion is $18,000 per person (so $36,000 for a married couple using…

Gift of Equity: How It Works, Benefits, Risks, and What You Need What is a gift of equity? A gift of equity is when a homeowner sells a property to a family member for less than its appraised market value, and the price difference is treated as a gift. Instead of transferring cash for a…

Gift Inter Vivos Key takeaways A gift inter vivos (Latin: “between the living”) is a transfer of property made during the donor’s lifetime. Inter vivos gifts reduce the donor’s taxable estate and generally avoid probate. Annual and lifetime gift-tax exclusions limit when gift taxes apply (for example, the 2023 annual exclusion was $17,000 per recipient…

Gift in Trust: Definition, How It Works, Pros and Cons A gift in trust is an estate-planning technique in which the grantor transfers assets into a trust for the benefit of a named beneficiary. Instead of giving assets outright, the grantor places them under the control of a trustee and sets conditions for how and…

Gift Letter A gift letter is a written, signed statement from a donor confirming that funds or property transferred to a recipient are a true gift and are not expected to be repaid. Lenders commonly require gift letters when gifted funds are used for a mortgage down payment so they can distinguish gifts from loans…

Gift Causa Mortis: What It Is and How It Works Key takeaways * A gift causa mortis is a gift of personal property given by someone who reasonably expects to die soon. * It is conditional and revocable while the donor is alive; it becomes final only if the donor actually dies. * For federal…

Gift Cards: Definition, Types, Fees, and Scams to Avoid Key takeaways * A gift card is a prepaid (stored-value) card loaded with a set amount for future purchases. * Closed-loop (store) cards work only at a specific retailer or affiliated brands; open-loop cards (Visa, MasterCard, AmEx, Discover) work wherever the network is accepted. * Open-loop…

Giffen Goods: Definition, How They Work, and Examples Key takeaways * A Giffen good is an essential, low-income good whose demand rises when its price increases, producing an upward-sloping demand curve. * This paradox arises when the income effect of a price change outweighs the substitution effect. * Giffen behavior is rare and requires specific…

G.I. Bill: Meaning, Overview, and History What is the G.I. Bill? The G.I. Bill (originally the Servicemen’s Readjustment Act of 1944) was enacted to help World War II veterans reintegrate into civilian life. Today, the term refers broadly to education benefits administered by the U.S. Department of Veterans Affairs for qualifying active‑duty service members, veterans,…

Tenement: Meaning, History, and Modern Context What is a tenement? A tenement is a multi-occupancy residential building rented out to multiple households. Historically and in common U.S. usage, the term often refers to crowded, low-quality apartment buildings that house low-income residents. In some legal contexts (and in Scotland), “tenement” can also mean any permanent residential…

Gharar: Meaning, Islamic Perspective, and Examples Gharar is an Arabic term describing uncertainty, risk, or deception in a contract or transaction. Traditionally it refers to selling what one does not yet possess—examples cited in classical sources include unborn animals, fish still in the water, or crops not yet harvested. In Islamic commercial ethics, gharar is…

George Soros Key takeaways * Legendary hedge fund manager and philanthropist. * Founded his first hedge fund in the late 1960s and later chaired Soros Fund Management and the Quantum Fund, which produced very strong historical returns. * Famous for large, leveraged currency bets—most notably shorting the British pound in 1992. * Founder of the…

Geometric Mean What it is The geometric mean is a type of average appropriate for multiplicative processes—most commonly used to summarize rates of return, growth rates, or any series where compounding matters. For n positive values a1, a2, …, an, the geometric mean is the nth root of their product: Geometric mean = (a1 ×…

Geolocation: What It Is and How It’s Used What is geolocation? Geolocation is the process of determining the physical location of an electronic device. Methods include GPS satellites, cell tower triangulation, Wi‑Fi access point mapping, IP address lookup, and Bluetooth beacons. These techniques can yield anything from a coarse country or city estimate (via IP)…