Category: Financial Terms

Wet Loan: Definition, How It Works, Risks, and State Rules Key takeaways * A wet loan (wet funding) is a mortgage where funds are disbursed at or immediately after signing, before all closing documentation is complete. * Wet funding speeds up purchases but increases risk for lenders and can raise fraud or default exposure. *…

Undivided (Eastern) Account: What it Is and How It Works An undivided account—also called an eastern account—is a syndication arrangement used in initial public offerings (IPOs) and new-issue underwriting. In this structure, multiple underwriters share collective responsibility for selling any unsold portion of the offering rather than being liable only for the slice they were…

West Texas Intermediate (WTI) West Texas Intermediate (WTI) is a high-quality North American crude oil widely used as a pricing benchmark. Originating in the United States (primarily the Permian Basin in Texas), WTI is a light, sweet crude—low in density and with sulfur content typically below 0.5%—which makes it easier and cheaper to refine into…

West African CFA Franc (XOF) Key takeaways The West African CFA franc (currency code: XOF) is the common currency of eight West African countries that belong to the West African Economic and Monetary Union (WAEMU). It is issued by the Central Bank of West African States (BCEAO) in Dakar, Senegal, and is subdivided into 100…

Wells Notice: What It Means and How It Works Key takeaways A Wells Notice is a formal letter from the Securities and Exchange Commission (SEC) indicating the agency may bring enforcement charges following an investigation. It summarizes the alleged violations and gives the recipient an opportunity to respond before charges are filed. The usual response…

Wellness Program Key takeaways A wellness program is an organizational initiative to improve individual health and wellbeing, commonly offered by employers, insurers, and governments. Benefits include higher productivity, fewer sick days, lower insurance costs, reduced turnover, and improved employee wellbeing. Programs range from fitness incentives to mental-health supports; costs typically run from $150 to $1,200…

Wellbore Definition A wellbore is the drilled hole that provides access to subsurface resources such as oil, natural gas, or water. It can be an open (uncased) hole or lined with casing and cement to stabilize the bore and protect surrounding formations. Wellbores may be vertical, deviated, or horizontal depending on the target and drilling…

Welfare State What is a welfare state? A welfare state is a political system in which the government plays a central role in protecting and promoting citizens’ economic and social well‑being. Typical aims include reducing poverty, promoting equality of opportunity, and ensuring access to basic needs such as income support, healthcare, education, and housing. Common…

Welfare Loss of Taxation Overview Welfare loss of taxation is the reduction in social and economic well-being that results when a government imposes a tax. Beyond the dollars transferred from taxpayers to the public treasury, taxes impose additional costs: real resources consumed in administering and complying with taxes, behavioral changes that reduce productive activity, and…

Welfare Economics: Theory, Methods, and Critiques What is welfare economics? Welfare economics studies how the allocation of resources affects social welfare and economic efficiency. It asks which arrangements of production, consumption, and income best enhance overall social well‑being, using tools from microeconomics such as utility theory, consumer and producer surplus, and market equilibrium. Core concepts…

Welfare and Pension Plans Disclosure Act (WPPDA) The Welfare and Pension Plans Disclosure Act (WPPDA) was federal legislation enacted in 1958 to increase transparency and oversight of private employee benefit plans. It required employers and labor unions to disclose plan information and financial reports to the U.S. Department of Labor and served as the first…

Welfare in the United States Definition Welfare refers broadly to government programs that provide financial assistance and services to individuals and families with low incomes. These programs help cover essentials such as food, health care, housing, and child-related needs. Most are federally funded and administered in partnership with states. Who qualifies Eligibility rules vary by…

Weighted Average Remaining Term (WART) What is WART? Weighted Average Remaining Term (WART) measures the average time to maturity of the assets in a fixed‑income portfolio, weighted by each asset’s outstanding principal. It is commonly applied to mortgage‑backed securities (MBS) and other asset‑backed securities (ABS). A longer WART indicates that, on average, the portfolio’s cash…

Weighted Average Rating Factor (WARF) The Weighted Average Rating Factor (WARF) is a single-number measure that summarizes the credit quality of a portfolio of rated assets. It is most commonly used by credit rating agencies and structured-finance market participants for collateralized debt obligations (CDOs) and similar securitized products. What WARF represents WARF converts letter credit…

Weighted Average Maturity (WAM) Weighted average maturity (WAM) measures the average remaining time until the securities in a debt portfolio mature, weighted by the dollar amount invested in each security. It’s commonly used for mortgage-backed securities (MBS), corporate bonds, municipal bonds, and bond funds to evaluate time horizon, interest-rate sensitivity, and portfolio risk. Key takeaways…

Weighted Average Market Capitalization The weighted average market capitalization (market-cap weighting) is a method for constructing stock market indexes or funds in which each component is weighted according to its total market capitalization (share price × number of outstanding shares). Larger companies therefore comprise a bigger share of the index and have greater influence on…

Weighted Average Loan Age (WALA) What is WALA? Weighted Average Loan Age (WALA) measures the average age of loans in a mortgage-backed securities (MBS) pool, expressed in months. The age of each loan is weighted by its dollar amount (either original balance or remaining principal), producing a single metric that summarizes how long, on average,…

Weighted Average Life (WAL) Weighted Average Life (WAL) measures the average time each dollar of unpaid principal on an amortizing loan, mortgage, or bond remains outstanding. Unlike measures that include interest, WAL considers only principal repayments, so it indicates how quickly principal is returned to investors. Why WAL matters Focuses on principal timing, which is…

Weighted Average Credit Rating (WACR) Key takeaways WACR summarizes the overall credit quality of a bond fund by combining the credit ratings of all holdings into a single average. It is calculated by weighting each credit rating by the proportion of the portfolio it represents. Some providers use linear-factor adjustments tied to default probabilities; methodologies…

Weighted Average Coupon (WAC) Definition The weighted average coupon (WAC) is the average gross interest rate of the mortgages in a mortgage-backed security (MBS), weighted by each mortgage’s outstanding principal. It represents the coupon investors receive on the pooled mortgages at the time the security is measured and is commonly used to analyze prepayment behavior…

Weighted Average Cost of Equity (WACE) Weighted Average Cost of Equity (WACE) measures a company’s overall cost of equity by combining the costs of its different equity components—commonly retained earnings, common stock, and preferred stock—weighted by their share of the firm’s equity capital. Using weights produces a more accurate cost-of-equity estimate than a simple average,…

Weighted Average Cost of Capital (WACC) Weighted Average Cost of Capital (WACC) measures the average rate a company must pay to finance its operations through debt and equity. It’s a central tool for corporate finance and investing: companies use it as a hurdle/discount rate for projects and acquisitions, and investors use it to assess whether…

Weighted Average A weighted average is a mean that assigns different levels of importance to values in a dataset. Instead of treating every observation equally (as in a simple arithmetic mean), each value is multiplied by a weight that reflects its relative significance. The weighted average better represents situations where some items contribute more to…

Weighted Alpha — Definition and Key Takeaways Weighted alpha is a performance metric that measures a security’s return over a specified period (commonly one year) while giving greater emphasis to more recent price movements. It is used to highlight recent momentum by weighting later returns more heavily than earlier ones. Key takeaways: * Positive weighted…

Weighted: What It Means and How It Works Weighting describes adjusting a calculation to reflect the relative importance or proportion of its components. Instead of treating every input equally, weighted measures give larger or smaller influence to components based on size, recency, probability, or some other criterion. Weighting is widely used in finance, accounting, and…

Wei Wei is the smallest denomination of ether, the native token of the Ethereum blockchain. One ether (1 ETH) equals 1,000,000,000,000,000,000 wei (10^18). Put differently, one wei is one quintillionth (10^-18) of an ether. Key points A wei is to ether what a satoshi is to bitcoin: the atomic unit used for precise values and…

Weekly Premium Insurance What it is Weekly premium insurance is a form of life or disability insurance in which policyholders make small premium payments every week. Historically known as industrial life insurance, it was designed to match the pay schedules and modest incomes of industrial and working-class families. Explore More Resources › Read more Government…

Weekly Charts: Definition and Purpose A weekly chart condenses a week’s worth of trading into a single bar or candle, giving a clearer view of longer-term price movement than daily or intraday charts. It’s especially useful for identifying enduring trends, price channels, and broad market direction. How Weekly Charts Are Constructed Each weekly bar/candle summarizes…

Understanding the Weekend Effect in Stock Markets What it is The weekend effect (also called the Monday effect) is a recurring market anomaly in which average stock returns on Mondays are lower than those on the preceding Fridays. It reflects a systematic difference in price behavior across these two days and has been observed in…

Understanding Bank Reserves: Definition, Purpose, and Impact Key takeaways Bank reserves are cash that financial institutions hold to meet central bank requirements and customer withdrawals. Reserves can be required (minimum mandated) or excess (above the minimum). The U.S. reserve requirement was set to zero on March 26, 2020, but banks still follow liquidity rules such…

Wedge Patterns in Trading A wedge is a technical-analysis chart pattern formed when two converging trend lines connect successive highs and lows, creating a narrowing price range. Wedges signal a loss of momentum and often precede a meaningful breakout — either continuing the existing trend or reversing it. There are two primary types: rising wedges…

Web Syndication Web syndication is a content-distribution strategy in which one website licenses or gives another site the right to republish its content. It’s a common way for content creators to extend reach and for larger or niche aggregators to offer more content to their audiences. Key takeaways Syndication lets content producers gain exposure and…

Understanding Web 2.0 Web 2.0 describes the shift from a static, read-only web to a dynamic, interactive internet where users create, share, and collaborate. Rather than a specific set of technical upgrades, Web 2.0 refers to how people use the web: social networking, user-generated content, cloud-hosted applications, and participatory platforms became central. How Web 2.0…

Weather Insurance What is weather insurance? Weather insurance is a form of financial protection against losses caused by measurable adverse weather conditions — for example, heavy rain, high winds, snow, fog, or temperatures outside an expected range. It is typically purchased by businesses (event organizers, retailers, broadcasters, agricultural enterprises, utilities) and sometimes by individuals (for…

Weather Futures: What They Are and How They Work Key takeaways Weather futures are financial contracts that pay based on the value of a weather index (most often temperature-based). Payments typically depend on cumulative Heating Degree Days (HDD) or Cooling Degree Days (CDD) over a specified period. They let businesses hedge revenue or cost exposure…