Category: Financial Terms

Two-Tailed Tests A two-tailed test assesses whether a sample statistic (usually a mean) differs significantly from a hypothesized population value in either direction — that is, whether it is either significantly higher or significantly lower. It is a fundamental tool in null-hypothesis significance testing used across science, manufacturing, finance, and quality control. Key takeaways A…

Two-Bin Inventory Control Two-bin inventory control is a simple stock management technique that helps ensure a steady supply of items while minimizing excess inventory. It’s commonly used for small, low-value, high-turnover parts and supplies. What it is The system uses two physical or logical “bins” for each stocked item: – Bin 1 (working stock): the…

Two and Twenty: Hedge Fund Fee Structure Key takeaways “Two and twenty” refers to a common hedge fund fee model: a 2% annual management fee on assets under management (AUM) and a 20% performance (incentive) fee on profits above a benchmark. Variations exist by strategy; some funds charge lower management fees or lower performance fees….

28/36 Rule: What It Is and How to Use It The 28/36 rule is a simple guideline lenders and consumers use to judge how much debt a household can safely carry. It says: Spend no more than 28% of your gross monthly income on total housing expenses (mortgage or rent, taxes, insurance, HOA fees). Spend…

Tweezer Patterns: A Short Guide What is a tweezer pattern? A tweezer pattern is a candlestick reversal signal used in technical analysis to identify potential short-term market tops or bottoms. It consists of two (or sometimes more) consecutive candlesticks that share approximately the same high (tweezer top) or the same low (tweezer bottom). The pattern…

Turnover Ratio: Definition and Why It Matters The turnover ratio (or turnover rate) measures how frequently a fund’s holdings are bought and sold over a one-year period. It’s expressed as a percentage of the portfolio’s assets that have been replaced during that year. For example, a 25% turnover ratio means one-quarter of the portfolio’s holdings…

Turnover Turnover measures how quickly a company replaces or cycles through assets, obligations, or holdings over a given period. It is used in accounting and investing to assess operational efficiency, liquidity, and portfolio activity. Key takeaways Turnover gauges the speed of business activity—selling inventory, collecting receivables, paying suppliers, replacing assets, or trading securities. Common measures:…

Turnkey Solution Key takeaways * A turnkey solution is a ready-to-use product, system, or service that requires no modification by the buyer. * It’s generally faster and less expensive than a custom-built option but may not meet every specific need. * Common applications include software systems, real estate (move-in ready properties), and ready-made businesses or…

Turnkey Property: Definition, How It Works, and Investment Considerations What is a turnkey property? A turnkey property is a residential unit — a house or apartment building — that has been fully renovated and is ready for immediate occupancy or rental. These properties are often sold by firms that specialize in restoring older homes and…

Turnkey Business: Definition and How It Works What is a turnkey business? A turnkey business is a fully operational enterprise sold or transferred to a new owner in a ready-to-run condition. The buyer should be able to begin operations immediately—figuratively “turn the key” and start. Turnkey solutions can apply to entire companies, franchise units, sales…

What is a Turnkey Asset Management Program (TAMP)? A Turnkey Asset Management Program (TAMP) is a fee-based platform that provides financial advisors, broker-dealers, and other professionals with outsourced investment management, technology, and back‑office services. TAMPs let advisors delegate portfolio construction, investment research, reporting, billing, and many administrative tasks so they can spend more time serving…

Turnaround (Business and Finance) Definition A turnaround is the process by which a struggling company, economy, or individual’s financial position shifts from decline toward stability and growth. It involves identifying root causes of poor performance, implementing corrective actions, and restoring profitability or solvency. Why turnarounds matter Restore financial stability and preserve value for stakeholders. Prevent…

TSA PreCheck: What it is and how it works TSA PreCheck is a U.S. Transportation Security Administration (TSA) program that lets approved, low-risk travelers use expedited airport security lanes. PreCheck passengers typically don’t need to remove shoes, belts, light jackets, laptops or compliant liquids from carry-ons, speeding them through screening at more than 200 U.S….

Truth in Lending Act (TILA) The Truth in Lending Act (TILA) is a federal consumer protection law that requires clear, standardized disclosure of key credit terms so consumers can compare and evaluate loan and credit offers. Enacted in 1968 and implemented through Regulation Z, TILA promotes transparency in consumer lending—covering most mortgages, auto loans, credit…

Trustee: Definition, Role, and Duties A trustee is an individual or organization legally responsible for holding, managing, and ultimately distributing assets placed in a trust for the benefit of one or more beneficiaries. Trustees hold title to trust property and must administer the trust according to the grantor’s instructions and applicable law. Key points A…

Trust Receipts What is a trust receipt? A trust receipt is a short-term financing arrangement where a bank pays for goods (often to an exporter or supplier) but retains legal title to those goods while allowing the buyer to take possession. The buyer holds the merchandise “in trust” for the bank, uses it for resale…

Trust Property Trust property (also called trust assets or trust corpus) is any asset placed into a trust and managed by a trustee for the benefit of one or more beneficiaries. Assets commonly held in trusts include cash, investments, real estate, life insurance proceeds, and personal property. Key takeaways Trust property is owned by the…

Trust Preferred Securities (TruPS): Overview Trust Preferred Securities (TruPS) were hybrid financial instruments issued primarily by banks and bank holding companies. They combined features of debt and equity: structured to appear as preferred stock to investors and on financial statements, while economically funded with debt whose payments were tax-deductible for the issuer. First issued in…

Trust Indenture A trust indenture is a legally binding agreement between a bond issuer and an independent trustee that sets out the rights and obligations of the issuer, the trustee, and the bondholders. Its purpose is to protect investors by documenting the bond’s terms and the procedures that apply if the issuer defaults. Key takeaways…

Understanding Trust Funds: A Practical Guide Key takeaways * A trust fund (or trust) is a legal arrangement that holds and manages assets for one or more beneficiaries. * It involves three main parties: the grantor (who creates and funds the trust), the trustee (who manages it), and the beneficiary (who receives benefits). * Trusts…

Trust Deed: What It Is and How It Works Key takeaways A trust deed (deed of trust) is an alternative to a mortgage in many U.S. states. It transfers legal title to a neutral third party (trustee) as security for a loan while the borrower retains equitable title and possession. Trust deeds typically allow faster,…

Understanding Trust Companies What is a trust company? A trust company is a legal entity that acts as a fiduciary or trustee to manage and administer assets on behalf of individuals, families, businesses, or estates. It holds and manages trust assets according to the trust document and the grantor’s instructions, with a legal duty to…

Trusts: Definition, How They Work, and Common Types What is a trust? A trust is a legal arrangement in which one person (the trustor or grantor) transfers property or assets to another party (the trustee) to hold and manage for the benefit of one or more third parties (the beneficiaries). A trust is a separate…

True Strength Index (TSI) What is the TSI? The True Strength Index (TSI) is a momentum oscillator used by technical analysts to gauge the strength and direction of price movement. It helps identify trend direction, potential reversals, overbought/oversold conditions, and divergence between price and momentum. Key characteristics Oscillator that fluctuates above and below zero (positive…

Understanding the Troy Ounce: History, Definition, and Uses in Precious Metals What is a troy ounce? A troy ounce is a unit of mass used almost exclusively for precious metals and some gemstones. Its precise modern value is: – 1 troy ounce = 31.1034768 grams When markets quote prices for gold, silver, platinum, or palladium…

Trough (Business Cycle) A trough is the low point in the business cycle where economic activity stops declining and begins to recover. It marks the end of a contraction (recession) and the transition into recovery and expansion. Key takeaways A trough signals the bottom of economic activity or prices before a rise. It follows a…

Troubled Asset Relief Program (TARP): Overview and Legacy The Troubled Asset Relief Program (TARP) was a U.S. Treasury program launched during the 2008 financial crisis to stabilize the financial system, restore credit markets, and reduce foreclosures. Designed as an emergency intervention, TARP used government capital to purchase troubled assets and equity, recapitalize financial institutions, and…

Triple Witching: What It Is and Why It Matters Definition Triple witching is the simultaneous expiration of three types of equity derivatives—stock options, stock index options, and stock index futures—on the same trading day. It occurs quarterly: on the third Friday of March, June, September, and December. The final hour of trading on those days…

Triple Top Key takeaways * A triple top is a bearish reversal chart pattern that forms after an uptrend and consists of three consecutive peaks at roughly the same price level. * The pattern is confirmed when price falls below the pattern’s support (the swing lows between peaks). Confirmation often coincides with rising volume. *…

Triple Net Lease (NNN) Key takeaways * A triple net lease (NNN) requires the tenant to pay property taxes, building insurance, and maintenance costs in addition to base rent. * NNN leases typically offer lower base rent and transfer many operating responsibilities to the tenant, producing stable, low‑management income for landlords. * Tenants assume the…

Triple Exponential Moving Average (TEMA) The Triple Exponential Moving Average (TEMA) is a trend-following indicator designed to smooth price action while reducing the lag common to traditional moving averages. It achieves this by applying exponential moving averages (EMAs) multiple times and combining them to subtract out some of the lag, producing a line that reacts…

Triple Bottom Line (TBL) The triple bottom line (TBL) is an accounting and management framework that broadens the evaluation of a company’s performance beyond financial profit to include social and environmental outcomes. It captures three dimensions—people, planet, and profit—so organizations can assess their overall impact on society and the environment as well as their financial…

Triple Bottom A triple bottom is a bullish reversal chart pattern in technical analysis. It forms after a downtrend and consists of three roughly equal lows followed by a breakout above resistance. The pattern signals that selling pressure is waning and buyers may be gaining control. How the pattern works Appears after a prolonged downtrend….

Trimmed Mean A trimmed mean is an average calculated after removing a specified percentage of the highest and lowest values from a data set. By excluding extreme observations (outliers) at both tails, the trimmed mean reduces the influence of erratic or skewed values and often gives a more representative measure of central tendency. How it…

Trillion Cubic Feet (Tcf) What Tcf means Trillion cubic feet (Tcf) is a volume measure used primarily for natural gas in the U.S. oil and gas industry. One Tcf equals 1,000,000,000,000 cubic feet. It is commonly used to express large quantities such as national reserves or annual production. Energy equivalence Tcf is often translated into…