The Secret Language of Finance
Everything you need to know about abbreviations, initialisms, and acronyms in order to join the club
I often tell students in my introductory finance courses that to understand finance you first need to learn the language of finance. Not knowing a foreign language can be a barrier in dealing with foreign businesses; and similarly, not knowing the language of finance can be a communications barrier. Even if your goal isn’t to be a finance professional, you probably spend at least part of your time communicating with finance and accounting professionals within your organization. Knowing the language of finance can give you confidence so that you can at least follow conversations, and even contribute. I’ll review the most common abbreviations, acronyms, and initialisms so you know how to pronounce them, and have an idea as to what they mean. (At the end of this article I’ll provide an alphabetized list of the abbreviations and what they stand for.) And if you are experienced in the language of finance or have already taken a finance or investments course, I’ve got some “shocking news” (ok, that’s admittedly a bit of a stretch) about the pronunciation — or mispronunciation — of one of the best-known financial models, CAPM.
Abbreviations, Acronyms, and Initialisms
First, let’s distinguish among…
