Dictionary
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Time Value of Money

Time Value of Money

The concept that money you have now is more valuable than the same sum in the future.

The concept that money you have now is more valuable than the same sum in the future.

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Account balance

The amount of money a user has stored in a financial repository.
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Leverage

A method of trading using borrowed money that usually involves a very high level of risk.
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Yield

Income from an investment as a percentage of its current price.
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Dirty price

The total price payable on the purchase of a gilt. It’s calculated as the clean price plus accrued interest.
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Professional Client

An investor that is able to meet several regulatory criteria.
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Geometric Mean Return

A way of calculating compound returns on an investment or savings over a set period of time.
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Retail Prices Index (RPI)

An index published each month by the Office for National Statistics, which measures the level of retail prices in the UK. Cash flows on all index-linked gilts are linked to the RPI.
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Hedge Fund

Investment funds that are often associated with riskier and shorter-term trading strategies.
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Free Trade

The other free trade. International trade in which countries allow goods to flow across their borders without imposing import or export taxes.
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