Definitions Starting with "U"

U.S. Department of the Treasury

The United States Department of the Treasury protects and manages many American economic and financial systems. The Secretary of the Treasury is the Chief Financial Officer of the U. Read more

UCC-1 Statement

A UCC-1 statement is a written list and description of assets that serve as collateral for a loan.   Let's say Company XYZ is a restaurant chain. Read more

Ultimate Mortality Table

An ultimate mortality table lists the probabilities of death for people of different ages and gender. Most mortality tables, like this one from the IRS, show what percentage of a population or number per 100,000 people who will probably be alive when they reach the age indicated in the table. Read more

Umberto Agnelli

Umberto Agnelli was a well-known chairman of Italian automaker Fiat -- the famous maker of the Fiat and the Ferrari. Born in Lausanne, Switzerland, in 1934, Agnelli was one of seven children. Read more

Umbrella Insurance Policy

An umbrella insurance policy is an insurance policy that covers claims beyond what traditional property and/or liability insurance covers. Businesses also obtain umbrella policies to mitigate any lawsuits or judgments. Read more

Umbrella Personal Liability Policy

An umbrella personal liability policy is an insurance policy that covers claims beyond what traditional property and/or liability insurance covers. Let' say John Doe owns a home and has homeowners insurance as his mortgage lender requires. Read more


Unannualized refers to a rate of return or other measure for a period that is not one year. Let's assume Company XYZ stock rises by 2% in one week. Read more

Unappropriated Retained Earnings

Unappropriated retained earnings are profits that are not set aside for a specific purpose. Let's say Company XYZ makes $1 million in profits this year. Read more

Unaudited Opinion

An unaudited opinion is a written statement describing an auditor’s expectations about the outcome of its audit before the audit occurs Before an audit occurs, the auditor may issue an unaudited opinion, expressing what it expects to find and its view of the overall condition of the company's books and records. An audit is an independent, unbiased and qualified evaluation of the accuracy and completeness of a company’s financial statements and practices, as well as an evaluation of a company’s compliance with Generally Accepted Accounting Standards (GAAP). Read more


A person is unbanked when he or she does not participate in the banking system and relies on the use of cash rather than checks or credit cards. Let's assume John Doe is poor and does not trust banks. Read more


In the stock world, unchanged means that the closing quote at the end of a trading day for a particular stock is the same as the closing price for the stock the day before. For example, let's say that on Monday, Company XYZ closes at $45 a share. Read more

Uncle Sam

Uncle Sam is a fictional character who represents the United States government. His predecessor was a character named Brother Jonathan. Read more

Uncollected Funds

Uncollected funds refer to the balance of uncleared checks in a bank account. When an account holder deposits a check into a savings or checking account, the bank must collect the specified amount of cash from the check writer's bank account. Read more

Uncommitted Facility

An uncommitted facility is a borrowing agreement that allows the lender to determine how much it will lend to the borrower at a given time. Let's say Company XYZ needs extra cash once in a while because it has huge payroll expenses every two weeks and less predictable payments from customers. Read more

Unconditional Probability

Unconditional probability refers to the chance that a particular event will occur without regard to external circumstances. The outcome of a single event can be affected by any number of accompanying conditions. Read more

Unconventional Oil

Unconventional oil is crude oil produced by means other than a conventional oil well. Crude, unrefined oil stock is traditionally extracted from underground reservoirs through an oil well. Read more

Uncovered Option

Also known as “being naked,” an uncovered option is the sale of an option involving securities the seller does not own. It is the opposite of a covered option. Read more


A person is underbanked when he or she does not participate in the banking system very much and instead relies on the use of cash rather than checks or credit cards. In the securities world, underbanked can also mean that the underwriter of a security offering is unable to get more financial institutions to join the underwriting syndicate. Read more


Undercapitalization occurs when a company does not have enough cash to conduct its operations. Let's say Company XYZ is a jewelry company that begins getting huge orders from several national department stores. Read more


Underemployment occurs when one does not have a job that is full-time or that reflects his or her training and financial needs. It is not the same as unemployment, which is the percentage of employable people in a country’s workforce who are over the age of 16 and who have either lost their jobs or unsuccessfully sought jobs in the last month and are actively seeking work. Read more

Underinsured Motorist Coverage

Underinsured motorist coverage protects drivers from other drivers who do not carry any or enough auto insurance. Let's say you're driving your car and are hit by another driver. Read more

Underlying Asset

An underlying asset is a security on which a derivative is based. For example, options are derivative instruments, meaning that their prices are derived from the price of another security. Read more

Underlying Security

An underlying security is an asset that a derivative instrument (e. g. Read more


The term underperform refers to an analyst recommendation that a stock is expected to do slightly worse than the overall market return. Analysts regularly evaluate and project stock performance. Read more


Underpricing occurs in the finance world when a company prices its shares too low in an initial public offering. When a company decides it wants to issue stock, bonds or other publicly traded securities, it hires an underwriter to manage what is a long and sometimes complicated process. Read more


In the securities industry, undersubscribed means that an offering does not have enough buyers. When a company decides it wants to issue stock, bonds or other publicly traded securities, it hires an underwriter to manage what is a long and sometimes complicated process. Read more


Undervalued describes a security for which the market price is considered too low for its fundamentals. Some metrics used to evaluate whether a security is undervalued are P/E ratio, growth potential, balance sheet health, etc. Read more


In the real estate world, underwater means that a property is worth less than what is owed on it. For example, let's say John Doe buys a house for $500,000. Read more

Underwater Mortgage

An underwater mortgage is a mortgage on a property that is worth less than what is owed on it. For example, let's say John Doe buys a house for $500,000. Read more


Whenever you apply for a major loan or an insurance policy, your personal data will often go before an underwriter. Although you may never meet them, these specialists have a lot of control over whether you’re approved for a mortgage or life insurance policy. Read more


Underwriting is the process that a lender or other financial service uses to assess the creditworthiness or risk of a potential customer.   Underwriting also refers to an investment banker's process of packaging and selling a security on behalf of a client. Read more

Underwriting Fees

In the securities industry, underwriting fees are the fees earned by an investment bank to help bring a company public or to conduct some other offering. In the mortgage business, an underwriting fee is often a fee charged by a mortgage lender for preparing the loan and associated paperwork. Read more

Undue Influence

Undue influence occurs when one party to a transaction is able to influence the decisions of another party to the transaction. Anybody who's ever had a pushy girlfriend or boyfriend knows what undue influence feels like. Read more

Unearned Income

Unearned income is an IRS term for income that is not obtained by participating in a business or trade (e. g. Read more


Unemployment occurs when one does not have a job. In the financial world, the term is often short for unemployment rate, which is the percentage of employable people in a country’s workforce who are over the age of 16 and actively seeking work. Read more

Unemployment Rate

The unemployment rate measures the percentage of employable people in a country's workforce who are over the age of 16 and who have either lost their jobs or have unsuccessfully sought jobs in the last month and are still actively seeking work. The formula for unemployment rate is: Unemployment Rate = Number of Unemployed / Total Labor Force In the U. Read more


An encumbrance is a limitation on the ownership of a property. When an asset is unencumbered, there are no limitations on its ownership. Read more

Uniform Gifts to Minors Act (UGMA)

The Uniform Gifts to Minors Act (UGMA) is a set of rules under which adults can give money to a minor via a custodial account in the minor's name. In some states, the UGMA has been superseded by the Uniform Transfers to Minors Act (UTMA). Read more

Uninsured Certificate of Deposit (CD)

An uninsured certificate of deposit (CD) is a certificate of deposit that is not covered by depositor’s insurance. Certificates of deposit (CDs) are insured up to the maximum allowable amounts by either the Federal Deposit Insurance Corporation (FDIC) or National Credit Union Administration (NCUA) insurance if they are issued by U. Read more

Unit Cost

Unit cost is a measure of a company's cost to build or create one unit of product. For example, let's assume that it costs Company XYZ $10,000 to purchase 5,000 widgets that it will resell in its retail outlets. Read more

Unit Investment Trust (UIT)

A unit investment trust is a type of investment fund comprising a fixed portfolio of securities that is sold in units to potential investors similar to a mutual fund. Also called unit trusts or fixed trusts, unit investment trusts are made up of a portfolio whose security assets are fixed and remain unchanged throughout the life of the trust. Read more


A unitholder is an investor who owns the securities of a trust, like a real estate investment trust (REIT) or a master limited partnership (MLP). The securities issued by trusts and MLPs are called units, and investors in units are called unitholders. Read more

Universal Banking

Universal banking refers to the practice of offering clients retail banking as well as investment services. Investment services and retail banking services (savings and checking accounts, loans, mortgages, etc. Read more

Universal Life Insurance

Universal life insurance is a type of life insurance policy that allows the policyholder to alter the policy in response to life changes, by merging the benefits of term life insurance with those of a savings account. Universal life insurance is based on whole life insurance. Read more

Unqualified Opinion

An unqualified opinion is a written notice from an auditor stating that a company has complied with generally accepted accounting principles (GAAP). For example, let’s assume that Company XYZ is a publicly traded company. Read more

Unrealized Gain

An unrealized gain represents the increase in the value of an asset that has not been sold. This concept is often called paper profit. Read more

Unrealized Loss

An unrealized loss is a paper loss from holding an asset that has lost value but has not yet been sold. Unrealized losses are losses in asset value, but not cash value. Read more

Unrelated Business Taxable Income (UBTI)

Unrelated business taxable income (UBTI) is the tax placed on the income derived from unrelated business activities of an otherwise tax-exempt entity. For example, if an investor uses his Individual Retirement Account (IRA) open a bakery, this is a business clearly not related to the primary purpose of an IRA. Read more


In the finance world, a lender or piece of debt is unsecured if it does not have collateral. Let's assume you would like to borrow $100,000 to start a business. Read more

Unsecured Creditor

An unsecured creditor is a lender or any entity to which a company or individual owes money for services provided. That creditor, however, does not have any collateral from the borrower. Read more

Unsecured Debt

Unsecured debt is debt that does not have any collateral attached. If you borrow money from XYZ Bank, XYZ Bank becomes your creditor. Read more

Unsecured Loan

An unsecured loan is debt that does not have any collateral attached. Let’s assume you would like to borrow $100,000 to start a business. Read more

Unsecured Note

In the finance world, an unsecured note is corporate debt that does not have any collateral attached. Unsecured notes are not the same as debentures, which are also unsecured corporate debt (but debentures usually have insurance policies that pay out when the borrower defaults). Read more

Unsponsored American Depository Receipt (ADR)

An Unsponsored American Depository Receipt (ADR), though backed by the common stock of an offshore company, is not directly sanctioned by that company and renders the holder un-entitled to the shareholder benefits that come with a sponsored ADR. An ADR is a financial instrument denominated in U. Read more

Unsubordinated Debt

Unsubordinated debt refers to loans and debt securities (e. g. Read more


The term unsubscribed describes the portion of the shares in an IPO that are not sold prior to the IPO. Let’s assume Company XYZ is going public. Read more

Unweighted Index

An unweighted index has components that are not adjusted to reflect importance or certain characteristics. Here is information about five stocks. Read more


Upside refers to an investment's potential future increase in value. For example, you purchase 100 shares of Company XYZ at $5 per share, for a total investment of $500. Read more


Upthrusts are false breakouts that can trap the unsuspecting trader. Upthrust patterns quickly reverse, with the stock or index then often testing the opposite end of the trading range. Read more


Uptick refers to the increase in the market price of a security over the preceding transaction. If a new trading price for a security is higher than the preceding one (even by one cent), the security is on an uptick. Read more

Uptick Rule

Known as Rule 10(a)(1) of the Securities Exchange Act of 1934, the uptick rule allows investors to short a security only at a price higher than the security's last trade. Essentially, a short seller is trying to do the same thing a regular investor is: buy low and sell high. Read more

Uptick Volume

Uptick volume is the number of shares of a particular stock that trades when the price is increasing. Let's assume that in the last hour, Company XYZ stock increased from $15 to $17 per share for 30 minutes. Read more

Useful Life

A useful life is the number of years in which an asset can reliably produce benefits. Let's assume you buy a car for $20,000. Read more


Usury is lending money at an interest rate thought to be irrationally high or higher than permitted by law.   Usury is another word for predatory lending, which is the act of imposing unfair and abusive loan terms on borrowers. Read more

Utilization Ratio

The utilization ratio compares an individual's total debt balances to total available credit. It helps determine part of a person's credit score. Read more