Term Definition
Bond A type of security, usually issued by a government or company, that normally pays a fixed rate of interest over a given time period, at the end of which the initial investment is repaid.
Capital Refers to the financial assets, or resources, that a company has to fund its business operations.
Default When a company or government does not maintain interest payments on its fixed interest security or repay the initial investment at the end of the security's life.
Monetary policy A central bank's regulation of money in circulation and interest rates.
Yield (bond) Refers to the income received from an investment and is usually expressed annually as a percentage based on the investment's cost, its current market value or face value.
Sovereign debt Debt of a government.
Inflation The rate of increase in the cost of living. Inflation is usually quoted as an annual percentage, comparing the average price this month with the same month a year earlier.
Recession A country is considered technically to be in recession if it has experienced two consecutive quarters of negative economic growth.
Depression A severe and prolonged downturn in economic activity - a recession that lasts two or more years.
Devaluation A currency devaluation is a deliberate downward adjustment to a country's official exchange rate relative to other currencies.