Glossary of Terms

The information presented here is not intended as financial, investment, tax or legal advice and is provided for educational purposes only.
Q
Term
Explanation
Q's, QQQ or Qubes
Nicknames for the Nasdaq 100 Index Tracking Stock Index Shares. Their stock symbol is QQQ.
Qualified Dividends
Dividends received from domestic corporations and certain qualifying foreign corporations that meet holding period requirements. Common stock must be held at least 61 days within the 121-day period beginning 60 days before the ex-dividend date. Preferred stock must be held at least 91 days during the 181-day period beginning 90 days before the ex-dividend date.
Qualified Domestic Relation Order (QDRO)
A judicial order or court decree that divides ownership of an individual's qualified (i.e. tax-advantaged) retirement account or pension with a spouse, ex-spouse, child or other dependent as part of the equitable distribution of marital assets following a divorce or legal separation. The QDRO may be a separate document or it may be a part of the divorce decree.
Qualified Interest Income
A tax-deferred plan established by an employer for employees that qualifies for federal tax preferences. Such plans usually provide for employer contributions, (e.g., profit sharing or pension plans,) and may also allow employee contributions e.g., 401(k) plans. Because these plans are designed to build retirement savings, employees may pay taxes when they withdraw money. In the case of a Roth 401(k) or Roth 403(b), assets are considered after-tax monies for which earnings may be withdrawn tax-free if certain requirements are met. Participants may receive certain deductions and other tax benefits when they make contributions.
Qualified Plan
A tax-deferred plan established by an employer for employees that qualifies for federal tax preferences. Such plans usually provide for employer contributions, (e.g., profit sharing or pension plans,) and may also allow employee contributions e.g., 401(k) plans. Because these plans are designed to build retirement savings, employees may pay taxes when they withdraw money. In the case of a Roth 401(k) or Roth 403(b), assets are considered after-tax monies for which earnings may be withdrawn tax-free if certain requirements are met. Participants may receive certain deductions and other tax benefits when they make contributions.
Quality
A measure of the financial soundness of an institution, indicating its ability to honor financial obligations in a timely manner. Ratings agencies, such as Moody's, S&P, A.M. Best and Duff & Phelps, assign quality ratings on banks, insurance companies and other corporate entities based on their financial health, industry outlook, balance sheet, management quality, etc.
Quantitative Easing/Credit Easing
Specific steps the government can take to increase liquidity in the economy by encouraging banks to lend money. Typically, lowering short-term interest rate targets is the first step taken to improve liquidity. But after short-term interest rates are close to, or at zero, the government has limited options - which makes quantitative easing something of a last resort. U.S. Federal Reserve Board (the Fed) Chairman Ben Bernanke refers to the U.S. version of quantitative easing as "credit easing" because it focuses on the mix of assets to be used to increase liquidity rather than on the quantity of credit created. Quantitative easing is sometimes described as "printing money", although the Fed actually creates it electronically by increasing the credit in its own bank account. It uses these funds to:
  • Buy toxic assets from banks, providing them more money to lend.
  • Buy long-term government bonds, thereby lowering yields on long-term Treasuries. This encourages banks to lend money to individuals and businesses - because the banks can earn more from those loans than they could earn by investing in Treasuries.
  • Ensure that financial institutions have access to short-term credit ? thereby encouraging them to make loans rather than hoard reserves.
Quick Ratio
A measure of a company's financial liquidity calculated by dividing its cash and equivalents plus its receivables by its current liabilities. Also called acid test ratio.