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5.03
Vocab
Term | Definition |
---|---|
Bond | A form of lending to a company or the government. (city, state, or federal) |
Brokerage Firm | Facilitates the buying and selling of investments from a stock exchange. |
Capital Gain | Unearned income received from the sale of an asset above its purchase price. |
Discount Brokerage Firm | Only completes orders to buy and sell investments. |
Dividend | The share of profits distributed in cash. |
Financial Advisor | A trained professional that helps people make investing decisions. |
Full-Service Brokerage Firm | Offer investment transactions as well as investment advice and a financial advisor. |
Index | A group of similar stocks and bonds. |
Index Fund | A mutual fund that was designed to reduce fees by investing in the stocks and bonds that make up an index. |
Inflation | The rise in the general level of prices. |
Inflation Risk | The danger that money won't be worth as much in the future as it is today. |
Investment | Assets purchased with the goal of providing additional income from the asset itself but with the risk of loss. |
Investment Philosophy | An individual's general approach to investment risk. |
Investment Risk | The possibility that an investment will fail to pay the expected return or fail to pay a return at all. |
Market Price | The current price that a buyer is willing to pay. |
Maturity Date | The specified time in the future when the principal (or initial investment) amount of the bond is repaid to the bondholder. |
Mutual Fund | Created when a company combines the funds of many different investers and then invests that money in a diversified portfolio of investments. |
Portfolio Diversification | Reduces risk by spreading money among a wide array of investments. |
Rate of Return | The total return on an investment expressed as an percentage of the amount of money saved. |
Rent | A fee charged for the use of property or land. |
Return | The profit or income generated by saving and investment. |
Risk | The chance of loss from an event that cannot be entirely controlled. |
Speculative Investments | Have the potential for significant fluctuations in return over a short period of time. |
Stock | A share of ownership in a company. |
Stockholder/Shareholder | The owner of a stock. |
Stock Exchange | An organized, central service to buy and sell stocks, bonds and other investments that are traded. |
Tax-Advantaged Investments | Reduce, defer, or adjust the current year tax liability. |