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Finance Midterm
| Term | Definition |
|---|---|
| Annual Report | Includes a corporation's income and balance sheet. Anything that has to do with the company's status |
| Bear Market | A market in which the share prices are failing, encouraging selling |
| Beta Number | A calculation that helps measure the level of risk in investing in a stock. |
| Blue Chip Stock | Common stock for a well regarded US company. Earning profits and paying dividends regardless |
| Bonds | an IOU + interest |
| Bull Market | a market in which share prices are rising encouraging rising |
| Common Stock | do not guarantee dividend and have more risk and volatility;have the right to vote on company decisions |
| Compound Interest | interest added at regular intervals |
| Conservative Risk | Low risk |
| Corporation | a business that is owned by stockholders and has right and responsibilities as if it were a person |
| Cyclical Stocks | mirrors the economy |
| Default | failure to pay principal or interest when due |
| Diversification | an investment strategy in which you spread your investment dollars among industry sectors |
| Dividend | part of a company's profits to stockholders |
| Dow Jones Industrial Average | commonly referred to as the Dow, it is an index of 30 large well known companies |
| Earnings | the amount of money that remains after subtracting the company's expenses from its revenue |
| Fixed-Income Investments | pay interest on a set schedule |
| Growth Stocks | are stocks that attract investors by their potential for growth and higher stock prices. small to no dividends |
| High- Yield Bonds | to attract investors, the issuers of these bonds pay a higher rate of interest |
| Income Stocks | are stocks that tend to have a history of regular dividend that are the essential element in the stock's return to investors |
| Index | reports changes, usually expressed as a percentage, in a specific financial market |
| Industry | a group of companies that make the same products |
| Investor | someone who risks finds by purchasing financial products with the hope the investments will increase in value over time |
| IPO | Initial Public Offering |
| Market Capitalization | this is the market value of a company's stock |
| Maturity | the date when the principal amount of a security is payable |
| Moderate Risk | growth stocks |
| Mutual Funds | an investment instrument developed and managed by a company that pools members' money |
| NASDAQ | a global electronic marketplace for buying and selling securities |
| P/E Ratio | stands for price to earnings ratio. price per share/earnings per share |
| Portfolio | a collection of investments owned by one individual or organization |
| Preferred Stock | shares of ownership of a company in which the shareholder is guaranteed a dividend |
| Private Company | a company that is owned by a person,family,or small group of investors that does not sell shares of stock in the company to the public |
| Public Company | a company that is owned by investors who buy shares of stock, partial ownership of the assists of a business, in the corporation usually through one of the stock exchanges |
| Risk | the chance of losing all or part of the value of an investment |
| Risk Tolerance | is an individual investor's ability to accept loss of some or all of the money that they invested |
| Sector | a group of stocks, often in industry. |
| Short Selling | borrowing shares to sell, then buy back at a lower price |
| Share | a unit of ownership in a corporation or mutual fund |
| Simple Interest | calculate at regular intervals sole on principal |
| Speculative Risk | high risk |
| Standard and Poor's 500 | commonly referred to S&P's 500. index of 500 large cap stocks |
| Stock | a type of security that signifies ownership in a corporation and represents a claim to a part of the company's profits or losses |
| Stock Exchange | where brokers gather to buy and sell stocks and other securities |
| Stock splits | when a company divides each of the outstanding shares of a company thereby lowering the price per share |
| Volatility | potential unpredictability or instability of a stock |
| Volume | the number of shares traded in a company's stock |
Created by:
tarielie
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