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AR Entre 2 U5
Arkansas Entrepreneurship II Unit 5
Term | Definition |
---|---|
Blue Chip Stock | stock of an establishes and historically successful corporation |
Bond | A written promise to pay a debt by a specified date |
Brokerage firm | A company that specializes in helping people buy and sell stocks and bonds |
Capital gain | Profit earned from selling stock at a price higher than its purchase price. |
Capital loss | the amount lost if selling stock at a price lower than its purchase price. |
Certificate of deposit | a deposit in a savings institution that earns a fixed interest rate for a specified period of time. |
Annual Percentage Yield (APY) | the actual interest rate an account pays per year |
Commercial bank | a financial institution that serves individuals and businesses with a variety of accounts, loans, and other financial services. |
Common stock | a voting share of stock that does not pay a set divident |
Compound interest | interest paid on the principal and also on previously earned interest, assuming that the interest is left in the account. |
Credit union | a financial institution that offers memberships to people who share a common bond, such as people in a particular profession, company, church, or labor union. |
Diversification | investing in various businesses with different levels of risk |
dividend | a share of corporation's profit paid to it's stockholders based on the number of shares of stock owned. |
face value | the amount printed on a bond |
high-yield bond (HYB) | high-return, high -risk bonds or junk bonds |
insider trading | trading stock based on information that is not available to the general public |
investing | saving in a way that earns income |
load | sales fee paid when investing in a mutual fund |
money market account | a deposit for which the interest rate changes over time |
mutual fund | business that accepts deposits from many people and invests them in a variety of ways. |
preferred stock | a non-voting share of stock that pays a fixed dividend |
principle | money on deposit in a savings account, CD, or other saving options |
prospectus | a publication that describes how a fund is operated, the fund's investing objectives, and the fees it charges. |
return | income earned on an investment |
risk | the chance that an investment will decrease in value |
savings | money that is put aside for a later use. |
savings account | an account offered by any savings institution in which money is deposited, interest is earned on deposits, and the money can be withdrawn at any time. |
savings bond | a U.S. government bond issued for amounts of $50 to $10,000 |
Securities and Exchange Commission (SEC) | the government commission responsible for enforcing the laws concerning the trading of stocks and bonds. |
share of stock | a unit of ownership in a corporation |
simple interest | the amount paid on the average balance in an account once a year at the end of the year. |
stock exchange | the location where orders to buy or sell stock are sent and carried out. |
stock transaction | when shares of stock are bought and sold |
stockbroker | a person who handles the transfer of stock and bonds between buyer and seller |
stockholder | an investor who owns part of a corporation because he or she owns shares of stock |