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Invest. Fundamentals
| Term | Definition |
|---|---|
| Annual Percentage Yield(APY) ; rate of interest | "The annual interest rate an account pays per year, including compounding amounts." =r, as a percentage (A=(1+r/k)^kt); eg, 3.7% interest, compounded annually. |
| Annual Report | "A summary of a corporation's financial results for the year and potential for future years." ; legally required, and helps investors look into a company and such. |
| Intrest | "Earnings on a savings or investment account." ; in this case, not r(rate of interest), but just the earned. |
| Compound Interest | "Interest computed on the original principal plus the accumulated interest." ; 'Original principle'=P=IA; =A(interest+IA) |
| Risk | "The chance that an investment's value will decrease." ; eg, the risk of stocks. |
| Market Risk | "Susceptibility of an investment's performance to general stock market conditions." ; Risk of a stock market crash/decline, etc. |
| Ineterest Risk | "The risk that the value of n investment could decline as a result of a change in interest rates." ; based on the economy; eg, economic crash, like the Great Depression. |
| Political Risk | "The risk that government actions will have an adverse effects on an investment." ; new laws/actions in play; eg, the ban of certain foods in schools, when you mainly sell school food. |
| Diversification | "Spreading risk among many types of investments." ; eg, investing in many companies and such, to avoid risking everything on one stock, and, essentially, one crash. |
| Certificate of Deposit(CD) | "A deposit that earns a fixed interest rate for a specified length of time." ; Higher interest rates usually, but it's locked in; long-term investment. |
| Emergency Fund | "Money used to pay for short-term needs with enough left over to cover unexpected expenses; Typically 3-6 months worth of expenses." ; High schoolers typically should have $500 set aside. |
| Securities | "Stocks and bonds issued by corporations or governments." ; government typically only has bonds, but corporations have both. |
| Discretionary Income | "Money that is left over after the bills have been paid." ; Money that you can actually set aside and save; individual net income. |
| Inflation | "A rise in the general level of prices." ; An increase in the price of goods; in major terms, is paired with over-speculation and crises. |
| Maturity Date | "The date on which an investment becomes due for payment." ; eg, when you can pull out that CD and such. |
| Principal | "The amount of money set aside by an investor that will earn interest." ; Initial Amount; P. |
| Liquidity | "The ability of an asset to be converted into cash quickly without loss of value." ; Real estate and such has low liquidity, while maybe a bank account is high. |
| Money Market | "An investment in which deposited money is used to purchase safe, liquid securities." |
Created by:
TheFavChild
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