Terminology 1
A share of ownership in a company
What is a stock?
A form of lending to a company or the government.
What is a bond?
A fee charged for the use of their property or land.
What is rent?
The profit or income generated by saving and investing.
What is a return?
Reduces risk by spreading money among a wide array of investments.
What is portfolio diversification?
Assets purchased with the goal of providing additional income from the asset itself but with the risk of loss
What is an investment?
The owner of a stock.
What is a stockholder?
An organized, central service to buy and sell stocks, bonds and other investments that are traded.
What is the stock exchange?
Facilitates the buying and selling of investments from a stock exchange.
What is a brokerage firm?
The chance of loss from an event that cannot be entirely controlled.
What is risk?
The current price that a a buyer is willing to pay.
What is market price?
A mutual fund that was designed to reduce fees by investing in the stocks and bonds that make up an index.
What is an index fund?
The rise in the general level of prices.
What is inflation?
The share of profits distributed in cash.
What is a dividend?
The danger that money won' be worth as much in the future as it is today.
What is inflation risk?
Created when a company combines the funds of many different investors and then invests that money in a diversified portfolio of investments.
What is a mutual fund?
The specified time in the future when the principal or initial investment amount of the bond is repaid to the bondholder.
What is maturity date?
The possibility that an investment will fail to pay the expected return or fail to pay a return at all.
What is investment risk?
An individual's general approach to investment risk.
What is investment philosophy?
Only completes orders to buy and sell investments.
What is a discount brokerage firm?
The total return on an investment expressed as a percentage of the amount of money saved.
What is rate of return?
Reduce, defer, or adjust the current year tax liability.
What is tax-advantaged investments?
A group of similar stocks and bonds.
What is an index?
Have the potential for significant fluctuations in return over a short period of time.
What is speculative investments?
Unearned income received form the sale of an asset above its purchase price.
What is capital gain?