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5.03 Vocabulary
| Term | Definition |
|---|---|
| Bond | A form of lending to a company or the government (city, state, or federal) |
| Brokerage form | 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 form | 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 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 investors 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 a 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 investing |
| 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 or 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 |
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brooke.burgess
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