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Saving and Investing
Term | Definition |
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emergency fund | a savings account that you can access quickly to pay for unexpected expenses or emergencies |
speculative investment | a high-rick in vestment that might earn a large profit in a short time |
dividends | distributions of money, stock, or other property that a corporation pays to stockholders |
retained earnings | profits that a company reinvests, usually for expansion or to conduct research and development |
investment liquidity | the ability to buy or sell an investment quickly without substantially reducing its value. |
equity capital | money that a business gets from its owners in order to operate |
common stock | a unit of ownership of a company, and it entitiles the owner, or stockholder, to voting privileges |
preferred stocks | a type of stock thatgives the owner the advantage of receiving cash dividends before common stockholders receive cash dividends |
corporate bond | a corporation's written pledge to repay a specific amount of money, along with interest |
government bond | the written pledge of a government or a municipality, such as a city, to repay a specific sum of money with interest |
mutual fund | an investment in which investors pool their money to buy stocks, bonds, and other securities selected by professional managers who work for an investment company |
diversification | the process of spreading your assests among several different types of investments to reduce risk |
financial planner | a specialist who is trained to offer specific financial help and advice |
tax-exempt income | income that is not taxed |
tax-deferred income | income that is taxed at a later date |
capital gain | the profit from the sale of assests such as stocks, bonds, or real estate |
capital lost | the sale of investment for less than its purchase price |
prospectus | a document that dissolves information about a company's earnings, assets and liabilities, its products or services, a particular stock, and the qualifications of its management |