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Unit 5:
Saving and Investing
| Term | Definition |
|---|---|
| Annual Percentage Yield (APY) | The actual interest rate an account pays per year. |
| Blue Chip Stock | stock of an established 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 |
| capitol loss | the amount lost if selling stock at a price lower than its purchase price |
| certificate of deposit (CD) | a deposit in a savings institution that earns a fixed interest rate |
| 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 as a set dividend |
| 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 membership 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 ofcorporations profit paid to its 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 | Savings 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 invest 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 savings account |
| Prospectus | A publication that describes how a fund is operated, the funds investing objectives, and he 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 later use |
| Savings account | An account offered by any savings institution in which money is deposited, interest is earned on the deposits, and the money can be withdrawn at any time. |
| Savings bond | A US 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 stocks and bonds between buyer and seller |
| Stockholder | An investor who owns part of a corporation because he or she owns a share of stock |
Created by:
jsnyde02