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Unit 5
Saving and Investing
| Question | Answer |
|---|---|
| Annual percentage yield | interest rate an account pays per year |
| Blue chip stock | stock of an established and historically successful corp. |
| Bond | written promise to pay a debt |
| Brokerage firm | company specializing in helping people buy & sell stocks/bonds |
| Capital gain | profit earned from selling stock at higher price than you bought it at |
| Capital loss | amount lost from selling stock at lower price than bought at |
| CD | deposit in savings inst. earns a fixed int. rate for specific time |
| commercial bank | fin. inst. serves indiv. & bus. w/variety of accounts loans, etc. |
| common stock | voting share of stock doesn't pay set dividend |
| compound int. | paid on the principal & previously earned interest |
| credit union | fin. inst. offers memberships to people who share a common bond |
| diversification | investing in various bus. w/ diff. levels of risk |
| dividend | share of corp. profit paid to stockholders based on # of shares of stock owned |
| face value | amount printed on a bond |
| HYB | high-return, huge-risk bonds or junk bonds |
| insider trading | trading stock based on info not available to gen. public |
| investing | saving to earn income |
| load | paid when investing in a mutual fund |
| money market account | deposit in which the int. rate changes over time. |
| mutual fund | bus. that accepts deposits from many people & invests them in a variety of ways |
| preferred stock | non-voting share pays fixed dividend |
| principle | money on deposit in a savings option |
| prospectus | publication describes how a fund is operated the fund's investing objectives, and the fees it charges |
| return | income earned on investment |
| risk | chance that an investment will decrease in value |
| savings | money put aside for later use |
| savings account | offered by savings inst. where money is deposited interest is earned and money can be withdrew |
| savings bond | us govt. bond issued for amounts of $50-$10,000 |
| share of stock | unit of ownership in corp. |
| simple interest | amt. paid on avg. balance in account once a year |
| stock exchange | location where orders to buy or sell stock occur |
| stock transaction | shares of stock are bought and sold |
| stockbroker | handles transfers of stocks and bonds between buyers and sellers |
| stockholder | investor who owns part of a corp. b/c he/she owns shares of stocks |
| SEC | enforces laws about trading stocks and bonds |
Created by:
dylandye
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