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5.03
Vocab
| Term | Definition |
|---|---|
| Bond | A form of lending to a company or the government. (city, state, or federal) |
| Brokerage Firm | 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 Firm | 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 the 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 investers 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 an 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 investment. |
| 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/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. |