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Finance 5.03
The Fundamentals of Investing Vocabulary List
| 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. |
| Investment | Assets purchased with the goal of providing additional income from the asset itself but with the risk of lost |
| 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 rice 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 or investing. |
| Risk | The chance of loss from an even 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 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. |