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Economics
Econ Chapter 11
| Term | Definition |
|---|---|
| Bear Market | a steady drop in the stock market over a period of time |
| Brokerage Firm | a business that specializes in trading stocks |
| Bull Market | a steady rise in the stock market over a period of time |
| Call Option | the option to buy shares of stock at a specified time in the future |
| Capital Gain | the difference between a higher selling price and a lower selling price, resulting in a financial gain for the seller |
| Capital Loss | the difference between a lower selling price and a higher selling price, resulting in a financial loss for the seller |
| Capital Market | market in which money is lent for periods longer than a year |
| Corporate Bond | a bond that a corporation issues to raise money to expand its business |
| Coupon Rate | the interest rate that a bond issuer will pay to a bondholder |
| Diversification | spreading out investments to reduce risk |
| The Dow | index that shows how certain stocks have traded |
| Equities | claims of ownership in a corporation |
| Financial Intermediary | institution thar helps channel funds from savers to borrowers |
| Financial Asset | claim on the property of income of a borrower |
| Financial System | the system that allows the transfer of money between saver and borrowers |
| Futures | contracts to buy or sell the transfer of money between saver and borrowers |
| Great Crash | the collapse of the stock market in 1929 |
| Investment | the act of redirecting resources from being consumed today so that they may create benefits in the future; the use of assets to earn income or profit |
| Junk Bond | a lower-rated, potentially higher-paying bond |
| Maturity | the time at which payment to a bondholder is due |
| Money Market | market in which money is lent for periods less than a year |
| Municipal Bond | a bond issued bye a state or local government or municipality to finance such improvements as highways, state buildings, libraries, parkes, and schools |
| Mutual Fund | fund that pools the savings of many individuals and invests this money in a variety of stocks, bonds, and other financial assets |
| Nasdaq | an electronic marketplace for stocks and bonds |
| Options | contracts taht give investors the choice to buy or sell stock and other financial assets |
| OTC Market | American market for OTC securities |
| Par Value | the amount that an investor pays to purchase a bond and that will be repaid to the investor at maturity |
| Portfolio | a collection of financial assets |
| Primary Market | market selling financial assets that can only be redeemed by the original holder |
| Prospectus | an investment report to potential investors |
| Put Option | the option to sell shares of stock at a specified time in the future |
| Return | the money an investor receives above and beyond the sum of money initially invested |
| S & P 500 | index that shows the price of changes of 500 different stocks |
| Savings Bond | low-denomination bond issued by the United States government |
| Secondary Market | market for reselling financial assets |
| Securities and Exchange Commission | an independent agency of the government that regulates financial markets and investment companies |
| Share | portion of stock |
| Speculation | the practice of making high-risk investments with borrowed money in hopes of getting a big return |
| Stock Exchange | a market for buying and selling stock |
| Stock Split | the division of a single share of stock into more than one share |
| Stock Broker | a person who links buyers and sellers of stock |
| Yield | the annual rate of return on a bond if the bond were held to maturity |
Created by:
halvy
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