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AR Entre 2 U5
Arkansas Entrepreneurship II Unit 5
| Term | Definition |
|---|---|
| Blue Chip Stock | stock of an establishes 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. |
| Capital loss | the amount lost if selling stock at a price lower than its purchase price. |
| Certificate of deposit | a deposit in a savings institution that earns a fixed interest rate for a specified period of time. |
| Annual Percentage Yield (APY) | the actual interest rate an account pays per year |
| 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 a set divident |
| 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 memberships 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 of corporation's profit paid to it's 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 | saving 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 invests 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 saving options |
| prospectus | a publication that describes how a fund is operated, the fund's investing objectives, and the 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 a later use. |
| savings account | an account offered by any savings institution in which money is deposited, interest is earned on deposits, and the money can be withdrawn at any time. |
| savings bond | a U.S. 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 stock and bonds between buyer and seller |
| stockholder | an investor who owns part of a corporation because he or she owns shares of stock |