click below
click below
Normal Size Small Size show me how
Per Fi Ch. 8
Fundamentals of Investing
| Question | Answer |
|---|---|
| emergency fund | money that you can access quickly for an immediate need |
| speculative investment | a high-risk investment made in the hope of earning a relatively large profit in a short time |
| retained earnings | profits that are reinvested |
| investment liquidity | the ability to buy or sell an investment quickly without substantially affecting its value |
| equity capital | money that a business gets from its oners in order to operate |
| dividends | distributions of money, stock, or other property that a corporation sometimes pays to stockholders |
| common stock | stock that provides the most basic form of corporate ownership and it tentitles you to voting privileges |
| preferred stock | stock that gives the owner teh advantage of receiving cash dividends before common stockholders receive any |
| corporate bond | a corporation's written pledge to repay a specified amount of money, along with interest |
| government bond | the written pledge of a government or municipality to repay a specified sum of oney with interest |
| mutual fund | an investment alternative in which investors pool their money to buy stocks, bonds, and other securities based ont eh selections of professional managers who work for an investment company |
| diversification | the process of spreading your assets among several different types of investments to lessen risk |
| financial planner | a specialist who is trained to offer specific financial help and advice |
| tax-exempt income | income that is not taxed |
| tax-deferred income | income that will be taxed at alater date |
| capital gain | the profit from the sale of an asset such stocks, bonds, or real estate |
| capital loss | the sale of investment for less than its purchase price |