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Econ Honors U0
| Question | Answer |
|---|---|
| dividend | a sum of money paid regularly (typically quarterly) by a company to its shareholders out of its profits (or reserves). |
| Financial Risk Pyramid | Pyramid that illustrates the trade-offs between risk and return for a number of saving and investing tools |
| inflation | general rise in prices |
| Inflation Risk | danger that money won't have a greater value in the future |
| Investment risk | possibility that an investment will fail to pay the expected return or fail completely |
| IPO (Initial Public Offering) | First sale of stock by a private company to sell shares to the public |
| Mutual Fund | A company combines funds from many investors then invests the money back into a portfolio of stocks and bonds |
| Parent Company | A company on top of the hierarchy of business |
| Risk | uncertainty regarding the outcome of the situation of events |
| rule of 72 | equation that helps people find how long it takes to double an investment |
| stock price | how much 1 share is sold for |
| ticker symbol | a series of characters (usually letters) that represents a company |
| demand | how much of a good or service a customer is willing to pay |
| equilibrium | equal supply and demand in the market |
| law of demand | as prices or service go up the demand goes down |
| law of supply | as prices for goods and services go up so does the demand |
| shortage | when demand is greater than supply, there is not enough supply |
| supply | the number of goods or services that people are willing to sell at a set price |
| surplus | too much product, not enough consumers |
| value stock | low stock price, but investors invest because the belief that the company will grow |
| countercyclical stock | stock that always makes money since most products are inelastic |
| cyclical stock | stock that does well when the economy does well, and bad when the economy is poor |
| growth stock | stock for companies that are rapidly growing in all conditions that don't usually pay dividends, income usually earned by rise of market price |
| income stock | stock that pays investors more per share of stock that retains more profit, typically good for people who don't have time to wait for investments to double, but costs more per share |
| speculative stock | high risk stock that has potential for high returns, from companies that have potentials for good earnings in the future |
| sole proprietorship | a business run by one person or multiple people who share taxes |
| partnership | business run by 2 or more people |
| corporation | a business that no longer relies on one person or partnership, and grows rapidly. Allows ability to be sued, to sue, own property, and conduct business |
| bonds | debt issued by govts and businesses to finance projects and/or activities |
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