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Business Vocab
| Term | Definition |
|---|---|
| savings | The portion of income not spent on current consumption, but reserved for future use or to accumulate wealth over time. |
| investment | The act of buying assets such as stocks, bonds, or real estate with the expectation that the investment will generate income or grow in value over time. |
| return on investment | A performance measure used to evaluate the efficiency or profitability of an investment, typically expressed as a percentage of the net profit relative to the total cost. |
| compound interest | Interest that is calculated not only on the initial principal but also on all the accumulated interest from previous periods, leading to exponential growth of savings or debt over time. |
| stock | Units of ownership in a corporation; owning stock makes you a shareholder with a claim on the company's assets and earnings. |
| bond | A type of security where an investor is essentially lending money to an entity |
| disversification | An investment strategy that involves holding a wide range of investments to reduce overall risk; the idea is that losses in one area may be balanced by gains in |
| retirement account | A financial account, often with tax advantages |
| stock market | A network of exchanges where company shares are bought and sold to raise capital and grow wealth. |
| divedend | A portion of a company's profit distributed to its shareholders. |
| mutual fund | An investment vehicle that pools money from many investors to purchase a diversified portfolio of securities |
| common stock | Basic stock that represents company ownership, usually with voting rights. |
| preferred stock | A class of stock with preferential treatment (e.g., fixed dividends) but generally no voting rights. |
| corporate bond | A debt security issued by a corporation to raise capital. |
| government bond | A debt security issued by a national government to finance public spending. |
| beneficiary | The person or entity designated to receive assets from a will, trust, or insurance policy. |
| executor | The individual named in a will to manage the deceased person's estate and distribute assets. |
| trust | A legal arrangement where assets are held and managed by a trustee for the benefit of a beneficiary. |
| estate | An individual's total assets minus their liabilities at the time of their death. |
| will | A legal document specifying how a person's assets should be distributed after death. |
| power of attorney | A legal document granting someone else authority to act on one's behalf in financial or legal matters. |
| investment liquidity | The ease of converting an investment into cash quickly without significant loss of value. |
| probate | The legal process of proving a will and settling a deceased person's estate under court supervision |
| personal financial planning | The process of managing an individual's finances throughout life to achieve financial goals. |
| estate planning | :The process of preparing for the management and transfer of one's estate after death or incapacitation. |
Created by:
jeffersonr