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CFM Stock Market
vocab for stock market unit
| Question | Answer |
|---|---|
| Portfolio | The group of assets—such as stock, bonds and mutual—held by and investor. |
| Stock | A share of ownership in a business. A share of a company's profit (or loss) belongs to each owner. |
| Risk | The likelihood of losing money. Higher risk means a greater opportunity for high return and a higher potential for loss. |
| Diversification | A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize risk by combining different investments whose prices are not likely to move in step with one another. |
| Mutual Fund | :A company owned by investors who pool their savings to invest in a variety of stocks or bonds managed by a professional. |
| Dividend | A cash payment from profits announced by a company’s board of director’s and distributed among stockholders. In the Stock Market Game, and dividends received are listed in Transaction History and are included in the portfolio’s total equity. |
| NASDAQ | An electronic, floorless stock exchange (National Association of Securities Dealers Automated Quotations) known for tech and growth companies. Its Composite Index tracks the performance of over 3,000 stocks traded on the network. |
| New York Stock Exchange (NYSE) | The oldest (founded 1792) and largest equities-based stock exchange in the world, located on Wall Street in NYC. It handles thousands of listed companies, making it the premier global marketplace measured by total market capitalization |
| Public Company | A company with publicly traded shares that anyone can buy in the stock market. |
| Private Company | A company that doesn't sell shares to the public. You can't buy shares of a private company in the stock market. |
| Dow Jones Industrial Average (DOW): | The best-known measure of stock prices consisting of 30 large, well-known companies in major sectors of the U.S. economy. |
| S&P 500 (Standard & Poor's 500) | A popular measure of stock prices consisting of 500 large companies that represent the major sectors of the U.S. economy. One of the most commonly used benchmarks of the overall stock market. |
| Market Capitalization (or Market Cap) | The total current market value of all outstanding shares of a company. Market capitalization is calculated by multiplying a stock's current price by the total number of outstanding shares. |
| Small capitalization stocks (Small Cap): | A stock of a company whose market capitalization is small, usually under $500 million. Small-cap stocks tend to grow faster than larger cap companies, but they also tend to be more volatile (inconsistent, fickle, changeable). |
| Mid Cap: | Short for “middle cap,” mid cap refers to stocks with a market capitalization of between $2 billion to $10 billon. |
| Large Cap: | refers to a company with a market capitalization value of more than $10 billion. Large cap is a shortened version of the term "large market capitalization. |
| Beta | Measures a stock's risk/volatility compared to the market. A beta of 1 moves exactly with the market. Under 1 means less volatile (safer); over 1 means more volatile (riskier). For example, 1.2 is 20% riskier than the market. |
| P/E: | Measures a company's stock price relative to its earnings. A P/E of 20 means investors are willing to pay $20 today for every $1 of the company's current earnings. It shows if a stock is over or undervalued |
Created by:
Rain2026