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Investing - Final
Investing - Final Exam
| Question | Answer |
|---|---|
| Anything of value that is owned | Assets |
| Allocating money for a particular purpose | Budget |
| Expenses that don't change month to month | Fixed Expenses |
| Something a person intends to acquire, achieve or accomplish | Goal |
| The total amount of money earned before any deductions are made | Gross Pay |
| An amount owed to a lender | Liability |
| The amount left after all deductions are taken out | Net Pay |
| Expenses that change or vary month to month | Variable Expenses |
| The danger that money won't be worth as much in the future as it is today | Inflation Risk |
| The current price that a buyer is willing to pay for stock | Market Price |
| The specified time int he future when the principal amount of the bond is repaid to a bondholder | Maturity Date |
| The total return on an investment expressed as a percentage of the amount of money invested (return/money invested) | Nominal Rate of Return |
| Reduces risk by spreading investment money among a wide array of investments | Portfolio Diversification |
| Nominal Rate of Return - Inflation Rate | Real Rate of Return |
| The uncertainty regarding the outcome of a situation or event (the higher the risk the higher the reward) | Risk |
| Allows a person to calcualte when the future value of an investment will double the principal amount (72/IR=# of years) | Rule of 72 |
| Owner of a share of stock | Shareholder |
| Have potential for significant fluctuations in return over a short period | Speculative Investments |
| The market is doing poorly, investors are not purchasing stock | Bear Market |
| Measures a stocks volatility compare to the overall changes in the stock market (higher beta = higher risk) | Beta |
| The market is doing well, investors are optimistic and purchasing stock | Bull Market |
| shares of ownership in a public corporation (voting rights, most common, dividends can be paid) | Common Stock |
| Brockerage firms buy and sell stocks (New York stock Exchange, American Stock Exchange, Regional Stock Exchanges, NASDAQ) | Exchange |
| Price per share / Earnings per share | P/E Ratio |
| Shares which pay fixed dividends and have priority over common stock (less risky, no voting rights, dividends stated as a fixed percentage) | Preferred Stock |
| Companies that do no issue stock | Private Companies |
| Companies that sell stock | Public Companies |
| Information about the companies of financial information | Prospectus |
| A class of shares with lower 12b-1 fees, breakpoints, and good for large investments and a long time frame | Class A Shares |
| A class of shares with no front-end fees or breakpoints, there are deferred sales charges, the shares can convert to class A shares and they have a higher expense ration. They are good for investors with little investment amounts and a long time horizon. | Class B Shares |
| A class of shares with no front-end or breakpoints, they have a small back-end load that can be removed after 1 year, there are higher expense ratios. Good for investors with a short-time horizon. | Class C Shares |
| The interest payment on a coupon bond. | Coupon |
| The price an investor pays for a bond (also called par value or principal) | Face Value |
| An investment in which the amount of income an investor receives is set, or fixed, by the issuer. | Fixed Income Security |
| The entity (government or corporation) that writes the bond purchased by investors. | Issuer |
| The price an investor pays for a bond (also called face value or principal) | Par Value |
| The initial cost of the bond (also known as the par value or face value of the bond | Principal |
Created by:
mryan396
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