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42 Cards in this Set
- Front
- Back
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Investment
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the act of redirecting resources from being consumed today so that they may create benefits in the future; the use of assets to earn income or profit
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Financial System
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the system that allows the transfer of money between savers and borrowers
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Financial Asset
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claim on the property or income of a borrower
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Financial Intermediary
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institution that helps channel funds from savers to borrowers
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Mutual Fund
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fund that pools the savings of many individuals and invests this money in a variety of stocks, bonds, and other financial assets
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Diversification
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spreading out investments to reduce risk
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Portfolio
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a collection of financial assets
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Prospectus
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an investment report to potential
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Return
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the money an investor receives above and beyond the sum of money initially invested
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Coupon Rate
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the interest rate that a bond issuer will pay to a bondholder
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Maturity
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the time at which payment to a bondholder is due
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Par Value
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the amount that an investor pays to purchase a bond and that will be repaid to the investor at maturity
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Yield
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the annual rate of return on a bond if the bond were held to maturity
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Savings Bond
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low-denomination bond issued by the United States government
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Municipal Bond
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a bond issued by a state or local government or municipality to finance such improvements as highways, state buildings, libraries, parks, and schools
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Corporate Bond
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a bond that a corporation issues to raise money to expand its business
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Securities and Exchange Commission
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an independent agency of the government that regulates financial markets and investment companies
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Junk Bond
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a lower-rated, potentially higher-paying bond
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Capital Market
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market in which money is lent for periods longer than a year
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Money Market
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market in which money is lent for periods of less than a year
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Primary Market
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market for selling financial assets that can only be redeemed by the original holder
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Secondary Market
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market for reselling financial assets
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Share
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portion of stock
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Equities
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claims of ownership in a corporation
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Capital Gain
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the difference between a higher selling price and a lower purchase price, resulting in a financial gain for the seller
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Capital Loss
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the difference between a lower selling price and a higher purchase price resulting in a financial loss to the seller
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Stock Split
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the division of a single share of stock into more than one share
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Stockbroker
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a person who links buyers and sellers of stock
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Brokerage Firm
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a business that specializes in trading stocks
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Stock Exchange
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a market for buying and selling stock
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OTC Market
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an electronic marketplace for stocks and bonds
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Nasdaq
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American market for OTC securites
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Futures
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contracts to buy or sell at a speciic date in the future at a price specified today
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Options
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contracts that give investors the choice to buy or sell stock and other financial assets
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Call Option
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the option to buy shares of stock at a specified time in the future
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Put Option
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the option to sell shares of stock at a specified time in the future
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Bull Market
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a steady rise in the stock market over a period of time
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Bear Market
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a steady drop in the stock market over a period of time
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The Dow
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index that shows how certain stocks have traded
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S&P 500
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index that shows the price changes of 500 different stocks
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Great Crash
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the collapse o the stock market in 1929
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Speculation
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the practiceof making high-risk investments with borrowed money in hopes of getting a big return
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