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25 Cards in this Set
- Front
- Back
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Appreciation
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An increase in the value of an investment
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Capital Gain
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Income earned from selling an asset for more than the purchase price
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Stock
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A share in ownership of a corporation
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Dividend
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A portion of a company's earnings paid to stockholders
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Common stock
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Stock that pays dividends declared by the company and gives stockholders certain voting rights
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Preferred stock
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Stock that pays regular dividends at a set rate; have a priority in receiving dividends and assets but do not have voting privileges
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Securities Exchange
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A formal market in where securities are bought and sold by stockholders
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Stockbroker
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An agent who buys and sells securities for clients
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Bond
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A certificate of debt issued by a corporation or government that entitles the bondholder to a set rate of interest on the face value of the it until it matures
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Mutual fund
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An investment created by pooling the money of many people and investing it in a collection of several securities
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Net asset value (NAV)
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A mutual fund's assets minus its liabilities; also called current market value
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Money market fund
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A type of mutual fund that deals only in high interest, short term investments such as U.S. Treasury Bills, certificates of deposit, and commercial paper
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Bull market
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Term for the market when investors are confident in the economy and stock prices are rising
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Bear market
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Term for the market when investors feel insecure and stock prices fall
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Investment portfolio
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The collection of securities and other assets a person owns
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Diversification
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Spreading risk by putting money in a variety of investments
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Prospectus
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A legal document that gives a detailed description of security
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Dollar-cost averaging
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A strategy of investing a fixed dollar amount at regular intervals
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Annuity
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A contract with an insurance company that provides income for a set period of time or for life
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Estate
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The possessions such as property, savings, investments, and insurance benefits, a person leaves behind when he or she dies
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Executor
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A person appointed to carry out the terms outlined in a will
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Trustee
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A person or institution named to manage an estate on behalf of the beneficiaries
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Living will
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A statement of instructions for specific medical treatment if a person becomes unable to make medical decisions
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Trust
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A legal agreement where assets and property are managed by a trustee on behalf of the beneficiaries
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Probate court
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The government institution that processes a deceased individual's will and estate
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