Personal Finance, Ch.7

Front 1

Stock

Back 1

An investment in the ownership of a corporation, usually represented by shares of the business.

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Dividends

Back 2

Company earnings distributed to shareholders, usually in the form of money or stock.

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Capital Gain

Back 3

The profit from the sale of assets such as stocks, bonds, or real estate.

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Common Stock

Back 4

A stock whose owner has voting rights and receives dividends based on company profits, paid out after preferred stockholders receive their dividends.

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Preferred Stock

Back 5

A stock whose owner has no voting rights, but receives a fixed dividend, paid before common stockholders receive their dividends.

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New York Stock Exchange (NYSE)

Back 6

The world's largest stock market in terms of dollar volume.

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NASDAQ

Back 7

The largest U.S. stock market in terms of number of companies listed and number of shares traded per day. All are traded electronically through a network of computers.

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Blue-Chip Stocks

Back 8

Safe investments in the ownership of large, respected, and well-established companies.

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Dow Jones Industrial Average

Back 9

A daily average of the stock prices of thirty of the largest and richest blue-chip companies in the United States, used to measure changes in stock market activity.

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Bull Market

Back 10

A condition that exists when investors are optimistic about the economy and the market goes up.

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Bear Market

Back 11

A condition that exists when investors are pessimistic about the economy and the market goes down.

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S & P 500 Index

Back 12

An indicator of overall stock market performance based on the average stock prices of 500 top U.S. companies, compiled by Standard & Poor's.

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Fortune 500

Back 13

A list of the 500 U.S. companies with the highest earnings. It is published yearly by 'Fortune Magazine'.

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Futures

Back 14

Contracts to buy or sell a specific commodity or financial instrument at a set price on a set date in the future.

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Commodities

Back 15

The bulk items such as grains, metals, and food that are bought and sold on a commodities exchange.

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Options

Back 16

Contracts that give the owner the right, but not the obligation, to buy or sell a stock or commodity at a set price on or before a specified date.

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Penny Stocks

Back 17

High risk stocks that typically sell for less than $1 per share when they are first offered.

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Bond

Back 18

A promise to pay a certain amount on a certain date, issued by a corporation or government for the purpose of borrowing money.

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Mutual Fund

Back 19

An investment in which people pool their money to buy stocks, bonds, real estate, or other assets selected by professional managers.

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No-Load Funds

Back 20

Mutual funds that do not require an up-front fee.

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Load Funds

Back 21

Mutual Funds that charge a commission every time shares are bought or sold.

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Real Estate

Back 22

Land, and any houses or other buildings that are on the land.

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Collectibles

Back 23

Items that appeal to collectors and investors, including stamps, art, antiques, and sports memorabilia.

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Pension

Back 24

A retirement plan that is funded at least in part by an employer.

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Vested

Back 25

Being eligible to receive a pension or other employer contributed benefits, usually after working at a company for a certain number of years.

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Profit-Sharing Plan

Back 26

A retirement plan that allows employees to share in the company's profits.

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Stock-Bonus Plan

Back 27

A type of profit-sharing plan in which the employer rewards employees with company stock instead of cash.

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401(k) Plan

Back 28

A tax-deferred retirement plan funded by regular contributions from the employee.

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403(b) Plan

Back 29

A tax-deferred retirement plan for employees of public schools and tax-exempt organizations.

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Individual Retirement Account (IRA)

Back 30

A personal retirement plan that permits individuals to set aside money. The contributions and earnings are not taxed until the fund is withdrawn.

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Roth IRA

Back 31

A personal retirement plan in which the original contributions are not tax-deductible, but the earnings are tax-free.

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Simplified Employee Pension (SEP-IRA)

Back 32

A tax-deferred retirement plan for small businesses and self-employed people, in which the employer makes contributions directly to employee IRA accounts.

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Broker

Back 33

A person who works for a brokerage firm and who buys and sells stocks, bonds, and securities for clients.

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Financial Adviser

Back 34

A person with the knowledge to give financial advice based on the client's goals, income, debts, and assets, stage in life, and other personal factors.

Front 35

Annual Report

Back 35

A detailed report about the financial condition of a company, published each year.