Personal Finance Theme 5 Vocab

Front 1

Passbook savings account

Back 1

federally insured account at a banking/saving institution from which you can withdraw your money at any time

Front 2

financial risk

Back 2

the risk that a business or government will not be able to return your money

Front 3

real rate of return

Back 3

rate of return from an investment after adjustment for inflation

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annual rate of return (yield)

Back 4

additional money earned on an investment in percentage terms for a year

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inflation risk

Back 5

the risk that the real value of your investment will decrease because of a rise in the price level

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compound interest

Back 6

interest earned not only on the principal but also on the interest already earned

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market price risk

Back 7

the risk that the price of an investment will go down because of supply and demand

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rate of return

Back 8

income earned from an investment divided by the amount of the investment

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liquidity risk

Back 9

the risk that an investment will be difficult to turn into cash

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money market mutual fund

Back 10

a mutual fund that includes loans to businesses and governments for short periods of time

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wealth/net worth

Back 11

the amount of money a person accumulates; total assets minus total liabilities

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nominal rate of return

Back 12

the rate of return from an investment before adjusting for inflation

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fraud risk

Back 13

the risk that an investment has been misrepresented

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certificate of deposit

Back 14

a type of savings deposit that you must leave in a bank for a specified amount of time that earns a higher rate of return than a regular saving deposit

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real estate

Back 15

forms of investment consisting of homes, buildings, and land

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stocks

Back 16

shares of ownership of a corporation bought and sold on a stock market

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stock mutual fund

Back 17

a mutual fund that has more risks than a money market mutual fund and has higher potential rewards

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American Exchange (AMEX)

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stock market much like the NYSE but usually consists of smaller companies and fewer daily trades

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bond

Back 19

certificate issued by a government or a public company promising to repay borrowed money at a fixed rate of interest at a specified time

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bond mutual fund

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an investment fund more secure than a stock mutual fund that offers lower rate of return made up of bonds, both corporate and government

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capital

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money or technology used in production

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diversification

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the act of introducing variety, especially in investments or in the variety of goods and services offered

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economic investing

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the commitment of money or capital to purchase financial instruments or other assets in order to gain profitable returns

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insider trading

Back 24

illegal practice of trading stock on the stock exchange to one's own advantage through having access to confidential information

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interest

Back 25

money paid regularly at a particular rate for the use of money lent, or for the repayment of a debt

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invest

Back 26

expend money with the expectation of achieving a profit or material result by putting it into financial schemes, shares, or property, or by using it to develop a commercial venture

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mutual fund

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an investment program funded by shareholders that trades in diversified holdings and is professionally managed

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NASDAQ stock market

Back 28

National Association of Securities Dealers Automated Quotations; a computerized system for trading in securities

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New York Stock Exchange

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founded in 1792, the world's largest stock market

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personal investing

Back 30

financial investment by a person rather than by a business or financial institution

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primary stock market

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market that issues new securities on an exchange

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profit

Back 32

a financial gain, especially the difference between the amount earned and the amount spent in buying, operating, or producing something

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publicly-traded company

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a company that has permission to offer its securities for sale to the general public, typically through a stock exchange, or the market makers operating in over the counter markets

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savings

Back 34

the money one has saved, especially through a bank or official scheme

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secondary stock market

Back 35

exchanges for corporate securities such as the NYSE and the NASDAQ

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Securities and Exchange Commission

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an independent federal agency that oversees the exchange of securities to protect investors

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stock market

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an exchange where security trading is conducted by professional stock brokers

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volatility

Back 38

statistical measure of the dispersion of returns for a given security or market index

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currency

Back 39

cash; money that is in the form of "paper" bills; Federal Reserve Notes.

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liquidity

Back 40

the ease with which an asset can be converted to cash

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risk

Back 41

the chance that an asset may lose some or all of its value

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value

Back 42

the worth placed on an item, possession, or product.