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25 Cards in this Set

  • Front
  • Back

Herd Behavior

A kind of self-fulfilling behavior

Bear Market

A period when stocks decline in value


As a young college graduate, your biggest investment ally is this


Assets such as stocks, bonds, and real estate are considered to be the investor's

Political and Regulatory Risk

Changes in the capital gains tax rate or in the tax deductibility on municipal bonds are examples of this risk

Investment Return MATH

Gain/basis = ROI 9% from sale and dividends - basis = purchase price

Tax Advantages

Capital gains are taxed at a lower rate than ordinary income


Income investors who may potentially receive dividends on their investments


Legal document that describes a securities issue and is made available to potential investors

Real Rate of Return

Nominal rate of return minus the inflation rate

Diverse Portfolio

Owning stocks, bonds, real estate, gold coins, T - bills, and gemstones


Purchasing an assets that generates a return


Purchasing an asset whose value depends solely on supply and demand

Financial Risk

Risk associated with corporations who have filed for bankruptcy

Foreign Bonds

Risks include inflation risks, interest rate risks and exchange rate risks

Capital Gain

Selling a machine or real estate that or stocks for more than you paid

Par Value

Stated amount on the face of a bond, which the firm is to pay at the maturity date

Ownership Investments

Stock purchases rather than bond purchases


The date at which the bond issuer must repay the loan or borrowed funds

Liquidity Risks

The risk that you will not be able to find a buyer at fair market price and have to sell for less than an asset's worth

Exchange Rate Risk

The variability in earnings you might experience as the relationship between the euro and the U.S. dollar fluctuates this risk

Cap Gain Tax Rate

These gains are taxed at 15%

Preferred Stock

These stock holders receive dividend payouts before common stock holders do

Coupon Interest

This rate is the interest to be paid annually on a bond as the percentage of its par value

Tax Obligation Date

You owe capital gain taxes only after you sell the asset