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25 Cards in this Set
- Front
- Back
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Herd Behavior |
A kind of self-fulfilling behavior |
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Bear Market |
A period when stocks decline in value |
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Time |
As a young college graduate, your biggest investment ally is this |
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Portfolio |
Assets such as stocks, bonds, and real estate are considered to be the investor's |
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Political and Regulatory Risk |
Changes in the capital gains tax rate or in the tax deductibility on municipal bonds are examples of this risk |
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Investment Return MATH |
Gain/basis = ROI 9% from sale and dividends - basis = purchase price |
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Tax Advantages |
Capital gains are taxed at a lower rate than ordinary income |
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Stockholders |
Income investors who may potentially receive dividends on their investments |
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Prospectus |
Legal document that describes a securities issue and is made available to potential investors |
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Real Rate of Return |
Nominal rate of return minus the inflation rate |
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Diverse Portfolio |
Owning stocks, bonds, real estate, gold coins, T - bills, and gemstones |
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Investment |
Purchasing an assets that generates a return |
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Speculation |
Purchasing an asset whose value depends solely on supply and demand |
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Financial Risk |
Risk associated with corporations who have filed for bankruptcy |
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Foreign Bonds |
Risks include inflation risks, interest rate risks and exchange rate risks |
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Capital Gain |
Selling a machine or real estate that or stocks for more than you paid |
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Par Value |
Stated amount on the face of a bond, which the firm is to pay at the maturity date |
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Ownership Investments |
Stock purchases rather than bond purchases |
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Maturity |
The date at which the bond issuer must repay the loan or borrowed funds |
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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 |
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Exchange Rate Risk |
The variability in earnings you might experience as the relationship between the euro and the U.S. dollar fluctuates this risk |
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Cap Gain Tax Rate |
These gains are taxed at 15% |
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Preferred Stock |
These stock holders receive dividend payouts before common stock holders do |
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Coupon Interest |
This rate is the interest to be paid annually on a bond as the percentage of its par value |
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Tax Obligation Date |
You owe capital gain taxes only after you sell the asset |
