Shared Flashcard Set

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Investments
Investments
38
Business
12th Grade
09/17/2013

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Term
Diversification
Definition
To spread your money around in order to lower the risk of your investments.
Term
Liquidity
Definition
The availability of your money. Cash is very liquid; real estate is not.
Term
Mutual Fund
Definition
Investors pool their money together to invest it in the stocks of 90 to 200 companies in each mutual fund.
Term
Risk
Definition
The probability of getting your money back from an investment.
Term
Risk Return Ratio
Definition
The higher the risk, the greater the expected return on investment. The lower the risk, the lower the return.
Term
Share (or stock)
Definition
A piece of ownership in a publicly traded company.
Term
Back End Load
Definition
Fees paid to the mutual fund company when selling a mutual fund.
Term
Dividends
Definition
Quarterly payout of profits by a company to all shareholders.
Term
Expense Ratios
Definition
For a mutual fund, an annual percentage the fund takes as payment. Expense ratios of different funds can be compared to find the best value.
Term
FDIC Insured
Definition
The FDIC (Federal Deposit Insurance Corporation) is a government agency that insures depositors' money.
Term
Front End Load
Definition
Fees paid to the mutual fund company as an entry requirement into certain mutual funds.
Term
Inflation
Definition
Rise in prices that effectively makes cash have less buying power.
Term
Savings Account
Definition
A safe, low-return investment available from banks. There is generally no minimum deposit for this type of account, making it perfect for kids and teens just starting out.
Term
Year to Date Return (YTD)
Definition
On a mutual fund statement, a comparison of how the fund has done compared to its value on the first of the year.
Term
Yield
Definition
For a savings account, the percentage of interest earned annually. For a stock, the annual dividend divided by the share price.
Term
Asset Class
Definition
Separate types of investments, such as stocks/stock mutual funds, bonds/bond funds, money market accounts, and international stocks/international stock funds.
Term
Capital Gain
Definition
When you sell a stock for more than you paid for it, the difference is called a capital gain.
Term
Capital Loss
Definition
When what you sell a stock for is less than what you originally paid for it, the difference is called a capital loss.
Term
Common Stock
Definition
A share in a company's assets and profits. The ownership of a publicly traded company is split up into the shares of stock being traded and held
Term
Dividend
Definition
Money paid by a corporation to each shareholder.
Term
Money Market
Definition
A mutual fund or account that invests in short-term, liquid investments.
Term
Mutual Fund
Definition
A mutual fund is a pool of stocks, bonds, and other securities managed by an investment company.
Term
Private Corporation
Definition
An incorporated business that does not trade shares of stock on an open market.
Term
Public Corporation
Definition
An incorporated business owned jointly by all stockholders.
Term
Rate of Return
Definition
The annual amount of money an investment makes, given as a percentage.
Term
Risk
Definition
The chance that an investment makes.
Term
Return
Definition
Monetary increase that an investment makes.
Term
Bear Market
Definition
A time with generally falling stock prices.
Term
Blue Chip Stock
Definition
Stocks issued by solid and reliable companies with long records of growth and stability.
Term
Bonds
Definition
Money loaned to the government, corporations, or municipalities that pays the investor interest.
Term
Bull Market
Definition
A time with generally rising stock prices
Term
Defensive Stock
Definition
Stock of companies that produce such staples as food, beverages, and pharmaceuticals, and insurance companies.
Term
Diversification
Definition
Owning a collection of investments such as stocks from different industries and small and large companies, bonds, and money market funds for cash, in order to spread risk and have a safer investment overall.
Term
Growth Stock
Definition
Stocks of companies that generally do not pay dividends or pay only very small dividends.
Term
Investment Portfolio
Definition
The collection of investments you personally hold, including stocks, bonds, money market accounts, and savings accounts.
Term
Large-Cap Stock
Definition
Stocks of very large companies such as wal mart, General Electric, and IBM, that have a market capitalization of between $10 billion and $200 billion.
Term
Personal Investing Plan
Definition
A collection of investments tailored to your investment risk tolerance and time horizon.
Term
Small-Cap Stock
Definition
Stocks of largely unknown companies with smaller market capitalization.
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