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| bankruptcy | A proceeding in a federal court in which an insolvent debtor's assets are liquidated and the debtor is relieved of further liability. |
| mutual fund | An open-ended fund operated by an investment company which raises money from shareholders and invests in a group of assets, in accordance with a stated set of objectives. |
| stock | An instrument that signifies an ownership position (called equity) in a corporation, and represents a claim on its proportional share in the corporation's assets and profits. |
| bull market | A prolonged period in which investment prices rise faster than their historical average. |
| bear market | A prolonged period in which investment prices fall, accompanied by widespread pessimism. |
| corporation | The most common form of business organization, and one which is chartered by a state and given many legal rights as an entity separate from its owners. |
| portfolio | A collection of investments all owned by the same individual or organization. |
| diversification | A portfolio strategy designed to reduce exposure to risk by combining a variety of investments, such as stocks, bonds, and real estate, which are unlikely to all move in the same direction. |
| investment | In finance, the purchase of a financial product or other item of value with an expectation of favorable future returns. |
| capital | Cash or goods used to generate income either by investing in a business or a different income property. |
| liability | An obligation that legally binds an individual or company to settle a debt. |
| IPO | Initial Public Offering. The first sale of stock by a company to the public. |
| bond | A debt instrument issued for a period of more than one year with the purpose of raising capital by borrowing. |
| company | Any entity engaging in business, such as a proprietorship, partnership, or corporation. |
| liquidity | The ability of an asset to be converted into cash quickly and without any price discount. |
| sector | A distinct subset of a market, society, industry, or economy, whose components share similar characteristics. |
| subsidy | Financial aid given by the government to individuals or groups. |
| yield | The annual rate of return on an investment, expressed as a percentage. |
| recession | A period of general economic decline; specifically, a decline in GDP for two or more consecutive quarters. |
| short sale | Borrowing a security (or commodity futures contract) from a broker and selling it, with the understanding that it must later be bought back (hopefully at a lower price) and returned to the broker. |
