| A | B |
|---|
| Bond | a promissory note to repay a certain amount of money at some future point |
| brokerage | a firm that provides access to the stock markets |
| commission | fee chraged by brokerage from for carrying out a transaction |
| corporate bond | bongs issued by a large company - they have all degrees of risk dependin gon the strength of the corporation |
| coupon payment | regular interest payments on bonds |
| coupon rate | a bond's interest rate, so called because originally bonds came with booklets of prewritten coupons for the interest due |
| discount brokerage | offers a reduced level of service, lower costs, and often the ability to trade online |
| diversification | the process of investing in multiple investments |
| dividend | the distribution of cash to shareholders |
| face value | a bond's maturity value, which is printed on the front of the bond |
| federal agency bonds | issued by federal agencies whose proceeds are used to buy mortgages to encourage home ownership |
| full-service brokerage | provides advice and executes trades for a price; for example, Merrill Lynch and Edward Jones |
| intial public offering | the first sale of stock issued by a company to raise money for business operations, expansion or other needs |
| instituational investor | one who trades large volumes of stocks on behalf of large institutions; for example for a huge pension fund |
| investment | something acquired with the goal of making money |
| junk bond | corporate bonds issued by companies with the highest risk |
| marturity date | the date at which a loan will be completely repaid |
| municipal bond | issued by state and local governments to finance large public projects such as water and sewer systems |
| mutual fund | sells shares to investors in order to collect a pool of money that is then used to buy various investments |
| National Association of Security Dealers Automated Quoatation | an organized stock exhance in the secondary market in which stock sales occure |
| New York Stock Exchange | an organized stock exhange in the secondary market in which stock sales occure |
| Primary market | the initial sale of financial assets in which a company receives money during an IPO |
| publicly traded | when a company begins trading on one of the organized stock exhanges |
| secondary market | transactions that take place after an IPO |
| securities and exchance commission | a government agency that regulates and monitors the stock market |
| security | investment issued by a corporation or government in which the investor receives proof of ownership |
| shareholder | people who own stock in a company |
| stock | a fractional share of ownership in a company |
| treasury bonds | issued by the US Treasury to finance the debt of the government |
| asset allocation | the process of spreading investments among asset classes - diversifying investments |
| asset class | investments, such as stocks, bonds and real estate, that one makes to reach long-term goals |
| beneficiary | a person who receives payment from a life insurance provider when the policy holder dies |
| compounding | the process of earning interest on interest previoulsy added to an account |
| diversification | the process of investing in multiple investments |
| estate planning | the process of determining how wealth will be allocated on or before a person's death |
| future value | what money is worth at a specified time in the future assuming a certain interest rate |
| intestate | fee charged by a lender on money borrowed |
| portfolio | an individual's investments |
| present value | the value of a cost or benefit computed in terms of cash today |
| rule of 72 | shows how long it would take to double an amount of money for a give interest rate |
| Simple Interest | interest earned only on the original amount of principal |
| Time Value of money | refers to the fact tat moeny received today is worth more than money received next year or the year after |
| Trust | legal mechanism that help sto reduce tax liability when assets are transferred from one person to another |
| Will | a legal request for how an individual's estate should be distributed upon death |
