| A | B |
|---|
| Cyclical Stock | Market Value of the Stock reflects the state of the economy |
| Defensive Stock | Stock issued by a company that is not affected by economic cycles |
| Blue Chip Stock | Stock issued by well known, financially stable companies |
| Income Stock | A stock that historically pays out dividends to investors |
| Growth Stock | Stock issued by companies that have high retained earnings |
| Penny Stock | Stock issued by new companies that have unproven sales |
| Diversification | To spread out investment risk among different types of investments |
| Liquidity | Ability to buy or sell an investment quickly without substantially affecting value |
| Speculation | Highest Risk investments |
| Compounding | Action of calculating interest on previously earned interest |
| Retained Earnings | When a company reinvests profits back into the business |
| Dividend | distribution of money, stock or other property that a corporation pays to its stockholders |
| Capital Loss | the sale of an investment for less than it's purchase price |
| Public Corporation | Corporation that sells stock openly in the stock market |
| Inflation | general rise in prices that affects everyone |
| Tax deferred | To pay income taxes at a later date - example= 401K, 403b |
| Proxy | a document that transfers voting rights to someone else |
| preemptive right | gives current stockholders the right to buy new company stock before the general public |
| Common Stock | Equity capital for a company that allows for voting rights and ownership |
| Preferred Stock | Equity capital for a company that pays cash dividends first and traditionally does not provide for voting rights. |
