| A | B |
|---|
| Stock | Shares of ownership in corporation. |
| Long term goal | accomplished in more than 1 year |
| Short Term goal | accomplished in less than 1 year |
| specific | state exactly what is to be done |
| measurable | Include how the goal is to be measured |
| attainable | determine steps to reach the goal |
| Realistic | do not set goals for something unrealistic |
| time bound | state when the goal will be met |
| Investing | using money to make more money |
| Rate of return | total return/amount of money invested |
| risk | the uncertainty reguarding the outcome of a situation or event |
| bonds | a form of lending to a company or the government |
| mutual fund | created when a compnay combines the funds of many different investors and then invests that money in a siversified portfolio of stock and bonds |
| portfolio | the collection of all of an investors investments |
| liquidity | the abiltiy to turn your assets into cash witout loss of value |
| diversification | reduces the risk in investments when you invest in many differnt types of investments |
| Rule of 72 | allows you to easily calculate how long it will take for your money to double |
| Bull Market | When investors are optomistic and invest in the market |
| Bear market | when investors are pessimestic and sell their stocks |
| Dividend | the amount a company pays to its share holders |
| capital gain | when you sell an investment for more than you paid for it. |
| capital loss | when you sell a stock for less than you paid for it. |
| securities | all of the investments including, stocks, bonds, mututal funds, options, and commodities, that are traded bought and sold. |
| private corporation | Shares are owned by a relatively small group of people are not traded openly in stock markets. |
| public corporation | sells its shares openly in stock markets where anyone can buy them. |
| stock split | process in which the shares of stock owned by existing stockholders are divided into a larger number of shares. |
| Blue-chip stock | considered safe investment that usually attracts conservative investors |
| income stock | pays higher-than-average dividends compared to other stock issues |
| growth stock | issued by a corporation whose potential earnings may be higher than the average earnings predicted for all the firms in the country |
| cyclical stock | has a market value that tends to reflect the state of the economy |
| defensive stock | a stock that remains stable during declines in the economy |
| large cap stock | stock of a corporation that has issued a large number of shares of stock and had a large amount of capitalization |
| capitalization | the total amount of stock and bonds issued by a corporation |
| small cap stock | stock issued by a company with a capitalization of $500 million or less |
| penny stock | typically sells for less than $1 per share, although can sell for as much as $10 a share |
| earnings per share | a corporation's net, or after-tax, earnings divided by the number of outstanding shares of common stock |
| initial public offering (IPO) | occurs when a company sells stock to the general public for the first time |
| income dividends | the earnings a fund pays to shareholders |
| municiple bond | a securitiy issued by a state or local government to pay for its ongoing activities |
| maturity date | the date when a bond will be repaid |
| face value | the dollar amount that the bondholder will recieve at the bond's maturity date |
| debenture | a bond that is backed only by the reputation of the issuing corporation rather than by its specific assets |
| mortgage bond | a bond that is backed by the assets of a corporation |
| convertible bond | a bond that an investor can trade for shares of the corporation's common stock |
| sinking fund | a fund to which a corporation makes deposits for purpose of paying back a bond issue |
| serial bonds | bonds issued at the same time that mature on different dates |
