A “trusted contact person” is a person that you authorize your brokerage firm to contact in limited circumstances, such as if your broker has trouble reaching you or has a reasonable belief that your account may be exposed to possible financial exploitation. A trusted contact person must be age 18 or older.
A risk assessment quiz will help determine how much risk you, as a potential investor, are willing to accept. The results of a risk assessment may reveal that you are an aggressive investor, that is one that likes to take risks to achieve a higher return. On the other hand, you may be a conservative investor - one that is willing to accept a smaller return for a much lower risk investment. Complete the risk assessment survey and save your results.
An important component of the STARS program is creating a portfolio with fictional money to purchase stocks, bonds, and mutual funds. The focus of this program is not to see how much money your portfolio will make in the short-term. STARS differs from other programs because the stock portfolio project focus is on long-term investing principles, not short term performance gains. Performance is assessed on what you learn not the value of the portfolio. STARS provides you with the opportunity to review your portfolios five or ten years later. This gives you the ability to truly see the importance of long-term investing, the time value of money, and the compounding of interest.
As you track your investments in the portfolio the system will monitor your overall gains or losses.
To view terms, click on a letter below. Click the term to view its definition.
the annual report that publicly traded companies provide to investors; summarizes the fourth quarter and the entire fiscal year
the quarterly report that publicly traded companies provide to investors; published three times a year at the end of fiscal quarter 1,2, and 3. The 10-K is published at the end of the fourth quarter and summarizes the entire year
the marketing and distribution fees charged by a mutual fund; it is part of the fund's expense ratio
tax-sheltered account that employers provide to their workers; employees put a portion of their income in the 401-K plan and the contributions; the capital gains and dividends are not subject to taxes
tax-sheltered account that tax-exempt organizations, such as state or city schools, provide to their workers; employees put a portion of their income in the 403-b plan; the capital gains and dividends are not subject to taxes
investment policy for a fund in which the fund manager picks the investments to buy or sell after researching the best opportunities; the opposite of passive management.
a home loan where the interest rate adjusts periodically as the market rate of interest changes; if current long-term interest rates go down, the interest rate on the loan goes down as well
financial fraud implemented in a group with common beliefs or interests, such as a church congregation or social club
a set of instructions or rules to solve a problem; financial algorithms are used to make stock trades by computers, or design an "optimal" portfolio
the portion of a mutual fund's return that can be attributed to the fund manager's skill as opposed to the overall market
non-traditional investments, such as real estate, commodities, and hedge funds
shares of a foreign stock that are packaged and traded on a US-based exchange
the process of ensuring that as equal loan payments are made, the final balance will be zero; each loan payment includes both interest and principal
the quoted annual rate of return; does not include the effects of compounding interest
the effective annual rate of return; includes the effects of compound interest
publication offered by public companies each year that summarizes the financial and business accomplishments over the previous fiscal year
a periodic rate of return transformed into a 12-month compounded return; if you earn 1% in a month, the annualized rate of return would be 12.68%
a series of periodic cash flows, often paid monthly; a mortgage contract is set up like an annuity, as are car loans
financial contract that promises a future stream of income in exchange for cash investment today
growth in a the value of an asset or investment
a profitable trade that is usually risk free; for example buying a stock at $50 on one exchange and instantly selling it at $52 on another exchange
how an investor distributes his investment capital across different assets; for example, 50% stocks, 30% bonds, 20% real estate; the allocation must add up to 100%
property or contracts owned by investors, expected to produce cash flows and capital gains; can be financial, like stocks or real, like real estate
a situation where one party in a transaction has more information than the other party
financial statement that contains a company's assets, liabilities and owners' equity at a point in time
financial institution that allows individuals to save, invest, and make monetary transactions
document that includes the customer's bank balance and a list of transactions that occurred during a period of time, usually issued monthly
the financial condition when a company or individual cannot pay its obligations (bills) and its creditors demand payment; often occurs because debts are much larger than the assets of a company or individual
a period of falling prices in a financial market, e.g., stock prices go down during a bear market
the approach to investing that considers the role of psychological and cognitive biases
a targeted return for a mutual fund or investment portfolio; it represents the average return of similar portfolios
a measure of correlation with the overall market index; a beta lower than 1 means that the stock has been less volatile than the market; a beta higher than 1 means it has been more volatile than the overall market.
the best-known and largest of the crypto-currencies; a decentralized digital currency created through the process of "mining", a process of solving complex mathematical problems
shares of stock in well-known, large companies; large-cap companies with years of consistent results are considered "blue-chip"
the group of individuals that represents the interests of shareholders of a publicly traded company; elected by the shareholders and have the power to hire and fire managers
the seven people who lead the Federal Reserve banking system and supervise the regulation and management of the central bank and the US banking system
a debt security that promises the return of principal (called par value) along with coupon payments (which represents the interest payments) paid every six months
the classification system that indicates the riskiness of a bond; the ratings are provided by ratings organizations such as Moody's, Standard and Poor's, and Fitch
the "net worth" of a company based on accounting values; take the assets on the balance sheet, subtract the liabilities, and what is left is the book value (or shareholder's equity)
a system of managing the income and expenses of an individual or organization
when expenses (or spending) exceeds income; for example, a government spends more than it receives in tax revenue
a time of rising prices in the financial markets; e.g., stock prices go up in a bull market
the stages of growth or decline in an economy; usually divided into "expansion, "recession", "recovery", occasionally "depression"
the part of Wall Street and the financial industry that buys securities for customers; known as the "asset management" industry
the classification of a security when the issuer (company that sells the bond or stock) has the right to buy back the security at a predetermined price at a point in the future
assets, like cash or equipment, that can be invested or allocated to growing a business and generating cash flows
the change in value of a security from the original purchase price to the current price; a gain is when the price rises above the original purchase price, a loss is when the price is lower than original purchase price
the financial statement that provides the operating, investing, and financing cash flows of a company
a check guaranteed by a bank or financial institution; usually required for large financial transactions
"buyer beware"; a warning usually given when buying something risky or very uncertain
the monetary authority in most country's banking systems
a security offering by a bank where the investor deposits money in a bank for a specific amount of time at a fixed interest rate; also known as a "CD"
a check that has been verified by a bank for the specific amount written on check
a corporate restructuring where a company liquidates its assets, pays its creditors, and ceases operations
a corporate restructuring where a company continues to operate during the bankruptcy process; the debt is exchanged for equity in the new company
paper document used in financial transactions drawn from an individual's checking account
a mutual fund that offers a fixed number of shares, raises a fixed amount of money and the shares trade on an exchange; the opposite of an "open-ended" fund
the additional fees and commissions paid by a customer when completing a loan or financial transaction
metallic currency used to purchase goods and services in an economy
an asset, cash, or securities that an investor pledges against a loan or liability; for example, a house is the collateral in a mortgage contract
financial institution that provides banking services such as deposits, loans, and investment products to all types of customers, but primarily serves the business community
a fee for a financial transaction paid to a broker or salesperson
a real asset such as gold, oil, wheat; assets used in industrial production
equity ownership in a business; a financial claim in a business which includes dividends (if paid) and voting rights
interest earned on the interest previously earned in an account; "interest on interest", differs from simple interest
a large corporation made up of multiple different businesses; usually built from a series of acquisitions
the value of a basket of goods that consumers purchase on a regular basis; changes in this index indicate the level of inflation in the economy
individuals who purchase goods and services
an agreement between two parties that is legally binding and usually involves the exchange of services for money
a financial contract that allows the owner to "convert" or exchange the contract for shares of stock in the borrowing company
an individual's contribution to the total payment in an insurance-based transaction, i.e., the individual pays part of the payment and the insurance company pays the rest.
business entity where investors have limited liability, i.e. you can only lose the amount you invest, and has a board of directors that represents the shareholders' interests
how much money is required to purchase a basket of goods and services to support the "average" family; often used as part of an index to measure appropriate income increases
the periodic interest payment that the owner of a bond receives; usually paid every six months. If a bond has a 6% coupon rate, and a face value of $1000, then the annual coupon is $60, given as $30 every six months.
the ability to borrow money; can be short-term like a credit card, or long-term, like a mortgage
payment method by consumers where the purchase amount of an item is provided by a third party financial institution and becomes an unsecured, high-interest loan if not paid off on a monthly basis
a record of a consumer's borrowing and repayments over time
a list of specific banks and lending institutions over time that a consumer has used in borrowing funds
a calculated measure of an individual's risk ("credit worthiness") in borrowing money; the formulas are developed by private companies and typically range from 300 to 850 (the higher, the better)
financial institution owned by members that accepts deposits, loans money, and provides banking services to its members
one who loans money with the expectation of receiving interest and principal in the future
able to receive credit from a financial institution in the purchase of an asset
electronic or "digital" asset used as a medium of exchange; not subject to central banking regulation or control
medium of exchange and a store of economic value
a financial institution that holds assets or securities for others
an amount of money owed by one party to another
the amount that an insured individual must pay out of pocket before the insurance company starts to cover costs
an item that can be used to reduce taxable income; for example, interest paid on a mortgage can be used as an itemized deduction, that is, it can be subtracted from your taxable income
a condition when a compnay or person is no longer paying interest or principal on a loan or financial contract; when a company cannot make a coupon payment due to financial difficulty, the bond is said to be "in default"
a period of falling prices in an economy or asset class
account protection provided by the government for depositors in case the bank fails; each account is insured up to $250,000
financial institution that can accept customer deposits; this is how most banks are classified in the United States
a non-cash expense that reduces the carrying value, or stated value on the balance sheet, of an asset
an economic downturn that lasts more than two years; a significant drop in economic output
security whose value is based on , or derived from, the price of a another asset; e.g., a corn futures contract is a derivative, since its price is based on the underlying value of corn on a certain date; a call option value is based on the price of the underlying stock
a member of the board that represents the shareholders' interests at a company
a price below "fair value"; with bond investing, a price below par value
taking a future cash flow and valuing it at today's present value by dividing it by a factor (1 + interest rate) per year
a brokerage firm that charges low fees and commissions
the interest rate charged by the central bank to other banks in a financial system; also used in the calculation of the present value
investment account in which a broker or manager has permission (discretion) to make decisions on what to buy and sell
payment of dividends and capital gains in a mutual fund to the shareholder
a method of decreasing portfolio risk by owning different types of assets or stocks in different industries
a cash payment made by a company to its shareholders as a return of capital
the rate of return of the annual dividend relative to the purchase price of the stock; for example if a company pays $3 per year as a dividend, and the current price of the stock is $60, then the dividend yield is $3/$60, or 4%.
consistent equal investments made over time in the same asset; for example, putting $100 per month in a stock mutual fund
frequently quoted stock market index that includes 30 large American companies
wages, salaries, tips and commissions earned by a worker
the net income of a company; the income after all bills and taxes are paid
the amount of net income per share; calculated as net income divided by the number of shares outstanding
quarterly publication of a company's financial results
a system of production and consumption of goods and services within a country
economic theory that market prices of securities are always at "fair value" based on current available information
the value of ownership in a firm; the difference between a firm's assets and liabilities
an account held by a third party that distributes cash on behalf of a borrower, such as insurance payments for a mortgage holder
the currency used in the European nations that are part of the European Monetary Union; created in 1998
a location, physical or electronic, where securities are traded
the value of one currency, relative to another currency; for example, $1.20 Canadian Dollars per $1 US
a mutual fund that trades on an exchange and is available to buy and sell throughout the day
economic cycle that is characterized by growth in output (such as real GDP)
a cost to an investor in a fund or investment pool that decreases the rate of return; could be a fee, commission, or transaction cost
the percentage of net assets that a mutual fund charges its investors
goods and services sold outside of a home country
also known as the Federal National Mortgage Association; government-sponsored agency that purchases mortgages in order to stabilize the mortgage market
the government-sponsored corporation that insures depositors in member banks
the government agency that supervises home loan insurance
the tax imposed by the Internal Revenue Service on all income earned
one of the regional banks of the Federal Reserve System that oversees and regulates the banking system
banking system in the United States that includes the Federal Reserve Banks and is led by Board of Governors and Federal Reserve Board; primarily sets short-term rates and monitors economic activity
required payments to investment management companies or brokerages to compensate them for their services
a numerical representation of a borrower's credit worthiness; the score is generated by a credit bureau, and may vary from firm to firm
the responsibility of an investment advisor to put the customer's interests before any other interested party
contractual claim or contract such as a bond or stock; the opposite of a real, or tangible, asset, such as land
a scheme designed to unlawfully separate investors from their wealth
when an investor places money at risk in anticipation of positive return and an increase in wealth; the investment may be in a security such as a stock or bond
a comprehensive understanding of monetary issues including investments, budgets, taxes, insurance, fraud avoidance, savings, and household debt
a professional who helps individuals and families in preparing investment, insurance, and tax strategies
Financial Industry Regulatory Authority; the self-regulatory organization in the financial services industry
an investment that makes predetermined payments, such as a bond or mortgage contract
a home loan where the periodic payments are equal every month, and the size of the payments is determined by the interest rate environment at the time the contract is initiated
a home loan where the periodic payments are linked to a variable rate; the payments reset on a predetermined basis, and the size of the payments depends on a market interest rate on the reset date
the process of a bank's recovery of the mortgage (loan) principal amount from a customer who has stopped paying on the loan by taking ownership and reselling the house
a location, primarily electronic, where participants can trade global currencies
the government-sponsored entity that provides services such as insurance and securitization to the domestic mortgage market; also known as the Federal Home Loan Mortgage Corporation
a money management firm that provides advice and counseling to investors; charges greater fees than discount brokerages
analysis of a company based on sales growth, accounting information, new products, and intrinsic value
the value of money invested today, earning interest every year, until a specific time in the future; for example, $1000 invested today, earning 10% per year for 5 years, has a future value of $1610.51
a financial contract that allows an investor to buy or sell a specific commodity at a future time at a specific price
a precious metal used by speculators and investors as a hedge against the value of the US dollar
an order to buy or sell stock that remains on the order book until the investor cancels the order; for example, an investor may want to place an order to sell IBM at 170 "GTC", if the stock is at 160 per share, if he feels the stock may gradually rise over the next few months
the amount of money owed by a country's national treasury to creditors
the value of the goods and services produced within a country's borders
household earnings before taxes and withholdings
the value of the goods and services produced by a country's businesses and individuals
a strategy where the investor chooses companies that are expected to grow revenues and earnings in the future; these companies typically trade at higher multiples than "value" stocks
the percentage change in value of a financial asset or economic measure from one time period to the next; for example if a stock was at 20 last year, and is at 22 this year, the growth rate is 10%
equities with high earnings expectations and characterized by investor enthusiasm about future growth
investment partnership where the general partner manages the assets on behalf of the limited partners and charges a management fee and a performance fee
homeowner borrowing that utilizes the property as collateral; typically a second lien below the first mortgage owner
the monetary value after subtracting the mortgage debt from the current market value of a home
the value of all an individual's estimated future income; based on the skills a person has and how many years of future employment
excessive inflation that usually persists and accelerates over time; a large increase in price levels for consumers
the seizure of an individual's personal and financial data by others
the revenue or cash inflows from the sale of goods and services
a company's financial statement that provides information on the revenues, costs and profits throughout the year or quarter
the tax owed to the government based on an individual's annual compensation
a mutual fund or ETF that invests in a specific stock market index, such as the S&P 500; these types of funds typically have low fees
a numerical measure of asset prices (stocks or bonds); for example, the S&P 500 or the Dow Jones Industrial average are stock indices
an investment account that is considered "tax sheltered"; often the gains and income in the account are exempt from taxation; IRAs come in different varieties, such as Traditional, non-deductible, and Roth
a company's specific area of economic activity, such as automobile manufacturing or medical technology
when the price level in the economy is rising
when a company sells stock to the public for the first time and has its stock listed on an exchange
individuals who work for a company and have access to non-public information
asset manager who invests on behalf of large groups, such as pension funds, insurance companies and mutual funds
the compensation paid by a borrower to a creditor, as expressed as a dollar amount
the price of money; the cost, expressed as a percentage, of borrowing by a debtor, paid to a creditor
the government agency that collects federal taxes and also enforces the collection of such taxes
investing in securities outside the borders of an investor's home country; for example, a German investor purchasing Japanese bonds
placing your money at risk with the expectation of earning a positive rate of return on your capital
when a company spends money on capital equipment, research and development, or another firm in order to grow cash flows; alternatively, when an individual owns a risky asset such as a stock, bond, or mutual fund
professional who manages individual's investment accounts
financial institution that helps raise capital for companies and provides advisory services for business transactions
a business that organizes investment funds and portfolios
a collection of risky assets held in a brokerage account
individuals who purchase securities in order to earn a positive return
individual retirement account; a tax-free investment account
a risky class of debt securities; also known as "high-yield" bonds
equities with a market capitalization in excess of $10 billion; large public companies
financial transaction where one party rents an asset from another party in exchange for a periodic cash flow
individual or firm that loans money to another party in exchange for a contract that promises specific future interest payments and return of principal
the use of debt or borrowing to enhance investment returns
an amount owed to another party
legal term for the claim of a bank or financial institution on an asset; for example, a bank can have a lien on a home that ensures payment of a debt
a type of trading instruction that specifies a specific price when an investor wants to buy or sell a security; for example, an investor tells her broker, "Sell 100 shares of IBM at $160"
an asset that is easily convertible into cash; for example, a share of Amazon stock is liquid because it is easy to sell, a house is not liquid because it may take a long time to sell with high transaction costs
the ability to generate cash quickly to pay creditors or investors
a mutual fund that requires a commission payment to a broker either upfront (front load) or when the fund is sold (back load)
a financial contract in which one party borrows from a financial institution and promises to repay on a certain date and pay a predetermined interest rate
Wall Street slang for owning an asset, as in "I am long IBM stock", means "I own IBM stock"
an investment portfolio that contains both long and short positions
the study of national and global business cycles, inflation, growth and employment
the amount (usually a percentage of assets) charged by investment management companies for the service of managing the pool of investment capital
an account at a brokerage firm that measures the amount of money borrowed to buy or sell short securities
a location, physical or virtual/electronic, where securities or other goods are available to buy and sell
the value of all a company's public shares; for example, if a company has 200 million shares, and the price per share is $8, then $8*200 million= $1.6 billion is the market capitalization; also known as "market cap"
an economic system that allows trade of goods and services with minimal government interference and follows supply and demand signals to set prices
an order to buy or sell stock at the best current available price; the priority of this order is time, not price
the current value of a security based on the supply and demand
when a financial contract, like a bond, matures (or expires), and the debtor must pay back the principal to the creditor
when an item is used as a method of payment; a requirement for an item to be considered "money"
the study of the financial decisions and competitive environment of a firm or individual
equities with a market capitalization between $2 Billion and $10 Billion
a government-mandated minimum hourly pay rate for employees
physical or electronic items used in payment for goods and services
a mutual fund that invests in highly liquid, short-term debt securities; goal is to maintain a share value of $1.00 and provide interest and safety for investors
the amount of currency and deposits in the banking system
a market that is dominated by one firm
the economic principle that explains how individuals will take more risk when they are insured against loss; for example, "too big to fail" banks know they will be bailed out by the government, so they take more risk
financial contract signed by an individual who purchases real estate with the borrowed money
a debt security issued by a state, city or county; the interest is tax-free for creditors (owners of the bonds)
a numerical measure of a stock's valuation; the higher the multiple, the more "expensive" a stock. For example, a Price-Earnings multiple (or ratio), calculates the amount investors are willing to pay for every dollar of earnings.
a managed investment product that pools investor money into one portfolio of stocks and bonds in expectation of positive returns
an electronic stock exchange (National Association of Securities Dealers Automated Quotation)
the amount of money that is owed by a country's national treasury
real assets such as oil, copper, agriculture or lumber; assets extracted from the land
the per-share value of a mutual fund or investment product
a firm's profit after subtracting all expenses and taxes from revenues; the residual left over after all expenses are paid
a measure of personal wealth, calculated by taking the difference between a person's assets and liabilities; what a person owns minus what a person owes
the oldest stock exchange in the United States; located on the corner of Wall and Broad Streets in New York City
a mutual fund with no sales charge; all the money invested buys shares of the fund and does not go to a salesman
a mutual fund that allows investors to invest money and create new shares; the fund continuously accepts outside investor funds
the next best use of an asset, like real estate, cash, or even a worker's time; what you give up when you make a decision about your resources
securities that give the owner the right to buy or sell stocks at a predetermined price; known as 'derivative' securities
when a bank customer writes a check in excess of the current account balance; this condition is usually accompanied by significant fees
any asset that sells for more than intrinsic value; a subjective judgement about value
the redemption or maturity value of a fixed income product, like a bond
management of a portfolio's assets by following an index, not by active management
owning a business through the purchase of publicly available shares
the ownership right, protected by government law, of a technology or asset used in production
high interest rate loan that will be repaid over the short term (on a customer's payday)
a valuation ratio, calculated by dividing the P/E ratio by an expected earnings growth rate; the lower the PEG ratio, the 'cheaper' the stock
high risk stocks that trade for under $2 per share
a financial contract that pays an employee during retirement
an additional fee paid by an investor if the fund manager achieves certain goals, usually based on the annual return
investment fraud where the manager takes money from new investors in order to pay old investors, because no real investment business exists
a collection of risky assets that an investor owns in the hopes of capital gains and income
the names of all the securities in a portfolio
the individual who decides what to buy or sell in an investment fund; the manager must follow the fund's stated mandate or mission
natural resources such as gold, silver, platinum and palladium
a class of stock that receives a fixed dividend, holds no ownership rights, and is ranked above common stock , but below debt, in the capital structure of a firm
the value paid above par value for a bond; also the amount paid in excess of fair value for a security
today's value of a future cash flow, or a series of future cash flows, discounted (adjusted) to today's dollars; for example, $50 in 10 years may be worth only $10 today (the present value)
the market value of a security or asset
the financial ratio calculated by dividing the current price by the last twelve months' earnings per share; represents the amount investors are willing to pay for $1 of earnings; for example, a stock with a price of $40 and a $2 EPS, has a P/E ratio of 20
the financial ratio calculated by dividing the current price by the book value per share; represents the amount investors are willing to pay for $1 of book equity; for example, a stock with a price of $50 and a $25 book value, has a P/B ratio of 2
the interest rate charged by banks for short and medium loans; changes when the Fed adjusts the Fed Funds rate
the original amount loaned out by a creditor; the par value of a bond
companies whose shares are closely held by the owners and are not available to purchase by the general investing public
participants in the economy that create goods and provide services to consumers; those who sell to consumers
a measure of a firm's income, typically calculated by subtracting expenses from revenues
the financial ratio that measures how much income a firm receives per dollar of sales; for example, a 5% profit margin means that for every $100 of sales generates $5 of profit
a document filed by a company when it sells shares to the public; the document discloses important information about a company's business
the document that must be provided to shareholders each year that discloses important information about the board of directors and management pay
companies whose shares are available to purchase by any investor
financial fraud that promises income from a non-existent business and relies on recruiting new members who pay into the scheme to pay early investors
the current bid and ask price of a stock, for example, $29.00-$29.20; the current price at which a stock can be sold ($29)or purchased($29.20)
land and property holdings that can be rented out for income or used as a dwelling
a licensed individual who participates in buying and selling of real estate
a public or private security that is backed by real estate purchased with investors' capital; income is generated by the rent on the underlying property
the return on investment adjusted for the rate of inflation; nominal (or quoted) return minus the inflation rate
the stage of the business cycle when real output (GDP) declines year-over-year two quarters in a row
an individual who serves a stockbroker or intermediary at a brokerage in a stock transaction for a customer
oversight and enforcement of government rules and standards in an industry
payment for the use of property or equipment by a company or individual
the portion of net income that a company keeps and reinvests, rather than returning to the shareholders as a dividend
the financial ratio that measure the rate of return on the firm's assets, calculated by dividing the net income by total assets
the financial ratio that measures the rate of return on the stockholder's equity or ownership, calculated by dividing the net income by stockholder equity
the financial ratio that measures the rate of return on the amount invested, calculated by dividing the change in the investment's value by the total amount invested
financial contract marketed to seniors that allows a homeowner who owns a house debt-free to sell the property back to a bank, continue to stay in the house, and receive paymentsfrom the bank as income over time
the likelihood of investment loss, and if loss occurs, how much an investor can afford to lose
description of investors who actively avoid risk by varying degrees
techniques and strategies used by investors and firms to control and monitor the amount of portfolio risk
the ability to accept a given amount of risk in investing; the higher the risk tolerance, the more risk investors accept in their portfolios
the approach to investing that allows automatic allocation of assets by algorithms based on previous research; the customer does not interact with a human in the decision process
approximation method for finding how many years it takes for an investment to double in value; for example, if you earn 10%, divide 72 by 10, and you get 7.2 years until your money doubles
the wages paid by an employer to a worker for work performed; a salary is paid periodically, often weekly, bi-weekly or monthly.
the amount of money that an individual keeps after receiving wages and paying expenses
money deposited in an interest-bearing bank account that is not used for daily expenses
financial institution that provides its customers services such as savings accounts and loans
a specific area of the economy that a business focuses on, such as, semiconductors, food services, pharmaceuticals, etc.
government agency with the mandate to protect investors by monitoring companies that offer investments to the public
location, electronic or physical, where stocks and bonds are traded
a financial claim or contract that is available for purchase
the investment bankers who sell new investments to the "buy side" of the investing public
the number of shares a company has issued to its owners
a measure of return compared to risk; the formula is the portfolio return minus the risk free rate, divided by the portfolio volatility
a high-risk investment strategy that profits from falling stock prices; borrowing shares and selling them in anticipation of lower prices, so the investor can buy back the shares at a cheaper price, earn a profit and return them to the lender
the interest earned on the original amount invested; for example, 5% loan on $10,000 pays $500 per year of simple interest
stocks with less than $500 Million in market capitalization
the government program that pays income to senior citizens in the United States
forecasting the direction of prices in a particular market and trading on your beliefs
a method of changing the number of shares of stock that a company has issued; a 2-1 "two for one" split increases the number of shares by a factor of two, and the percentage ownership stake stays the same
the difference between the bid and ask price ("the quote") of a stock or any financial asset; for example, if the quote is $50 - $50.05, the spread is $0.05
the stock market index that includes 500 large US companies representing the most important sectors in the US economy
a measure of minimum income, housing, and employment requirements to sustain a specific lifestyle
a financial claim in a business which includes dividends (if paid), voting and ownership rights; stocks can be classified as "common" or preferred; preferred stock primarily pays dividends
The location where stocks are traded by public investors; can be in a central location, like the NYSE, or an electronic network, like NASDAQ
the collection or grouping of all publicly traded companies in a country; the size of the stock market is the sum of the market values of all public companies
a measure of prices of various public companies in a specific stock market, like the Dow Jones Industrial Average, or the S&P 500 Index
when a company changes the number of shares issued to investors, which typically reduces the price per share and increases the number of shares; for example, a 2 for 1 stock split the price falls in half, and the number of shares doubles
individual who places trades for customers in the financial markets and provides investment advice
a type of trading instruction when placing an order, that triggers a sell order when the stock falls to a certain price, or a buy order when the stock climbs to a certain price. For example, if a stock is at $45, a sell stop order would be "Sell at $40 stop".
financial levy or assessment imposed on citizens and companies by a government, usually based on income and sales transactions
the method of reducing taxable income by subtracting allowable expenses according to the local tax authority
a tax status when an entity is not required to pay taxes
A rebate from the government which occurs when a person or company has paid more taxes over the year than actually owed. This occurs since taxes are paid periodically are estimated. At the end of the year the actual taxes owed is calculated and then the person or company must either pay more or get a refund.
the method of studying stock prices using charts and past financial data to make trading decisions
when a company or investment fund offers to buy shares from the public at a specific price; the transaction does not take place on an exchange
the letters that identify a stock, mutual fund, or ETF; for example, Facebook is "FB", Amazon is "AMZN"
analysis of the effect of interest rates and time on cash flows; used to determine the present value of future cash flows and the future value of current investments
an expression used to explain why the largest banks get bailed out by the government in difficult economic times, since their collapse would endanger the entire economic system
the measure of return that includes both capital gains and cash flows such as dividends or interest paid on an investment
the movement of goods and services between countries
the difference between a nation's imports and exports; if the number is negative, then the nation has a trade surplus
buying and selling securities, like stocks, in order to earn profits
commissions, fees, and expenses paid when buying or selling investments
a short-term government security; represents a loan to the government over one month, 3-months, 6-months, or a year.
a loan to the US Treasury, packaged as a fixed-income investment, such as a bond, note, or bill; for example, when the Treasury needs money, it sells Treasury securities for cash
a measure of how often a fund manager buys and sells stocks in a portfolio; the lower the turnover, the longer the average holding period of stocks; the higher the turnover, the shorter the average holding period of stocks and the greater the transaction costs
when the price of an investment is perceived as being below intrinsic, or fair, value
when an investment bank raises money for a company by selling shares of stock or bonds to the public
when an individual is looking for a job, but cannot find employment
the percentage of the workforce that currently do not have a job but are looking for jobs
the process of determining the fair price of an investment
an approach to investing that focuses on a strategy of finding mispriced and ignored stocks that will later be recognized at their fair value
a classification of equities that appear to be undervalued due to being out of favor with the investing public; often these companies are in a turnaround phase after recent difficult financial performance
a measure of the dispersion, or changes, of asset returns over time; often measured by the standard deviation of an asset's returns
the number of shares of stock that trade throughout the business day for a particular company
a tax statement from an employer that reports your earnings and withholdings during the year
a tax form that provides your employer with basic withholding information based on your dependents; usually filed with the payroll department of a company
the rate of payment or the amount of payment to an employee for their work; also known as income
the amount of your income that is collected as tax during the year by federal, state, and local governments
a measure of return on a bond or fixed income product, like a certificate of deposit; it is based on the income generated by your investment
the rate of return for a bond if you purchase the bond today, hold it until maturity and the bond does not default; it assumes you reinvest the coupons at the same YTM
a bond that pays a 0% coupon, that is, its only future contractual cash flow is the return of principal in the future. For example, a 10-year zero coupon bond will return your principal in 10 years, but pays no cash interest. It is priced at a discount to par (below $1000 per bond) to ensure a positive rate of return.
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