FBLA Securities and Investments Vocab

Adjustable-rate Mortgage (ARM)

A mortgage in which the interest rate is raised or lowered from time to time depending on the current interest rate being charged by lenders

Annual Percentage Yield (APY)

a way to show how much money your savings or investment actually earns in one year, including compound interest; APY = your real yearly return; It includes interest + how often that interest is added (compounded)

Appraiser

Someone trained to estimate the value of property and who can give an official report on the value

Appreciation

a general increase in the value of property that occurs over time

Assessed value

the amount that your local government determines your property to be worth for tax purposes

Bond

a certificate representing a promise to pay a definite amount of money to a stated interest rate on a specified date due

Capital Gain

the result of a stock increasing in value and then being sold for more than its original cost

Capital Loss

the result of an investment being sold for less than its original cost

Certificate of Deposit

a savings instrument that requires a minimum deposit for a specified period of time

Collectibles

items of personal interest to collector that can increase in value in the future

Commodities

grain, livestock, and precious metals

Common Stock

stocks that represent general ownership in a corporation and a right to share in its profits

Compound Interest

the interest compound on the amount saved plus the interest previously earned

Condominium

an individually owned housing unit in an apartment-like complex

Corporate Bonds

bonds issued by corporations

Creditor

one who sells on credit or makes a loan; the purchaser of a corporate or government bond

Current Income

Income for current living expense

Discount Broker

a stockbroker who places orders and offers limited research and other services

Dividends

payments of profits in cash to stockholders

Equity

tock ownership; the difference between the price at which you could currently sell your house and the amount owed on the mortgage

Fixed-Rate Mortgage

interest rates on mortgages that are set for the term of the loan

Full-Service Broker

a broker who provides information about securities you may want to buy; they work for brokerage houses with large research staffs

Futures Contract

agreement to buy or sell an amount of a commodity at a specified price in the future; contract involving the buying and selling of currencies and financial instrument

I Bond

bond that pays an interest rate that lower than the rate of other savings bonds, but is a variable rate that increases with inflation

Interest

the money you receive for letting others use your money; the money you pay for using someone else’s money

Investing

using your savings to earn more money

Liquidity

the ease with which an investment can be changed into cash without losing its value

Market Value

the price at which a share of stock can be bought and sold in the stock market

Maturity Date

the date on which a loan must be repaid

Maturity Value (Face Value)

the amount being borrowed by the corporation issuing the bond

Money Market Account

an account that pays a variable interest rate based on various government and corporate securities

Mortgage

a legal document giving the leader a claim against the property if the principle, interest, or both are not paid as agreed

Municipal Bonds

bonds issued by local and state governments

Mutual Fund

an investment fund set up and managed by companies that receive money from many investors

Net Asset Value (NAV)

the market share price of a mutual fund based on the total current worth of all stocks and bonds owned by the investment company

Over-The-Counter (OTC) Market

a network where securities transactions occur using telephone and computers rather than on an exchange

Preferred Stock

stock that has priority over a common stock in the payment of dividends

Price Earning (P/E) Ration

the relationship between a stock’s selling price and its earning per share

Real Estate

land and anything that is attached to it

Saing

the storage of money for future use

Stock Exchange

a business organization that accommodates the buying and selling of securities

Stock Index

a measurement of investment values

Stockbroker

a licensed specialist in the buying and selling of securities

Tax-Deferred Earnings

the investment earning on a retirement plan that will be taxed later, after retirement

Tax-Exempt Earning

earnings on which the recipient is not required to pay taxes

Treasury Bill (T-bills)

bills that involve short-term borrowing, with maturities ranging from 10-30 yrs

Treasury Bonds (T-Bonds)

bonds that involve borrowing with maturities from 1-10 yrs

Treasury Notes

Notes that involve borrowing with maturities from 1-10 yrs

Upkeep

maintaining your property in good condition

yield

the percentage of money earned on savings or investment over a year