Studied by 27 people
financial asset
something you own that has financial value(cash, stock, CD)
liquidity
the ease with which you can turn an asset into cash
return
the money an investor receives above and beyond the sum of money initially invested. Interest earned on investment
investment
redirecting resources from being consumed today so that they may create benefits in the future
financial system
the network of structures and mechanisms that allows the transfer of money between savers and borrowers
financial intermediary
and institution that helps channel funds from savers to borrowers (i.e. banks)
mutual fund
an organization that pools money of many individuals and invests this money in a variety of stocks, bonds, and other financial assets
hedge fund
a private investment organization that employs risky strategies to try to make huge profits for investors
diversification
the strategy of spreading out investments among a variety of financial assets in order to reduce risk
portfolio
a collection of financial assets
prospectus
an investment report that provides information to potential investors
share
a portion of stock
capital gain
the difference between the selling price and purchase price that results in a financial gain for the seller
capital loss
the difference between the selling price and purchase price that results in a financial loss for the seller
stock split
the division of each single share of a company’s stock into more than one share
dividend
a sum of money paid regularly by a company to its shareholders out of its profits
stockbroker
a person who links buyers and sellers of stock
brokerage firm
a business that specializes in trading stocks
stock exchange
a market for buying and selling stock
bull market
a steady rise in the stock market over a period of time
bear market
a steady drop or stagnation in the stock market over a period of time
sector
the stock market is divided into 11 major sectors representing key areas of the economy (i.e. financial, consumer goods, technology)
