Unit IV Personal Finance Set II

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New York Stock Exchange (NYSE)

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Vocab for Unit IV Personal Finance Part II

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New York Stock Exchange (NYSE)

The oldest and largest of the organized stock exchanges in the US.

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Over the Counter (OTC)

Market for stocks that are NOT traded on a formal stock exchange.

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NASDAQ

One of the world's largest stock exchanges. An OTC market (most are tech companies).

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Future

A contract to buy or sell a commodity at a specified date and price.

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Option

Similar to a future, but only gives the right, not the obligation to buy or sell.

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Stock index

Measure of the change in prices for a specific set of stocks.

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The Dow Jones Industrial Average (DJIA)

Tracks the stocks of 30 of the largest companies traded on the NYSE.

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Standard & Poor's 500 (S&P 500)

An index based on the stock prices of 500 of the largest firms by market value.

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Bull market

When stock prices rise steadily.

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Bear market

When the trend in stock price is a steady decline.

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Bond

A contract issued by a corporation promising to repay borrowed money, plus interest, on a fixed schedule.

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Par Value

The amount that the bond issuer promises to pay the buyer at maturity.

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Maturity

The date when the bond is due to be repaid.

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Coupon rate

The interest rate a bondholder receives every year until a bond matures.

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Yield

The annual rate of return on a bond if the bond were held to maturity

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Junk bond

A lower-rated, potentially higher-paying bond.

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Amortization Schedule

A calendar showing the interest and principal payments of a loan.

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Principal Payment

The original sum of money borrowed for a loan (the amount of money borrowed minus interest).

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Grant

Money given to someone that is NOT paid back.

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Loan

Money given to someone that DOES have to be paid back.

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