DECA Finance Cluster(ICDC Level)

Alpha

Return on an investment that is higher or lower than what you expect based on risk and market performance.

Annual Report

Yearly audited record of a corporation’s and mutual fund’s condition and performance that is distributed among it’s shareholders

Alternative Minimum Tax

A specialized tax system that ensures high income earners pay some amount of tax regardless of deductions and credits made on their accounts.

Annualized

The process of projecting or extending a period less than a year to a period of 12 months

Annualized Rate of Return

Rate of return from an investment of a period of years taking into account the effect of compounding.

Appreciation

The value increase of a specific financial asset

Asset Allocation

Partition of investments among cash, income and growth buckets to ensure an appropriate balance between risk and reward based on investment needs

Asset Class

Securities with similar features. Most common ones are stocks and bonds

Average Maturity

Weighted average time all debt instruments under a financial obligation such as bonds and loans reach their final due payment

Bear Market

A prolonged period of declining stock prices mostly due to pessimism, rising unemployment, and recessions

Balanced Fund

A mutual fund that seeks out both growth and income by investing in a mix of stocks and bonds from various industries and regions.

Beta

A measure of an investment’s volatility compared to the overall market.

Best in Class

A top performing service, individual, or product tied to a specific category or group or a sustainable investment by a corporation that seeks to outcompete its peer groups in sustainable approach.

Blue chip

A high quality, low risk investment that usually is a stock from a highly influential corporation that has had a history of reliable performance. Comes from the blue chips in poker which are the most reliable.

Bond

A loan to a corporation, municipality, or U.S government in which the issuer agrees to pay it back at a certain date and also paying interest at regular intervals

Bull Market

A market characterized by rising prices and high optimistic investor sentiment

Best In Class

A top performing product,service or indiviudal in a specific category or group. Also, a sustainable investment by a business to outcompete it’s peer groups in sustainable approach

Beta

Measure of a investment’s volatility compared to the market.

Bond

A type of loan made to a corporation, municipality or U.S Government where the issuer then pays it back at a certain date with added interest.

Bull Market

A market characterized by rising prices and highly optimistic investor sentiment.

Bond Fund

A fund that primarily invests in bonds

Capital Gains

Profit made from selling a security for more than it’s purchasing price.

Capital Gains Ex Date

Date at which a shareholder is no longer eligible for a declared capital gains distribution from a security or a mutual fund.

Capital Gains Reinvest NAV

Profit made from selling an asset that is then reinvested into the same security or mutual fund at its net asset value.

Capital Gains Short Term

Profit made from selling an asset for more than it’s purchasing price and is held for less than a year.

Capital Gains Long Term

Profit made from selling an asset for higher than its purchasing price and is held for more than a year.

Capital Loss

Profit loss incurred from selling an asset for less than its purchasing price.

Cash Equivalent

Total market value of a company that is calculated by multiplying the number of shares by price per share.

Common Stock

Shares that represent ownership in a corporation.

Country breakdown

A distribution or breakdown of a portfolio’s securities based on the countries it came from

Custodian

A bank that oversees a mutual fund’s financial assets, manages its trade, and calculates its net asset value.

Daily Dividend Factor(Date)

Daily dividend amount distributed by a money market mutual fund

Default

When a borrower fails to make timely payments of interest or principle or can’t meet the terms of a bond agreement.

Distribution Scheduele

A tentative plan for a mutual fund to distribute dividends and cash gains to its investors.

Dividend

A portion of a company’s profits given to shareholders, providing income for investors. Companies aren’t required to give dividends

Dividend Pair

Amount of money paid to shareholders in a security or mutual fund

Dividend Yield

The annual return a mutual fund earns from dividends expressed as a percentage of its net asset value or public offerings piece.

Dollar Cost Averaging

An investment strategy that invests a fixed amount of money over time regardless of share price. This helps investors purchase more shares when prices are low compared to buying fewer shares when prices are high.

Dow Jones Industrial Average(DOW)

A key indicator of stock market performance based on the stock prices of the 30 major U.S companies. It reflects the average stock price in these companies adjusted for stock splits and changes in the index

Earnings Per Share(EPS)

A portion of a company’s profit assigned to each share of common stock, indicating its profitability.

Equities

Portions of ownership in a company or corporation.

Affinity Fraud

A type of investment scam similar to a Ponzi or pyramid scheme that attempts to coerce a specific group or category of people and defraud them.

Tax Deductible Expense

A qualifying cost that can be removed from your taxable income, lowering the amount of tax you owe.

Insider Trading

Refers to the buying and selling of a company’s securities based on material information that is not public and can be illegal if used to gain an unfair advantage.

Lower of Cost or Market(LCM)

A principle that states inventory must be recorded lower than its original cost or current market value to account for and address potential losses promptly

Equity Fund

A mutual fund that primarily invests in stocks, either common or preferred based on investment goals

Ex-Dividend

The period between the announcement and payment of a stock’s next dividend

Exclusion

An investment strategy that seeks to exclude specific investments or sectors based on certain values or criteria.

Exchange Privilege

The option to transfer money from different mutual funds into the same fund family.

Expense Ratio

The percentage of a mutual fund’s assets being used to cover operating expenses and management fees for a year.

Expense Ratio(Date)

Annual percentage of the total investment by shareholders in paying for a mutual fund’s operating expenses and management fees.

Federal Funds Rate

The interest rate banks charge each other for overnight loans based on reserve requirements. A key indicator of direction of interest rates as it is set daily by the market.

Federal Reserve Board

The governing body of the Federal Reserve, managing the money supply and credit conditions of the U.S Economy.

Financial Materiality

Information of events that has a significant impact on a company’s financial performance and condition and is important in its investment decisions.

Fixed Income Fund

A fund that primarily invests in bonds, offering no fixed maturity or repayment guarantee

Fixed Income Security

A financial instrument that pays a fixed interest rate on a regular basis, such as bonds.

Fund

A pooled investment vehicle that collects money from multiple investors and pays for securities. It can come in the form of a mutual fund from security companies or a collective fund from bank trust departments.

Green Bond

A bond issued to finance environmentally friendly projects such as renewable energy and conservation efforts.

Green Bond Principles

Voluntary guidelines that promote transparency and integrity by recommending the best practices of issuing green bonds.

Growth Stock

A stock in a successful company that has rapidly increased its earnings and revenue and typically pays little or no dividend.

Growth style funds

Mutual funds that invest in stocks that are growing faster than the overall market and focus on companies in rapidly expanding sectors.

Investment Stewardship

The practice of engaging with companies and voting in shareholder matters to represent and protect the interests of the client, usually focusing on responsible capital allocation and long-term value creation.

Index

A benchmark that tracks the performance of a group of investments among a specific market or investment category

Individual Retirement Account(IRA)

A tax deferred savings account for retirement where individuals can save up to $3000 annually.

Inflation

The general increase in the price of goods and services, decreasing purchasing power

Interest Rate

Percentage of face value of a bond that the issuer agrees to pay bondholders as interest.

Interest rate Risk

Risk of an interest rate spike causing the value of a bond or fixed income security to fall

Investment Grade Bonds

Bonds considered safe for purchase by cautious investors due to low risk of default.

Junk Bond

A lower rate bond that offers higher returns but higher risk.

Large Cap

A company with a market value of more than $10 Billion, often well run and stable

Letter of Intent

A document by a mutual fund investor requesting to invest certain amounts at a time.

Enterprise Resource Planning System(ERP)

A business’s central nervous system, holding all the operational and financial data of a business.

Lipper Ratings

Ranking of a mutual fund’s performance by Lipper Analytical Services comparing funs by category.

Loads

Fees on a mutual fund

Long Term Investment Strategy

A plan focused on long term goals, ignoring daily market ups and downs.

Market Price

The current price of an asset

Market Risk

The chance an investment won’t reach its financial goals

Maturity

The date at which a bond or note must be paid back

Maturity Distribution

Timeline in which investments in a portfolio must be paid back

Median Market Cap

Middle value of market capitalization(stock price times number of shares) in a portfolio. Half of the shares are larger or half smaller

Mid-Cap

Companies with a current market value between $3 Billion and $10 Billion, often in the growth phase

Money Market Mutual fund

A short-term investment fund that seeks to protect your principal and gain income by making safe investments like treasury bills.

Morning Star Ratings

A system by Morningstar Inc to rank annuities and mutual funds on a scale of 1 to 5 based on risk adjusted performance.

Mutual Fund

An investment fund that collects money from shareholders and buys stocks, bonds, and other assets.

NASDAQ

A computerized system that provides price quotes based on over the counter and many New York Stock Exchange listed companies

Net Asset Value Per Share

The value of one share in a mutual fund calculated by dividing the total equity by the number of shares.

P/B Ratio(Price to Book Ratio)

Price per share of a stock divided by book value(assets minus liabilities) per share.

Par Value

The original value of a bond that is paid at its maturity usually in $1000 increments

Portfolio Allocation

Partition of a portfolio’s assets among different types of investments

Positive Tilt

An investment approach that focuses on companies, sectors, and projects with positive social, environmental and governance characteristics

Power Purchase Agreements(PPAs)

Deal where a developer installs a solar energy system on a property where the owner pays for the power generated.

Preferred Stock

A type of stock with a fixed dividend that has priority over common stock with dividend payments and asset liquidiation.

Premium

The amount a stock or bonds sells for more than its original value

Price to Book

Stock price divided by the book value per share. In a portfolio it is the P/B ratio for all stocks

Price to Earnings

Stock price divided by earnings per share, showing how much investors are paying for a company’s earnings

P/E ratio (1 year trailing)

Stock price divided by last year’s earnings

P/E Ratio(1 year forecast)

Stock price divided by projected earnings for next year

Public Offering Piece

Price of a mutual fund share with sales charges

Quality Distribution

The breakdown of a portfolio’s investments by quality ratings

R-2

A measure of how much a fund’s performance is based on its benchmark index with a score of 100 being exactly matching.