FINANCE 2 - Chapter 10 Saving & Investing | Quizlet

Emergency Fund

a savings account that you can access quickly to pay for unexpected expenses or emergencies

speculative investment

a high-risk investment that might earn a large profit in a short time

Dividends

distributions of money, stock, or other property that a corporation pays to stockholders

retained earnings

profits that a company reinvests

investment liquidity

the ability to buy or sell an investment quickly without substantially reducing its value

equity capital

money that a business gets from its owners in order to operate

common stock

a unit of ownership of a company, and it entitles the owner, or stockholder, to voting privileges

preferred stock

a type of stock that gives the owner the advantage of receiving cash dividends before common stockholders receive cash dividends

corporate bond

a corporation's written pledge to repay a specific amount of money, along with interest

Government bond

the written pledge of a government or a municipality, such as a city, to repay a specific sum of money with interest

mutual fund

an investment in which investors pool their money to buy stocks, bonds, and other securities selected by professional managers who work for an investment company

Diversification

the process of spreading your assets among several different types of investments to reduce risk

financial planner

a specialist who is trained to offer specific financial help and advice

tax-exempt income

income that is not taxed

tax-deferred income

income that is taxed at a later date

capital gain

a profit from the sale of assets

capital loss

the sale of an investment for less than its purchase price

prospectus

document that discloses information about a company's earnings, assets, and liabilities, its products or services

resort

a choice

elective

optional

maturity

the state of a financial arrangement when it falls due for payment

diversity

variety

commissions

earnings

Discrimination

selective

inflation

If a person loses buying power because he or she invests money at a fixed rate, the risk factor at fault is?