| Term | Definition |
|---|
| speculative investment | High risk -- may earn large profit in short period of time |
| retained earnings | profits a company reinvests for growth or research |
| common stock | unit of ownership in a company |
| prospectus | discloses information about a company's earnings, assets, liabilities |
| capital loss | sale of an investment for less than its purchase price |
| stock split | stockholders' shares are divided into larger number of shares |
| cyclical stock | linked to patterns of the economy (ex: Ford) |
| limit order | a request to buy a specified number of stock shares |
| sinking fund | secure fund set up to make SURE a corp. can pay back bonds |
| net asset value | amount that one share of a mutual fund is worth |
| government bonds | stable; low risk; backed by gov't (ex: savings bonds) |
| home ownership | produces an average rate of return |
| business failure | a risk that causes stock to become worthless |
| equity capital | money received by stockholders investing in a corporation |
| financial markets are affected by .... | political & social conditions, inflation, and interest rates |
| Dow Industrial Average | provides statistical averages |
| preferred stock | less risk, higher yield; gives owner advantage over common stock |
| blue chip stock | safe; attracts conservative investors (ex: AT&T) |
| NASDAQ (naz dek) | electronic marketplace; most over the counter stock traded here |
| stop order | requests stockbroker sell at a certain price |
| diversification | purchasing a group of stocks (ex: mutual fund) |
| capital gains | profit from the sale of securities, assets, or real estate (taxable income) |
| home ownership | largest financial asset for most Americans |
| precious gems | factors to look for: color, weight, clarity |
| dividend | money, stock, other property paid to stockholder |
| liquidity | ability to buy or sell investments quickly |
| NYSE | largest securities exchange in the world |
| closed-end fund | only a certain number of shares can be sold |
| annual report | companies that sell stock must send this rpt out to investors |
| tax deferred | income that is taxed at a later date |
| tax exempt | income that is not taxed |
Combine with other sets
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