chapter 2 vocabulary

27 terms by devenj

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aggressive growth stock mutual fund

mutual fund that seeks to provide maximum long-term capital growth from stocks of promarily smaller companies or narrow market segments

Annuity

payment received every year

bond

a certificate of debt (usually interest-bearing or discounted) that is issued by a government or corporation in order to raise money

C.D.

certificate of deposite

commodity

anything that is bought or sold

diversification

the act of introducing variety

dividend

that part of the earnings of a corporation that is distributed to its shareholders

fixed annuity

A type of annuity that provides a guaranteed fixed benefit amount payable for the life of the annuitant.

futures

contracts to buy or sell at a specific date in the future at a price specified today

investments

savings that are put to work to earn more money

growth stock mutual fund

fund that buys stock in medium-sized companies that have experienced some growth and are still expanding; also called a mid-cap fund

large cap fund

funds comprised of large, well-established companies

liquidity

How easily money can be accessed

mid cap fund

mutual fund containing a group of medium-sized companies that are growing

money market

Market in which money is lent for periods of less than a year

portfolio

a list of the financial assets held by an individual or a bank or other financial institution

rental real estate

buying real estate to rent out as an investment

risk

the chance an entrepreneur takes of losing time and money on a business that may not prove profitable

international stock mutual fund

Mutual fund that invests in securities markets throughout the world so that if one market is in a slump, profits can still be earned in others.

risk return ratio

a ratio based on the principle that a high-risk decision should generate higher financial returns for a business and more conservative decisions often generate lesser returns

savings account

a bank account that accumulates interest

share

any of the equal portions into which the capital stock of a corporation is divided and ownership of which is evidenced by a stock certificate

single stocks

futures contracts with the underlying asset being one particular stock

small cap fund

mutual fund that invests in companies whose markets value is less than $ 1 billion; largely consists of smaller, more volatile companies; also called growth stock mutual fund

speculative

not financially safe or secure

track record

the sum of recognized accomplishments

variable annuity

annuity that has a varying rate of return based on the mutual funds in which one has invested

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