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27 terms

chapter 2 vocabulary

STUDY
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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