Ch. 17 Vocab

Question 1

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

Answer 1

Emergency fund

Question 2

Choice

Answer 2

Resort

Question 3

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

Answer 3

Speculative investment

Question 4

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

Answer 4

Dividends

Question 5

Profits that a company reinvests, usually for expansion or to conduct research and development

Answer 5

Retained earnings

Question 6

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

Answer 6

Investment liquidity

Question 7

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

Answer 7

Equity capital

Question 8

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

Answer 8

Common stock

Question 9

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

Answer 9

Preferred stock

Question 10

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

Answer 10

Corporate bond

Question 11

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

Answer 11

government bond

Question 12

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

Answer 12

mutual fund

Question 13

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

Answer 13

diversification

Question 14

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

Answer 14

financial planner

Question 15

income that is not taxed

Answer 15

tax-exempt income

Question 16

income that is taxed at a later date

Answer 16

tax-deferred income

Question 17

the profit from the sale of assets such as stocks, bonds, or real estate

Answer 17

capital gain

Question 18

the sale of an investment for less than its purchase price

Answer 18

capital loss

Question 19

a document that discloses information about a company’s earnings, assets, and liabilities, its products or services, a particular stock, and the qualifications of its management

Answer 19

prospectus

Question 20

optional

Answer 20

elective

Question 21

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

Answer 21

maturity

Question 22

variety

Answer 22

diversity

Question 23

earnings

Answer 23

commissions

Question 24

selective

Answer 24

discriminating