financial markets Flashcards
bear market
steady drop in the stock market over a period of time
yield
annual rate of return on a bond-percent of growth on a stock
bull market
a steady rise in the stock market over a period of time
prospectus
information about an investment
capital gain
difference between a high selling price and a low purchase price
portfolio
collection of all your assets (net worth)
par value
the amount the investor pays to purchase a bond
financial asset
anything that has value
investment
earns more than the rate of inflation
equity
claims of ownership in anything
blue chip stock
top performing stock
stock split
a division of a single share of stock into more than one buisness
growth stock
pays few or no dividends, reinvest its earning into the buisess
tax sheltered
tax free
what are components of a bond?
coupon rate, maturity, par value, yield
what makes up the dow jones industrial average?
30 large companies in different industries
what does a mutual fund invest in?
spreads money in multiple investments
how do bonds differ?
risk, return, rating
what is an advantage of diversification
having different investments
what are examples of financial intermediaries?
401k, 403b, ira
what are 3 low risk investments?
savings, cd, money markets
