Investment Key Terms Flashcards
What are investments?
The commitment to funds to one or more assets that will be held over some future period; Putting money towards something to gain more back
What is Liquidity?
How fast you can turn your assets into cash
What is a Bear Market
A downward trend in the stock market greater than 20%
What is a Bull Market
An upward trend in the stock market of greater than 20%
What is an Initial Public Offering?
When common shares of a company are being sold for the first time to the public, usually the financial institution; Opening your company to the public by having a bank/insurance company reference your validity
What is Common Stock
An equity security that represents the ownership of a company. Shares that have voting rights.
What is Preferred Stock?
An equity security that represents the ownership of a company. Shares with no voting rights. Usually, they are more expensive than common shares and have dividends but are not guaranteed. Dividends are guaranteed if they are cumulative preferred stock.
What are Dividends?
Cash payments are declared by a corporation to shareholders. It is a distribution of the profit of a company to shareholders.
What is a Portfolio?
A collection of securities or investments held by an investor.
What are Financial Statements?
Statements that show a company’s financial position over a fiscal year (balance sheet, income statement, cash flow statement)
What are Generally Accepted Accounting Principles (GAAP)?
A set of rules and regulations that are used in accounting to prevent fraudulent or misleading information.
What is Risk?
The chance that the actual return on an investment will be different than the expected return
What is the Toronto Stock Exchange (TSX)?
A place where securities are listed and traded
What are Corporate Bonds?
Debt securities issued by corporations to raise capital
What are Bonds?
Debt instruments that allow companies or governments to raise funds by borrowing from investors
What are Expiration Dates?
Specified date in the future when a contract, agreement, or option comes to an end, and its terms and conditions are no longer valid.
What are Short Positions?
The practice of selling a financial asset, such as a stock or commodity, that the seller does not own, with the expectation of buying it back later at a lower price to profit from the price decline.
What are Index Funds?
Investment funds that aim to replicate the performance of a specific market index by holding a diversified portfolio of the same or similar assets.
What are Options?
financial derivatives that give the holder the right, but not the obligation, to buy or sell an underlying asset at a predetermined price on or before a specified date.
What is Call?
A financial option that gives the holder the right, but not the obligation, to buy an underlying asset, such as a stock, at a specified price (strike price) within a predetermined time frame.
What is Put?
A financial option that gives the holder the right, but not the obligation, to sell an underlying asset, such as a stock, at a specified price (strike price) within a predetermined time frame.
What is the Secondary Market?
Normal investors can buy and
Sell shares
What is capitalization?
A company’s worth is based on the market price
