Brainscape's Knowledge GenomeTM


Top Flashcards (Certified)
All Flashcards

Key Investment Terms > Key Investment Terms > Flashcards

Key Investment Terms Flashcards

1
Q

Asset

A

Something valuable you own, like money, a house, or investments, that can increase in value over time.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Capital Gain

A

The money you make when you sell something, like a stock or a house, for more than what you paid for it.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Bond

A

A loan you give to a company or government, and they pay you back with extra money called interest.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Index Fund

A

A fund that lets you invest in many companies at once by following a group of companies from a stock market index, like the S&P500.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Exchange-Traded Fund (ETF)

A

An ETF holds many different investments, like stocks or bonds, and you can buy and sell it like a regular stock.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Mutual Fund

A

A group of investments like stocks or bonds managed by professionals and funded by money from many people.

(when you invest in a mutual fund, your money is combined with other people’s money to buy a bunch of investments)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Market Cap

A

The total value of a company’s stock. You calculate it by multiplying the stock price by the number of shares.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Risk

A

In investing, risk is the permanent loss of capital.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Return on Investment (ROI)

A

A way to measure how much money you make from an investment, shown as a percentage of your original investment.

Example: If you invest £1,000 and make £200 in profit, your ROI is 20%.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Compound Interest

A

Interest that builds on both the original money and the interest that has already been earned, making your money grow faster.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Liquidity

A

How quickly and easily you can buy and sell something, like a stock or a house.

Example: Stocks have high liquidity because they can be sold quickly, while houses take longer to sell.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Bull Market

A

When the prices of stocks or other assets keep going up (>20%) because people feel good about the economy.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Bear Market

A

When the prices of stocks or other assets keep going down (>20%), usually because of economic problems.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Blue-Chip Stock

A

Shares in big, trusted companies that have been around a long time and are known for being reliable.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Initial Public Offering (IPO)

A

The first time a company sells its stock to the public, giving people a chance to buy shares.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Dividend Yield

A

The amount of money a company pays shareholders as a percentage of the stock price, showing how much income it gives.

Example: If a stock costs £50 and pays a £2 dividend, its dividend yield is 4%.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Asset Allocation

A

A way to divide your money among different types of investments to balance risk and growth.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Hedge Fund

A

A special type of investment that invests in risky things, hoping to make more money than traditional investments.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Short Selling

A

A strategy where you borrow stock, sell it, and hope to buy it back later at a lower price to make a profit.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Inflation

A

Inflation causes prices of goods and services to go up over time, meaning money loses some of its buying power.

Example: If inflation is 5%, something that costs £100 this year will cost £105 next year.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Alpha

A

The measure of an investment’s performance compared to a benchmark.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Arbitrage

A

Buying and selling an asset to profit from price differences in different markets.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Balance Sheet

A

A financial statement that reports a company’s assets, liabilities, and shareholder’s equity.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Beta

A

A measure of volatility or systematic risk of a security or portfolio compared to the market.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Bid-Ask Spread
The difference between the highest price a buyer is willing to pay and the lowest price a seller is willing to accept.
26
Capital Loss
The loss incurred when selling an asset at a lower price than its purchase price.
27
Cash Flow
The net amount of cash being transferred into and out of a business.
28
Commodities
Basic goods used in commerce that are interchangeable with other goods of the same type.
29
Corporate Bond
A bond issued by a corporation to raise financing for a variety of reasons.
30
Credit Risk
The risk of loss of principal or loss of a financial reward stemming from a borrower's failure to repay a loan.
31
Cryptocurrency
Digital or virtual currency that uses cryptography for security.
32
Diversification
A risk management strategy that mixes a wide variety of investments within a portfolio.
33
Dividend
A share of profits distributed by a corporation to its shareholders.
34
Earnings per Share (EPS)
The portion of a company's profit allocated to each outstanding share of common stock.
35
Equity
Ownership interest in a corporation in the form of common or preferred stock.
36
Ex-Dividend
A stock trading term indicating that a declared dividend belongs to the seller rather than the buyer.
37
Fiduciary
A person or organisation that acts on behalf of another person or persons to manage assets.
38
Financial Adviser
A professional who suggests and renders financial services to clients based on their financial situation.
39
Fixed Income
Investments that yield a regular (or fixed) return, such as Bonds.
40
Futures
Financial contracts obligating the buyer to purchase an asset or the seller to sell an asset at a predetermined future date and price.
41
Hedge
An investment to reduce the risk of adverse price movements in an asset.
42
Interest Rate
The amount charged by a lender to a borrower for the use of assets expressed as a percentage of the principal.
43
Investment Grade
A rating that signifies a municipal or corporate bond presents a relatively low risk of default.
44
Junk Bond
A bond rated 'BB' or lower because of its high default risk.
45
Leverage
The use of borrowed money (debt) to amplify returns from an investment or project.
46
NASDAQ
A global electronic marketplace for buying and selling securities, as well as the benchmark index for U.S. technology stocks.
47
Net Income
The total profit of a company after all expenses and taxes have been deducted from revenue.
48
Options
Contracts that give the buyer the right, but not the obligation, to buy or sell an underlying asset at a specified price on or before a certain date.
49
P/E Ratio (price-to-earnings)
A valuation ratio of a company's current share price compared to its per-share earnings.
50
Portfolio
A collection of financial investments like stocks, bonds, commodities, cash and cash equivalents, including mutual funds and ETFs.
51
Preferred Stock
A class of ownership in a corporation that has a higher claim on assets and earnings than common stock.
52
Price Volatility
The rate at which the price of a security increases or decreases for a given set of returns.
53
Principal
The amount of money lent or invested, on which interest is paid.
54
Private Equity
Capital that is not noted on a public exchange. Private equity is composed of funds and investors that directly invest in private companies.
55
Prospectus
A formal legal document required by and filed with the Securities and Exchange Commission that provides details about an investment offering for sale to the public.
56
REIT (Real Estate Investment Trust)
A company that owns, operates, or finances income-generating real estate.
57
SEC (Securities and Exchange Commission)
The U.S. federal agency responsible for enforcing federal securities laws and regulating the securities industry.
58
Securities
Financial instruments that represent some form of financial value, such as stocks, bonds, or options.
59
Stock
A type of security that signifies ownership in a corporation and represents a claim on part of the corporation's assets and earnings.
60
Stock Market
A collection of markets and exchanges where the issuing and trading of equities, bonds, and other sorts of securities take place.
61
Stock Split
The division of a company's existing stock into multiple shares to boost the liquidity of the shares.
62
Stop-Loss Order
An order placed with a broker to buy or sell once the stock reaches a certain price.
63
Technical Analysis
A trading discipline employed to evaluate investments and identify trading opportunities by analysing statistical trends gathered from trading activity.
64
Treasury Bonds (T-Bonds)
Long-term government debt securities with a maturity of more than 10 years.
65
Treasury Bills (T-Bills)
Short-term government debt securities with maturities of less than a year.
66
Treasury Notes (T-Notes)
Medium-term government debt securities with maturities ranging from 1 to 10 years.
67
Underwriting
The process by which an underwriter brings a new security issue to the public, typically by purchasing the securities from the issuer and selling them to investors.
68
Valuation
The process of determining the current worth of an asset or company.
69
Value Investing
An investment strategy that involves picking stocks that appear to be trading for less than their intrinsic or book value.
70
Venture Capital
Financing that investors provide to startup companies and small businesses that are believed to have long-term growth potential.
71
Volatility
The rate at which the price of a security increases or decreases for a given set of returns.
72
Yield
The income return on an investment, such as the interest or dividends received from holding a particular security.
73
Yield Curve
A line that plots the interest rates, at a set point in time, of bonds having equal credit quality but differing maturity dates.
74
Z-Score
A statistical measurement of a score's relationship to the mean group of scores.
75
Zero-Coupon Bond
A bond that does not pay periodic interest but is sold at a deep discount from its face value.
76
Market Order
An order to buy or sell a stock at the best available price.
77
Limit Order
An order to buy or sell stock at a specific price or better.
78
Financial Leverage
The use of debt to increase the potential return of an investment.
79
Gross Margin
The difference between revenue and cost of goods sold divided by revenue, expressed as a percentage.
80
Insider Trading
The trading of a public company's stock or other securities by individuals with access to non-public information about the company.
81
Liquidity Ratio
A class of financial metrics used to determine a debtor's ability to pay off current debt obligations without raising external capital.
82
Market Liquidity
The extent to which a market, such as a country's stock market or a city's real estate market, allows assets to be bought and sold at stable, transparent prices.
83
Net Asset Value (NAV)
The value per share of a mutual fund or an ETF on a specific date or time.
84
Option Premium
The income received by an investor who sells or "writes" an option contract to another party.
85
Over-The-Counter (OTC)
Trading done directly between two parties, without the supervision of an exchange.
86
Portfolio Diversification
The practice of spreading your investments around so that your exposure to any one type of asset is limited.
87
Price-to-Book Ratio (P/B Ratio)
A ratio used to compare a stock's market value to its book value.
88
Price-to-Sales Ratio (P/S Ratio)
A valuation ratio that compares a company's stock price to its revenues.
89
Quantitative Easing
A monetary policy whereby a central bank buys government securities and other securities from the market in order to lower interest rates and increase the money supply.
90

Key Investment Terms (1 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions