Letter I Vocabulary Flashcards
The estimated volatility of a security’s price derived from its option price.
Implied Volatility
A mutual fund that focuses on generating income, typically through bonds, dividend-paying stocks, or other interest or dividend-generating assets.
Income Fund
A financial statement that shows a company’s revenues, expenses, and profits over a specified period.
Income Statement
A stock that consistently pays dividends and is purchased primarily for this income rather than capital appreciation.
Income Stock
A statistical measure representing the value or performance of a specific group of stocks, bonds, or other assets.
Index
A mutual fund or ETF designed to replicate the performance of a specific market index.
Index Fund
A tax-advantaged investment account designed for individual retirement savings in the U.S.
Individual Retirement Account (IRA)
The rate at which the general price level of goods and services rises, leading to a decrease in purchasing power.
Inflation
The minimum percentage of the total value of securities that an investor must deposit to open a margin account.
Initial Margin
The first sale of stock by a private company to the public.
Initial Public Offering (IPO)
Material non-public information about a company that could influence its stock price if disclosed.
Inside Information
Trading of a company’s stocks or bonds based on material non-public information.
Insider Trading
An entity, such as a pension fund or mutual fund, that manages large amounts of money and invests in stocks, bonds, and other securities.
Institutional Investor
Shares of mutual funds or other investments that are designed for institutional investors, often with lower fees due to larger investment amounts.
Institutional Shares
An asset that lacks a physical presence, such as patents, trademarks, or goodwill.
Intangible Asset
The percentage at which interest is paid by a borrower to a lender, often expressed on an annual basis.
Interest Rate
The risk that an investment’s value will change due to a change in absolute interest rates or the spread between different rates.
Interest Rate Risk
A financial derivative where two parties exchange interest rate cash flows, often swapping fixed interest rate for a floating rate or vice versa.
Interest Rate Swap
A mutual fund that invests in companies located outside of the investor’s home country.
International Fund
A term referring to an option that has intrinsic value, typically when a call option’s strike price is below the market price of the underlying asset or when a put option’s strike price is above the market price.
In-The-Money
The inherent or true value of an asset or option, disregarding any external factors or speculative pricing.
Intrinsic Value
A professional who provides advice on securities investing in exchange for a fee.
Investment Adviser
Another term for an Investment Adviser, referring to an individual or firm that gives investment advice.
Investment Advisor
A financial institution that assists companies in raising capital, advises on mergers and acquisitions, and conducts other high-level financial services.
Investment Bank
U.S. legislation that regulates mutual funds and investment companies to protect investors.
Investment Company Act of 1940
A credit rating that indicates a relatively low risk of default.
Investment Grade
A formal document detailing an investor’s or institution’s investment goals and strategies.
Investment Policy
A planned approach to investing based on objectives, risk tolerance, and time horizon.
Investment Strategy
The phenomenon where the price of an initial public offering (IPO) is set below its market value, leading to a surge in stock price once trading begins.
IPO Underpricing
