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FBLA Region '23 > Securities & Investments > Flashcards

Securities & Investments Flashcards

1
Q

Asset

A

anything that has economic value

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2
Q

Asset Allocation

A

The blend of assets chosen for an investment portfolio

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3
Q

Bonds

A

pay interest on the investment, but the amount of money that is invested can be locked and inaccessible until the end of the bond period

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4
Q

Bond Maturity

A

the date when a bond’s principal is repaid with interest

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5
Q

short-term bond

A

matures within 1-3 years

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6
Q

long-term bond

A

maturity period greater than 10 years

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7
Q

capital gain/loss

A

selling an investment for more or less than you bought it for

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8
Q

Asset classes

A

cash, equities, fixed income/bonds, alternative investments/real estate

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9
Q

ETF/Exchange Traded Funds

A

fund that tracks a specific industry, commodity, or index; trade like stocks

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10
Q

Index Fund

A

measures the performance of a group of assets

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11
Q

Mutual Funds

A

pool of money gathered from many investors and invested in stocks, bonds and other assets by a professional manager; considered some of the safest investments in the market for retirement accounts to invest in because of the diversification in assets that many aim for

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12
Q

Real Estate

A

Property that consists of land or buildings

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13
Q

Retirement Account

A

tax-advantaged account used to finance retirement

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14
Q

Security

A

A stock, bond or other investment instrument that can be traded; sale of securities is regulated by the SEC

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15
Q

SEC/Securities and Exchange Commission

A

protects investors, maintains fair, orderly, and efficient markets, and facilitates capital formation

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16
Q

Stock

A

a security that represents a share of ownership in a company; may also be called shares or equities

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17
Q

Bear Markets

A

stock prices are falling, and investing is risky but potentially very rewarding. Bear markets tend to occur during an economic downturn

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18
Q

Bull Markets

A

stock prices are rising, so investments aren’t as risky but don’t provide the same opportunity for a large reward. Bull markets tend to last longer than bear markets

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19
Q

Common Stock

A

voting rights, dividends fluctuate depending on current profit levels, more volatility

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20
Q

Preferred Stock

A

no voting rights, dividends are set, more stable (preferred stock dividends are prioritized over common stock dividends)

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21
Q

Stock Market Index

A

an index that measures the performance of a stock market, or of a subset of a stock market

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22
Q

Share

A

unit of ownership

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23
Q

Liquidity

A

how easily an asset converts to cash

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24
Q

Real estate investment trusts/REIT

A

mutual fund that invests in real estate

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25
Q

Ask

A

the amount a seller is willing to accept for a security

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26
Q

Bid

A

the amount an investor is willing to pay for a security

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27
Q

Balance Sheet

A

information about a company’s assets (left) and liabilities (right), and the shareholders’ equity that results

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28
Q

Income Statement

A

shows the company’s revenues and expenses during a particular period

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29
Q

Cash Flow Statement

A

a financial statement that shows how cash entered and exited a company during an accounting period

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30
Q

Current Asset

A

cash or can readily be converted to cash within the next year

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31
Q

Fixed/Long-term Assets

A

may not easily be converted into cash

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32
Q

Current Liabilities

A

to be settled over the next year; includes debt payments and taxes

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33
Q

Long-Term Liabilities

A

to be paid over a period greater than 5 years

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34
Q

ISA/Individual Savings Account

A

savings account you NEVER pay tax on; restriction on how much you can invest in a given year

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35
Q

Pension

A

a fund into which amounts are paid regularly during the individual’s working career, and from which periodic payments are made to support the person’s retirement from work

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36
Q

Revolving Credit

A

lets you borrow up to a predetermined credit limit. At the end of each billing cycle, you can either repay what you’ve borrowed in full or carry over (“revolve”) a balance to the next month, making only a minimum payment

37
Q

Home-Equity Loans

A

allows you to borrow against the value of your home

38
Q

Term Life Insurance

A

lower cost, covers holder in case of death during a predetermined time period, doesn’t accrue cash value

39
Q

Whole Life Insurance

A

lasts your entire lifetime, builds cash value, higher premiums

40
Q

Universal Life Insurance

A

allows you to adjust premiums, builds cash value, variable death benefit and cash value growth

41
Q

Variable Life Insurance

A

cash value growth is tied to investments accounts such as mutual funds and bonds, fixed premiums, (guaranteed death benefit remains constant while the variable death benefit fluctuates)

42
Q

Cash Value of Life Insurance

A

While premiums are paid and interest accrues, the cash value builds over time; can be borrowed against, cash can be withdrawn from it but this will reduce the death benefit

43
Q

Unit Trust

A

a type of mutual fund where money from many investors (called “unit holders”), is managed by a fund manager to achieve a specific return

44
Q

Open-Ended Investment Company

A

regular mutual fund

45
Q

Closed-Ended Fund

A

has a fixed number of shares offered by an investment company through an initial public offering

46
Q

Pricing

A

establishing a value for a product or service

47
Q

Dealing

A

executing and trading financial instruments

48
Q

Settlement

A

final step in the transfer of ownership involving the physical exchange of securities or payment; after settlement, the obligations of all the parties have been discharged and the transaction is considered complete

49
Q

Investment Trust

A

a fund that is a public limited company

50
Q

Hedge Fund

A

actively managed fund with freer rein to invest aggressively in a wider variety of financial products than most mutual funds; typically open-ended

51
Q

Primary Market

A

the issuance and sale of securities to purchasers directly by the issuer (where governments and businesses offer new securities for the first time); most buyers are institutional investors

52
Q

Secondary Market

A

Trades take place on the secondary market between other investors and traders rather than from the companies that issue the securities; typically associated with the stock market

53
Q

Pig Market

A

investors assume high degrees of risk with a singular focus on short-term profit

54
Q

Total Return

A

capital appreciation + income received on the portfolio in the form of interest, capital gains, dividends

55
Q

Capital Gain

A

the profit earned on the sale of an asset which has increased in value over the holding period

56
Q

Bond Duration

A

measures the bond’s sensitivity to interest rate changes

57
Q

Futures Contract

A

a standardized legal contract to buy or sell something at a predetermined price for delivery at a specified time in the future

58
Q

Derivative

A

a contract that derives its value from the performance of an underlying entity

59
Q

Options

A

a derivative that conveys to the purchaser (the option holder) the right, but not the obligation, to buy or sell a set quantity or dollar value of a particular asset at a fixed price by a set date

60
Q

Swap

A

derivative contract in which one party exchanges or swaps the values or cash flows of one asset for another

61
Q

Floating Interest Rate

A

does not have a fixed rate of interest over the life of the instrument

62
Q

Arbitrage

A

the practice of taking advantage of a difference in prices in two or more markets

63
Q

Financial Services & Markets Act

A

establishes the UK’s principal financial services regulators, the PRA and the FCA, and sets out their mandates; helps ensure regulators have the tools to regulate the sector

64
Q

Money Laundering

A

illegally concealing the origin of money obtained from illicit activities by converting it to a legitimate source

65
Q

Embezzlement

A

a trusted individual taking advantage of their position to steal funds or assets, most commonly over a period of time

66
Q

Data Protection Act of 1998

A

(UK) gives individuals the right of access to information about themselves which is held by an organization, and sets out how personal information should be collected, stored and processed

67
Q

Annuity

A

a series of payments made at equal intervals (regular deposits to a savings account, monthly home mortgage payments, monthly insurance payments and pension payments)

68
Q

Top 3 U.S. Indexes

A

S&P 500, Dow Jones, Nasdaq

69
Q

Short-Selling

A

selling a borrowed security and buying it back at a lower price profit from the decrease in its price

70
Q

Long-Selling

A

buying then selling assets to profit from an increase in the asset’s price; less risky

71
Q

Descriptive Vs. Analytic Information

A

Descriptive research classifies, describes, compares, and measures data. Meanwhile, analytical research focuses on cause and effect.

72
Q

Demand Deposit Account

A

a bank account from which deposited funds can be withdrawn at any time, without advance notice

73
Q

Prospectus

A

a disclosure document that describes a financial security for potential buyers

74
Q

Trustee Vs. Executor

A

an executor administers the estate of the person who died, while a trustee administers a trust for the benefit of the named beneficiaries

75
Q

Trust Fund

A

legal arrangements that allow individuals to place assets in a special account to benefit another person or entity

76
Q

Income Stock

A

equity financial securities that pay regular and predictable dividends. They are purchased with the purpose of generating a steady stream of dividend flows.

77
Q

Over-the-counter Stock

A

securities that are not listed on a major exchange in the United States and are instead traded via a broker-dealer network, usually because many are smaller companies and do not meet the requirements to be listed on a national exchange.

78
Q

Growth Stock

A

publicly traded share in a company expected to grow at a rate higher than the market average

79
Q

Value Stock

A

a stock that tends to trade at a lower price relative to its fundamentals. The idea behind value investing is that stocks of good companies will bounce back in time if and when the true value is recognized by other investors.

80
Q

Commercial Paper

A

short-term unsecured promissory notes issued by companies

81
Q

Wrap Account

A

an investment account where a “wrapped” fee or fees cover all of the management, brokerage and administrative expenses for the account

82
Q

Declaration Date

A

the date on which the board of directors of a company announces the next dividend payment

83
Q

Record Date

A

the last date in which shareholders are eligible to receive a dividend or distribution

84
Q

FSA/Flexible Spending Account

A

a special account you put money into that you use to pay for certain out-of-pocket health care costs. You don’t pay taxes on this money.

85
Q

Living Will

A

Advanced Healthcare Directive; a written statement detailing a person’s desires regarding their medical treatment in circumstances in which they are no longer able to express informed consent

86
Q

Intestate

A

a person who has died without having made a will.

87
Q

Probate

A

legal process in which a will is reviewed to determine whether it is valid and authentic; happens after you die

88
Q

How are dividends taxed?

A

Qualified dividends are taxed at a capital gains rate, while ordinary dividends are taxed at the standard federal/state rate

FBLA Region '23 (9 decks)

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