Unit 11 Flashcards
Investing equal dollar amounts at regular intervals rather than making a large investment at one time
Dollar cost averaging
Brokerage firm that facilitates transactions at low cost to clients and provides online investment management tools and resources
Discount broker
A non depository financial institution that helps its customers to buy and sell financial securities
Brokerage firm
An investors account at a brokerage firm, from which the investor pays for purchases and into which the firm deposits proceeds from sales
Brokerage account
Lends money to an individual, government entity, financial institution, or other business
Debt investor
An investor who has an ownership interest in a business
Equity or stock investor
Debt investment that provides a fixed interest payment to the investor over the term of the investment
Fixed income investing
Broad category of investments that have certain characteristics in common
Asset class
An investment in which the investor contributes a sum of money to a common enterprise with the intention of making a profit through the effort of others
Security
Represents a share of ownership in a business
Common stock
Periodic distribution of profits to equity investors
Dividend
Debt investment representing a loan to a governmental or business entity. Which usually pays a fixed rate of interest for a fixed rate of time
Bond
Offer very low interest rates and also have very low risk
Money Market Securities
Hybrid of stock and bond, has constant cash flow in form of dividends to the investor
Preferred Stock
Derives from its value from changes in price of some underlying asset over time
Derivative Securities
High risk, made in order to make short-term profit
Speculative investment
Contract to buy or sell an underlying asset at a future date, price set in advance
Future contract
Contract gives holder right, not obligation, to purchase or sell investment at set price on or before a set date
Option contract
