Voc 3

Question 1

International monetary fund (IMF):

Answer 1

nternational organization that works to promote global economic stability, facilitate international trade, and reduce poverty around the world. It provides financial assistance, policy advice, and technical expertise to its member countries, especially in times of economic crisis.

Question 2

Inflation:

Answer 2

when prices go up over time, making it more expensive to buy things. This means your money doesn’t go as far as it used to. For example, if a loaf of bread costs $2 today but $2.50 next year, that’s inflation.

Question 3

Internal rate of return (IRR):

Answer 3

financial metric used to evaluate how much profit, on average, you can expect to make from an investment each year.

Question 4

Invest:

Answer 4

investing means to put money into something, such as a business, property, or financial asset, with the expectation of earning a return or profit over time. The goal of investing is to grow your money by generating income or increasing the value of the asset over time.

Question 5

Investment fund:

Answer 5

way for people to pool their money together, so a professional manager can invest it in a variety of assets, like stocks and bonds.

Question 6

Legal tender:

Answer 6

official money that people must accept when paying debts. It includes coins and banknotes issued by the government like the dollar in the U.S. or the euro in Europe.

Question 7

Leverage:

Answer 7

refers to using borrowed money to make bigger investments. It can help you earn more money if things go well but it can also lead to bigger losses if things go wrong.

Question 8

Limit order:

Answer 8

instruction given to a broker to buy or sell a stock (or other asset) at a specific price or better. It ensures that you don’t pay more than a certain price when buying or sell for less than a certain price when selling.

Question 9

Liquidity ratio:

Answer 9

financial metric that shows whether a company has enough cash or assets that can be quickly turned into cash to pay off its short-term debts. Higher ratios mean the company is more likely to cover its bills easily.

Question 10

Load:

Answer 10

refers to a sales charge or commission applied when buying or selling certain types of investment funds particularly mutual funds.

Question 11

Loan:

Answer 11

sum of money that one party (the lender) gives to another party (the borrower) with the agreement that it will be paid back, usually with interest, over a specified period of time.

Question 12

Market capitalisation:

Answer 12

shows how much a company is worth on the stock market.

Question 13

Market risk premium:

Answer 13

refers to the extra money investors expect to make from investing in stocks, which are riskier, compared to a safer investment like government bonds. It’s the reward for taking on that extra risk.

Question 14

Money laundering:

Answer 14

the process of concealing the origins of illegally obtained money to make it appear as if the money comes from a lawful source so they can use it without getting caught.

Question 15

Mutual fund company:

Answer 15

financial institution that collects money from many investors and invests it in a range of assets like stocks or bonds. Professional managers make the investment decisions aiming to help people grow their money while spreading out risk.

Question 16

Net present value (NPV):

Answer 16

financial metric used to determine the value of an investment or project by calculating the present value of all future cash flows and subtracting the initial investment cost. It helps investors or businesses assess whether a project or investment is likely to be profitable.

Question 17

No load mutual fund:

Answer 17

mutual fund that does not charge any sales fees or commissions when you buy or sell shares. This means that all the money you invest goes directly into the fund without any portion being deducted for fees.

Question 18

Opening price:

Answer 18

the price at which a stock or asset starts trading when the market opens for the day. It’s influenced by what happened before the market opened like news or events that affect the stock’s value.

Question 19

Over the counter (OTC)

Answer 19

off exchange trading: Over-the-counter trading happens directly between two parties without using a big stock exchange. It can offer more flexibility but may come with higher risks and less transparency than trading on traditional exchanges.

Question 20

P/e ratio (price per earning):

Answer 20

financial metric used to evaluate how expensive or cheap a company’s stock is compared to its earnings. A high ratio means you’re paying more for each dollar of earnings and a low ratio means you’re paying less.

Question 21

Parity:

Answer 21

refers to the situation where two assets, prices, or values are equal or equivalent.

Question 22

Payout ratio:

Answer 22

financial metric that shows what percentage of a company’s profits are being paid out as dividends to shareholders. A high ratio means more money is given to shareholders while a low ratio means the company keeps more to grow the business.

Question 23

Put (option):

Answer 23

financial contract that gives the buyer the right, but not the obligation, to sell an underlying asset at a specified price within a certain period of time.

Question 24

Quotation:

Answer 24

refers to the current price at which an asset, such as a stock, bond, or commodity, is being bought or sold in the market. It tells you how much buyers are willing to pay or sellers are asking for it.