Vocabulary

• Asset – Something valuable that an individual, corporation or country owns or controls with the expectation that it will provide a future benefit.
• Bankruptcy – A legal status of a person or other entity that cannot repay the debts it owes to creditors.
• Bonds – A fixed income instrument that represents a loan made by an investor to a borrower.
• Budget – An estimate of income and expenditure for a set period of time.
• Capital – Wealth in the form of money or other assets owned by a person or organization or available for a purpose such as starting a company or investing.
• Compound Interest – The addition of interest to the principal sum of a loan or deposit, resulting in interest on interest.
• Credit – The ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future.
• Debt – Money owed by one party, the borrower or debtor, to a second party, the lender or creditor.
• Diversification – The practice of spreading investments among different securities to reduce risk.
• Dividends – A sum of money paid regularly by a company to its shareholders out of its profits.
• Equity – The value of an ownership interest in property, including shareholders' equity, in a business.
• ETFs (Exchange-Traded Funds) – Investment funds traded on stock exchanges, much like stocks.
• Financial Advisors – Professionals who provide advice on financial matters to clients.
• Fiscal Policy – Government policy that attempts to manage the economy by controlling taxing and spending.
• Forex (Foreign Exchange) – The conversion of one currency into another.
• Hedge Funds – Alternative investments using pooled funds that employ numerous strategies to earn active return for their investors.
• Inflation – The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling.
• Interest Rate – The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan outstanding.
• Investment – The action or process of investing money for profit.
• Liquidity – The degree to which an asset or security can be quickly bought or sold in the market without affecting the asset's price.
• Mutual Funds – An investment program funded by shareholders that trades in diversified holdings and is professionally managed.
• Portfolio – A range of investments held by a person or organization.
• Private Equity – Capital that is not listed on a public exchange.
• Recession – A period of temporary economic decline during which trade and industrial activity are reduced.
• ROI (Return on Investment) – A performance measure used to evaluate the efficiency of an investment.
• Securities – Tradable financial assets such as equities or fixed income instruments.
• Stock Market – A place where shares of pubic listed companies are traded.
• Tax – A compulsory contribution to state revenue, levied by the government on workers' income and business profits, or added to the cost of some goods, services, and transactions.
• Venture Capital – A type of private equity, a form of financing that is provided by firms or funds to small, early-stage, emerging firms that are deemed to have high growth potential.
• Yield – The income return on an investment.
• Risk Management – The forecasting and evaluation of financial risks together with the identification of procedures to avoid or minimize their impact.
• Derivatives – A security with a price that is dependent upon or derived from one or more underlying assets.
• Pension Funds – A type of investment that pools capital from individuals and organizations to invest and grow until retirement.
• Insurance – A contract, represented by a policy, in which an individual or entity receives financial protection or reimbursement against losses from an insurance company.
• Cryptocurrency – A digital or virtual currency that uses cryptography for security.
• Short Selling – The sale of a security that is not owned by the seller, or that the seller has borrowed, in the hope of buying it back later at a lower price.
• Bull Market – A market in which share prices are rising, encouraging buying.
• Bear Market – A market in which prices are falling, encouraging selling.
• IPO (Initial Public Offering) – The first sale of stock by a company to the public.
• Leverage – The use of borrowed funds to increase one's trading position beyond what would be available from their cash balance alone.
• Margin – Borrowed money that is used to purchase securities.
• Financial Literacy – The ability to understand and use various financial skills, including personal financial management, budgeting, and investing.
• Fiscal Year – A one-year period that companies and governments use for financial reporting and budgeting.
• Net Worth – The value of all the non-financial and financial assets owned by an individual or institution minus the value of all its outstanding liabilities.
• Real Estate – Property consisting of land or buildings.
• Savings Account – A deposit account held at a bank or other financial institution that provides principal security and a modest interest rate.
• Treasury Bonds – A government debt security with a maturity of more than 10 years.
• Volatility – A statistical measure of the dispersion of returns for a given security or market index.
• Wealth Management – A high-level professional service that combines financial and investment advice, accounting and tax services, retirement planning, and legal or estate planning.
• Zero-Sum Game – A situation in which one person's gain is equivalent to another's loss, so the net change in wealth or benefit is zero.