Vocabulary

• Asset – A resource with economic value that an individual, corporation, or country owns or controls with the expectation that it will provide a future benefit.
• Balance Sheet – A financial statement that reports a company's assets, liabilities, and shareholders' equity at a specific point in time.
• Bonds – A fixed income instrument that represents a loan made by an investor to a borrower.
• 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.
• Capital Gain – The rise in value of a capital asset (investment or real estate) that gives it a higher worth than the purchase price.
• Cash Flow – The net amount of cash and cash-equivalents being transferred into and out of a business.
• Collateral – An asset that a lender accepts as security for a loan.
• Compound Interest – Interest on a loan or deposit calculated based on both the initial principal and the accumulated interest from previous periods.
• 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.
• Dividend – A distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders.
• Equity – Ownership interest in a corporation in the form of common or preferred stock.
• ETFs (Exchange-Traded Funds) – A type of security that involves a collection of securities—such as stocks—that often tracks an underlying index.
• Fiscal Policy – The use of government revenue collection and expenditure to influence a country's economy.
• Hedge Fund – An investment fund that trades in relatively liquid assets and is able to make extensive use of more complex trading, portfolio construction and risk management techniques to improve performance.
• Index Fund – A type of mutual fund or exchange-traded fund (ETF) with a portfolio constructed to match or track the components of a financial market index.
• 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 amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets.
• Investment – An asset or item acquired with the goal of generating income or appreciation.
• IPO (Initial Public Offering) – The process by which a private company can go public by sale of its stocks to general public.
• Liability – A company's financial debt or obligations that arise during the course of its business operations.
• Liquidity – The degree to which an asset or security can be quickly bought or sold in the market without affecting the asset's price.
• Margin – Borrowed money that is used to purchase securities.
• Mutual Fund – An investment vehicle made up of a pool of money collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments, and other assets.
• Portfolio – A range of investments held by a person or organization.
• Profit – A financial gain, especially the difference between the amount earned and the amount spent in buying, operating, or producing something.
• ROI (Return on Investment) – A performance measure used to evaluate the efficiency or profitability of an investment.
• Securities – A fungible, negotiable financial instrument that holds some type of monetary value.
• Shareholder – An individual or institution that legally owns one or more shares of stock in a public or private corporation.
• Stock – A type of security that signifies ownership in a corporation and represents a claim on part of the corporation's assets and earnings.
• 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.
• Treasury Bill – A short-term debt obligation backed by the U.S. government with a maturity of less than one year.
• Volatility – A statistical measure of the dispersion of returns for a given security or market index.
• Yield – The income return on an investment, such as the interest or dividends received from holding a particular security.
• Cryptocurrency – A digital or virtual form of currency that uses cryptography for security.
• Bull Market – A market condition in which the prices of securities are rising, or are expected to rise.
• Bear Market – A condition in which securities prices fall and widespread pessimism causes the stock market's downward spiral to be self-sustaining.
• Pension Fund – A type of investment that is designed to collect and grow funds for retirement.
• Diversification – A risk management strategy that mixes a wide variety of investments within a portfolio.
• Derivative – A financial security with a value that is reliant upon or derived from, an underlying asset or group of assets.
• Commodity – A basic good used in commerce that is interchangeable with other goods of the same type.
• Blue-Chip Stocks – Shares in large, well-established companies with a history of reliable performance.
• Variable Interest Rate – An interest rate on a loan or security that fluctuates over time because it is based on an underlying benchmark interest rate or index.
• Fixed Interest Rate – An interest rate on a liability, such as a loan or mortgage, that remains the same either for the entire term of the loan or for part of the term.
• Portfolio Manager – A professional responsible for making investment decisions and carrying out investment activities on behalf of vested individuals or institutions.
• Market Capitalization – The total dollar market value of a company's outstanding shares of stock.
• Leverage – The use of borrowed money to increase the potential return of an investment.
• Forex Market – The market in which participants can buy, sell, exchange, and speculate on currencies.
• Financial Advisor – A professional who provides financial services to clients based on their financial situation.
• Risk Tolerance – The degree of variability in investment returns that an individual is willing to withstand.
• Credit Score – A number assigned to a person that indicates to lenders their capacity to repay a loan.