Business Vocabulary

Company

A business or association usually formed to manufacture or supply products or services for profit.

Portfolio

A collection of investments owned by one indvididual or organization.

Corporation

A company legally separate from stockholders who own it and the managers who run it.

Partnership

A company owned and managed by two or more people who share its profits or losses.

Sole Proprietorship

A company owned and run by one individual who receives its profits or bears its losses.

Parent Company

A company that owns enough voting stock in another firm to control management and operations.

Public corporation

A company that sells it's shares.

Private corporation

A corporation that doesn't sell shares to the public.

Industry

A group of companies producing similar products or services.

Sector

A group of stocks, often in one industry.

Entrepreneur

A person who organizes, manages, and takes on the risks of a business.

Mutual Funds

A pool of money used by a company to purchase a variety of stocks, bonds or money market instruments. Provides diversification and professional management for investors.

Stock

A share of ownership in a corporation.

Corporate Bonds

Bonds are major sources of corporate borrowing

Municipal Bonds

Bonds issued by state and local governments

Investment Grade Bonds

Bonds that are sold by a very reliable issuer

Interest rate

Compensation paid or to vbe paid for the use of money.

Open-end Funds

Funds that usually sell as many shares as investors want to buy.

Volatility

Indicates how much and how quickly the value of an investment, market, or market sector changes.

Conservative

Investment-grade bonds and preffered stocks

IOU

Means exactly as it sounds, "I Owe You." It is an acknowledgement of a debt.

Volume

Number of shares traded in a company's stock

Preffered Stock

Often pay a fixed divedend on a regular schedule.

Dividend

Part of a corporation's profit that is paid out to stockholders

Fixed-Income Investments

Pay interest on a set schedule.

Share

Piece of ownership in a company, mutual fund or other investment

Index

Reports changes in a specific financial market.

Common Stock

Shares represent ownership in a corporation and give the right to vote for the company's board of directors and benefit from its financial success

Agency Bonds

Some government sponsored but privately owned corporations and federal government agencies.

Investor

Someone who purchases stocks, bonds, mutual funds and other financial instruments in hopes the investments will increase in value over time.

Diversification

Spreading out investments to reduce risk

Moderate

Stocks that pay little or no dividends.

Ticker symbol

The abbreviated term that is used to identify a stock for trading purposes

Risk

The chance of losing all or part of an investment.

Maturity

The date when the principal amount of a security is payable

Trade date

The date when the purchase or sale of a bond is transacted.

Risk Tolerance

The degree, amount, or volume of risk that an organization or individual will withstand.

Principal

The face amount of a bond, payable at maturity

Initial Public Offering (IPO)

The first public offering of a corporation's stock.

US Treasury Bonds

The most secure bonds and the most secured investment, and they are backed by the "full faith and credit" of the U.S. Government

Stockholder

The owner of the stock.

Par Value

The principle amount of a bond or note due at maturity

Prepayment

The unscheduled partial or complete payment of the principal amount outstanding on a mortgage or other debt before it is due.

Earnings

Whatever profits or net income remains after subtracting the company's expenses from its revenue.

Closed-end Funds

a collective investment model based on issuing a fixed number of shares which are not redeemable from the fund

Stock Exchange

a market for buying and selling stock

Bonds

an IOU issued by a corporation or government that confirms you are lending the corporation or government money.

Issuer

an entity that issues and is obligated to pay principal and interest on securities

Exchange traded funds

collections of stocks, bonds, and other investments that are traded on exchanges but are traded more like individual stocks than like mutual funds

High-Yield Bonds

corporate bonds that pay higher interest, but also have a higher risk of default

Default

failure to pay back a loan

P/E Ratio

ratio of stock price to earnings per share

Trade

the action of buying and selling goods and services.