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.