Personal Finance: Chapter 8
corporate bond
a corporation's written pledge to repay a specific amount of money, along with interest
prospectus
a document that discloses information about a company's earnings, assets and liabilities, its products or services, a particular stock, and the qualifications of its management
speculative investment
a high-risk investment that might earn a large profit in a short time
emergency fund
a savings account you can access quickly to pay for unexpected expenses or emergencies
financial planner
a specialist who is trained to offer specific financial help and advice
preferred stock
a type of stock that gives the owner the advantage of receiving cash dividends before common stockholders receive cash dividends
common stock
a unit of ownership of a company that entitles the owner, or stockholder, to voting privileges
mutual fund
an investment in which investors pool their money to buy stocks, bonds, and other securities selected by professional managers who work for an investment company
dividends
distributions of money, stock, or other property that a corporation pays to stockholders
tax-exempt income
income that is not taxed
tax-deferred income
income that is taxed at a later date
equity capital
money that a business gets from its owners in order to operate
capital gain
profit from the sale of assets such as stocks, bonds, or real estate
retained earnings
profits that a company reinvests investment
liquidity
the ability to buy or sell an investment quickly without substantially reducing its value
diversification
the process of spreading your assets among several different types of investments to reduce risk
capital loss
the sale of an investment for less than its purchase price
government bond
the written pledge of the government or a municipality, such as a city, to repay a specific sum of money with interest