Vocab Flashcards
Pension
A regular payment intended to provide income security to someone who has worked a certain number of years, reached a certain age, or suffered some kind of injury
Mutual fund
A company that sells stock in itself to individual investors and then invests the money it receives in stocks and bonds issued by other corporations.
401k plan
A tax-differed investment and savings plan that acts as a personal pension fund for employees.
Current yield
The annual interest divided by the purchase price
Tax-exempt
The federal government does not tax the interest paid to investors.
Individual retirement account
Long term tax sheltered time deposits that an employee can set up as a part of a retirement plan
Capital market
A market where money is loaned for more than one year
Roth IRA
An IRA whose contributions are made after taxes so that no taxes are taken out at maturity
Money market
A market where money is loaned for periods of less than one year
Stockbroker
A person who buys or sells equities for clients
Portfolio diversification
the practice of holding a large number of different stocks so that increases in some can offset unexpected declines in others-is a popular strategy
Bull market
A strong market with the prices moving up for several months or years in a row
Bear market
A “mean” market, with the prices of equities moving sharply down for several months or years in a row
Put option
The right to sell a share of stock at a specified price in the future
Call option
The right to buy a share of stock at a specified price sometime in the future
