Saving and Investing Vocabulary
Terms-College Prep
Asset - ANS - An item of financial value owned by an individual or corporation
which could be exchanged or sold for cash
\Bear Market - ANS - A prolonged period of falling stock prices, often measured
by a decline of 20 percent or more
\Beta - ANS - Measures volatility of a security or portfolio as compared to the
overall stock market. The lower the beta, the less volatile the stock. A beta of 1
means the price correlates with the market; less than 1 means less volatile;
greater than 1 means more volatile
\Bond - ANS - debt sold by a corporation or government entity for a certain term
which pays a specified rate of interest to the purchaser and returns the principal
investment at the end of the term, called maturity
\Broker - ANS - An agent acting on behalf of a buyer or seller to execute a trade at
the best available price. While the trading can be quite intense, it is orderly
because the participants adhere to exchange rules. The buyer, seller, and broker
may all be individuals, or one or more may be a business or other institution
\Bull Market - ANS - A prolonged period of rising stock prices
\Compound Interest - ANS - Interest calculated on the sum of what you put into an
account(principal) plus accrued interest
\Consumer Price Index(CPI) - ANS - A measure of the level of prices paid by the
average American consumer. Percentage changes in the CPI measure the rate of
inflation
\Diversification - ANS - A technique to minimize investment risk and maximize
return by putting assets in several categories of investments stocks, bonds,
cash, or economic sectors or in a mutual fund with a variety of investments in its
portfolio. The concept is illustrated by the saying, "don't pull your eggs in on
basket."
\Dividend - ANS - Periodic distribution of profits to stockholders
\Dow Jones Industrial Average (DOW) - ANS - The best known measure of stock
prices consisting of 30 large, well known companies in major sectors of the U.S
economy
\Hedge - ANS - A hedge is an investment that is made with the intention of
reducing the risk of adverse price movements in an asset. Normally, a hedge
consists of taking an offsetting or opposite position in a related security
Terms-College Prep
Asset - ANS - An item of financial value owned by an individual or corporation
which could be exchanged or sold for cash
\Bear Market - ANS - A prolonged period of falling stock prices, often measured
by a decline of 20 percent or more
\Beta - ANS - Measures volatility of a security or portfolio as compared to the
overall stock market. The lower the beta, the less volatile the stock. A beta of 1
means the price correlates with the market; less than 1 means less volatile;
greater than 1 means more volatile
\Bond - ANS - debt sold by a corporation or government entity for a certain term
which pays a specified rate of interest to the purchaser and returns the principal
investment at the end of the term, called maturity
\Broker - ANS - An agent acting on behalf of a buyer or seller to execute a trade at
the best available price. While the trading can be quite intense, it is orderly
because the participants adhere to exchange rules. The buyer, seller, and broker
may all be individuals, or one or more may be a business or other institution
\Bull Market - ANS - A prolonged period of rising stock prices
\Compound Interest - ANS - Interest calculated on the sum of what you put into an
account(principal) plus accrued interest
\Consumer Price Index(CPI) - ANS - A measure of the level of prices paid by the
average American consumer. Percentage changes in the CPI measure the rate of
inflation
\Diversification - ANS - A technique to minimize investment risk and maximize
return by putting assets in several categories of investments stocks, bonds,
cash, or economic sectors or in a mutual fund with a variety of investments in its
portfolio. The concept is illustrated by the saying, "don't pull your eggs in on
basket."
\Dividend - ANS - Periodic distribution of profits to stockholders
\Dow Jones Industrial Average (DOW) - ANS - The best known measure of stock
prices consisting of 30 large, well known companies in major sectors of the U.S
economy
\Hedge - ANS - A hedge is an investment that is made with the intention of
reducing the risk of adverse price movements in an asset. Normally, a hedge
consists of taking an offsetting or opposite position in a related security
