Business: Chapter 20

  1. Account Executive
    an individual, sometimes called a stockbroker or registered representative, who buys and sells securities for clients
  2. Asset Allocation
    the process of spreading your money among several different types of investments to lessen risk
  3. Blue-Chip Stock
    a safe investment that generally attracts conservative investors
  4. Buying Long
    buying stock with the expectation that it will increase in value and then can be sold at a profit
  5. Capital Gain
    the difference between a security’s purchase price and its selling price
  6. Discretionary Order
    an order to buy or sell a security that lets the broker decide when to execute the transaction and at what price
  7. Family of Funds
    a group of mutual funds managed by one investment company
  8. Financial Planner
    an individual who has had at least two years of training in investments, insurance, taxation, retirement planning, and estate planning and has passed a rigorous examination
  9. Full Disclosure
    requirement that investors should have access to all important facts about stocks, bonds, and other securities so that they can make informed decisions
  10. High-Risk Investment
    an investment made in the uncertain hope of earning a relatively large profit in a short time
  11. Insider Trading
    the practice of board members, corporate managers, and employees buying and selling a corporation’s stock
  12. Limit Order
    a request that a security be bought or sold at a price that is equal to or better than some specified price
  13. Liquidity
    the ease with which an investment can be converted into cash
  14. Margin Requirement
    the portion of the price of a stock that cannot be borrowed
  15. Market Order
    a request that a security be purchased or sold at the current market price
  16. Market Value
    the price of one share of a stock at a particular time
  17. Municipal Bond
    sometimes called a muni, a debt security issued by a state or local government
  18. Mutual Fund
    a company that pools the money of many investors—its shareholders—to invest in a variety of different securities
  19. Nasdaq
    computerized electronic exchange system through which most OTC securities are traded
  20. Net Asset Value (NAV)
    current market value of a mutual fund’s portfolio minus the mutual fund’s liabilities divided by the number of outstanding shares
  21. Over-the-Counter (OTC) Market
    a network of dealers who buy and sell the stocks of corporations that are not listed on a securities exchange
  22. Personal Budget
    a specific plan for spending your income
  23. Personal Investment
    the use of your personal funds to earn a financial return
  24. Primary Market
    a market in which an investor purchases financial securities (via an investment bank) directly from the issuer of those securities
  25. Prospectus
    a detailed, written description of a new security, the issuing corporation, and the corporation’s top management
  26. Rate of Return
    the total dollar amount of return you receive on an investment over a specific period of time divided by the amount invested
  27. Secondary Market
    a market for existing financial securities that are traded between investors
  28. Securities Exchange
    a marketplace where member brokers meet to buy and sell securities
  29. Security Average (or security index)
    an average of the current market prices of selected securities
  30. Selling Short
    the process of selling stock that an investor does not actually own but has borrowed from a brokerage firm and will repay at a later date
  31. Stock Dividend
    a dividend in the form of additional stock
  32. Stock Split
    the division of each outstanding share of a corporation’s stock into a greater number of shares
Card Set
Business: Chapter 20
Business: Chapter 20