Term
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Definition
| principle that invested money grown, over time, by earning interest or some other form of return |
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Term
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Definition
| compounding of interest over time - with each additional time period, interest returns accumulate |
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Definition
| portion of ownership of a corporation |
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Term
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Definition
| most basic form of ownership, including voting rights on major issues, in a company |
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Term
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Definition
| current price of a share of stock in the stock market |
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Term
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Definition
| value of a common stock expressed as the firm's owners' equity divided by the number of common shares |
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Definition
| payment to shareholders, on a per-share basis, out of the company's earnings |
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Term
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Definition
| company that pools cash investments from individuals and organizations to purchase a portfolio of stocks, bonds, and other securities |
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Term
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Definition
| registration statement filed with the SEC, containing information for prospective investors about a security to be offered and the issuing company |
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Term
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Definition
| illegal practice of using special knowledge about a firm for profit or gain |
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Term
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Definition
| bundle of stocks or bonds that are in an index that tracks the overall movement of a market but, unlike a mutual fund, can be traded like a stock |
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Term
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Definition
| stocks, bonds, and mutual funds representing secured, or assed-based, claims by investors against issues |
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Term
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Definition
| markets in which stocks and bonds are sold |
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Term
| Primary Securities Market |
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Definition
| market in which new stocks and bonds are bought and sold by firms and governments |
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Term
| Securities and Exchange Commission (SEC) |
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Definition
| government agency that regulates US securities markets |
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Term
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Definition
| financial institution that specialized in issuing and reselling new securities |
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Term
| Secondary Securities Market |
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Definition
| market in which existing (not new) stocks and bonds are sold to the public |
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Term
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Definition
| an organization of individuals to provide an institutional auction setting in which stocks can be bought and sold |
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Term
| National Association of Securities Dealers Automated Quotation (NASDAQ) System |
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Definition
| world's oldest electronic stock market consisting of dealers who buy and sell securities over a network of electronic communications |
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Term
| Electronic Communication Network (ECN) |
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Definition
| electronic trading system that brings buyers and sellers together outside traditional stock exchanges |
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Term
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Definition
| individual or organization that receives and executed buy and sell orders on behalf of outside customers in return for commissions |
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Term
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Definition
| procedure that holds investors' shares in a book-entry form, rather than issuing a physical paper certificate of ownership |
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Term
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Definition
| statistical indicator designed to measure the performance of a large group of stocks or track the price changes of a stock market |
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Term
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Definition
| period of rising stock prices, lasting 12 months or longer, featuring investor confidence for future gains and motivation to buy |
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Term
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Definition
| period of falling stock prices marked by negative investor sentiments with motivation to sell ahead of anticipated losses |
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Term
| Dow Jones Industrial Average (DJIA) |
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Definition
| oldest and most widely cited market index based on the prices of 30 blue-chip, large-cap industrial firms on the NYSE |
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Term
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Definition
| market index of US equities based on the performance of 500 large-cap stocks representing various sectors of the overall equities market |
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Term
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Definition
| market index that includes all NASDAW-listed companies, both domestic and foreign, with a high proportion of technology companies and small-cap stocks |
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Term
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Definition
| specialty index that uses 2000 stocks to measure the performance of the smallest US companies |
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Term
| Risk-Return (Risk-Reward) Relationship |
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Definition
| principle that safer investments tend to offer lower returns whereas riskier investments tend to offer higher returns (rewards) |
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Term
| Current/Interest Dividend Yield |
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Definition
| yearly dollar amount of income divided by the investment's current market value, expressed as a percentage |
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Term
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Definition
| increase in the dollar value of an investment at two points in time (the amount by which the price of a security increases) |
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Term
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Definition
| profit realized from the increased value of an investment |
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Term
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Definition
| purchase of several different kinds of investments rather than just one |
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Term
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Definition
| relative amount of funds invested in (or allocated to) each of several investment alternatives |
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Term
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Definition
| combined holdings of all the financial investments of any company or individual |
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Term
| Secured Loan (Asset-Backed Loan) |
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Definition
| loan to finance an asset, backed by the borrower pledging the asset as collateral to the lender |
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Term
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Definition
| asset pledged for the fulfillment of repaying a loan |
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Term
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Definition
| amount of money that is loaned and must be repaid |
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Term
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Definition
| fee paid to a lender for the use of borrowed funds; like a rental fee |
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Term
| Annual Percentage Rate (APR) |
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Definition
| one-year rate that is charged for borrowing, expressed as a percentage of the borrowed principal |
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Term
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Definition
| loan for which collateral is not required |
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Term
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Definition
| outside investors who provide new capital for firms in return for a share of equity ownership |
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Term
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Definition
| private funds from wealthy individuals seeking investment opportunities in new growth companies |
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Term
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Definition
| formal pledge obligating the issuer (the company) to pay interest periodically and repay the principal at maturity |
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Term
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Definition
| legal document containing complete details of a bond issue |
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Term
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Definition
| future date when repayment of a bond is due from the bond issuer (borrower) |
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Term
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Definition
| amount of money that the bond buyer (lender) lent the issuer and that the lender will receive upon repayment |
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Term
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Definition
| failure of a borrower to make payment when due to a lender |
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Term
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Definition
| request for court enforcement of a bond's terms of payment |
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Term
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Definition
| court-granted permission for a company to not pay some or all debts |
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Term
| Mortgage-Backed Security (MBS) |
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Definition
| mortgages pooled together to form a debt obligation - a bond - that entitles the holder (investor) to cash that flows in from the bundled mortgages |
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Term
| Initial Public Offering (IPO) |
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Definition
| first sale of a company's stock to the general public |
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Term
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Definition
| investor conducting a type of hostile corporate takeover against the wishes of the company |
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Term
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Definition
| stock dividend paid in additional shares to shareholders, thus increasing the number of outstanding shares |
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Term
| Market Capitalization (Market Cap) |
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Definition
| total dollar value of all the company's outstanding shares |
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Term
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Definition
| longterm borrowing from sources outside a company |
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Term
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Definition
| using the owners' funds from inside the company as the source for long-term funding |
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