Investment and Stock Market Basics

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Stock

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A share of ownership in a company. When you buy a stock, you own a small part of that company.

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Share

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A single unit of stock. Buying multiple shares means purchasing multiple units of ownership in a company.

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Investment

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Money put into something (like stocks) with the expectation that it will increase in value.

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Profit

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The money gained from an investment. In stocks, profit is the difference between the selling price and the purchase price.

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Percentage Return

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A way to express profit as a percentage of the initial investment. Helps compare the performance of different investments.

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Break-Even Price

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The price at which an investment’s gains equal its losses, resulting in zero profit or loss.

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Short Selling

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A strategy where an investor borrows shares to sell them at the current price, hoping the price will drop so they can buy back at a lower price and make a profit.

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Buyback Price

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In short selling, the price at which an investor repurchases shares they initially sold.

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Bond

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A loan an investor gives to a corporation or government. The bond issuer agrees to pay back the loan with interest by a certain date.

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Issuer

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The organization or government that issues a bond and receives the loan amount from investors.