Ch. 11 Financial Markets Vocabulary Words

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401K

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A retirement savings plan sponsored by an employer, allowing employees to save and invest a portion of their paycheck before taxes are taken out.

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Bear market

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A market condition where prices are falling or are expected to fall, typically by 20% or more.

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Beneficiary

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A person or entity entitled to receive benefits or funds under a will, trust, insurance policy, etc.

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Bond

Back

A fixed-income instrument representing a loan made by an investor to a borrower, typically corporate or governmental.

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Bull market

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A market condition where prices are rising or are expected to rise, typically by 20% or more.

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Capital market

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A financial market in which long-term debt or equity-backed securities are bought and sold.

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Certificate of Deposit

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A savings certificate with a fixed maturity date and a specified fixed interest rate.

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Compensation

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Payment or benefits received for services or employment.

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Coupon rate

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The yield paid by a fixed-income security; a fixed percentage of the bond's face value.

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Credit Union

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A member-owned financial cooperative providing credit and other financial services to its members.