Key Financial Terms Practice

The group of assets such as stocks, bonds, and mutual funds that are held by an investor.

• Stock

• Portfolio

• Risk

• Diversification

A share of ownership in a business. A share of a company's profit (or loss) belongs to each owner.

• Stock

• Capital

• Dividend

• Market Capitalization

The likelihood of losing money. Higher means a greater opportunity for high return and higher potential for loss.

• Mutual Fund

• Beta

• Risk

• Diversification

A company owned by investors who pool their savings to invest in a variety of stocks or bonds managed by a professional.

• Mutual Fund

• Individual Stock

• Risk

• Large Cap

A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize risk by combining different investments whose prices are not likely to move in step with one another.

• Diversification

• Risk

• Mutual Fund

• Mid Cap

A cash payment from profits announced by a company's board of director's and distributed among shareholders.

• Dividend

• Shares

• Small CAP

• Yield

An electronic exchange where stocks are traded through an automated network of computers instead of a trading floor. It stands for the National Association of Securities Dealers Automated System and is the largest electronic stock market in the US and second largest in the world. This index measures the change in more than 3,000 stocks.

• S&P 500

• NASDAQ

• Dow Jones Industrial Average

• Stock

The oldest and largest stock exchange in the United States. This exchange is located on Wall Street in New York City and is the largest equities-based exchange in the world based on the total market capitalization of its listed securities.

• DOW Jones

• S&P 500

• New York Stock Exchange (NYSE)

• Stocks

A company with publicly traded shares that anyone can buy in the stock market.

• Private Company

• S&P 500

• Public company

• Dow Jones

A company that does not sell shares to the public. You can't buy shares of this company in the stock market.

• Private company

• Public company

• Dividend

• Yield