Vocabulary: Investing

A measurement of the likelihood that a bondholder will be paid back.

• Bond Rating

• Compound Interest

• Capital Gain

• Municipal Bond

An individual retirement account that allows a person to set aside after-tax income up to a specified amount each year.

• Traditional IRA

• Roth IRA

• Mutual Fund

• Pension

An application that allows users to regularly save small sums of money.

• Asset Allocation

• Micro-Investing Platform

• Stock Exchange

• Investing

The rate at which the price of goods increases and consumer purchasing power decreases over time

• Diversification

• Inflation

• Investing

• Compound Interest

The annual interest payment on a bond, usually expressed as a percentage of its face value

• Dividend

• Bond

• Pension

• Coupon

Market value of a company's outstanding shares calculated by multiplying the current share price by number of shares outstanding

• Market Capitalization

• Insider Trading

• Inflation

• Portfolio

Degree of uncertainty on how likely the investor is to make money on an investment

• Inflation

• Stock

• Dividend

• Risk

A low-fee portfolio of stocks chosen to track or mimic a stock market index, thereby removing the human element of investing because no one is choosing the individual stocks

• Municipal Bond

• Index Fund

• Mutual Fund

• Bond

A share of the value of a company, which can be bought, sold, or traded as an investment and which gives the investor small partial ownership of the company

• Dividend

• Stock

• Bond

• Mutual Fund

A security in which the investor loans money to a company or government, which then pays regular interest to the bondholder and returns the principal on the bond's maturity date is called:

• Bond

• Mutual Fund

• Stock

• Dividend