Financial Terms and Definitions - 25 Terms

An asset or item that is acquired with the goal of making a profit is called a/an:

• investment

• liability

• expense

• revenue

The market value of a company's outstanding shares is calculated by multiplying the current share price by the number of shares outstanding. What is this value called?

• Market Capitalization

• Net Worth

• Book Value

• Revenue

An application that allows users to regularly save small sums of money is called a:

• Budget Tracker

• Savings App

• Expense Manager

• Investment Platform

A bond, often having tax advantages for individual investors, issued by a state or local government which typically uses the loan to pay for public works to benefit its citizens is called a:

• Corporate bond

• Municipal bond

• Treasury bond

• Savings bond

A collection of stocks and/or bonds combined into one fund which will be traded as a unit, typically chosen and actively managed by an 'expert' in exchange for a fee from each investor is called:

• Mutual Fund

• Stock Portfolio

• Bond Index

• Exchange-Traded Fund

The second largest stock exchange in the world behind the NYSE is:

• NASDAQ

• London Stock Exchange

• Shanghai Stock Exchange

• Tokyo Stock Exchange

The world's largest stock exchange, physically located in New York City, is:

• NASDAQ

• New York Stock Exchange

• London Stock Exchange

• Tokyo Stock Exchange

The rate of return that does not account for inflation or taxes is called:

• Nominal rate of return

• Real rate of return

• Effective rate of return

• After-tax rate of return

What is a long-term strategy for building wealth by buying investments - typically index funds - and holding them for many years to minimize trading and costs?

• Day trading

• Swing trading

• Buy and hold investing

• Short selling

A retirement account, offered in some job sectors or companies, that an employer maintains to give an employee a fixed payout at retirement is called a:

• 401(k) plan

• Pension plan

• Roth IRA

• Savings account