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Investing Vocabulary

Total questions: 7

Worksheet time: 11mins

Name
Class
Date
1.

Match the following

a)

An employer contribution made to their employees' 401(k) plan based on individual employee's contributions

1.

401(K) Match

b)

Dividing an investment portfolio among different asset categories, such as stocks, bonds, and cash

2.

Asset Allocation

c)

A group of financial instruments which have similar financial characteristics and behave similarly in the marketplace (like stocks, bonds, and cash)

3.

Asset Class

d)

A market in which prices are falling, encouraging selling.

4.

Bear Market

e)

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

5.

Bond

2.

Match the following

a)
A measurement of the likelihood that a bondholder will be paid back
1.
Bond Rating
b)
The annual income from an investment, usually expressed as a percentage
2.
Yield
c)
The date on which a bond matures and the issuer must pay back the bondholder
3.
Maturity Date
d)
A type of investment that represents ownership in a company
4.
Stock
e)
The total value of a company's outstanding shares of stock
5.
Market Capitalization
3.

Match the following

a)

A market in which there is increased stock trading and rising stock prices

1.

Bull Market

b)

Profit from the sale of an asset, such as a stock or a bond, calculated by subtracting the price you initially paid from the price you then sold it for

2.

Capital Gain

c)

Reinvesting earned interest back into the principal to allow money to grow exponentially over time

3.

Compound Interest

d)

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

4.

Coupon

e)

The practice of investing in a large variety of stocks, bonds, and/or funds as a way to as a way to reduce your overall risk

5.

Diversification

4.

Match the following

a)

Money from the profits of a company that is paid out to its shareholders, typically on a quarterly basis

1.

Dividend

b)

A collection of stocks and/or bonds that are traded on securities exchanges. Unlike mutual funds, they can be traded throughout the day like an individual stock.

2.

Exchange-Traded Fund (ETF)

c)


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

3.

Index Fund

d)

An investing tool for individuals to earmark funds specifically for their retirement

4.

Individual Retirement Account (IRA)

e)

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

5.

Inflation

5.

Match the following

a)

The process of setting money aside to increase wealth over time for long-term financial goals such as retirement

1.

Investing

b)

The illegal act of trading a company's stock using information that is not available to the public

2.

Insider Trading

c)

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

3.

Market Capitalization

d)

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

4.

Micro-Investing Platform

e)

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

5.

Municipal Bond

6.

Match the following

a)

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

1.

Stock

b)

A federal program that provides monthly benefits to millions of Americans, including retirees, military families, surviving families of deceased workers, and disabled individuals

2.

Social Security

c)

An index of 500 large cap companies chosen based on their size, industry, and other factors, used to represent the entire market

3.

S&P 500

d)

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

4.

NYSE

e)

The second largest stock exchange in the world behind the NYSE

5.

Nasdaq

7.

Match the following

a)

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

1.

Mutal Fund

b)

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

2.

Roth IRA

c)

A bond, generally considered to be a risk-free investment, issued by the U.S. Treasury with a maturity of more than 10 years

3.

Treasury Bond

d)

A retirement savings plan, sponsored through your employer who will often match your contributions, that allows an individual to save for retirement and have the savings grow while deferring taxes until funds are withdrawn

4.

Traditional 401(k) Plan

e)

A type of investment fund that rebalances its asset mix over time based on a projected retirement year

5.

Target Date Fund (TDF)