University:
Texas A&M University
Course:
ECON 202 | Principles of Economics
Academic year:

2024
Views:

278

Pages:

2
Author:

Tyshawn Shaffer

Name _____________________________________________ Date _____________________ Class _________________ Vocabulary Activity for: “Investing 101” KEY Use the words in the box below to fill in the correct term with the matching definition Ask price, Bid price, Bond Ratings, Bonds, Common Stock, Compound Interest, Diversification, Dividend, Exchanges, Investing, Mutual Funds, Pension Programs, Pooled Funds, Portfolio, Preferred Stock, Primary Market, Principal, Risk Averse, Risk Tolerance, Secondary Market, Social Security, Stock Market, Stocks, Systematic Risk, Unsystematic Risk, Volatile 1. Compound Interest - interest calculated on the initial principal and also on the accumulated interest of previous periods 2. Volatile – refers to something whose value fluctuates frequently 3. Principal – initial sum of money 4. Systematic Risk - risk inherent to an entire market that is unpredictable and impossible to avoid 5. Common Stock – represents ownership in a company and claim on profit, with one vote per share 6. Primary Market – where securities are created and stocks are initially issued through IPO 7. Dividend – a sum of money paid regularly by a company to its shareholders out of its profits 8. Diversification - a risk management tool that mixes a large amount of different investment mediums within a portfolio 9. Risk Tolerance – a measure of how much risk you can handle as an investor 10. Social Security – government program that is paid for by an income tax that will be given to retirees and those who are disabled 11. Bond Ratings - a grade given to a particular bond that indicates its credit quality 12. Stocks – a general term used to describe the ownership certificates of any company 13. Mutual Funds – an investment vehicle that consists of a pool of funds contributed by many investors in order to invest in stocks, bonds, and other assets 14. Investing – the act of committing money or capital to an endeavor with the expectation of obtaining an additional income or profit 15. Portfolio – a conglomerate of different financial assets that helps balance risk and return according to the investor’s risk tolerance 16. Unsystematic Risk –company- or industry-specific risk that is inherent in all investments and can be reduced through diversification 17. Risk Averse – refers to an investor who, when faced with two investments with a similar expected return, will prefer the one with the lower risk 18. Bid price – price quoted for those who want to buy 19. Pension Programs - type of retirement plan where an employer puts money into a pool of funds that is invested on the employee’s behalf 20. Exchanges – can be physical or virtual; facilitates trading of securities between buyers and sellers 21. Preferred Stock – a type of stock that is usually guaranteed a fixed dividend 22. Pooled Funds – investment from many individuals that are aggregated specifically to be invested 23. Stock Market – facilitates the exchange of securities between buyers and sellers 24. Bonds - an interest-bearing security that obligates the issuer to pay the bondholder a specified sum of money, usually at specific intervals (known as a coupon), and to repay the principal amount of the loan at maturity 25. Ask price – price quoted for those who want to sell 26. Secondary Market – where previously-issued stocks are traded

Investing Vocabulary Worksheet

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