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A B C D E F G H I J L M N O P R S T U V Y Z 
A Alternative
One of two or more choices or courses of action in a given situation.
View LEI Lesson(s) that address this term » American Stock Exchange (AMEX)
A stock exchange in New York City; provides facilities for trading securities of national interest; often trades in securities of younger
and smaller firms. Asset
Something of monetary value owned by an individual or an organization. top ^
B Bankruptcy
The financial status of a firm or an individual legally judged to have debts that exceed assets and thus unable to pay its bills. Formal bankruptcy may result in reorganization of the firm or it may require liquidation and distribution of proceeds to creditors. Stock transaction tables indicate that a company is in bankruptcy proceedings by appending a vi or q immediately before the name of the stock. Bear/bear market
A bear is an investor who believes that a security’s price or security prices in general will go down. A bear market is an extended period of price decline for a security or the securities market in general.(Compare Bull/bull market.) Benefit
Monetary or non-monetary gain. (See also Cost, Cost/benefit analysis.)
View LEI Lesson(s) that address this term » Blue Chip Stocks
A high-quality, low-risk stock. Usually refers to stock in nationally known companies that have been profitable for a long time. Bond
A certificate of indebtedness issued by a governmental unit or a corporation, promising to repay borrowed money to the lender at a fixed rate of interest and at a specified time.
View LEI Lesson(s) that address this term » Bond fund
An investment company that invests in longterm debt securities; may specialize in certain bond categories, such as corporate or municipal. Bond rating
The grading of a bond by reference to the bond issuer’s ability to make interest and principal payments as specified in the terms of the bond. The three major rating services — Fitch, Moody’s and Standard & Poor’s — use AAA as their highest rating and grade down through Bs and Cs.
View LEI Lesson(s) that address this term » Broker
A professional trader who buys or sells stocks for individuals and institutional customers. (See also Dealer, Discount broker and Full-service broker.)
View LEI Lesson(s) that address this term » Bull/bull market
A bull is an investor or analyst who believes that the price of a security or security prices in general will rise. A bull market is an extended period of rising prices for a security or the securities market in general. (Compare Bear/bear market.) Business Cycles
Ups and downs in economic activity over time, often described in terms of expansion, peak, contraction and trough. (See also Expansion, Peak, Contraction, Trough.) Buying on margin
Buying securities by paying only a percentage (a margin) of the purchase price and borrowing the remainder. The loan is usually arranged by the investor’s broker. (See also Margin requirement.) top ^
C Capital Gain
A profit realized from the sale of property, stocks or other investments. Capital goods
Goods that people use in their work to make other goods. Buildings, tools, machines and other equipment are capital goods. Capitalization
A measure of the value of a corporation. It is calculated by multiplying the number of the company’s outstanding shares by the stock price. Corporations are often referred to by their level of capitalization such as large cap, medium cap or small cap. Certificate of Deposit (CD)
A receipt issued by a bank to a person depositing money in an account (a CD account) for a specified period of time — often six months, one year or two years. CD accounts pay interest at specified, fixed rates; banks ordinarily impose penalties for early withdrawals from CD accounts. Choice
A decision made or a course of action taken when faced with two or more alternatives. (See also Scarcity.)
View LEI Lesson(s) that address this term » Circuit breaker
The automatic response (usually a halt or slowdown) in activity at a securities exchange in response to certain occurrences in trading. Designed to reduce market volatility, circuit breakers were instituted
following sharp market downturns in October 1987 and October 1989. Closing price
The price of a stock reported at the end (close) of a trading day.
View LEI Lesson(s) that address this term » Command Economy
An economy in which government makes most of the decisions about what goods and services will be produced, how they will be produced and how they will be distributed. (Compare Market economy.) Commission
A percentage of a stock trade (a buy or sell) paid by a customer to a broker. Common stock
An ownership share or shares of ownership in a corporation. A common stock offers no guarantee that it will hold its value or pay dividends. (Compare Preferred stock.) Competition
The effort of two or more individuals or organizations to get the business of others by offering the best deal. Consumers compete with other consumers for goods and services. Producers compete with other producers for sales to consumers. Compound Interest
Interest paid on the principal (see Principal) and on interest earned previously. (Compare Simple interest.) Compound interest
Interest paid on the principal (see Principal) and on interest earned previously. (Compare Simple interest.)
View LEI Lesson(s) that address this term » Corporate bond
A bond issued by a corporation. (See also Bond, Municipal bond, U.S. savings bond.) Corporation
A company authorized to act as a single entity (legally, as a person), having rights, privileges and responsibilities distinct from those of the individuals within the entity. A corporation has four major characteristics: limited liability, easy transfer of ownership through the sale of stock, continuity of existence and centralized management. Most large firms today are organized as corporations. (Compare Partnership, Sole proprietorship.)
View LEI Lesson(s) that address this term » Cost
An amount that must be paid to obtain something. (See also Opportunity cost.)
View LEI Lesson(s) that address this term » Cost/Benefit Analysis
A process of examining the advantages (benefits) and disadvantages (costs) of each alternative in arriving at a decision. Coupon
The annual interest paid on a bond, usually stated in terms of the rate paid on a bond’s face value. For example, a nine percent coupon, $1,000 bond would pay its owner $90 in interest annually up to maturity. (See also Coupon bond, Coupon rate of return.)
View LEI Lesson(s) that address this term » Coupon bond
A bond that pays interest at regular intervals with a final payment that includes the original principal when the bond matures. (See also Zero-coupon bond.)
View LEI Lesson(s) that address this term » Coupon rate of return
See Coupon. Credit
The ability of a customer to obtain goods or services before payment, based on an agreement to pay later.
View LEI Lesson(s) that address this term » Credit Card
A small, specially coded plastic card issued by a bank or other organization, authorizing the cardholder to purchase goods or services on credit. Credit rating
An evaluation of a borrower’s ability to meet financial obligations. (See also Bond rating.) Currency markets
Foreign exchange markets in which the currency of one nation (such as the United States) can be used to purchase the currency of another nation (such as Mexico). (See also Exchange rate.)
View LEI Lesson(s) that address this term » top ^
D Dealer
Someone who buys and sells stocks from his or her own accounts or the accounts of the firm he or she represents. Some dealers also act as brokers. (See also Broker.) Debt
Money owed to somebody else — as in I’m $900 in debt. Also the state or condition of owing money — as in Jones is always in debt.
View LEI Lesson(s) that address this term » Debt financing
Obtaining funds by issuing bonds.(Compare Equity financing.)
View LEI Lesson(s) that address this term » Demand
Demand: The quantity of a good or service that customers are willing and able to buy at all possible prices during a period of time.
View LEI Lesson(s) that address this term » Depression
A severe, prolonged contraction in economic activity. The most famous example is the Great Depression of the 1930s. (See also Great Depression, Recession.) Discount broker
An individual or firm that discounts commissions for individuals to trade securities. Discount brokers typically offer limited advice to investors. (See also Full-service broker.) Disposable Income
The money a person has left to spend or save after taxes and other required deductions have been taken out of his or her gross pay. Diversification
Spreading investment funds out over various investment options (stocks, bonds, mutual funds and money market accounts, for example) in an effort to reduce risk.
View LEI Lesson(s) that address this term » Dividend
A share of a company’s net profits paid to stockholders.
View LEI Lesson(s) that address this term » Dividend reinvestment plan (DRIP)
A plan that allows stockholders to automatically reinvest dividends in additional shares of the company’s stock.
View LEI Lesson(s) that address this term » Dow Jones Industrial Average (DJIA)
One of the oldest and most widely quoted measures of stock market performance; also called the Dow. The average is calculated by reference to the share prices of 30 large, seasoned industrial firms. top ^
E Economic forecasting
Predicting what will happen to the economy in the future, often by reference to leading economic indicators. Forecasts may focus on GDP, prices, interest rates, employment and other variables. (See also Leading economic indicators.)
View LEI Lesson(s) that address this term » Economic investing
Purchasing capital goods — computers, delivery trucks or office buildings, for example — to be used in producing goods and services in the future. Equilibrium Price
A price at which the quantity demanded by buyers equals the quantity supplied by sellers; also called the market-clearing price. Equities
Stocks, both common and preferred — as in I prefer to invest in equities rather than bonds. Equity financing
Obtaining funds by issuing stock. (Compare Debt financing.)
View LEI Lesson(s) that address this term » Exchange Rate
The price of one nation’s currency in terms of another nation’s currency. Expansion
A time of growth in the business cycle, marked by increases in GDP, income, employment, investment and consumption. (See also Business cycle.)
View LEI Lesson(s) that address this term » top ^
F Face value
For a bond, the dollar amount on which interest is calculated and the amount paid to the bondholder at maturity.
View LEI Lesson(s) that address this term » Federal Deposit Insurance Corporation (FDIC)
The federal agency that insures deposits at commercial banks, savings banks and savings associations in the United States. Federal funds rate
The interest rate banks pay when they borrow federal funds from other banks. Federal Reserve
The central bank of the United States. Also called the Fed. Its main function is controlling the money supply through monetary policy. (See also Monetary policy.)
View LEI Lesson(s) that address this term » Finance Charge
The cost of credit, including interest and transaction fees. Financial institutions
Banks, credit unions, pension funds, insurance companies, mutual fund companies and other organizations that act as intermediaries, enabling savers and borrowers to engage in transactions.
View LEI Lesson(s) that address this term » Financial markets
Markets for the exchange of financial capital and credit. Most often, these are markets in which investors buy and sell stocks and bonds.
View LEI Lesson(s) that address this term » Full-service broker
An individual or firm that provides a wide range of services to investors, including research and advice. (Compare Discount broker.) top ^
G Goal
Something a person or organization plans to achieve in the future; an aim or desired result. Financial planners often classify goals according to the time it would take individuals to save the money needed to attain them: Short-term goals: Goals that might be attained within two months. Medium-term goals: Goals that might be attained in
two months to one year. Long-term goals: Goals that require three years or more to attain.
View LEI Lesson(s) that address this term » Great Depression
A time of deep, prolonged recession in the United States (and elsewhere) during the 1930s. Output fell drastically; unemployment soared; banks failed; and many individuals experienced deprivation and hardship. (See also Depression, Recession.) Gross Domestic Product (GDP)
The market value of all goods and services produced in a nation in a calendar year. (Compare Gross domestic product, real.) Growth Fund
An investment company whose major objective is long-term capital growth. (Compare Income fund.) Growth stock
The stock of a firm that is expected to have above-average increases in revenues and earnings. Growth stocks often sell at high price-earnings ratios and are subject to wide swings in price. (Compare Income stock.) top ^
H Human Capital
Intangible assets possessed by individuals,including knowledge, talent, skills, health and values. top ^
I Incentive
A factor that encourages people to do something. Often a monetary reward or the prospect of obtaining one — as in Tax provisions in the new forest-management program give landowners an incentive to take good care of the trees on their property.
View LEI Lesson(s) that address this term » Income
Money received for work performed or from investments; may include salaries, wages, dividends, bonuses, interest, etc.
View LEI Lesson(s) that address this term » Income fund
An investment company that concentrates on bonds, preferred stocks and common stocks that pay dividends, thus seeking to maximize current income (rather than growth) for its owners. (Compare Growth fund.) Income stock
A stock that pays dividends regularly. Associated with firms that have stable earnings and operate in a mature industry. (Compare Growth stock.) Index Fund
A mutual fund that keeps a portfolio of securities designed to match the performance of the market as a whole. The market is represented by a market index such as the S&P 500. Inflation
A general increase in the price level of goods and services. Initial Public Offering (IPO)
A company’s first sale of stock to the public. Insider trading
The illegal buying or selling of securities on the basis of information not available to the general public. Institutional Investor
A financial intermediary (a mutual fund or a pension fund, for example) that invests in the securities markets for clients. Interest
Money paid by borrowers, at a particular rate (see Interest rate), for their use of the money they have borrowed. Also, money paid by financial institutions to depositors.
View LEI Lesson(s) that address this term » Interest Rate
The price borrowers pay for using someone else’s money; expressed as a percentage of the amount borrowed. Also, money paid by financial institutions to depositors. Investing
A decision to forgo benefits today in an effort to increase future wealth or satisfaction over time. Investing is most often associated with purchasing stocks, bonds, mutual funds, real estate and other financial instruments or ventures. (See also Investment, economic;
Investment, financial; Investment, personal.)
View LEI Lesson(s) that address this term » Investment bank
An institution that participates in the primary markets for the sale of newly issued stocks and corporate and government bonds.
View LEI Lesson(s) that address this term » Investment, economic
The purchase of capital goods such as machinery, technology and buildings used to increase the production of consumer goods and services in the future. Economic investment entails forgoing current benefits in anticipation of increasing the standard of living in the future. (See also Investing.) Investment, financial
A decision to forego benefits today in an effort to increase future wealth or satisfaction over time. (See also Investing.) Investment, personal
A decision by individuals to forgo benefits today in an effort to increase future wealth or satisfaction over time. This means setting aside income and using it for investing and other actions (saving, for
example). (See also Investing.) top ^
J Junk bond
A high-risk, high-yield bond, unrated or rated lower than BBB. top ^
L Law of Demand
An economic principle stating that consumers will purchase less of a good or service at higher prices and more at lower prices. Law of Supply
An economic principle stating that producers will provide more of a good or service at higher prices and less at lower prices. Leading Economic Indicators
Measures of economic performance that tend to move ahead of GDP, thus indicating how the economy will perform in the months ahead. Examples include stock prices, the money supply and new business start-ups. (See also Economic forecasting.) Limit order
An investor’s order to a broker, instructing him or her to execute a transaction (to buy or sell a security) only at a specified price (the limit) or better. Limited liability
The liability of a firm’s owners (in the case of a lawsuit, for example) for no more money than they have invested in the business. Thus, a stockholder can lose no more than he or she has paid for shares of ownership regardless of the firm’s financial obligations.
Limited liability is one of the major advantages of organizing a company as a corporation. (See also Corporation.)
View LEI Lesson(s) that address this term » Liquidity
The ease with which an asset can be converted to cash. For example: money held in a checking account is a liquid asset; real estate is far less liquid
View LEI Lesson(s) that address this term » Load
A sales charge investors must pay to acquire certain assets — shares in many mutual funds, for example. Also called front-end load or sales load. (See also Load fund.)
View LEI Lesson(s) that address this term » Load fund
A mutual fund with shares sold at a price that includes a sales charge, or load — typically four to nine percent of the net amount invested. (See also Load.) top ^
M Margin requirement
The minimum portion of a new security purchase price that an investor must pay in cash. Margin requirements are determined by the Federal Reserve Board. (See also Buying on margin.) Market
A place, institution or technological arrangement by means of which goods and services are bought and sold.
View LEI Lesson(s) that address this term » Market Economy
An economy that relies on a system of interdependent market prices to allocate goods, services and productive resources and to coordinate the diverse plans of consumers and producers, all of them acting according their self-interest. (Compare Command economy.) Market order
An investor’s order to a broker for immediate execution of a trade at the best price available when the order reaches the marketplace. (Compare Limit order.) Maturity
The date on which payment of a financial obligation is due. For a bond, the maturity date is the date on which the bond issuer must pay the face value of the bond to the bond holder.
View LEI Lesson(s) that address this term » Monetary Policy
Changes in the supply of money and the availability of credit, initiated by a nation’s central bank (in the United States, by the Fed) to promote price stability, full employment and economic growth. (See also Federal Reserve.) Money market fund
A mutual fund company that sells shares of ownership and uses the proceeds to purchase short-term, high-quality securities such as Treasury bills and negotiable certificates of deposit. Income earned by
shareholders is received in the form of additional shares of stock in the fund. (See also Mutual fund.) Municipal bond
A bond issued by a city, county, state or other political entity. Interest paid on most municipal bonds is exempt from federal income taxes and often from state and local taxes as well. (Compare Bond, Corporate bond, U.S. savings bond.) Mutual Fund
A pool of money used by an a company to buy various assets — including stocks, bonds or money market instruments — on behalf of its shareholders. Mutual fund investments provide investors with diversification and professional management. top ^
N NASDAQ
An electronic marketplace enabling buyers and sellers to get together via computer and hundreds of thousands of miles of high-speed data lines to trade stocks. Net asset value per share (NAV)
Net asset value per share (NAV): A valuation of an investment company’s shares, calculated by subtracting any liabilities from the market value of the firm’s assets and dividing the difference by the number of shares outstanding. In general, NAV is the price an investor would
receive when selling shares back to a fund. New York Stock Exchange (NYSE)
The oldest stock exchange in the United States, founded in 1792. No-load fund
An investment company in which shares are sold directly to customers at net asset value, without a sales charge. (See also Load and compare Load fund.) top ^
O Odd lot
A trading unit of fewer than 100 shares of stock. To buy one share or seven shares, for example, is to buy an odd lot. (Compare Round lot.) Open Market Operations
The buying and selling of government bonds by the Federal Reserve to control bank reserves and the money supply; an important monetary policy tool. (See also Monetary policy.) Opportunity Cost
The next-best alternative (or the value of that alternative) that a person gives up in making a choice. Over-the-counter market (OTC)
A widespread aggregation of dealers who make markets in many different securities, trading through telephone or computer negotiations between buyers and sellers. Virtually all government and municipal bonds and most corporate bonds are traded in the OTC market. Over-the-counter stock
A stock not listed on an exchange and traded only in the OTC market. top ^
P Partnership
A business owned by two or more people who share the firm’s profits and losses. (Compare Corporation, Sole proprietorship.)
View LEI Lesson(s) that address this term » Paying yourself first
A principle of personal financial management that emphasizes making saving a priority over spending. Individuals “pay themselves first” when they save or invest some money from every paycheck before they buy consumer goods. Peak
A high point in the expansion phase of the business cycle, and also a turning point. After the peak, the economy begins to contract. (See also Business cycle.)
View LEI Lesson(s) that address this term » Portfolio
A collection of savings and investments held by an individual or an institution. The more diversified the portfolio, the more likely it is that the investor will earn the same return as the market. (See also Diversification.) Preferred stock
An ownership share with a guaranteed dividend that is paid before any dividends are paid on common stock. (Compare Common stock.) Price
Regarding securities, the dollar amount at which a security trades.
View LEI Lesson(s) that address this term » Price earnings (P/E) ratio
The current price of a stock divided by the current (or sometimes the projected) earnings per share of the issuing firm. A high P/E ratio
generally indicates that investors expect the firm’s earnings to grow. Primary Market
The market in which new securities are sold. (Compare Secondary market.) Principal
An original amount of money invested or lent.
View LEI Lesson(s) that address this term » Productive Resources
Natural resources, human resources, capital resources and entrepreneurship used to make goods and services. Prospectus
A document related to a new securities offering, intended to provide investors with information that will help them decide whether to buy the security. The prospectus will ordinarily describe the proposed business plan and related information, including financial data, a
summary of the firm’s business history, a list of its officers, a description of its operations and notification of any pending litigation. top ^
R Recession
An extended decline in national economic activity; often defined as a decline in real GDP for at least two consecutive quarters (i.e., six months). (See also Contraction.)
View LEI Lesson(s) that address this term » Return
Earnings from an investment, usually expressed as an annual percentage. (See also Yield.)
View LEI Lesson(s) that address this term » Revolving credit
Credit that is automatically renewed as debts are paid off or paid down.
View LEI Lesson(s) that address this term » Risk
The chance of losing money on an investment. Risk arises from variability in returns. The greater the potential variability (in stock prices, for example), the greater the risk. (See also Risk-return relationship.) Risk is sometimes classified according to the sources of variability: Currency risk: The risk that returns to be paid in foreign currency will be affected adversely by exchange-rate changes.Inflation risk: The risk that returns (on money deposited in a CD account, for example) will not keep pace with inflation Interest-rate risk: The risk that returns will not keep pace with rising interest rates. Market risk: The risk that forces of supply and
demand might affect the value of an investment adversely. Risk of principal: The risk that some or all of an investor’s original deposit or investment might be lost.
View LEI Lesson(s) that address this term » Risk-return relationship
A “goes together” relationship between risk and potential returns. Because investors generally are averse to risk, high-risk investment options (junk bonds, for example) must offer higher potential returns than low-risk options (index funds or CD accounts, for example). (See also Risk.) Role of Government
Regarding financial markets, the government’s role is to protect the integrity of markets by enforcing property rights and correcting market failures. Round lot
The standard unit of trading in a particular type of security. For stocks, a round lot is 100 shares or a multiple of 100 shares. (Compare Odd lot.) Rule of 72
View LEI Lesson(s) that address this term » top ^
S S & P 500
The Standard & Poor’s 500 Stock Index. An index made up of 500 stock prices to provide a broad indicator of stock price movements. Save
Savings
Disposable income minus consumption.
View LEI Lesson(s) that address this term » Savings Account
Scarcity
The lack of enough resources to satisfy human wants. Because scarcity is ever-present, individuals face an ever-present need to make choices. (See also Choice.)
View LEI Lesson(s) that address this term » Secondary Market
A market in which stocks can be bought and sold once they are approved for public sale; for example, the New York Stock Exchange. (Compare Primary market.) Securities and Exchange Commission (SEC)
The federal agency that administers U.S. securities laws; established under the Securities Exchange Act of 1934. Securities indexes
A statistical composite that measures changes in financial markets. The Dow Jones Industrial Average (DJIA) is the most commonly known securities index. (See also DJIA.)
View LEI Lesson(s) that address this term » Security
A certificate attesting to a stockholder’s ownership shares in a firm or a bondholder’s creditor relationship with a corporation or a governmental unit. Selling short
To sell short, the buyer borrows shares he or she does not own from a broker. The buyer orders the shares to be sold and takes the money from the sale. Then the buyer waits for the stock price to fall. If the price does fall, the buyer buys the shares at the lower price, pays the broker’s commission and any fees, and gains a profit. Selling short is risky; if the stock price increases, the buyer loses money. Shareholder
An individual or organization that owns common stock or preferred stock. Also called a stockholder. Shift in demand
A change in one or more of the determinants of demand including consumers’ tastes, the number of consumers in the market, consumers’ incomes, the prices of related goods, and consumer expectations. A change in demand causes the demand curve to shift to the right or left.
View LEI Lesson(s) that address this term » Shift in supply
A change in one or more of the determinants of supply including resource prices, technology, taxes and subsidies, prices of other goods, price expectations and the number of sellers. A change in supply causes the supply curve to shift to the right or left. Shortage
The situation that arises when the quantity demanded of a product exceeds the quantity supplied. Shortages generally occur when a price is set below the equilibrium price. (See also Equilibrium price; compare Surplus.)
View LEI Lesson(s) that address this term » Simple Interest
Interest paid on the initial investment (the principal) only. Calculated by multiplying the investment principal times the annual rate of return times the number of years involved. Sole Proprietorship
A business owned by one person. The sole proprietor receives all the profits of the business and is responsible for all of its debts. Many businesses in the United States are sole proprietorships. They are usually small businesses — e.g., neighborhood barber shops, gift shops, family farms. (Compare Corporation, Partnership.) Specialist
A member of a securities exchange who makes trades only in one or more designated securities; a “market maker” in the designated security or securities, assigned by the exchange to maintain an orderly market in his or her area of trading. Speculation
High-risk investment practices. Speculators take above-average risks — buying something on the basis of its potential selling price — in expectation of gaining above-average returns, generally during a short time period. Stock
An ownership share or shares of ownership in a corporation.
View LEI Lesson(s) that address this term » Stock certificate
A document attesting to ownership of shares of stock. Stock Market
A market in which the public trades stock that someone already owns. Often called the secondary stock market. Stock market crash
A sudden, steep decline in stock prices, prompting many stockholders to sell their shares out of fear that prices will continue to fall. Examples include the crash of October 1929 and the crash of October
1987. Stock split
The division of the outstanding number of shares into a higher number of shares. The market price per share drops proportionately. Stock symbol
The letter or sequence of letters used to identify a security. The stock symbol for ExxonMobil, for example, is XOM.
View LEI Lesson(s) that address this term » Stockholder
An individual or organization that owns common stock or preferred stock. Also called a shareholder.
View LEI Lesson(s) that address this term » Supply
The quantity of a good or service that producers are willing and able to offer for sale at each possible price during a period of time.
View LEI Lesson(s) that address this term » Surplus
The situation that results when the quantity supplied of a product exceeds the quantity demanded. Generally happens because the price of the product is above the market equilibrium price.
View LEI Lesson(s) that address this term » top ^
T Technical analysis
The study of relationships among market variables to gain insight into the supply of and demand for securities. The market variables used include price levels, trading volume and price movements. (Compare Fundamental analysis.) Ticker
An automated quotation system on which security transactions are reported after they occur on an exchange floor. (See also Ticker tape.) Ticker tape
The narrow, continuous rolls of paper on which stock transactions were recorded before electronic technology made the old recording system obsolete. The term now refers to the flow of prices appearing on tickers out of brokerage firms. (See also Ticker.) Trade deficit
A negative trade balance — that is, a balance in which a nation’s imports are of greater value than its exports. Trading volume
The number of shares of a stock traded on a given trading day, expressed in multiples of 100.
View LEI Lesson(s) that address this term » Treasury bonds
Longer-term (compared to treasury bills), interest-bearing bonds issued by the U.S. Treasury. Trough
A low point in the business cycle, and also a turning point. After a trough, the economy begins to expand. (See also Business cycle.)
View LEI Lesson(s) that address this term » top ^
U U.S. Savings Bonds
Securities issued by the U.S. Treasury in relatively small denominations for individual investors. Investors who buy U.S. savings bonds in effect make a loan to the government, in return for the government’s promise (represented by the bond, a nontransferable debt certificate) to repay the loan with interest. The interest is free from state and local taxation. U.S.
savings bonds are considered to be risk-free investments, since they are backed by the U.S. government. (Also known as savings bonds) top ^
V Venture capital
A pool of funds, typically contributed by large investors, from which allocations are made to young, small companies that have good growth
prospects but are short of funds. (See Venture capital fund.)
View LEI Lesson(s) that address this term » Venture capital fund
An investment company that invests its shareholders’ money in new business ventures that are risky but potentially very profitable. top ^
Y Yield
Earnings from an investment, usually expressed as an annual percentage. (See also Return.)
View LEI Lesson(s) that address this term » top ^
Z Zero-coupon bond
A bond that pays all its interest and principal at the bond’s maturity. An investor’s income from a zero-coupon bond comes solely from the bond’s appreciation in value.
View LEI Lesson(s) that address this term »
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