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  GLOSSARY

Assets

A resource having economic value that an individual, corporation or country owns or controls with the expectation that it will provide future benefit.
Balance Sheet

A financial statement that summarizes a company's assets, liabilities and shareholders' equity at a specific point in time. These three balance sheet segments give investors an idea as to what the company owns and owes, as well as the amount invested by the shareholders.
Balanced Fund

A fund that combines a stock component, a bond component and, sometimes, a money market component, in a single portfolio. Generally, these hybrid funds stick to a relatively fixed mix of stocks and bonds that reflects either a moderate (higher equity component) or conservative (higher fixed-income component) orientation.
Bond

A debt investment in which an investor loans money to an entity (corporate or governmental) that borrows the funds for a defined period of time at a fixed interest rate.
Book Value

A company's common stock equity as it appears on a balance sheet, equal to total assets minus liabilities.
Broker

An individual or firm that charges a fee or commission for executing buy and sell orders submitted by an investor.
Certificate of Deposit (CD)

A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate and can be issued in any denomination.
Commission

A service charge assessed by a broker or investment advisor in return for providing investment advice and/or handling the purchase or sale of a security.
Commodity

A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often used as inputs in the production of other goods or services. The quality of a given commodity may differ slightly, but it is essentially uniform across producers.
Common Stock

Common stock usually entitles the owner to vote at shareholders' meetings and to receive dividends.
Stock Correction

A reversal of the prevailing trend in price movement for a security. The term is most often used to describe a decline after a period of rising prices.
Day Order

Any order to buy or sell a security that automatically expires if not executed on the day the order is placed.
Discount Rate

The interest rate us by central bank in financing commercial banks.
Dividend

Distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders.
Economic Growth

An increase in the capacity of an economy to produce goods and services, compared from one period of time to another.
Equity

Stock or any other security representing an ownership interest.
Good Till Cancelled Order (GTC)

An order to buy or sell a security at a set price that is active until the investor decides to cancel it or the trade is executed.
Gross Domestic Product (GDP)

The monetary value of all the finished goods and services produced within a country's borders in a specific time period, though GDP is usually calculated on an annual basis.
Holding Period

The real or expected period of time during...
Limit Order

An order placed with a brokerage to buy or sell a set number of shares at a specified price or better. Limit orders also allow an investor to limit the length of time an order can be outstanding before being canceled.
Liquidity

The degree to which an asset or security can be bought or sold in the market without affecting the asset's price Liquidity is characterized by a high level of trading activity.
Maturity Date

The date on which the principal amount of a note, draft, acceptance bond or other debt instrument becomes due and is repaid to the investor and interest payments stop. It is also the termination or due date on which an installment loan must be paid in full.
Monetary Policy

The actions of a central bank, currency board or other regulatory committee, that determine the size and rate of growth of the money supply, which in turn affects interest rates.
Net Asset Value (NAV)

In the context of mutual funds, the total value of the fund's portfolio less liabilities The NAV is usually calculated on a daily basis.
No Load Fund

A mutual fund whose shares are sold without a commission or sales charge.
Operating Expense

A category of expenditure that a business incurs as a result of performing its normal business operations.
Operating Income

The amount of profit realized from a business's own operations, but excluding operating expenses (such as cost of goods sold) and depreciation from gross income.
Portfolio

The group of assets - such as stocks, bonds and mutual - held by an investor.
Preferred Stock

A class of ownership in a corporation that has a higher claim on the assets and earnings than common stock. Preferred stock generally has a dividend that must be paid out before dividends to common stockholders and the shares usually do not have voting rights.
Price-Earnings, Current (P/E)

A valuation ratio of a company's current share price compared to its per-share earnings.
Recession

A significant decline in activity spread across the economy, lasting longer than a few months.
Risk

The chance that an investment's actual return will be different than expected.
Round Lot

The normal unit of trading for a security, which is generally 100 shares of stock.
Stock

A type of security that signifies ownership in a corporation and represents a claim on part of the corporation's assets and earnings.
Stock Dividend

A dividend payment made in the form of additional shares, rather than a cash payout.
Stop Order

An order to buy or sell a security when its price surpasses a particular point, thus ensuring a greater probability of achieving a predetermined entry or exit price.
Stop-Limit Order

An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will be executed at a specified price (or better) after a given stop price has been reached.
 
         
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