Business Terms

1. Business Terms Stocks, Bonds and Mutual Funds By (Your name)

2. Income • The money you receive from selling your resources • Including your labor and human capital

3. Expenses • Money that must be paid to keep a business going

4. Profits • The money that a company gets to keep • Its earnings

5. Dividends • The part of a company’s profits that are given to their shareholders

6. Capital • Another use for this word! • Money used to expand a business • Not the same as physical capital (buildings and equipment) or human capital (skills and knowledge)

7. Capital Gain • Money that is made over what is spent

8. Capital Loss • Loss from selling stocks for less than what you paid for them

9. Savings • The term for money you get to keep • Not expenses • Includes investments

10. Securities • Stocks and bonds are called securities.

11. Portfolio • All your investments are your portfolio

12. Equity • The value of what is owned

13. Stock • When companies sell a part of their business to raise money they are said to issue stock.

14. Primary Market • Investment banks buy shares of stock directly from the corporations - IPO

15. Secondary market • Markets where stocks are bought and sold after being issued • Stock Market or Stock Exchange • NYSE • AMEX • NASDAQ

16. Shareholders • People who own stock in a company • Also called stockholders or investors

17. Bonds • When a company borrows money from the public, this is issuing bonds.

18. Mutual Fund • An investment in group of related companies When you buy a mutual fund you buy stock in several companies at the same time. (remember mutual means share) Their stock symbols end with an X

19. Diversified • A diversified portfolio is one where lots of different industries and different kinds of businesses are represented • “Don’t put all your eggs in one basket!”

20. IRA • Stands for Individual Retirement Account • Allows people to save for the future without paying taxes now