Business Terms

Stocks, Bonds and Mutual FundsBy

(Your name)

Income

• The money you receive from selling your resources – Including your labor and human capital

Expenses

– Money that must be paid to keep a business going

Profits

• The money that a company gets to keep • Its earnings

Dividends

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

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)

Capital Gain

• Money that is made over what is spent

Capital Loss

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

Savings

• The term for money you get to keep– Not expenses

• Includes investments

Securities

• Stocks and bonds are called securities.

Portfolio

• All your investments are your portfolio

Equity

• The value of what is owned

Stock

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

Primary Market

• Investment banks buy shares of stock directly from the corporations - IPO

Secondary market

• Markets where stocks are bought and sold after being issued

• Stock Market or Stock Exchange• NYSE• AMEX• NASDAQ

Shareholders

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

Bonds

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

Mutual Fund

• An investment in group of related companiesWhen 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

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!”

IRA

• Stands for Individual Retirement Account• Allows people to save for the future without

paying taxes now