Business Terms
Stocks, Bonds and Mutual Funds
By
(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 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
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