| Bond |
A debt instrument issued for a period of more
than one year with the purpose of raising capital by borrowing. The Federal
government, states, cities, corporations, and many other types of
institutions sell bonds. A bond is generally a promise to repay the
principal along with interest on a specified date (maturity) |
| Bond Fund |
A mutual fund which invests in bonds,
typically with the objective of providing stable income with minimal capital
risk |
| Capitalization |
The market price of an entire company,
calculated by multiplying the number of shares outstanding by the price per
share |
| CD (Certificate of Deposit) |
Short- or medium-term, interest-bearing, debt instrument offered by banks, savings and loans
and investment houses. Low
risk, low return. There is usually an early withdrawal penalty. May be
FDIC-insured or not. |
| Common Stock |
Securities representing equity ownership in a
corporation, providing voting rights, and entitling the holder to a share of
the company's success through dividends and/or capital appreciation. In the
event of liquidation, common stock holders have rights to a company's assets
only after bondholders, other debt holders, and preferred stock holders have
been satisfied. |
| Equity Fund |
A mutual fund which invest primarily in
stocks, usually common stocks |
| FDIC (Federal Deposit Insurance Corporation) |
A federal agency that insures deposits in
member banks and thrifts up to $100,000 |
| Growth and Income Fund |
A mutual fund whose aim is to provide both
growth and income, often by investing in companies which have earnings
growth as well as dividends |
| Income |
For corporations, same as earnings. For
individuals, money earned through employment and investments |
| Investment |
An item of value purchased for income or
capital appreciation |
| Jumbo CD |
A CD with a very large denomination, usually
$1 million or more. |
| Large Cap |
Over $5 billion capitalization |
| Mid Cap (Medium Cap) |
$1 billion to $5 billion capitalization |
| Mutual Fund |
An open-ended fund operated by an investment
company which raises money from shareholders and invests in a group of
assets, in accordance with a stated set of objectives. Benefits include
diversification and professional money management. Shares are issued and
redeemed on demand, based on the fund's net asset value which is determined
at the end of each trading session |
| Return |
The annual return on an investment, expressed
as a percentage of the total amount invested |
| Risk |
The quantifiable likelihood of loss or
less-than-expected returns |
| Small Cap |
$250 million to $1 billion capitalization |
| Yield |
The annual rate of return on an investment,
expressed as a percentage |
