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Finance & Investments

This guide includes basic terminology and ways to help you find financial and investment information.

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Terminology to Help You Get Started with Finance

Below are some common terms to help you get started in understanding finance and investing topics:

Acquisition - one company purchases another outright.

Annuity - a contract sold by life insurance companies that guarantees a fixed or variable payment to the annuitant at some future time, usually retirement.

Bear Market - prolonged period of falling prices. A bear market in stocks is usually brought on by the anticipation of declining economic activity, and a bear market in bonds is caused by rising interest rates.

Bond - any interest bearing or discounted government or corporate security that obligates the issuer to pay the bondholder a specified sum of money, usually at specific intervals, and to repay the principle amount of the loan at maturity. Bondholders have an IOU from the issuer, but no corporate ownership privileges , as stockholders do.

Bull Market- prolonged rise in the prices of stocks, bonds, or commodities.

Dividend - distribution of earnings to shareholders, prorated by class of security and paid in the form of money, stock, scrip, or rarely company products or property.

Equity - ownership interest possessed by shareholders in a corporation - stock as opposed to bonds.

Merger - the combination of two firms, which subsequently a new legal entity under the banner of one corporate name.

Mutual Fund - fund operated by an investment company that raises money from shareholders and invests it in stocks, bonds, options, futures, currencies, or money market securities.

Stock - ownership of a corporation represented by shares that are a claim on the corporation's earnings and assets.

Stock Exchange - organized marketplace in which stocks, common stock, and bonds are traded by the members of the exchange, acting both as agents (brokers) and as principals (dealers or traders).

Ticker Symbol - letters that identify a security for trading purposes on the consolidated tape, such as XON for Exxon Corporation.

Some content credited to BRASS Education Committee and LibGuides.