Financial Literacy terms and meaning

Stocks: Shares of ownership in a company that can be bought and sold on stock exchanges.

Bonds: Debt securities issued by corporations or governments that pay a fixed interest rate and have a set maturity date.

Mutual funds: Investment vehicles that pool the money of many investors to purchase a diversified portfolio of stocks, bonds, or other securities.

Exchange-traded funds (ETFs): Similar to mutual funds, but they trade like stocks on stock exchanges.

Certificates of Deposit (CDs): FDIC-insured savings accounts with a fixed interest rate and a set maturity date.

Money market accounts and funds: Low-risk investments that offer higher interest rates than traditional savings accounts.

Real estate: Physical property or land that can appreciate in value and generate income through rent or capital gains.

Annuities: Insurance products that provide regular income in exchange for a lump-sum payment.

Options: Contracts that give the buyer the right, but not the obligation, to buy or sell an underlying asset at a specific price by a certain date.

Futures: Contracts that obligate the buyer or seller to buy or sell an underlying asset at a specific price by a certain date in the future.

Entrepreneurship - the process of starting and running a new business venture.

Marketing - the process of promoting and selling products or services.

Sales - the process of generating revenue by selling products or services.

Cash flow - the amount of cash flowing in and out of a business over a period of time.

Profit margin - the percentage of profit made on each product or service sold.

Marketing campaign - a coordinated effort to promote a product or service through various advertising channels.

Branding - the process of creating and promoting a unique image and identity for a product or service.

Customer retention - the process of keeping existing customers happy and satisfied with a product or service.

Target market - the specific group of people or businesses that a product or service is designed to appeal to.

Market research - the process of gathering and analyzing information about a specific market or industry.

Equity - The value of ownership in a company or asset.

Asset - Any property or item of value owned by a person or business, such as cash, real estate, or stocks.

Liability - Any debt or obligation that a company or person owes to others, such as loans or credit card debts.

ROI (Return on Investment) - A measure of the profitability of an investment, calculated as the percentage of the original investment that is returned after all expenses and taxes are deducted.

Dividend - A portion of a company's profits that is distributed to its shareholders as a return on their investment.

Debt financing - Raising capital by borrowing money, typically through loans or bonds.

Equity financing - Raising capital by selling ownership shares in a company, typically through stocks.

Interest rate - The percentage that a lender charges for borrowing money.

Risk - The amount of uncertainty or potential loss associated with an investment or business activity.

Market volatility - The tendency of financial markets to fluctuate widely and unpredictably in response to economic, political, or other factors.

Diversification - Spreading investment risk across different assets, sectors, or geographic regions to reduce overall portfolio risk.

Portfolio - A collection of investments held by an individual or organization.

Mutual fund - An investment vehicle that pools money from many investors to buy a diverse portfolio of stocks, bonds, or other assets.

Stock - A security that represents ownership in a company and entitles the holder to a share of its profits and voting rights.

Bond - A debt security issued by a company or government that pays a fixed interest rate over a set period of time.