Understand the key terms used in banking, investment, and personal finance management.
Anything of value owned by an individual or corporation that can be converted into cash.
A financial obligation or debt that an individual or company owes to another party.
A condition in which securities prices fall and widespread pessimism causes the stock market's self-sustaining downward spiral.
A financial market of a group of securities in which prices are rising or are expected to rise.
The process in which an asset's earnings, from either capital gains or interest, are reinvested to generate additional earnings over time.
A distribution of a portion of a company's earnings, decided by the board of directors, paid to a class of its shareholders.
The value of an ownership interest in property, including shareholders' equity in a corporation.
The rate at which the general level of prices for goods and services is rising and, consequently, the purchasing power of currency is falling.
The availability of liquid assets (cash) to a market or company. The ease with which an asset can be converted into cash.
An investment program funded by shareholders that trades in diversified holdings and is professionally managed.
The amount by which assets exceed liabilities. It is a measure of what an entity is worth.
A grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents.
The original sum of money lent or invested on which interest is paid.
A performance measure used to evaluate the efficiency of an investment or compare the efficiency of several different investments.
An investment vehicle offered by mutual funds to investors, allowing them to invest small amounts periodically instead of lump sums.
A statistical measure of the dispersion of returns for a given security or market index.
The earnings generated and realized on an investment over a particular period of time.
A rise in the value of a capital asset (investment or real estate) that gives it a higher worth than the purchase price.
A risk management strategy that mixes a wide variety of investments within a portfolio.
The annual fee that all funds or ETFs charge their shareholders. It expresses the percentage of assets used to pay for management and other costs.
Financial literacy is the ability to understand and effectively use various financial skills, including personal financial management, budgeting, and investing. Higher financial literacy leads to better economic outcomes and more stable futures.