VOCABULARY

Stocks- A type of security that shows ownership in a corporation and represents a claim on part of the corporation's earnings and assets.
--I bought 300 shares of Under Armour's stocks and I am now losing money because Under Armous is not doing well economically.
Bonds- a debt instrument used by an investor loaning money to a corporate or governmental entity that borrows the funds for a period of time with a fixed interest rate.
--I bought a bond worth two thousand dollars and after five years I was paid back three thousand.
Dow Jones-an indicator of stock market prices and condition based on the share values of 30
blue-chip stocks traded on the NYSE
--The Dow Jones indicated that the stock market was struggling when it went down .76%.
Equity-A stock or any other security representing an ownership interest.
--The Smith's bought a house for 100,000 dollars and paid 50,000 dollars so their equity 50,000 dollars.
Growth Stock- shares in a company whose earnings are expected to grow at an above average rate.
--I thought investing in Wal-Mart would be a good idea because they are known for their growth stock.
Earnings-amount of profit produced by a company
--I think Nike is more successful than Addidas because their earnings seems to be way higher than Addidas.
Dividend- money paid to a number of people (usually shareholders) by a company
--I work at The Merc and we give out the dividend to our 500 shareholders annually.
Private Companies. vs Public Companies- private don’t offer shares to be sold to the public but public company does.
--I wanted to invest in Addidas, but they are a private company so instead I invested in Under Armour which is a public company.
Risk- the chance that an investment's actual makings will be different than expected.
--Today there is a huge risk factor in the stock market because our economy is in poor condition.
Small Cap- a company with a market capitalization of between $300 million and $2 billion.
--Forward Industries Inc. is a small cap company with a market cap of $17.14 million.
Mid Cap- company with a market capitalization of between $2 and $10 billion.
--Under Armour is a mid cap compnay I invested it with a market cap of $3.37 billion.
Large Cap- a company with a market capitalization of over $10 billion.
--Dell is a large cap company because its market cap. is $29.85 billion.
The Number of the Dow and where it comes from- The Dow Jones is found by the average price of 30 of the largest stocks being traded
--The Dow Jones has gone up because the top stocks are all trading for more money.
S and P 500- The Standard and Poors 500, it is an index made up of 500 large-cap stocks; it is the benchmark for the overall market.
--When the stock market is in poor condition, it seems like there is no way it will reach the S and P 500.
Russell 2000- Index measuring the performance of 2000 small companies.
--Google is way too big to be considered in the Russell 2000.
Treasury Bond- A bond with a fixed interest rate issued by the government, with a maturity of more than ten years.
--I was given a treasury bond of $200 with a twelver percent interest rate, so in ten years I owe the government $224.
Inflation- The rate at which the general level of prices for goods and services is rising.
--The poor economy has caused inflation so milk is now $7!! (not really)
Gross Domestic Product- The money value of all the finished goods and services produced within a country's borders in a specific time.
--My house contributes to the GDP, but the wood it was built with does not!
Currency- General name for money.
--The currency in the DR is different than the U.S. dollar; there, it is a peso!
Infrastructure- the basic physical systems of a business or nation
--Roads are part of our country's infrastructure.
Economy- the large set of related economic production and consumption activities which aid in determining how resources are used.
--The United State's economy has been causing people to spend less money and companies have been struggling with business.
Economic System- the system of production, distribution and consumption.
--The economic system is a constant system unlike supply and demand that can waver.
Supply and Demand-price determination for merchandise in a market.
--When the supply of corn is really low, but a lot more people wanted it, my dad raised the price!
Interest-charge for borrowing money
--I borrowed ten dollars from Kelsey but she charged me interest so I had to pay her back twelve dollars.
Assets-items owned of economic value that can be sold for cash
--When we went into debt, we had to sell every possible asset.
Acounts Payable-money which a company owes to vendors for products and services purchased on credits; debt payments.
--Whent he store's accounts payable consistently kept them from earning profit, they knew they had to close.
Accounts Receivable- money owed to a business by its clients
--We were afraid business was going to be bad, but then our accounts receivable proved much higher than accounts payable.
Amortize-to pay off the cost off an amount by periodic payments
--I have amortized three-fourths of my car loan so I now owe only $2000.
Economic Index-data on a macroeconomic scale used to interpret current or future investments possibilities; used to judge overall health of the economy
Depreciation-when the value or priceof an item is lowered
--Because of the depreciation of my car, I was only able to sell it for for half the original price.
Gross Margin- profits divided by net sales
--We sold 200 glasses of lemonade for fifty cents each so our gross margin was twenty-five cents.
Earnings Per Share-the portion of a company's profit set aside to be given to each outstanding share of common stock
--Our company calculated our earnings per share to help us figure out our profitability.

LIABILITIES- financial obligations or debts
OVERHEAD EXPENSE-income not directly related to goods or services
OWNERS EQUITY-A stock or any other security representing an ownership interest--readily sell the item for cash, no debt
PRODUCTION COST-cost of producing a good or providing service
WORKING CAPITAL- a measure of both a company's efficiency and its short term financial health
LOAN
LOSS LEADER-offering a product or service that is not profitable so they can offer another product/service for greater profit to attract customers
SCARCITY-economic problem--unlimited wants, limited resources
OPPORTUNITY COSTS-the cost of an alternative in order to pursue a certain action
EXPLICIT COSTS-clear obvious cash outflows
IMPLICIT COSTS-costs not easily accounted for, time/effort
PRICE
RELATIVE PRICE
INCENTIVES(a fee) paid to a fund manager by investors
PROFIT
LOSS when expenses exceed the overall income
EQUILIBRIUM- supply and demand balance each other, price becomes stable
SURPLUS- assets exceed liabilities, income exceeds expenditures, exports exceed imports
SHORTAGE-demand for product or service exceeds the supply
MINIMUM WAGE- minimum amount of compensation an employee must receive for labor
PRICE FLOOR- lowest price the governemtn allows a good to be sold
BEAR MARKET market condition where the prices of securities are falling 
BULL MARKET prices of securites are rising (good)
BOOM- sales of a product or business activity increases rapidly
BILL OF EXCHANGE- A non-interest written order used in international trade that binds one party to pay a fixed sum of money to another party at a predetermined future date.       
BUDGET DEFICIT- A financial sitution when an entity has more money going out than coming in
CAPITAL-financial assets
SHORT SELL- the act of short selling securites that you already own. result: your gains in stock are equal to your losses
SHORT COVER-buying securites in order to close an open short postion