Financial Markets and Assets

Glossary

bills: short term (less than one year) debt instruments
bond: a financial contract through which a borrower like a corporation, a city or state, or the federal government agrees to repay the amount that it borrowed and also a rate of interest over a period of time in the future; usually long-term (greater than 10 year) debt instruments
bondholder: someone who owns bonds and receives the interest payments
capital gain: a financial gain from buying an asset, like a share of stock or a house, and later selling it at a higher price
corporation: a business owned by shareholders who have limited liability for the company's debt yet a share of the company's profits; may be private or public and may or may not have publicly-traded stock
debt instruments: IOUs
dividend: a direct payment from a firm to its shareholders
equities or stocks: ownership in a private company (unlike debt which conveys no ownership)
financial markets: marketplace where money is invested and borrowed, or in other words, where securities are traded
initial public offering (IPO): original sale of stock by a corporation
mutual funds: funds that buy a range of stocks or bonds from different companies, thus allowing an investor an easy way to diversify
notes: intermediate term (1-10 year) debt instruments
private company: a firm owned by the people who run it on a day-to-day basis
public company: a firm that has sold stock to the public, which in turn investors then can buy and sell
securities: synonym for financial assets, or a certificate or other financial instrument that has monetary value and can be traded. These can be debt securities like bonds or equity securities like stocks.
shareholders: people who own at least some shares of stock in a firm
shares: a firm's stock, divided into individual portions
sole proprietorship: a company run by an individual as opposed to a group
stock: a specific firm's claim on partial ownership
Treasury bond: a bond issued by the federal government through the U.S. Department of the Treasury
venture capital: financial investments in new companies that are still relatively small in size, but that have potential to grow substantially