Glossary of Key Terms

• Common Stock: A security representing ownership in a company, granting shareholders voting rights and potential for dividends and capital appreciation.
• Bonds: Debt securities representing loans made by investors to companies or governments, with the issuer obligated to repay principal and interest.
• Options: Contracts granting the right, but not the obligation, to buy or sell an underlying asset at a specified price on or before a specific date.
• Mutual Funds: Investment vehicles pooling money from multiple investors to purchase a diversified portfolio of securities, managed by professionals.
• Securities: Tradable financial assets representing ownership (stocks) or debt (bonds).
• Diversification: A risk management strategy involving investing in a variety of assets to reduce the impact of any single investment's performance.
• Principal: The original amount of money invested or loaned.
• Interest Payments: Periodic payments made to bondholders as compensation for lending money.
• Capital Appreciation: The increase in the value of an asset over time.
• Dividends: Payments made by companies to their shareholders, representing a share of the profits.
• Portfolio: A collection of investments held by an individual or institution.
• Risk: The possibility of losing money on an investment.
• Return: The profit or loss generated from an investment.
• Investment Vehicle: A product or strategy used to invest money.
• Hedge: An investment strategy to reduce risk.
• Speculate: To invest in an asset with the hope of making a profit from price fluctuations.

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