Plain-language overview of stocks, bonds, mutual funds, ETFs, and other common financial instruments.
40 cards · basic cards · AI-written, checked twice. Edit anything.
- What is a stock?
- A share of ownership in a company.
- What does equity mean in finance?
- Ownership interest in a company.
- What is a bond?
- A loan made to a company or government that pays back principal plus interest.
- What is the face value of a bond?
- The principal amount to be repaid at maturity.
- What is a coupon payment?
- Periodic interest payment made to a bond holder.
- What does yield to maturity (YTM) measure?
- The total return on a bond if held to maturity.
- What is a mutual fund?
- A pool of money from many investors invested in a diversified portfolio of securities.
- What is an ETF?
- An exchange-traded fund that trades on stock exchanges like a stock.
- How does an ETF differ from a mutual fund?
- ETFs trade continuously throughout the day; mutual funds price once daily after market close.
- What is a stock dividend?
- A payment to shareholders from company profits.
- What is a stock split?
- Division of existing shares into a greater number of shares, each with lower price.
- What is an option?
- A contract giving the right, but not obligation, to buy or sell an asset at a set price by a certain date.
- What is a call option?
- The right to buy an asset at a set price (the strike price).
- What is a put option?
- The right to sell an asset at a set price (the strike price).
- What is a futures contract?
- An agreement to buy or sell an asset at a predetermined price on a future date.