Unit 10

Question	Answer
securities	is a general term and refers to stocks, bonds, and money market instruments
stocks	= equities of companies which are listed on a public stock exchange
shares	includes both stocks and privately held stakes in small firms
mutual fund	= Anlagefonds: is a basket of stocks, put together by a fund manager
index	a selected group of companies (in stocks) brought together, for example, the Dow / DAX
the bond market	entirely electronic market; a market where a government or large company wants to borrow a large sum of money
the principal	the original amount an issuer has to pay back to the bondholder over a fixed period of time (= maturity)
the coupon	the fixed interest rate which the bondholder receives
an investment grade	a corporate bond with low risk
a junk bond	a corporate high-risk bond; = high-yield bond
the money market	a market for short-term loans (under a year) that pay interest; used by investors with spare cash
the foreign exchange	the market where dealers buy and sell currency pairs such as EUR/USD; players are commercial or central banks, for example
a) to invest b) to trade	a) buy and hold for the long term b) buy and sell over the short term
to hedge	= absichern: part of the risk management; it means having a second position in the market, so that if the market moves against your first position your losses are minimized
an endowment	= Stiftung: used to generate an income for non-commercial purposes, for example, Bill and Melinda Gates Foundation
price elasticity	how sensitive a company's sales are to changes in the price of its products
market capitalization	share price multiplied by total number of issued shares
earnings growth	earnings per share, compounded over several years
the dividend yield	the annual dividends per share divided by the share price
a breadth	= Breite, Umfang: the number of individual stocks participating in the movement of an index
a trading channel	two parallel lines drawn on a chart that contain all price movements over a time period

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