Investing Basics

A bid or bid price is the highest price a buyer is willing to pay for an asset.

An ask, or ask price, is the lowest price that a seller is willing to receive for an asset.

An investment portfolio represents all of the may consist of financial investments, including stocks, bonds, real estate, mutual funds, and other securities.

A buy limit order is an order to buy a stock at or below a specified price.

Stagflation refers to an economy marked by slow economic growth, high inflation, and high unemployment.

Short selling occurs when an investor borrows a security and sells it on the open market, planning to buy it back later for less money.

Liquidity indicates how easily an asset can be readily converted into cash with little impact to its market price.

A market economy is a system wherein demand and supply govern the prices and production of goods.

A ledger is a record of all the transactions that a company keeps to create its financial statements, namely income statement and balance sheet.

Scarcity refers to the shortage of a resource brought about by higher demand or other structural changes in the economy.

Inflation is defined as an increase in the price of goods and services over time.

A limited liability company (LLC) is a legal structure that protects its owners from the liabilities of the company.

When it comes to investing, opportunity cost is the cost of choosing one investment over another.

The S&P 500 is an index that tracks about 500 of the largest U.S. companies by market cap.

Venture Capital is a fund that pools investments from specialized investors or institutions and invests in start-ups.

The debt ratio measures the proportion of assets that are financed by debt. It is calculated by dividing total debt by total assets.

CAGR, or compound annual growth rate, is the average rate of exponential growth that takes place over a certain period

National Association of Securities Dealers Automated Quotations, or Nasdaq, is the world’s first electronic stock exchange that lists over 4000 companies.

A corporation is a legal entity in which the assets and liabilities of this entity are separated from those of the owners.