Blue chip stock
Stock of large, well-known companies.
Bond
A security that obligates the issuer to repay the principal amount upon maturity and to make specified interest payments over specified time intervals to the bond holder. The issuer can be a corporation or a governmental entity.
Certificate of deposit (CD)
Savings certificate issued by banks that entitle the holder to the receipt of interest.
Closed-end fund
A pooled investment fund that has a fixed capitalization after the initial issue.
Convertible security
A corporate bond or a share of preferred stock that can be converted into shares of common stock of the issuing corporation.
Fixed-income security
An investment vehicle that provides a return in the form of fixed periodic payments and return of principal; examples are bonds and certificates of deposit.
Government bond
A debt obligation issued by the local or foreign governments.
Growth stock
The shares of a company whose earnings are expected to grow at an above-average rate.
Income stock
Those stocks having a history of regular dividend payments that contribute the largest proportion of the stock's overall return.
Mutual fund
A pool of investors, money invested and managed by an investment adviser. Money can be invested in the fund or withdrawn at any time, with few restrictions, at net asset value (the per share market value of all securities held) minus any loads and/or fees.
Open-end fund
A mutual fund that continuously sells shares to investors and redeems shares when investors wish to sell.
Preferred stock
A security representing prior claim to common stock on the firm's earnings and assets. Preferred stockholders normally forgo voting rights and receive a fixed dividend that takes precedence over payment of dividends to common stockholders.
Zero-coupon bond: A bond that generates no periodic interest payments and is issued at a discount from face value. All return is realized at maturity.
