GlossaryGuide

The total amount of money being borrowed or lent; the initial amount of money invested.

“Prime bank” investments are scams. Promoters of “prime bank” programs often claim that investors’ funds will be used to buy and trade supposed “prime bank” instruments, and that investors will receive guaranteed, high investment returns with little or no risk. Promoters try to make the schemes sound legitimate by using complex, sophisticated, and official-sounding terms.… Continue reading PRIME BANK INVESTMENTS

Markets in which newly issued securities are sold to investors and the issuer receives the proceeds.

A company’s P/E ratio is a way of gauging whether the stock price is high or low compared to the past or to other companies. The ratio is calculated by dividing the current stock price by the current earnings per share. Earnings per share are calculated by dividing the earnings for the past 12 months… Continue reading PRICE-EARNINGS (P/E) RATIO

The risk that principal repayment will occur earlier than scheduled, forcing the investor to reinvest at lower prevailing rates.

The unscheduled partial or complete payment of the principal amount outstanding on a loan, such as a mortgage, before it is due.

A type of 529 plan that lets an account owner purchase units or credits at participating colleges or universities for future tuition for the account beneficiary.

The amount by which the price of a bond exceeds its principal (par) amount.

The combined holdings of stock, bond, commodity, real estate and other investments by an individual or institutional investor.

A Ponzi scheme is an investment fraud that pays existing investors with funds collected from new investors. Ponzi schemes are named after Charles Ponzi. In the 1920s, Ponzi promised investors a 50% return within a few months for what he claimed was an investment in international mail coupons. Ponzi used funds from new investors to… Continue reading PONZI SCHEMES