Investing 101

Term: Underwrite/underwriter/going public
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Sentence: The image depicts a middle man, which essentially is an underwriter who facilitates the issuing of new securities by a corporations to the public.

Term: Franchise
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Sentence: McDonald's is company that franchises, so it allows different people to open restaurants, using the trademark and logos for a annual licensing fee.

Term: Selling Short
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Sentence: Selling short allows investors to gain profit on stocks that are failing by selling someone else's stock and then buying it back at a lower price and keeping the difference, therefore gaining profit on dropping stock and actually wanting it to drop in price.

Term: Bulls
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Sentence: Bulls  are optimistic investors believe that a particular part of the market will rise, and attempt to profit from the increase.

Term: Bears
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Sentence: Bears are essentially pessimistic investors that believe a particular security or market will head downward and will attempt to profit from the fall.

Term: Primary Market
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Sentence: In a primary market, you purchase securities straight from the issuer, like purchasing stock straight from a company on the stock exchange.

Term: Secondary Market
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Sentence: In a secondary market, the security is purchased from another investor, not the original seller, much like buying a used car, taking it from the owner rather than a dealer.

Term: Bond
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Sentence: Bonds essentially are a promissory note that they promise to repay an amount plus interest within a stated period of time.

Term: Stock
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Sentence: In monopoly, you never own a property truly, but ownership is signified by a house on the property, much like stock signifies ownership in a company.