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Do buffalo have elbows? I just wanted to make sure I could check my watch during the test.

Vocabulary

144a



Definition
144a is the legal rule that sets out when you can sell shares in a company in which you are an insider - i.e., say, the venture capital investor in the early rounds. Usually shares are locked up 6 months and change after the first day of trading after an IPO.

529 Savings Plan



Definition
Think: Tax advantaged college savings plan for the middle class. Taxes on college savings are deferred if various standards are met.

Bankruptcy



Definition
When a company can't pay its bills. It goes kaput. Dies. The creditors to whom it promised to pay back money don't get paid (the bank's GOOD customers have to make up the difference even though they did nothing wrong) and the bankrupt company is a corporate deadbeat.

Business Cycle



Definition
In the end, everything is the same. Ups. Downs. We all lead back, more or less, to the same place. Business is no different - there are booms and busts and over time, real estate goes up. So does the stock market. Over time.

Contraction



Definition
Click here. http://myjuicecleanse.com/ After you've expanded too much and just need the contraction, this will help.

Credit Risk



Definition
Will the borrower pay or end up a deadbeat so that the rest of society has to pay for their debts? That's credit risk - the risk that the promise to pay won't be honored.

Exempt



Definition
No longer empt. That is, "tax friendly" - "exempt" from taxability. Your home mortgage interest is a tax exempt payment.http://www.shmoop.com/financial-literacy/mortgages/mortgage-shmortgage-mechanics.html

Expansion



Definition
Click here.http://www.mcdonalds.com/us/en/food/product_nutrition.sandwiches.287.double-quarter-pounder-with-cheese.html Lots of expansion comes from clicking here. Same idea with money in a business cycle.

Fiscal Policy



Definition
When the economy begins to suffer from serious recession or inflation, politicians will almost always intervene to try to improve the situation. Their interventions may or not be good economics-often they're not!-but you can hardly blame the politicians for trying. Nobody wants to go down in history like Herbert Hoover, the president who became a widely hated figure for failing to use the government aggressively enough to try to end the Great Depression. LInk here: http://www.shmoop.com/economic-policy-macroeconomics/fiscal-policy.html

Flat Yield Curve



Definition
Happens in blue moons and when the cost of renting money is the same if you're renting it for a short period of time or a long period of time. A normal yield curve goes... up - that is, the cost of borrowing money in the short term is cheaper than that in the long term.

Fundamental Analysis



Definition
When it's a blast doing damental analysis. Applies to investing in companies - to determine whether it's a good or bad deal at $37.20 a share, you assess the core business operations of the company, their revenue growth, profit margins, cash flow generation and other things that all pertain to the basics of investing which are to get more out of an investment than you put in; this system differs from astrology which is the primary form of "analysis" for "macro trading" and other short term "strategies" that rely on charts and bumps on skulls.

Gross National Product



Definition
Hamburgers. They're a huge national product of the U.S. and they're gross. Just see GDP and click here <>

Incentive Stock Option



Definition
Think: An enticement to work for a Silicon Valley startup for a below market salary. That is, we'll pay you $45,000 a year even though you are used to making $100,000. But we'll give you 300,000 ISOs (incentive stock options) at a 4 cent a share strike price - so if we make it big, you make millions.... More or less.

Keynes



Definition
We at Shmoop are keen on Keynes -But as the Depression only worsened through the first years of the 1930s, many began to doubt the classical economists' faith in the market's long-run ability to correct itself. "In the long run we're all dead," protested British economistJohn Maynard Keynes. "Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is long past the ocean is flat again." In his massively influentialGeneral Theory of Employment, Interest and Money(1936), Keynes suggested that the Great Depression had been caused by a broad failure of aggregate demand across the economy, which created a new equilibrium at less than full employment-a situation in which Depression conditions might persist indefinitely. In order to increase aggregate demand and get the economy moving again, Keynes argued that the government should massively increase its own spending in times of economic distress, even if it meant running a significant budget deficit. While most of the key players in the Roosevelt administration were initially skeptical of Keynes's theories, the New Deal did end up taking on a broadly Keynesian quality, characterized by major and unprecedented government interventions into the economy. Keynesian ideas went on to dominate academic and government thinking about political economy through the 1960s.

Liabilities



Definition
Stuff you owe.

Monetary Policy



Definition
By serving as an intermediary bank, setting reserve requirements, and making short-term loans to banks, the Fed plays a crucial role in overseeing the nation's banks and money supply. Our checks (a huge part of our money supply) are efficiently processed, banks are prevented from lending more of our money than is safe, and banks are provided assistance in meeting the federal regulations that ensure a stable and safe financial system. But the Fed also uses some of these same tools to more generally influence the performance of the economy. By adjusting the discount rate and reserve requirement, the Fed can make adjustments in the nation's money supply during periods of recession and inflation. http://www.shmoop.com/money-banking/monetary-policy.html

Non Exempt



Definition
See Exempt

Non-Qualified Stock Option



Definition
A stock option that isn't "qualified" to receive favorable tax treatment, more or less. That is, in a qualified stock option, an employee can buy it out, own the equity, hold it for a year or much more and then get long term gain tax treatment. In a non-qualified option, all gains are ordinary income abuse.

Sharpe Ratio



Definition
You produced a given investment result. A good one. But how much risk did you take to get it? That's what the Sharpe Ratio measures. You want a deeper definition? Google it.

Stock Certificate



Definition
the piece of paper that says you own a given ownership piece in a company in the form of shares.

Systematic Risk



Definition
Risk in the system. Like... if you own a bunch of stocks and the whole system crashes (i.e. the market goes down and not in the good way), that's just risk you take on if you are long the market. To hedge that risk, you can find ways to be short the market - i.e. buy puts or collect some cash premiums by selling calls. R-rated note: Systematic risk applies to risk of the market going UP as well - if you're short and it takes off, then click here.http://www.job-applications.com/united-states-postal-service-job-application/

Trade Deficit



Definition
Like a wart. A bad thing if you have one. It happens when you are paying more cashola to buy things from a given country than receipts you are getting in cash FROM that country for selling your shizzel to them.

Unsystematic Risk



Definition
Risk that YOU bring to the table. That is, it's risk of bad stock and bond and ..other.. investment vehicles you'd put your clients' hard earned money into - and lose it because you're a lousy investor. See systematic risk.

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