Scholastic News Online

Scholastic News Online is a free resource with breaking news and highlights from the print magazine.

Available for grades 1-6, Scholastic News magazine brings high-interest current events and nonfiction to millions of classrooms each week.

Additionally, our subscribers have FREE access to Scholastic News Interactive, an exclusive online learning tool featuring digital editions, videos, interactive features, differentiated articles, and much more.

Money Meanings

Asset: any possession that has value in an exchange.

Bank account: an assigned name and number that keeps track of how much money you are putting in and taking out of the bank. It is how you store your money, whether in a savings or checking account.

Bankruptcy: the legal process a company goes through when it goes broke and can't pay its bills. A judge decides whether to reorganize the company, or to force it to sell its belongings to raise money to pay back investors and creditors. Stockholders usually lose all of their investment in the company. Bondholders sometimes get some money back.

Bear: an investor who believes a certain stock or the overall market will decline. A bear market is an extended period of falling stock prices, usually by 20 percent or more. It is called a bear market, to symbolize the bear claw slashing down through the prices.

Bond: a certificate, or piece of paper, sold by corporations and governments to raise money. That money, called capital, helps them expand or build really big things such as bridges, railways, or sewer systems (capital improvement projects). The certificate pays interest, and the owner of the certificate receives back the full amount plus interest when the bond expires.

Broker: 1) someone who buys and sells something like stock or real estate. Brokers help match buyers and sellers. Say you want to sell your shares of stock in General Motors Corporation. You could stand on the corner of an intersection and scream "Shares for Sale!" That would not be too efficient, however. A broker buys the shares from you at the market price and then finds someone else willing to snatch them up, hopefully at a higher price. He or she will charge a commission, or fee based on the amount of the sale price, to do so. 2) Stock brokers are agents that are authorized by the stock exchanges to sell or buy stocks for investors.

Bull: an investor who thinks the market will rise. A bull market is any market that's in an upward swing. A big brass bull sits near Wall Street in New York as a symbol of optimism for investors. He is lifting his horns up proudly, as if lifting up the stock prices.

Bureau of Engraving and Printing: a division of the U.S. Treasury Department responsible for printing the nation's paper currency. It was established by the Appropriation Act of 1869. It delivers printed money directly to the Federal Reserve System. The bureau also prints U.S. postage stamps and U.S. bonds.

Certificate of deposit (CD): a piece of paper an investor buys at the bank. The investor buys the certificate for a specified amount of time, usually between one month and three years. The longer the term, the higher the interest rate. When the investor sells the certificate back to the bank, he or she gets the original price of the certificate plus the interest earned.

Commission: a fee stockbrokers charge for buying or selling stock. It's usually a percentage of the transaction amount.

Compounding interest: interest on the interest already earned on the original deposit. For example, $100 at 10 percent interest after one year would become $110. But after the second year, it would be 10 percent of $110, making it $121. The pot grew $10 in the first year, but $11 in the second year!

Corporation: an organization created by a government charter that allows people to associate together for a common goal under a common name. The charter gives the corporation certain rights, including permission to buy and sell property, enter into contracts, sue and be sued, and borrow and lend money. In the United States, state governments create charter corporations. Coca-Cola, Nike, and Microsoft are examples of corporations.

Counterfeiting: illegally printing or minting fake money. The Secret Service investigates counterfeiting.

Currency: term designating all the coins and paper money circulating in a country.

Deposit: the money you add to your bank account.

Diversification: putting your money in different types of investments. Generally, the more diversified, the less risk. It's like the old saying: "Don't put all your eggs in one basket."

Dividend: a payment by a corporation to its stock shareholders. The payment comes in the form of additional shares of stock instead of cash.

Exchange: a marketplace in which stocks and other investments are traded.

Exchange rate: the price changing one country's currency into another country's currency. When you give a bank your American money and ask for French francs, the bank uses the exchange rate to figure out how many francs you get for your dollars.

Dow Jones industrial average (DJIA): an indicator showing how well the stock market is doing. It's an average of the prices of 30 stocks of really big companies trading in the New York Stock Exchange. It includes giants such as General Motors Corp., General Electric Co., AT&T, and IBM. If most of the stocks are doing well, the DJIA is up.

Federal Reserve System: the U.S. central banking system was created in 1914. Think of it as a bank for the government. It also serves as a bank for regular banks. It's the bank that issues our nation's currency, and it supervises the distribution of money to regular banks.

Foreign exchange: transactions involving the conversion of money of one country into that of another or to the international transfer of money.

Fort Knox: While Fort Knox is really a military post and reservation in Kentucky, it is best known for what sits next door: the United States Bullion Depository. The depository, or "Gold Vault," houses the largest portion of the United States' gold reserve. Its security systems are secret, and access can only be gained by getting permission from the President.

Going public: an expression used to describe the first public selling of shares of a company that previously sold shares privately, or to a limited and privileged group of individuals. Did you know that M&M Mars Corp., the famous candy maker, is a private company? Its stock is mostly held by the family that owns the company. But Kelloggs, the maker of Corn Flakes and Rice Crispies, is public. You can buy shares through a broker.

Investment: spending or setting aside money for future financial gain. For an individual, investment might include the purchase of stocks, bonds, or mutual funds. Investment can also include the purchase of long-lasting things like a house or a car that are expected to increase in value or help you to make a living.

Loss: the opposite of a profit. When a company spends more to produce goods or services than it receives when selling those goods or services, it operates at a loss, or loses money.

Mint: a place where coins are made. The process of making coins is called minting. The U.S. Mint, an agency within the Treasury Department, was created by Congress in 1793.

Money: any medium of exchange that is widely accepted in payment for goods and services and in settlement of debts. It helps measure the relative worth of different goods and services. The number of units of money required to buy something is the price.

NASDAQ: (National Association of Securities Dealers Automated Quotations System) It's a mouthful, but you can just think of it as a "virtual stock exchange." There is no trading floor. Orders for stocks are made through a computer network instead of an actual trading floor. Normally, high-tech stocks are listed here.

Net income: profit after taxes.

New York Stock Exchange (NYSE): Located in New York City, it's the largest stock exchange in the world. Stocks are traded on a trading floor in Manhattan. It carries the stocks of big-time companies and is also known as "Wall Street."

Portfolio: a group of investments an investor holds, which can include a mix of stocks, bonds, cash, and other types of financial tools.

Profit: the opposite of loss. For a company, it's the difference between money received for selling goods or services and the costs it took to make them. If the company sells a product for more than it cost to produce the product, it makes a profit.

Rate of return: how fast your money makes more money in one year. It's described as a percentage of the amount you start off with. For example, if you invest $100, and after a year it's $110, that means your rate of return is 10 percent.

Risk: the degree of uncertainty of a return on an asset.

Savings: the amount you have stashed away in your piggy bank or savings account at the bank.

Security: a piece of paper that proves ownership of stocks, bonds, and other investments.

Standard & Poor's 500 index (S&P 500): a well-known index of 500 major U.S. companies. Like the Dow Jones industrial average, it's a good measure of how the stock market is doing.

Stock: shares in a company that represent part ownership of that company.

Transaction: the delivery of a security by a seller and its acceptance by the buyer.

U.S. Treasury: an executive department of the United States federal government, responsible for handling the government's dealings with money. It was established by Congress in September 1789. It manufactures paper money through its Bureau of Engraving and Printing and coins through the U.S. Mint. The Treasury Department also serves as the bank for the government, through the Federal Reserve System.

Privacy Policy




Here's something interesting from