Glossary

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There are currently 10 names in this directory beginning with the letter I.
Index
In the case of financial markets, stock and bond market indexes consist of a hypothetical portfolio of securities representing a particular market or a segment of it.

Index Fund
Index funds are investment funds that follow the performance of a specific stock market index, like the S&P 500. When you invest in an index fund, your money is used to invest in every company in that index. This results in a more diverse portfolio than if you were hand-selecting individual stocks, for example.

Indices Trading
Indices trading is the means by which traders attempt to make a profit from the price movements of indices.

Inflation
Inflation is a general increase in prices that causes a decline in a currency’s purchasing power.

Inflation Risk
Inflation risk, or purchasing power risk, is the risk that inflation will undermine the real value of cash flows made from an investment

Interest
Interest is the cost of borrowing money. The borrower pays interest, and the lender receives it. For instance, when you borrow money from a bank, you are required to repay the initial amount along with the agreed-upon interest.

Interest Rate Risk
Interest rate risk is the risk associated with the potential impact of market interest rate changes. It pertains to the likelihood that the earnings derived from an initial investment may diminish in value compared to prevailing market rates because of fluctuations in interest rates.

Intrinsic Value
Intrinsic value refers to the perceived or actual worth of an asset, which may differ from its current market price. It serves as a fundamental concept in evaluating investments, as it helps determine whether an asset is overvalued or undervalued.

Investment
An investment is an asset that you buy with the expectation that it will generate some future income or profit.

IPO (Initial Public Offering)
When a company decides to raise money through selling shares for the first time to the public.

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