Shared Flashcard Set

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Investing
Chapter 2
15
Business
12th Grade
02/13/2013

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Term
Diversification
Definition
To spread your money around in order to lower the risk of your investments.
Term
Liquidity
Definition
The availability of your money. Cash is very liquid; real eastate is not.
Term
Mutual Fund
Definition
Investors pool their money together to invest it in the stocks of 90 to 200 companies in each mutal fund.
Term
Risk
Definition
The probability of getting your money back from an investment.
Term
Risk Return Ratio
Definition
The higher the risk, the greater the expected return on investment. The lower the risk, the lower the return.
Term
Share(or stock)
Definition
A piece of ownership in a publicly traded company.
Term
Back End Load
Definition
Fees paid to the mutal fund company when selling a mutual fund.
Term
Dividends
Definition
Quarterly payout of Profits by a company to all shareholders.
Term
Expense Rations
Definition
For a mutual fund. An annual percentage the fund takes as payment, Expense rations of a different funds can be compared to find the best value.
Term
FDIC Insured
Definition
The FDIC (Federal Deposit Insurace Corporation) is a government agency that insures deposits money,banks and savings and loan companies that are FDIC-insured pay a percentage of thier deposits to the FDIC to pay for the insurance.
Term
Front End Load
Definition
Fes paid to the mutual fund company as an entry requirement into certain mutual funds.
Term
Inflation
Definition
Rise in prices that effectively makes cash have less buying power.
Term
Savings Account
Definition
A safe, low-return investment available from banks. There is generally no minimum depsit for this type of account, making it perfect for ids and teens just starting out.
Term
Year to Date Return (YTD)
Definition
On a mutual fund statement, a comparison of how the fund has done compared to its value on the first on the year
Term
Yield
Definition
For savings account, the percentage of interest earned annually. For a stock, the annual dividend divided by the share price.
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