Vocab
Loan
A sum of money or an item borrowed from a lender with the agreement that it will be paid back later, usually with an extra fee called interest.
What is a risk of taking a loan?
Interest cost.
What is a mutual fund?
A pooled investment collection of various stocks, bonds, and other assets
Lowering taxes would result in less investing. (True or False)
False
What does it mean to make an investment?
The choice or action to place money into something with the goal of gaining benefit over time.
Bond
An exchange for regular payments and the return of your original money later.
How does a bond work?
An issuer pays scheduled interest.
The per-share value of a mutual fund calculated daily at market close
What is a Capital Gains tax?
Increase in value of stocks or properties
Stocks and bonds act as investments (true or false).
True
Equilibrium Intrest Rate
It is the real interest rate that exactly balances the supply or loanable funds with the demand.
What are stocks?
A share of business.
What is diversification?
This core investment principle is achieved automatically by spreading money across dozens or hundreds of different holdings inn a single fund
Investments only benefit the investor (True or False).
False it also benefits the company being invested in.
What can be possible outcomes of investing into a company?
help business grow, create jobs, develop technology, produce better products at lower costs.