Types of Investments Income
Mutual funds that are properly _________ will have investment dollars spread equally among different classes of financial assets.
diversified
a formal, interest-bearing loan made by an investor to a borrower
Bonds
The uncertainty that an investment's actual return will differ from its expected return.
risk
When you do research before investing in stocks, are you making the risk of investment higher or lower?
Lower
A foundational U.S. federal social insurance program established in 1935
Social Security
What type of investment is done with a group of investors that pool their money together?
mutual fund
Fixed-income financial instruments issued by a national government to fund public spending and national debt.
Government Bonds
a piece of ownership in a company or mutual fund.
A share
Which has more risk?
Certificates of Deposit or Stocks
stocks
A employer-sponsored retirement plan that guarantees workers a fixed, regular income upon retirement, usually for the remainder of their lives
pension
stock
An individual or firm that acts as an intermediary, facilitating transactions between a buyer and a seller
Broker
Name two of the major stock exchanges
NASDAQ, NYSE, OR AMEX
Would the risk be low or high to invest all your money in only one type of stock?
High
An employer-sponsored retirement savings account in the United States. It allows employees to automatically save and invest a portion of their paycheck before or after taxes are applied
401(k)
Regular corporate profit payouts given to stock shareholders.
Diividends
Debt securities issued by U.S. federal government departments or government-sponsored enterprises
Agency Bonds
When you sell your stocks at a higher price than what you paid for them, you make a ___________
profit
The bigger the __________ the bigger the __________.
risk; return
It allows you to contribute pre-tax dollars, which can potentially lower your current taxable income, while allowing your investments to grow tax-deferred.
Traditional IRA
The profit made when you sell an asset for more than you bought it for.
Capital Gains
Long-term, fixed-interest debt securities issued by the U.S. government. They mature in 20 or 30 years and pay interest every six months until they expire, at which point the government repays the original face value.
Treasury Bonds
Which two animals do we refer to when we talk about the stock market?
Bull (growing) and Bear (shrinking)
True or False? Information, even if not true, can cause a stock's value to drop.
True
While you do not get a tax deduction for your contributions upfront, your investments grow tax-free, and you can withdraw both your contributions and earnings entirely tax-free during retirement
Roth IRA