Vocabulary
What does diversify mean?
To spread investments out
What is a stock?
Buying a share of a company
Lending money to a company or government
What is a mutual fund?
Group of investors buy stocks/bonds together
Which type of investment is low risk?
Conservative
What is an investment?
purchasing something with a goal to increase value over time
What do you call the owner of a share?
Shareholder
How do bonds make an investor money?
Earn interest
What is the benefit of a mutual fund?
don't need a lot of money to invest
Which type of investment has some risk?
What are dividends?
when a company shares some of its profits with stockholders
What is a Blue Chip stock?
well established, stable company
Maturity Date
What benefit does Income Funds have?
steady dividends
What type of risk do aggressive investments have?
High risk
Name a job that requires a person to buy and sell stocks for others.
Stockbroker
What is the unique letter combination assigned to each company on the stock market?
Stock symbol
Less risky than stocks
What are Global Mutual Funds?
international funds
How is investing different from savings?
Investing is long-term, includes dividends and capital gains, risky, can make more money
What happens to prices when inflation occurs?
Prices increase
What should an investor do in a Bull Market?
Buy Stocks
Name one type of bond.
Treasury, Municipal, Corporate, Savings
Are mutual funds diverse?
Yes
Explain the rule of 72.
Divide 72 by interest rate to determine how many years it takes to double your money.