Personal Finance
The maximum possible credit score you can have
What is 850?
The cost of borrowing money
What is Interest?
The range of prices that a stock experiences over time
What is Volatility?
An investment that pools money from different investors to build a portfolio of investments
What is a Mutual Fund?
The orignial invesment you deposit
What is the Principal?
A financial plan based on what you expect to spend money on
What is a Budget?
This represents ownership in a company
What is a Stock/Share?
Investing in multiple companies instead of just one
What is Diversification?
A collection of stocks and bonds that you invest in
What is a Portfolio?
Interest that is earned on the principal amount only
What is Simple Interest?
A loan for buying a house
What is a Mortgage?
An investment where you lend money to an entity for an interest rate
What is a Bond?
High volatility = _____ price swings
(big/stable/small)
What is Big Price Swings?
This is the fee a manager charges for actively managing a mutual fund
What is a Management Fee?
Interest that is earned on the principal amount and the interest
What is Compound Interest?
The income you earn after taxes are withheld
What is Net Income?
Between stocks and bonds, this is the safer investment
What is a Bond?
Low volatility = _____ price
(big/stable/small)
What is Stable Price?
A mutual fund that tracks a specific market index or sector
What is an Index Fund?
An investing strategy where an investor buys the same dollar amount of an investment at regular intervals
What is Dollar Cost Averaging?
This accounts for 35% of your credit score
What is Payment History?
Stocks have _____ risk, _____ reward
(higher/lower)
What is Higher Risk, Higher Reward?
Diversifying limits volatility by reducing this type of risk
What is Idiosyncratic Risk??
The S&P 500, Dow Jones Industrial Average, and Nasqad
What is an Index Fund?
This investment strategy helps fight short-term volatility in the market
What is Dollar Cost Averaging?