Personal Finance
A number that is based on your previous borrowing history and represents how trustworthy you are as a borrower
What is Credit Score?
The cost of borrowing money
What is Interest?
The range of prices that a stock experiences over time
What is Volatility?
Technology, healthcare, and energy are examples of these groups of industries that investors can choose from
What are sectors?
Is an asset acquired in order to make a financial gain
What is an investment?
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?
An investment that pools money from different investors to build a portfolio of investments
What is a Mutual Fund?
The original investment you deposit
What is the Principal?
The account that holds money a person will save for future spending or emergency spending
What is Savings?
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 type of investment lets you buy one share that represents a whole group of stocks or bonds, and it trades like a stock
What is an ETF (Exchange Traded Fund)?
Interest that is earned on the principal amount only
What is Simple Interest?
A retirement plan organized by most employers where you contribute a certain amount of your monthly paycheck to an investment fund and they match what you put in
What is 401K?
Between stocks and bonds, this is generally the safer investment
What is a Bond?
Low volatility = _____ price
(big/stable/small)
What is Stable Price?
Mutual funds charge these costs because a financial professional actively manages the investments for you
What are Management Fees?
Interest that is earned on the principal amount and the interest
What is Compound Interest?
An investment account that you run (unlike 401k)
What is IRA(Individual retirement account)?
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??
These market “scoreboards” include groups of companies like the S&P 500, Dow Jones, and Nasdaq
What are Index Funds?
This investment strategy helps fight short-term volatility in the market
What is Dollar Cost Averaging?