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Investment Strategies
Flashcards
30
Finance
12th Grade
05/06/2013

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Term
return
Definition
is the income that an investment produces.
Term
volatility
Definition
is the degree to which an investment's return or value may change.
Term
risk
Definition
is the possibility of variation in the return on your investment.
Term
diversification
Definition
is a strategy of making a variety of investments in order to reduce yiour exposure to risk.
Term
portfolio
Definition
collection of investments, that is both diversified and well ballanced.
Term
pension plan
Definition
is any retirement plan offered to a companys employees.
Term
401(k) plan
Definition
is a type of defined-contribution pension plan to which the employee contributes on a pretax basis.
Term
IRA
Definition
is a personal savings plan that enables workers and their pouses to set aside money for retirement.
Term
Roth IRA
Definition
is an IRA in which contributions are not tax-deductible; however, earnings accumulate tax-free.
Term
Keogh plan
Definition
is a federally approved, defined-contribution, tax-deferred retirement plan designed specifically for self-employed people.
Term
stock
Definition
ownership interest in the corporation.
Term
shares
Definition
individual units of ownership, available for purchase.
Term
shareholders
Definition
are actually part-owners of the comapny.
Term
stock market
Definition
the organized trading of stocks.
Term
stock exchange
Definition
a central location where stocks are sold on a trading floor.
Term
dividend
Definition
a payment to shareholders that represents a portion of the compnay's net profits.
Term
stockbroker
Definition
is an individual or firm that will buy and sell stock for clients according to their instrcutions.
Term
bonds
Definition
corporations and giverments can obtain funds by issuing certficates of debt.
Term
prospectus
Definition
is a legal document that provides potential investors with information about a mutual fund or other security.
Term
annuity
Definition
is a contract purchased from an insurance company.
Term
real estate
Definition
land and any strcutures on it by owning their own homes.
Term
commodities
Definition
wheat, corn, iron ore, natural gas, and precious metals.
Term
estate
Definition
the assets and liabilities left behind by a deceased person.
Term
estate planning
Definition
is the process of making legal and financial arrangments for how one property should be administered before and after death.
Term
will
Definition
a legal document in which a person directs how his or her estate is to be distributed after death.
Term
executor
Definition
is the individual who is in charge of handling the affairs of an estate.
Term
beneficiary
Definition
a person or group designated to receive soem or all of a deceased person's assets.
Term
living trust
Definition
is a legal arrangement that can serve as an alternative to a will.
Term
power of attorney
Definition
is a legal document assigning someone the right to act on a persons behalf.
Term
living will
Definition
is a legal document taht outlines a persons wishes for medical treatment under specific circumstances.
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