Investing Flashcards
What is a hedge fund
A limited partnership of private investors whose money is managed by fund managers who invest in risky or non-traditional assets, the manager of the hedge fund gets a fee of the profit made
What is an annuity
A series of payments made at equal intervals.
What is a bond
A certificate you receive for a loan you make to a company or government (an issuer). In return, the issuer of the bond promises to pay you interest at a set rate and to repay the loan on a set date.
What is the Canada Savings Bond (CSB)
A savings product issued and guaranteed by the federal government. It offered a minimum guaranteed interest rate. Canada Savings Bonds had a three-year term to maturity, with interest rates remaining in effect for that period.
What are Exchange Traded Fund (ETF)
An investment fund that holds assets such as stocks, commodities or bonds. Exchange traded funds trade on stock exchanges and have a value that is similar to the total value of the assets they contain.
What is a Guaranteed Investment Certificate (GIC)
An investment that protects your invested capital. You will not lose money on the investment. GICs can have either a fixed or a variable interest rate. Different banks offer different GIC percentages. Made by S&P.
What is a mutual fund
a type of investment in which the money of many investors is pooled together to buy a portfolio of different securities. Offered by investment management firms.
What is a segregated fund
A pooled investment fund, much like a mutual fund, is set up by an insurance company and segregated from the general capital of the company. The main difference between a segregated fund and a mutual fund is the guarantee that, regardless of fund performance, at least a minimum percentage of the investor’s payments into the fund will be returned when the fund matures. Offered by Life Insurance companies.
What is a stock
a unit of ownership in a company which is bought and sold on a stock exchange. (Historically, stocks are the best performing asset class in North America over long time)
What is a treasury bill (T-Bill)
Short-term, low-risk investment issued by a federal or provincial government. It is sold in amounts ranging from $1,000 to $1 million, on a fixed term ranging from one month to a year.
What is an RESP
a contract between an individual (the subscriber) and a person or organization (the promoter). Under the contract, the subscriber names one or more beneficiaries (the future student(s)) and agrees to make contributions for them, and the promoter agrees to pay educational assistance payments (EAPs) to the beneficiaries.
What is a TFSA
a way for individuals who are 18 and older and who have a valid social insurance number (SIN) to set money aside tax-free throughout their lifetime.
What is a registered retirement savings plan
a retirement savings plan that you establish, and to which you or your spouse or common-law partner contribute.
What is risk
Potential of losing money while making an investment, higher the potential risk the higher the potential return.
What is ROI and what is the equation
Money made back from an investment, there are also negative returns. Equation is Net Return/Cost of Investment
