Saving Definitions

Question 1

Bond

Answer 1

Debt instruments where an investor loans money to an entity in exchange for interest payments

Question 2

Mutual fund

Answer 2

Pooled funds managed by professionals, invested into various assets

Question 3

Stock

Answer 3

Shares of ownership in a company

Question 4

Equity

Answer 4

Investments where you own an asset that has the potential to generate income or appreciate in value over time

Question 5

ETF

Answer 5

Exchange-traded funds
Funds traded on stock exchanges that track an index, sector, commodity, or other assets

Question 6

Indexes

Answer 6

A statistical measure that tracks the performance of a specific group of stocks, bonds, or other investments

Question 7

Capital gains

Answer 7

A profit from an investment

Question 8

Liquidity

Answer 8

The ability of an investment to be converted into cash quickly and without loss of value

Question 9

Term deposit

Answer 9

Let you invest for a set amount of time for a fixed interest rate

Question 10

Fixed income

Answer 10

Investments where you lend money to an entity in exchange for regular interest payments and repayment of the principal

Question 11

Time horizon

Answer 11

When you need the money from an investment

Question 12

Market (bond and stock)

Answer 12

A system where companies and investors engage to raise capital and share profits

Question 13

Investment profile

Answer 13

A snapshot of your current financial situation. It’s a profile of your risk tolerance and investment goals

Question 14

Portfolios

Answer 14

A collection of financial investments

Question 15

TFSA

Answer 15

Tax-free savings account

Question 16

RRSP

Answer 16

Registered retirement savings plan

Question 17

Conservative

Answer 17

To be focused on reducing risk

Question 18

Investment risk

Answer 18

The chance that the value of an investment will decrease

Question 19

Volatility (investment)

Answer 19

The amount and frequency a stock price increases and decreases

Question 20

Diversification

Answer 20

Investment strategy that involves spreading your money across different asset classes, industries, or regions to reduce risk

Question 21

Asset class

Answer 21

A group of investments with similar characteristics and behaviour in the market

Question 22

Active investment strategy

Answer 22

Buying investments when they believe the value will increase and selling it when the value is about to decrease (buy low, sell high)

Question 23

Passive investment strategy

Answer 23

Buying investments and holding onto them for a long period of time so the value will gradually increase

Question 24

ROI

Answer 24

Return on investment
Measures the gain or loss made on an investment relative to the amount of money invested

Question 25

Commodities

Answer 25

Physical assets that may increase in value

Question 26

Simple interest

Answer 26

Amount of interest earned on an investment based on the original amount and the simple interest rate

Question 27

Compound interest

Answer 27

Interest that uses the principal and any previously earned interest