Unit 4 Vocabulary Flashcards
A contract agreement in which a borrower receives a sum of money or something of value and repays the lender at a later dat, generally with interest.
Credit
The efficiency or ease with which an asset or security can be converted into ready cash washout affecting its market price.
Liquidity
A risk management strategy that mixes a wide variety of investments within a portfolio.
Diversification
The original sum of money borrowed in a loan or put into an investment.
Principal
To commit money in order to earn a financial return.
Investment
A concept that sates that the higher the risk of an investment the higher the possible return.
Risk v Reward
An employee benefit that commits the employer to make a regular contribution to a pool of money that is set aside in order to fund payments made to eligible employees.
A defined benefit plan guarantees a set monthly payment for life or a lump sum payment at retirement.
The most common form of retirement savings plan many American employers offer to employees.
401K /Pension
An employee benefit that commits the employer to make a regular contribution to a pool of money that is set aside in order to fund payments made to eligible employees.
401K/Pension
A defined benefit plan guarantees a set monthly payment for life or a lump sum payment at retirement.
401K/Pension
The most common form of retirement savings plan many American employers offer to employees.
410K/Pension
A fixed-income instrument that represents a loan made by an investor to a borrower.
Bonds
The amount a lender charges a borrower and is a percentage of the principal – the amount loaned.
Interest Rate (APR)
Something, usually money, borrowed by one party from another.
Debt
A security that represents the ownership of a fraction of a corporation
Stocks
A type of financial vehicle made up of a pool of money collected from any investors to invest in securities like stocks, bonds, money market instruments, and other assets.
Operated by professional money managers, who allocate the fund’s assets and attempt to produce income for fund’s investors.
Mutual Funds
