Commerce: Money and Risk Flashcards

Savings

Putting money aside to spend at a later date.

Earn more

You may have a casual job or invest money to increase what you can save.

Spend less

Monitor spending and avoid buying non-essential items.

Savings Account

A flexible way to save and earn interest—money can be deposited and withdrawn as needed.

Term Deposit

A savings option with a fixed interest rate, requiring a minimum deposit and funds to remain untouched for a set period.

Investing

The process of putting money into ventures like property or shares with the expectation of making a profit.

Investment

Buying assets such as a house or shares to grow wealth over time.

Superannuation

A way to save for retirement through employer and personal contributions.

Interest

Extra money earned by depositing money in a bank or financial institution.

Investment Risk

The possibility of losing money when investing.

Low-risk investment

Investments such as savings accounts in banks with minimal risk of loss.

High-risk investment

Investments such as shares or property with potential for high rewards and high losses.

Risk profile

An investor’s willingness and ability to take risks based on their goals and timeframe.

Diversification

Spreading investments across various asset classes to reduce risk.

Portfolio

A collection of investments held by an individual or institution.

Internal Factors

Elements within the company under its control that can affect share prices.

Introduction of new products

An internal factor that may influence company performance and share value.

Resignation of top management

An internal factor that can cause uncertainty and affect share price.

Accounting errors or scandals

Internal factors that reduce investor trust and can lower share value.

New release of earnings (EPS)

Internal disclosures that affect investor expectations and share prices.

Announcement of dividends

An internal factor indicating company performance and profitability.

Employee layoffs

An internal decision that may signal financial troubles or restructuring.

External Factors

Elements outside the company’s control that can influence its share value.

Increased interest rates

Higher interest reduces business profits and can lower share prices.

Bull Market

A strong market where stock prices rise and investor confidence grows.

Bear Market

A weak market where stock prices fall and investor confidence fades.

Increased demand

An external factor that can raise product sales and company value.

Social and political factors

External influences like COVID-19 that impact company operations and stock prices.

Commbank

A public company listed on the ASX; a financial institution offering banking services.

All Ordinaries

The combined share price index of the top 500 companies listed on the ASX.