Financial Literacy

Unit 3 test

Investing 

Putting money into an idea or business, hoping you will get more money back

Stocks

You own part of a company

Bonds

A loan to the government or corporation for a period of time

Mutual Fund

Use money from investor for various securities

Index Fund

Investment funds that try to have the same perfeormance as market index

Diversification

Invests in various assets to reduce risk of portfolior risk.

Risk and Return

Risk you will recieve a different outcome typically negative. Return is the proft you earn

Compounuding

Money making money from itself

401(k)

You save money for retirement, your employer also gives you money to help save for retirement.

Individual Retirment Account

You save money for retirement by yourself.

Asset Allocation

You divide your money accros diferent types of investments (stocks, bonds, and cash)

Capital Gains

You sold an investment for more than you bought it.

Risk

Probably of recieving an outcoem different than what you expected typically negative

Return 

The money/profit you can earn