Economics 6.5

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10 Terms

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Investment

Using money to make more money.

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Financial system

Network that connects savers and borrowers.

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Financial asset

A claim on property or income (like stocks or bonds).

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Financial intermediary

Institution that links savers and borrowers (like banks).

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Mutual fund

Pool of money from many people to buy investments.

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Hedge fund

Riskier investment fund for wealthy investors.

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Diversification

Spreading money across different investments to reduce risk.

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Portfolio

Collection of investments owned by a person or group.

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Prospectus

Document describing an investment to help investors decide.

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Return

Money made or lost from an investment.