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Chapter 2 Investment
| Term | Definition |
|---|---|
| Aggressive Growth Stock Mutual Fund | A mutual fund that attempts to receive the highest capital gains. They are wilder and know as small-cap funds. |
| Annuity | Savings accounts with an insurance company |
| Bond | A debt instrument by which the company owes you money |
| C.D. | Certificate of Deposit |
| Commodity | You either hit big or lose it all |
| Diversification | To Spread Around |
| Dividend | A profit you get when the company you are investing in increases its value |
| Fixed Annuity | These are at a low interest rate (5%) and are a bad investment because they do not pay enough. |
| Liquidity | Availability; You can get to it; How you can get to your investment |
| Investments | Investing your money or capital in order to gain profitable returns. (Invest in a business or a share of stock) |
| Mutual Funds | investors pool their money to invest. These are good long term investments |
| Large-Cap Fund | 25% growth and income |
| Money Market | money accounts with check writing priviledges. These are good for emergency funds |
| Mid-Cap Fund | 25% Growth |
| Risk | Chances of losing your money. As the risk goes up, so does the potential return. |
| International Stock Mutual Funds | An investment made anywhere outside of the country that the resident is not in |
| Risk/Return Ratio | The higher the risk, the more the return and vice versa |
| Savings Account | An Account in which people put money in to save. Does not earn very good interest and you can't access it very easy. |
| Share | a part in the joint-stock company |
| Single Stocks | High degree of risk; when you buy stock, you are buying a small piece of ownership. When the value of the company increases, you get a dividend |
| Small-Cap Fund | 25% Aggressive Growth |
| Speculative | Based on history, you will predict how you will do in the future. |
| Track Record | How well the stock has performed |
| Variable Annuity | mutual funds sheltered by the annuity covering |
| New York Stock Exchange | The largest stock exchange in the U.S. located in New York City |
| American Stock Exchange | The second largest stock exchange in the U.S. located in New York City |
| Growth Stock | Long term stock that will grow and be worth more money |