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Savings And Investing

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Term
Definition
Save   To set aside present income for future use.  
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Invest   To put money to work earning interest over time.  
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Profit   Money remaining in a business after expenses are paid.  
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Interest   Money paid for the use of someone else's money over a period of time.  
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Return   The income that can be made on an investment.  
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Liquidity   How easily an asset can be converted into cash.  
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Volatility   How easily the interest or cash value of an investment can change.  
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Risk   The possibility of earning or losing money from an investment.  
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Transaction   A saving/investing activity---e.g., deposits, withdrawals, and transfers.  
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Savings Account   An account in a bank/financial institution for saving, making deposits/withdrawals.  
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Money Market   A savings account in which deposits are invested to yield additional earnings.  
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CD   A certificate of deposit stating money has been deposited for a specific time.  
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Savings Bond   A debt certificate issued by the U.S Treasury that is not transferable.  
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IRA   An individual retirement account used to save money for retirement.  
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Koegh Plan   A tax-deferred retirement plan for self-employed people.  
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Roth IRA   A personal savings plan; contributions are not tax-deductible; earnings are tax-free.  
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Stock   A share of ownership and interest in the assets and earnings of a company.  
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Common Stock   Stock in a public corporation; returns vary, but higher risk.  
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Preferred Stock   Stock with fixed dividends, less risk.  
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Blue Chip Stock   Stock from large companies, less risk.  
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Growth Stock   Stock from growing companies, more risk.  
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Penny Stock   Stock that costs less than $1 per share; extremely high risk.  
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Bond   A certificate of debt given by a company or government that entitles the bondholder to the original amount plus interest paid by a set date.  
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Mutual Fund   A group of investments held in common with shares owned by individual investors.  
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Created by: mooreja4
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