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Terms from Unit 1 Chapter 2

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Term
Definition
Diversification   to spread around one’s investment dollars among several different classes of financial assets and among the securities of many issuers; results in lowered risk.  
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Liquidity   : quality of an asset that permits it to be converted quickly into cash without loss of value; availability of money; when there is more liquidity, there is typically less return  
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Mutual Fund   pool of money managed by an investment company and invested in multiple companies, bonds, etc.; offers investors a variety of goals depending on the fund and its investment charter  
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Risk   degree of uncertainty of return on an asset; in business, the likelihood of loss or reduced profit  
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Risk Return Ratio   relationship of substantial reward in comparison to the amount of risk taken  
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Share   piece of ownership in a company or mutual fund  
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Created by: mgarda
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