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Civics Ch. 8

Terms in this set (13)

a list of your investments
portfolio
Quality of an asset that permits it to be
converted quickly into cash without loss
of value
liquidity
A piece of ownership in a company,
mutual fund or other investment
share
A retirement savings plan offered by
a corporation to its employees; the
employee contributes money from his/
her gross pay, and the money grows
tax deferred
401 k
Account or arrangement in which
one would put their money for longterm
growth
investment
Degree of uncertainty of return on
an asset
risk
Pool of money managed by an
investment company and invested
in multiple companies
mutual fund
Tax-deferred arrangement for
individuals with earned income;
individual retirement arrangement
IRA
Diversification lowers risk with investing
true
Long-term investments properly diversified
include the following mutual funds
Growth, growth and income,
international, aggressive growth
Which statement is true about liquidity
The more liquid an investment,
the less return
Explain the risk return ratio.
compare expected returns to the amount of risk taken to receive those returns
What is the Rule of 72? How is it calculated?
see how long it takes to double your investment
Divide 72 by the expected interest rate to determine the number of years
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