Econ Investing Flashcards

1
Q

A type of investment that gives people shares (a portion) of ownership in a company

A

Stocks

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2
Q

Interest earned only on the original principal amount invested

A

Simple Interest

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3
Q

Spreading monetary investments to various financial options in order to reduce risk

A

Diversification

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4
Q

An account at a bank or credit union used to set aside money and that pays you interest

A

Savings Account

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5
Q

A savings alternative in which money is left on deposit for a stated period of time to earn a specific rate of return

A

Certificate of Deposit (CD)

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6
Q

A savings account with tax advantages that individuals can save and invest in long-term

A

Individual Retirement Account (IRA)

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7
Q

A certificate purchased from a government or company promising to pay you a specified rate of interest during the life of the bond and to repay the principal when the bond “matures,” or comes due after a set period

A

Bonds

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8
Q

When you earn interest on both the money you save and the interest you earn

A

Compound Interest

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9
Q

A company that pools money from many investors and invests the money in securities such as stocks and bonds

A

Mutual Funds

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10
Q

An arrangement made with an employer to pay money to an employee after retirement

A

Pension Plan

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