19.1 Saving and Investment Planning Flashcards Preview

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Flashcards in 19.1 Saving and Investment Planning Deck (53)
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1

  • people buy stocks and bonds managed by an investment company
  • money from many investors are used to invest in a variety of securities
  • allow investors spread out their risk among many investments

mutual funds

2

What are the safest investments?

investments made with the federal government

3

this type of investment invests in businesses/entrepreneurs to receive a portion of the profits

 

  • bonds
  • venture capitalist
  • commodities
  • collectibles

venture capitalist

4

a good savings plan or investment should ____ a reasonable return

a good savings plan or investment should earn a reasonable return (person should make money from it)

5

interest that is computed on the amount saved plus the interest previously earned

compound interest

6

if a stock increases in value and is then sold for more than its original cost

capital gain

7

goal for those who desire financial security in the future

long term growth

8

earnings from most savings and investments are ____

taxed

9

  • allows you to earn a higher interest rate than regular savings account
  • usually requires a minimum deposit of $100 to $1000 or more
  • must leave money on deposit for a certain time period
  • penalties charged if money is withdrawn early

certificate of deposit / CD

10

  • grain, livestock, precious metals, currency, financial instruments
  • investors purchase these in hopes of higher market prices in the future
  • very risky

commodities

11

people who want income for current living expenses

current income

12

assurance that the money you have invested will be returned to you

safety

13

A person who desires high income from an investment would be most concerned with:

  • safety
  • return
  • liquidity
  • risk

return

14

_____ interest is when your account earns interest on top of interest

 

  • variable
  • simple
  • compound
  • none of these

compound

15

Which of the following is investing for current income?

  • retired person who needs to pay for living expenses
  • business manager planning for retirement
  • student putting away money for college
  • family that wants to buy a vacation home

retired person who needs to pay for living expenses

16

money you receive for letting others use your money

interest

17

savings accounts at most financial institutions are insured up to $250,000 by the _____

federal government

18

______ interest is when the rate changes

variable interest is when the rate changes

19

On which type of interest would you earn more?

simple interest or compound interest

compound interest

20

  • old coins, works of art, antique furniture, other rare items
  • bought with the hopes that their value will increase

collectibles

21

The most liquid investment listed here is:

  • rare coins
  • real estate
  • a savings account
  • a house

savings account

22

which investment is considered low risk (more than one)

  • certificate of deposit
  • stock
  • commodities
  • money market account
  • mutual fund
  • savings account
  • venture capitalism

  • certificate of deposit (CD)
  • money market account
  • savings account

23

this type of investment deals with grain, livestock and precious metals

  • stocks
  • collectibles
  • commodities
  • corporate bonds

commodities

24

Why do people invest in real estate?

  • people purchase their own home for the sense of security and stability (they pay the mortgage every month and when they sell it can make all that money back - hopefully)
  • people purchase property for rental income
  • some buy vacant property in hopes that its value will increase
  • examples - housing, farmland, apartment buildings and shopping malls

25

When you invest money with individuals or businesses, it usually earns _____ interest than that paid by the government because there is ____ safety.

when you invest money with individuals or businesses, it usually earns higher interest than that paid by the government because there is less safety (there is a chance you won't get money back)

26

the percentage of money earned on your savings or investment over a year

yield

aka - rate of return & annual yield

27

a _____ is made up of a group of stocks

 

  • bond fund
  • securities fund
  • commodity
  • mutual fund

mutual fund

28

What are the 2 major financial goals of every saver and investor?

income or growth

29

What are some choices for your saving and investing dollars?

  • savings plans:  savings account, certificate of deposit, money market account
  • securities:  stock investments, bond investments, mutual funds
  • alternative investments:  real estate, commodities, collectibles

30

What are two reasons people save?

  1. some save for years for a down payment to buy a home
  2. some save for emergencies