PFL # 5a Savings & Investing VOCAB

Front

Quality of an asset that converts quickly to cash without value loss.

Back

Liquidity

Front

Value of the second-best alternative given up when making a choice.

Back

Opportunity Cost

Front

Likelihood of loss or profit on an investment's return.

Back

Risk

Front

Likelihood of loss or profit; uncertainty of investment return.

Back

Risk Tolerance

Front

Purchasing securities like stocks and bonds to grow wealth over time, with risk of loss. Setting aside money for future income or profit to achieve long-term goals.

Back

Investing

Front

Setting aside income for future use, providing cash for emergencies and short-term goals, and funds for investing.

Back

Saving

Front

Money set aside for future use in easily accessed accounts like savings accounts and CDs.

Back

Savings

Front

Financial institution deposit account that pays interest and allows withdrawals.

Back

Savings Account

Front

Interest earned on principal and previously earned interest.

Back

Compound Interest

Front

Interest calculated periodically on the loan or investment principal only, not on previously earned interest.

Back

Simple Interest