NGPF Investing: Flashcard Review

Front

What is the definition of wealth?

Back

Wealth is defined as Assets - Debts.

Front

What is a primary use of a savings account?

Back

A savings account is useful for building an emergency fund.

Front

What is the difference between a mutual fund and an index fund?

Back

Mutual funds are actively managed by a professional while index funds are not.

Front

What is inflation?

Back

Inflation is the increase in the general price level of goods and services.

Front

What is the relationship between risk and return in investing?

Back

Higher risk indicates higher potential return.

Front

What is an asset?

Back

An asset is anything of value or a resource owned by an individual or entity.

Front

What is a liability?

Back

A liability is a financial obligation or debt owed to another party.

Front

What is the purpose of an emergency fund?

Back

An emergency fund is used to cover unexpected expenses or financial emergencies.

Front

What are stocks?

Back

Stocks are shares of ownership in a company.

Front

What is a bond?

Back

A bond is a fixed income instrument that represents a loan made by an investor to a borrower.