12.2 Understanding Investments Flashcardziz

Front

What is the stock market?

Back

A financial market that trades shares of ownership of public companies.

Front

What is the risk level of bonds?

Back

Moderate.

Front

What does a stock represent?

Back

A security that represents part ownership or equity in a company.

Front

What should you do if you don't understand an investment?

Back

Consult an investing professional.

Front

What is the return potential of real estate investments?

Back

Low to high.

Front

What is an investment?

Back

An asset or item acquired with the goal of generating income or appreciation.

Front

What is diversification in investing?

Back

The practice of spreading investments across various financial assets to reduce risk.

Front

What is a mutual fund?

Back

An investment vehicle that pools money from many investors to purchase a diversified portfolio of stocks and/or bonds.

Front

What is a dividend?

Back

A portion of a company's earnings distributed to shareholders.

Front

What is capital gain?

Back

The profit from the sale of an asset or investment when its selling price exceeds its purchase price.