Investing & Wealth Management - Strand 1 DOK 1 Vocab Flashcards

Front

Time Value of Money

Back

Money today will lose buying power over time if not invested

Front

What is simple interest?

Back

Interest earned only on the original amount

Front

Compound interest

Back

Interest earned on both principal and previous interest

Front

Principal in finance

Back

The original sum invested or borrowed

Front

What is the interest rate?

Back

The percentage used to figure out how much interest you earn or pay on money over time

Front

A money market account is:

Back

A savings account that usually earns more interest than a regular savings account

Front

Certificate of Deposit (CD)

Back

A deposit that earns interest for a fixed period

Front

Asset allocation

Back

Dividing investments among different asset types

Front

Diversification

Back

Spreading investments across different assets

Front

Market risk (systematic risk) is:

Back

Risk that affects the whole market