Dollars and Sense - Chapter 8 Vocabulary

Quality of an asset that permits it to be converted quickly into cash without loss of value; availability of money:

• Risk

• Liquidity

• Diversification

• Portfolio

Money that is invested, either tax deferred or tax free, within a retirement plan:

• Liquidity

• Shares

• Investment

• Tax-Favored Dollars

The process of setting money aside to increase wealth over time for long-term financial goals such as retirement:

• Investing

• Risk

• Share

• Portfolio

The practice of dividing the money a person invests between several different types of investments in order to lower risk

• Risk

• Liquidity

• Diversification

• Share

Account or arrangement in which a person puts his/her money for long-term growth; invested money should not be used for a suggested minimum of five years:

• Investment

• Share

• Stocks

• Tax-Favored Dollars

Degree of uncertainty of return on an asset; in business, the likelihood of loss or reduced profit:

• Investing

• Diversification

• Liquidity

• Risk

A list of your investments:

• Share

• Stocks

• Portfolio

• Diversification

Securities that represent part ownership or equity in a corporation:

• Share

• Stocks

• Portfolio

• Investment

Piece of ownership in a company, mutual fund or other investment:

• Stocks

• Portfolio

• Investment

• Share

Relationship of substantial reward compared to the amount of risk taken:

• Risk-Return Ratio

• Liquidity

• Investing

• Tax-Favored Dollars