W!se Investing Basics Part 1

Match the following

• return on investment - profit made on an investment

• loan

• a profit that is made off selling a property or an investment

• ROI

• the profit that is made off a stock and paid to the individual stockholders

• Investing

• amount of money given to a borrower. most times, money must be paid back and with interest.

• dividend

• Committing your money in the hope that it will grown and make more money over time.

• capital gain

What is COMPOUND INTEREST? Money earned on...​ ​ (a)  

• Initial Investment + Interest
• initial investment ONLY
• low liquidity
• high liquidity

What is SIMPLE INTEREST? Money earned on...​ ​ ​ (a)  

• initial investment ONLY
• low liquidity
• high liquidity
• Initial Investment + Interest

EASILY being able to access - checking account or savings account - your money is...​ ​​ (a)  

• HIGH liquidity
• LOW liquidity
• Initial Investment + Interest
• interest

NOT being able to access - stocks or bonds - your money easily is...​ ​​ (a)  

• LOW liquidity
• HIGH liquidity
• Initial Investment + Interest
• interest

RISK is...​ (a)  

• degree of uncertainty or potential loss
• a sum paid back for borrowing money
• annual percentage yield paid

APY is...​ ​ (a)  

• annual percentage yield paid
• a sum paid back for borrowing money
• degree of uncertainty or potential loss

Principal is... (If you have a $20,000 car loan, you will be charged interest on $20,000 of principal)

• the amount of money borrowed.

• the profit paid to stockholders.

• the percent you must pay back on a loan.