Unit 7 Investing Terms

Traditional IRA

• An individual retirement account that allows a person to set aside pre-tax income up to a specified amount each year.

• A type of savings account that offers tax-free withdrawals for education expenses.

• A retirement plan that requires post-tax contributions and offers tax-free growth.

• A government-sponsored investment program that guarantees a fixed return.

Bond

• A type of stock that represents ownership in a company.

• A security in which the investor loans money to a company or government, which then pays regular interest to the bondholder and returns the principal on the bond's maturity date.

• A financial instrument that allows investors to buy shares in a mutual fund.

• A contract that guarantees a fixed return on investment over a specified period.

Robo-Advisor

• A type of robot used in manufacturing.

• An online wealth management service that provides automated, algorithm-based portfolio management advice without the use of human financial planners.

• A financial advisor who works exclusively with high-net-worth individuals.

• A mobile app for tracking personal expenses.

Roth IRA

• A type of savings account for children

• An individual retirement account that allows a person to set aside after-tax income up to a specified amount each year.

• A government bond that offers tax-free interest

• A type of investment account for stocks and bonds

Security

• A financial asset, such as a stock or a bond, that can be bought and sold in a financial market.

• A type of insurance policy that protects against financial loss.

• A government-issued currency used for transactions.

• A legal document that outlines the terms of a loan.

New York Stock Exchange (NYSE)

• The world's largest stock exchange, physically located in New York City.

• A major stock exchange located in London.

• A stock exchange that primarily deals with cryptocurrencies.

• An online trading platform for small investors.

Index Fund

• A type of investment that actively selects stocks to maximize returns.

• A low-fee portfolio of stocks chosen to track or mimic a stock market index, thereby removing the human element of investing because no one is choosing the individual stocks.

• A mutual fund that only invests in bonds and fixed income securities.

• An investment strategy that focuses on high-risk, high-reward stocks.

Risk

• Degree of uncertainty on how likely the investor is to make money on an investment.

• The total amount of money invested in a project.

• The guaranteed return on an investment over time.

• The historical performance of an investment in the market.

Bond Rating

• A measurement of the likelihood that a bondholder will be paid back.

• A score indicating the risk of default on a loan.

• An assessment of the interest rate on a bond.

• A classification of bonds based on their maturity dates.

Rate Of Return

• The total amount of money invested in a project.

• The ratio of money gained or lost on an investment relative to the amount of money invested; also known as return on investment (ROI).

• The interest rate applied to a loan or investment.

• The percentage of profit made on a sale.