| A | B |
|---|
| simple interest | interest that is computed only on the amount saved |
| compound interest | interest that is compounded on the amount saved plus interest previously earned |
| securities | bonds, stocks and other documents sold by corporations and governments to raise large sums of money |
| savings | putting money aside for future use |
| common reasons for savings | major purchases, emergencies, retirement |
| savings account | simplest form of saving |
| certificate of deposit | requires a mimumun deposit for a minimum amount of time that can't be withdrawn until a certain time and earns a set interest rate |
| money market fund | kind of mutual fund put into a variety of stocks that is still liquid |
| bonds | promise to pay a definite amount of interest at a stated rate on a specific maturity date |
| bondholder | individual who lends money to a corporation |
| face value | amount being borrowed by the seller of the bond |
| coupon rate | rate of interest on the bond |
| municipal bond | bond issued by local or state governments |
| corporate bond | bond issued by a corporation |
| series EE bond | bond that costs half the face value |
| treasury bills | issued for three months to a year |
| treasury notes | issued for 2 to 10 years |
| treasury bonds | issued for ten or more years |
| stocks | shares of ownership in a business |
| stock certificate | proof of ownership in a corporation |
| market value | price at which a stock can be bought or sold |
| dividends | part of profits shared with stockholders |
| preferred stock | priority over common stockholders in the payment of dividends but have no voting rights |
| common stock | general ownership in a corporation and a right to vote |
| broker | person who acts as a go between for buyers and sellers of securities |
