| A | B |
|---|
| return | The income that an investmen produces. |
| risk | the possibility of variation in the return on your investment. |
| volatility | The degree to which an investment's return or value may change. |
| Diversification | A strategy of making a variety of investments in order to reduce your exposure to risk. |
| Portfolio | Collection of investments, that is both diversified and well balanced. |
| Pension Plan | Any retirement plan offered to a company's employees. |
| 401(k) plan | Type of defined-contribution pension plan to which the employee contributes on a pretax basis. |
| IRA | Personal savings plan that enables workers and their spouses to set aside money for retirement. |
| Roth IRA | an IRA in which contributions are not tax deductible; however, earning accumulate tax free. |
| Keogh plan | A federally approved, defined-contribution, tax-deferred retirement pland esigned specifically for self employed people. |
| stock | Ownership inerest in the corporation. |
| shares | individual units of ownership available for purchase. |
| shareholders | Investors who purchase shares of stock. |
| Stock Market | The organized trading of stocks. |
| stock exchange | A central location where stocks are sold on a trading floor. |
| Dividend | A payment to shareholders that represent a portion of the company's net profit. |
| stockbroker | An individual or firm that will buy and sell stock for clients according to their instructions. |
| bonds | Corporations and governments can obtain funds by issuing certificates of debt. |
| Mutual fund | A group of investments that is held in common by many individual investors. |
| prospectus | A legal document that providess potential investors with information about a mutual fund or other security. |
| annuity | A contract purchased from an insurance c ompany. |
| real estate | land and any structures on it. |
| commodities | Basic economic goods bought and sold in quantity. |
| estate | Assets and liabilites left behind by a deceased person. |
| Estate planning | The process of making legal and finacial arrangements for how one's property should be administered before and after death. |
| executor | The individual who is in charge of handling the affairs of an estate. |
| beneficiary | A person or group designated to receive some or all of a deceased person's assets. |
| intestate | A person who dies without a valid will. |
| living trust | A legal arrangement that can serve as an alterative to a will. |
| power of attorney | A legal document assigning someone the right to act on a person's behalf. |
| living will | a legal document that outlines a person's wishes for medical treatment under specific circumstances. |
