| A | B |
|---|
| Save | set aside present income for future use |
| invest | put money to work earning interest over time |
| profit | money remaining in a business after expenses are paid |
| interest | money paid for the use of someone else's money over a period of time |
| return | the income that can be made on an investment |
| liquidity | how easily an asset can be converted to cash |
| volatility | how easily the interest or cash value of an investment can change |
| risk | possibility of earning or losing money from an investment |
| transaction | a saving/investing activity e.g., deposits, withdrawals and transfers |
| savings account | an account in a bank/financial institution |
| money market account | savings account in which deposits are invested to yield additional savings |
| CD | certificate of deposit; savings deposited for a specific period of time in exchange for a higher interest rate |
| savings bond | debt certificate issued by the U.S. Treasury that is not transferable |
| IRA | Individual Retirement Account - used to save money for retirement |
| Keogh plan | a tax deferred plan retirement plan for self-employed people |
| Roth IRA | a personal retirement plan where contributions are not tax deductible but earnings are tax-free |
| stock | a share of ownership and interest in the assets and earnings of a company |
| common stock | stock in a public corporation; returns vary, higher risk |
| preferred stock | stock with fixed dividends, less risk |
| blue chip stock | stock from large companies, less risk |
| growth stock | stock from growing companies, more risk |
| penny stock | Stock that costs less than $1 per share; extremely high risk |
| bond | Certificate of debt given by a company or government that entitles the bondholder to the orginal amount plus interest by a set date |
| mutual fund | group of investments held in common with shares owed by individual investors |
