| A | B |
|---|
| Annual Percentage Rate | Percentage rate associated with what a $100 deposit would earn in 365 days (APR) |
| Compound interest | Interest computed on the amount saved plus the interest previously earned |
| Dividends | Payments of profits in cash to stockholders |
| Interest | Money paid for the use of someone else’s money over a period of time |
| Invest | To put money to work earning interest over time |
| Liquidity | How easily an asset can be converted into cash |
| Maturity Date | Date on which a loan must be repaid; due date |
| Maturity Value | Amount paid back on corporation/government bonds |
| Principle | Amount being borrowed by the corporation issuing the bond |
| Profit | Amount remaining from gross income after all expenses have been paid |
| Return | The income that can be made on an investment |
| Risk | The possibility of earning or losing money from an investment |
| Save | To set aside present income for future use |
| Simple interest | Amount of money paid to saver on amount deposited for a period of time |
| Speculative investment | High risk investment to either to earn high returns or to lose |
| Stock broker | A licensed specialist in the buying & selling of stocks & bonds |
| Tax deferred | Investment income that will be taxed at a later time; ex: at retirement |
| Tax exempt | Investment income that is NOT taxed; Roth IRA, Tax exempt government bonds, proceeds from life insurance |
| Transaction | A saving/investing activity---e.g., deposits, withdrawals, and transfers |
| Volatility | How easily the interest or cash value of an investment can change |
| Blue chip stock | Ownership in large companies with proven success, less risk |
| Bond | A loan to a government or organization |
| Brokerage firm | A licensed institution that specializes in investing. |
| Certificate of deposit (CD) | An insured interest-bearing savings tool with restricted access to funds; deposited for a specific time & interest rate |
| Collectibles | Items of personal interest to collectors that can increase in value in the future |
| Commodities | Grain, livestock, and precious metals |
| Common stock | Ownership in a public corporation; returns vary, but higher risk |
| Growth stock | Ownership in growing companies, more risk |
| IRA | Individual Retirement Account used to save money for retirement; contributions tax deferred, earnings taxed upon withdrawal |
| Koegh plan | A tax-deferred retirement plan for self-employed people |
| Money market | Savings account in which deposits are invested to yield additional earnings; pays variable interest rate based on various government & corporate securities |
| Mutual fund | Group of investments held in common with shares owned by individual investors, managed by professional |
| Over the Counter Market | Network where securities transactions occur using telephones and computers rather than on an exchange (OTC) |
| Real estate investment | Purchasing land and building properties as an investment to gain profit |
| Penny stock | Stock that costs less than $1 per share; extremely high risk |
| Preferred stock | Ownership with fixed dividends, less risk |
| Retirement plan | Plan for saving money for retirement; money tax-deferred until withdrawn |
| Roth IRA | Personal retirement plan; contributions not tax-deductible; earnings are tax-free |
| Savings account | An account in a bank/financial institution for saving, making deposits/withdrawals |
| Savings bond | A long term debt certificate issued by the U. S. Treasury that is not transferable |
| Securities | Stocks & Bonds |
| Stock | Share of ownership and interest in the assets and earnings of a company |
| Stock exchange | Business that accommodates the buying & selling of securities |
| US Securities | Debt obligations issued by US Treasury (T-bills, T-notes, T-bonds) |
