| A | B |
|---|
| save | To set aside present income for future use |
| invest | To 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 into cash |
| volatility | How easily the interest or cash value of an investment can change |
| risk | The 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 for saving, making deposits/withdrawals |
| money market | A savings account in which deposits are invested to yield additional earnings |
| CD | A certificate of deposit stating money has been deposited for a specific time |
| savings bond | A debt certificate issued by the U. S. Treasury that is not transferable |
| IRA | An Individual Retirement Account used to save money for retirement |
| Koegh plan | A tax-deferred retirement plan for self-employed people |
| Roth IRA | A personal savings plan; contributions are not tax-deductible; 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, but 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 | A certificate of debt given by a company or government that entitles the bondholder to the original amount plus interest paid by a set date |
| mutual fund | A group of investments held in common with shares owned by individual investors |
