Appendix 8.

01H --- Key Terms: Saving and Investing Options Term General Terms save invest profit interest return liquidity volatility risk transaction To set aside present income for future use To put money to work earning interest over time Money remaining in a business after expenses are paid Money paid for the use of someone else’s money over a period of time The income that can be made on an investment How easily an asset can be converted into cash How easily the interest or cash value of an investment can change The possibility of earning or losing money from an investment A saving/investing activity---e.g., deposits, withdrawals, and transfers Definition

Saving and Investing Options savings account money market CD savings bond IRA Koegh plan Roth IRA stock common stock preferred stock blue chip stock growth stock penny stock bond mutual fund An account in a bank/financial institution for saving, making deposits/withdrawals A savings account in which deposits are invested to yield additional earnings A certificate of deposit stating money has been deposited for a specific time A debt certificate issued by the U. S. Treasury that is not transferable An Individual Retirement Account used to save money for retirement A tax-deferred retirement plan for self-employed people A personal savings plan; contributions are not tax-deductible; earnings are tax-free A share of ownership and interest in the assets and earnings of a company Stock in a public corporation; returns vary, but higher risk Stock with fixed dividends, less risk Stock from large companies, less risk Stock from growing companies, more risk Stock that costs less than $1 per share; extremely high risk 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 A group of investments held in common with shares owned by individual investors

7086 Personal Finance

Unit D: Managing and Protecting Resources

Summer 2010 Page 394

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