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PF Ch 2 Savings

Terms from Unit 1 Chapter 2

TermDefinition
Diversification to spread around one’s investment dollars among several different classes of financial assets and among the securities of many issuers; results in lowered risk.
Liquidity : quality of an asset that permits it to be converted quickly into cash without loss of value; availability of money; when there is more liquidity, there is typically less return
Mutual Fund pool of money managed by an investment company and invested in multiple companies, bonds, etc.; offers investors a variety of goals depending on the fund and its investment charter
Risk degree of uncertainty of return on an asset; in business, the likelihood of loss or reduced profit
Risk Return Ratio relationship of substantial reward in comparison to the amount of risk taken
Share piece of ownership in a company or mutual fund
Created by: mgarda
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