click below
click below
Normal Size Small Size show me how
PCS Personal Fin
Personal Finance Key Terms Ch. 8
Term | Definition |
---|---|
diversification | the practice of dividing the money a person invests between several different types of investments in order to lower risk |
investing | the process of setting money aside to increase wealth over time for long-term financial goals such as retirement |
investment | account or arrangement in which a person puts his/her money for long-term growth; invested money should not be used for a suggested minimum of five years |
liquidity | quality of an asset that permits it to be converted quickly into cash without loss of value; availability of money |
portfolio | a list of your investments |
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 compared to the amount of risk taken |
share | piece of ownership in a company, mutual fund or other investment |
stocks | securities that represent part ownership or equity in a corporation |
tax-favored dollars | money that is invested, either tax deferred or tax free, within a retirement plan |