Investing/Retirement Flashcard3

Front

What is the stock market?

Back

A place for buying and selling shares of public companies.

Front

What is compound interest?

Back

Money earned on money and interest earned previously.

Front

What does ROI stand for in the context of investing?

Back

Return on Investment.

Front

How is a bond different from a stock?

Back

Bond - loan you give an organization; stock - partial ownership in a company.

Front

Which investment type typically offers the highest potential return?

Back

Stocks.

Front

What is a stock?

Back

A share representing a unit of ownership in a company.

Front

What is a bond?

Back

A fixed income instrument that represents a loan made by an investor to a borrower.

Front

What is diversification in investing?

Back

The practice of spreading investments across various financial assets to reduce risk.

Front

What is the purpose of a mutual fund?

Back

To pool money from multiple investors to purchase a diversified portfolio of stocks, bonds, or other securities.

Front

What is the difference between a traditional IRA and a Roth IRA?

Back

Traditional IRA contributions may be tax-deductible, while Roth IRA contributions are made with after-tax dollars.