SAVING AND INVESTING

UNIT 2INTRODUCTION TO FINANCIAL MARKETS

VOCABULARY

Diversification—spreading out savings and investments over multiple categories

VOCABULARY

Dividend—are the distribution of a company's profit or earnings to the company's shareholders or

stockholders

VOCABULARY

Liquid—can be bought and sold easily

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Stock—an investment product that represents partial ownership of a compnay or corporation

VOCABULARY

Prospectus—the legal document describing the mutual fund

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The return—more moneyInvestors run the risk of losing their money when they

invest, but they stand to gain a return—more money—if the investment is profitable.

VOCABULARY

Securities—investment instruments such as stocks and bonds

VOCABULARY

Tax-exempt—taxes do not have to be paid

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Appreciation—to increase

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Mutual fund—invests the pooled money of its shareholders in various types of investments

VOCABULARY

Bond—means investors have loaned money to a company or a governmental entitiy

VOCABULARY

No-load—no sales commissionAn employee takes your order to buy or sell, or can

offer limited support.The investor is fully responsible for understanding the

investment.

Talking Points

Savings Accounts

How does it relate to future investing?

Talking points

Liquid

What does the use of the word liquid usually mean?

Talking Points

Risk Tolerance

Conservative vs high-risk

Talking Points

The greater the risk, the higher the rate of return.

Talking Points

Dividends

Who gets a dividend?

Talking Points

Municipal

What does the word municipal mean?

Talking Points

Management fee

What is this?