Personal Finance Chapter 2

Chapter 2 of Dave Ramsey's Personal Finance course. 

27 cards   |   Total Attempts: 183
  

Cards In This Set

Front Back
Aggressive Growth Stock Mutual Fund
A mutual fund that attempts to receive the highest capital gains.
Annuity
Annuities are savings accounts with an insurance company
Bond
A bond is a debt instrument by which the company owes you money.
C.D.
Certificate of Deposit-Usually has a fixed interest rate; intended to be held until maturity.
Commodity
A common item that can be bought or sold.
Diversification
Means to spread around. It lowers risk.
Dividend
The profits from a single stock.
Fixed Annuity
Fixed annuities are at a low interest rate of around 5%, aren't really fixed, and are a bad investment
Futures
A futures contract is a standardized contract to buy or sell a specified commodity of standardized quality at a certain date in the future and at a market-determined price.
Investments
Types: Money Markets, Single Stocks, Bonds, Mutual Funds, Real Estate, Annuities. Bad investments: Gold, Commodities and Futures, Day trading, and Viaticals.
Growth Stock Mutual Fund
Growth funds are stock funds that invest in stocks with the potential for long-term capital appreciation. They focus on companies that are experiencing significant earnings or revenue growth, rather than companies that pay out dividends.
Large-Cap Fund
Large cap funds are those mutual funds, which seek capital appreciation by investing primarily in stocks of large blue chip companies with above-average prospects for earnings growth.
Liquidity
1. The degree to which an asset or security can be bought or sold in the market without affecting the asset's price. Liquidity is characterized by a high level of trading activity. Assets that can by easily bought or sold, are known as liquid assets.

2. The ability to convert an asset to cash quickly. Also known as "marketability".
Mid-cap fund
A type of stock fund that invests in mid-sized companies. A company's size is determined by itsmarket capitalization, with mid-sized firms generally ranging from $2 billion to $10 billion in market cap.
Money Market
Money market mutual funds are low risk money market accounts with check writing privileges. (Great for emergency funds.)