Professional Documents
Culture Documents
2.04 What Is Stock Anyways
2.04 What Is Stock Anyways
Investing Basics
Real-life
example of
Level of Risk this
Description—explain and Potential investment Minimum investment amount or
Type of what it is and how it Return— (name or time? Easy to start or stop
Investment works. explain. company) investment? Discuss.
CD A certificate of deposit Low risk, low A life Low minimum investment - Most
that is purchased at a return insurance CDs can be purchased with a
largely discounted rate. policy or an $1000 minimum investment with
annually larger amounts available in
increments of 1000
IRA Individual Retirement IRAs vary in An ira account IRAs have a limit ro how much
Account (IRA)—a amount of risk includes money can be deposited banks
portion of a person's depends on multiple types will charge a feeif money is taken
income is set aside to the specific of investments out early
be withdrawn after plan including stock
retirement, growing bonds
interest in the meantime
through investment in
other securities.
Employers might
contribute to the
account as a benefit to
employees.
MMA A savings account that Funds are This account will not make much
offers the competitive often money. But more than traditional
rate of interest in considered to savings banks will charge a fee if
exchange for larger- have less risk money is taken out early. And a
than-normal deposits than their bank may require minimum
stock and amount of money in the account
bonds
counterparts
Stocks A type of security that If the stock Coca-cola, Usually you can't just buy one
signifies ownership in a company fails, target, apple stock—you must invest a
corporation and all money inc minimum dollar amount. For
represents a claim on invested is lost example, a single share of the
part of the corporation's company Apple in 2018 costs
assets and earnings, about $500, which is not a
there are two main realistic option for most high
types of stock. Common school or college students!
and preferred. Common
stock usually entitled to
the owner to vote at
shareholders meetings
and to receive dividuals
preferred stock
generally does not have
voting rights . but has a
higher claim on assets
and earnings than the
common shares
Mutual Funds An investment vehicle The level of Example of not Mutual funds require a minimum
that is made up of a risk in a putting all your amount of money to invest.
pool of funds collected mutual fund eggs in one Mutual funds can earn
from many investors for depends on basket significantly more money can also
the purpose of what it invests potentially lose more
investigation securities in. usually the
higher the
potential
returns. The
higher the risk
it will be
Traditional Bank Funds deposited in a These ING direct's These accounts will not make
Account bank that the depositor accounts have orange savings much money, bank may charge a
can withdraw at will the potential account fee fir these accounts money can
for identity be taken out in cash easily
theft checking account is easy to use
debit cards and checks