Test 9

• Back-End Load?


  Fees paid to the mutual fund company when selling a mutual fund.
• Dividend?


  A payout of profits by a company to all shareholders.
• Expense Ratio?


  For a mutual fund, an annual percentage the fund takes as payment. Expense ratios of different funds can be compared to find the best value.
• FDIC-Insured?


  The FDIC (Federal Deposit Insurance Corporation) is a government agency that insures depositors’ money. Banks and savings and loan companies that are FDIC-insured pay a percentage of their deposits to the FDIC to pay for the insurance.
• Front-End Load?


  Fees paid to the mutual fund company as an entry requirement into certain mutual funds.
• Inflation?


  Rise in prices that effectively makes cash have less buying power over time.
• No-Load Fund?


  A mutual fund that charges no front-end or back-end load fees.
• Savings Account?


  A safe, low-return investment available from banks. There is generally no minimum deposit for this type of account, making it perfect for kids and teens just starting out.
• Yield?


  For a savings account, the percentage of interest earned annually. For a stock, the annual dividend, divided by the share price.
• Asset Class?


  Separate types of investments, such as stocks/stock mutual funds, bonds/bond funds, money market accounts, and international stocks/international stock funds. Each asset class has typical risks and returns, and a certain investment within that class may perform better or worse than its peers.
• Bond?


  Relatively safe investments issued usually by governments or large corporations.
• Dividend?


  Money paid by a corporation to each shareholder. Typically paid four times a year, these distributions of company profits can be used to reinvest in more shares of the company.
• Dow Jones Industrial Average (DJIA)?

  A portfolio of stocks chosen to provide an accurate assessment of day-to-day stock market performance.
• Money market?


  A mutual fund or account that invests in short-term, liquid investments. These funds generally pay better than a savings account with a bank but less than a typical stock mutual fund. These funds are considered very low risk.
• Mutual Fund?


  A mutual fund is a pool of stocks, bonds, and other securities managed by an investment company. Individuals can buy shares of the fund and profit from its investment gains.
• Rate of Return?


  The annual amount of money an investment makes, given as a percentage. For example, a $100 investment that is worth $112 the next year had a 12% return.
• Risk?


  The chance that an investment may lose value. Less-risky investments have a lower rate of return.
• Return?


  Monetary increase in an investment. If an investment loses value, it is called a negative return.